Indian Airlines' HR Problems

In the late 1990s, in yet another effort to appease its employees, IA introduced the productivity-linked scheme. The idea of the productivity linked incentive (PLI) scheme was to persuade pilots to fly more in order to increase aircraft utilization. But the PLI scheme was grossly misused by large sections of the employees to earn more cash. For instance, the agreement stated that if the engineering department made 28 Airbus A320s available for service every day, PLI would be paid. This number was later reduced to 25 and finally to 23. There were also reports that flights leaving 30 - 45 minutes late were shown as being on time for PLI purposes and Pilots were shown flying 75 hours a month, as compared to the earlier figures of 63 hours. Eventually, the PLI schemes raised an additional annual wage bill of Rs 1.8 bn for IA.

It was alleged that IA employees did no work during normal office hours; this way they could work overtime and earn more money. Though experts agreed that IA had to cut its operation costs, to survive the airline continued to add to its costs, by paying more money to its employees. (Refer Table II). The payment of overtime allowance (OTA) which included holiday pay to staff, increased by 109% during 1993-99.