COMPENSATION BENEFITS IN

BFSI SECTOR

Presented by

MBA CORE batch 2017-19’s

GROUP 1
Akash Goel A018
Aditya Kumar A026
Rebant Malhotra A029
Kush Naik A038
Harshit Sangtani A051
Purvi Sekhani A054
Ishita Tibrewal A062
Kshitij Vig A065
 Table of Contents
1. About the organisation............………………………………........................…………..3

2. Job Description....……………………………………………………………………….4

3. Components of payment structure ......................……………………………………....9

4. Compensable Factors.....................................................……………………………….13

5. Competitor Analysis...................………………………………………………………15

6. Job Evaluation......................…………………………………………………………..16

7. Recommendations.....................................…………………………………………….17
About the organization
AU Small Finance Bank Ltd. started in 1996. It is headquartered in Jaipur, Rajasthan. It has total

8515 number of employees. It started as a Private Limited company with an authorised share

capital of 0.1 million. It was founded by Mr. Sanjay Agarwal. It received its certificate of

registration from RBI in 2000 to operate as an NBFC. It recently became a bank and had its IPO.

It was ranked 469 among the Fortune India 500 in 2017. It has annual revenue of US$ 304

million and total assets of worth US$ 1367 million.

It started as vehicle finance company and later it was converted to small finance bank in

April’17. Its most of the loans were secured, unlike other small finance banks because of its

background in small finance by March 2018. It provides lower interest rates as a result of which

it is actively growing in deposits. It has also diversified into investment banking and other

financial products.

AU Bank has its operation in 11 states with 301 bank branches and 113 financial asset

management centers. It is planning to expand over 430 branches by the end of this year.
Job description
AU Small Finance Bank has divided the whole country into regions which are further divided
into clusters. Every cluster has multiple branches, thereafter. We have focused on the job roles of
branch manager, cluster manager and the regional manager.
Every regional manager has some cluster managers working beneath him and every cluster
manager in turn leads the various branch managers. Below are the job descriptions of the three
highlighting their job roles, skill sets required and the kind of responsibilities each person will
hold.

Regional Manager

Basic Information

Position Title State Manager Grade/Level

Vertical Liability Location

Business Retail Banking Business Department

Organizational Relationships

Position Reporting to Head Branch- Liability

Direct Reports if any Cluster Manager

Indirect Reports if Branch Manager

any ( total number)

Job Responsibilities

Financial  Manages a number of retail banking branches to ensure that

Responsibilities & revenues and asset under management (AUM) growth and
Non Financial customer base growth are as per the state business plan.
Responsibilities  Develops and builds relationships with high net worth customers
as well as critical customers
 Capitalizes on cross-sell opportunities and helps plan and
organize sales promotions in coordination with the branch
manager and manager marketing
 Monitoring financial transactions and Overseeing the efficient
 day to day processes.
 Preserving a professional environment, Preparing reports and
forecasts
 Dealing with customer service and satisfaction/Delight
 Establishes sales objectives by creating a sales plan and quota for
districts in support of national objectives.
 Maintains and expands customer base by counselling district sales
representatives; building and maintaining rapport with key
customers; identifying new customer opportunities.
 Recommends product lines by identifying new product
opportunities, and/or product, packaging, and service charges;
surveying consumer needs and trends; tracking competitors.
 Updates job knowledge by participating in educational
opportunities; reading professional publications; maintaining
personal networks.
 Accomplishes sales and organization mission by completing
related results as needed.
 The position will also ensure a smooth coordination and delivery
with the colleagues on the assets side of the business.

People Management  Trains, motivates and handles career planning for staff
 The position would be the owner of the assigned set of branches
and would be involved in hiring, training and retaining of
employees would be a key task.
 Hiring new team members and continuously assessing employee
performance
 Pursuing lifelong professional and educational development

Compliance & Risk  Ensures that all risk parameters applicable to Retail banking in
Responsiblities the state are met with
 Responsible for ensuring regulatory compliance and satisfactory
internal audit
 Ensuring compliance and security procedures are adhered to

Key Responsibility

Responsible for managing and growing the retail banking business in the assigned state by
coordinating with branch managers and retail banking personnel. The Number of Branches
under the span of the state manager depends on the strategy of the bank. This role would
typically be responsible for profitability of the entire state.
Meeting Sales Goals, Motivation for Sales, Territory Management, Presentation Skills,
Performance Management, Building Relationships, Emphasizing Excellence, Negotiation,
Results Driven, Sales Planning, Managing Profitability

Cluster Manager

Basic Information

Position Title Cluster Manager ( CM) Grade/Level

Vertical Liability Location

Business Retail Banking Business Department

Organizational Relationships

Position Reporting to State Manager

Direct Reports if any Branch Manager

Indirect Reports if BOSM

any ( total number)

Job Responsibilities

Financial  Responsible for managing and growing the retail banking

Responsibilities business within a cluster (area / district/ state) by coordinating
with branch managers and retail banking personnel.

Sales  Manages a select number of retail banking branches to ensure

that revenues and asset under management (AUM) growth and
customer base growth are as per the business plan.
 The position would be responsible for acquisition of new
clients, meeting the financial plan
 Would be also responsible for initiating and successful delivery
of micro events to onboard new clients and fasten the pace of
growth towards it

Non Financial Ensures that all risk parameters applicable to the region are met
Responsibilities with and complied with.

Operation Ensures that all service quality targets for the region are met with.
People Management Motivates and handles career planning for staff
Responsible for team management, the individual must ensure a
cohesive environment and maintaining the right culture within the
branches

Compliance & Risk Responsible for ensuring regulatory compliance and guidelines and
Responsiblities satisfactory internal audit . Adherence to the defined set of
controlof the Bank

Key Responsibility

The position will be responsible for management and effective functioning of eight to twelve
branches. The individual would be responsible for acquisition of new clients, meeting the
financial plan and adherence to the defined set of control, compliance and regulatory
guidelines. Responsible for team management, the individual must ensure a cohesive
environment and maintaining the right culture within the branches. Would be also
responsible for initiating and successful delivery of micro events to onboard new clients and
fasten the pace of growth towards it. This position will report to the Regional Head.

Branch Manager

Basic Information

Position Title Branch Manager Grade/Level

Vertical Liability Location

Business Retail Branch Banking Department

Organizational Relationships

Position Reporting to Cluster Manager (CM)

Direct Reports if any BOSM, BSM

Indirect Reports if Regional

any ( total number) Manager ( RM)

Job Responsibilities

Financial Devise action plan for the Branch and ensure that Liabilities business
Responsibilities -(Book size of CASA, yield, fee based income and Business quality)
 targets for the Branch is met.

Sales  Effectively manage the sales and service environment of a branch

 Actively Identify and establish the business relationship with
Retail customer in the Area of function.
 Strategic Sales direction for cross sell and Sales Planning for the
Area of function and Monitoring and Improving Sales
productivity.
 Responsible for undertaking various sales campaign / promotions
in the Area of function.
 Customer centric approach and Deepening the customer
relationships
 Support an environment that promotes providing a level of care
that makes customers feel welcomed, significant and engaged.

Non Financial Coordinate with BOSM and Team Leaders for developing Business
Responsibilities Supervise the day to day functions of the branch including Vault,
drawer and ATM balancing ,Overseeing teller and customer service
duties, Assisting with customers transactions

Operation  Recommend the matter to next level (CM/RM)) for the cases
beyond DOP of BM.
 Be knowledgeable about all Bank products (Retail & Asset) and
Provide guidance and support for new product launches.
 Ensure Business Turn Around Time (TAT) superior to
competition inline with the standards laid down for the Bank.
 Monitoring and controlling cost of acquisition of local Sales
Channel/FOS, Branch expenditures, Manage Branch
Administration
 Ensure ethical practices in acquisition and servicing
 Monitor performance of branch on a weekly basis viz. in terms of
business targets achieved
 Proactively seeks solutions that benefit the customer and the
Bank.

People Management  Manpower planning for Branch staff and performance appraisal,
 Develop alternative channels for CASA business sourcing
 Ensure full team is committed and customer focused in their
approach,
 Achieve high employee satisfaction and retention of good
performers and Manage attritions through motivation and job
 satisfaction
 Identify and carry out all actions/activities related to business
growth
 Train the Branch staff at periodic intervals in New products,
features and competition
 Assist in devising and implementing a customer acquisition and
retention programme.

Compliance & Risk  Adhere to regulatory compliance and banks policies and
Responsiblities procedures , Banks code of conduct and Ensure to comply all.
 Liasoning and Co-ordination with regulatory bodies and other
related organizations
 Address critical issues and potential conflicts in a candid and
timely manner

Key Responsibility

Responsible for heading a retail banking branch with responsibility for efficient operations,
customer service and marketing for all retail banking products. Also oversees daily operation
in the branch and ensures that service quality standards are maintained.
Achieving Business targets in terms of Book size, Yield, Fee-based income and customer
quality for the functional area. Leading the team of the Branch to achieve the Profit targets.
Improve efficiency and productivity of Staff, Turn-Around-Time, etc. of the Branch.
Supervise, coach, and develop staff regarding service expectations, policies, procedures,
products, systems and banking transactions.
Components of payment structure

SALARY BREAK-UP SHEET

Type of Salary Structure Salary + Bonus

NAME

HR DESIGNATION

FUNCTIONAL
DESIGNATION

GRADE

DATE OF JOINING

BUSINESS UNIT

PRODUCT

DEPARTMENT

JOB FAMILY

LOCATION

FIXED CTC ( A1 )

PARTICULARS CTC Amount (Rs)

SALARY PAYMENT Monthly Annually
Basic 0 0

House Rent Allowance 0 0

Transport Allowance 0 0

Education Allowance 0 0

Car & Fuel Reimbursement 0 0

 Office Helper Reimbursement 0 0

Medical Reimbursement 0 0

Leave Travel Allowance 0 0

Special Allowance 0 0

TOTAL GROSS PAY 0

RETIRAL BENEFITS

Employer PF Contribution 0 0
Gratuity 0 0

FIXED COST TO COMPANY (CTC) A1 0 0

JOB SPECIFIC ALLOWANCES (A2)

Stability Allowance 0 0

City Compensation Allowance 0 0

Statutory Bonus 0 0

VARIABLE PAY

*Performance Bonus (Variable) 0 0

Fix Incentive 0 0

TOTAL (A2) 0 0

TOTAL COST TO COMPANY (TCTC) 0 0

A1+A2 Minus Other Benefits
OTHER BENEFITS (A3)

Group Medicliam (GMC) 0 0

Group Personal Accident Insurance (GPA) 0 0

Group Term Life Insurance (GTLI)

0 0
TOTAL (A3) 0 0

TOTAL COST TO COMPANY (TCTC) 0 0

A1+A2 +A3
BENEFITS DESCRIPTION

Appraisal You shall be eligible for performance appraisal and increment

cycle as per company policy. The appraisal period will be from
date of Joining to end of financial year and increment would be
prorated accordingly. Employees joining from Jan to March will
not be eligible for appraisal for that financial year.
*Performance Bonus You will be eligible for performance bonus basis your performance
and company policy.
Group personal Covered under GPA policy of sum assured as per Company Policy,
Accident Policy effective from the date of endorsement in policy
Group Term Life Covered under GTLI policy of sum assured amount by the
Policy company, shall effective from the date of endorsement
Mediclaim Policy You will be eligible for Mediclaim as per company mediclaim
policy for self, spouse and two children. You can also opt medical
benefits for parents by paying top up premium.

Conveyance Conveyance expense will be reimbursed for official visits as per

company policy.
Mobile Limit You shall be eligible for the mobile limit as per our company
policy.
Relocation You shall be eligible for relocation as per our company policy.

Foreign Tour As per applicable programmes run by the company time to time.
Eligibilty

The compensation includes a fixed component (A1) which includes the following factors:
Basic Salary, HRA, Transport Allowance, etc. and it also includes three job specific allowances
description of which is given below:
Stability Allowance: This allowance is given to employees having a minimum tenure within the
bank.
City compensation allowance: AU Bank has divided cities into 4 categories based on the cost of
living in different cities and accordingly this compensation is given to employees working in
cities having a greater living cost.
Statutory Bonus: This is not applicable for the job categories under investigation.
This kind of salary structure has been adopted to have a fair basic salary which works as a
hygiene factor and other components have been included to reward an employee’s association
with the company and to have correcting factors.
Compensable factors
AU Small Finance Bank, is a relatively new entrant in the market and came up with a completely
new way on which they based the compensation that would be offered to their employees.
Instead of offering a compensation structure that followed a similar package to employees who
were on the same level, AU Bank came up with a revamped system that would place employees
of similar designation on different pay scales.
The bank categorizes its various branches into different categories and each individual who
works in them are paid as per the category they fall into. As of now, AU Bank has a 4 category
system

Branch Category

The individuals who work with AU Bank are paid as per the category they fall into. Therefore,
an employee of a designation in Category A cannot be compared to an employee in a similar
position at Category B.

Criteria for
Category
Selection

Population of Existing Clients in

Availability of
particular location the particular
Resources
Eg: Tier I,II,III location
Once offices are placed in various categories, there are 3 key decisions that are to be taken by the
management that pertain to the branch.

Decisions taken
after category
selection

Physical size of the Remuneration for

Workforce size
office the workforce

The bank then uses the technique of compensable factors to provide certain criteria on the basis
of which the compensation of an employee is calculated. Each of these factors have their own
weights and are taken into consideration while calculating the final amount that is to be given.
At AU Bank, some of the compensable factors are:

Experience in a similar industry

Educational qualifications and certifications required

Complexity of work

Number of individuals under supervision

Client Interaction

Access to Confidential/Important Data

 The Compensable Factors for Managerial job family are as follows:

Compensable Definition Level I Level II Level III

Factor
1. Experience The total number of 1-3 yrs 3-6 yrs Above 6 yrs
years of experience in
the BFSI sector

2. Educational The degree and A Masters A Masters A Masters Degree

Qualifications qualifications Degree in Degree in in Management +
possessed Management Management + CA + CFA
CA
3. Complexity of The difficulty and Work that is Work that Work that requires
work intricacy of the work routine in nature requires some devotion of time
handled by an level of and thought due to
individual expertise and is high complexity
guided and stakes
4. Individuals The span of control of 0-5 5-15 Above 15
under the manager in the
Supervision office
5. Client and Frequency of Low Medium High
Customer interaction with an
Interaction external party
6. Access to Data The kind of data that Data pertaining Data related to Confidential data
the individual has to a small pool multiple that covers
access to of people branches branches falling
under a large
geographic zone

Competitor analysis
Average salary:

Bank Branch Manager Cluster Manager Regional Manager

HDFC 7.8 10 12

ICICI 8.2 9.5 11

Equitas Holdings P Ltd 7 10 11

Industry 6.4 8 9

AU 7.36 9.2 10.35

The salaries are in lakh per annum. They are approximate figures. Actual figures might be a little

different. For AU, the HR head, though did not divulge any figures, said that the salaries they

offer for the three roles are 15%-25% above the industry average. They do this to retain the best

talent. Hence, we have increased the industry amounts by the same percentage. The wide

disparity between different banks for the same position is due to a difference in their

organisational structure. Some have other levels between them, while others don’t. Also, there is

disparity between different roles basis the span of control in terms of geography too.

Job evaluation
The total Job Evaluation (JE) points as shown in the above table are in sync with the

organisation’s hierarchy. As observed the total compensation to be provided for a particular role

would be the points scored in (JE/total no of available points)* total compensation bucket. We

made certain observations one of which was that the JE points scored by a cluster manager in

Category A is more than the regional manager in category C which could create conflicts at a

later stage in the organisation.

Recommendations

According to our observation the different levels of management i.e. Regional, Cluster and

Branch Manager are being evaluated under the same umbrella and then are allocated different

points out of 100 due to which in some situations the compensation being received by a cluster

manager of a higher category region earns more than the Regional manager of a lower category

which breaches the seniority and other compensable factors, which might become an issue of

contention among the managers in the future and might lead to disputes, which would result in

low employee motivation. So, in our view the city wise difference should be reduced a bit so that

other compensable factors do not get trumped.