Delay in AI's HR integration affects merger completion: CAG

The delay in integration of human resources has been "critical impediment" to the completion of Air India's merger, a government audit body has said.

"HR integration below the Deputy General Managers (DGM) level -- pilots, engineers, and other staff representing 98% of the total employees -- of erstwhile Air India and Indian Airlines has not yet taken place," the Comptroller and Auditor General said in its report tabled in Parliament today.

Terming it 'critical impediment to the merger', the CAG said pay and allowances, seniority, promotions and transfers had still not been harmonised.

"The key issue with regard to HR is not one of job security or protection of compensation/perquisites, but one of perceived disparities between employees of the erstwhile separate airlines," the report said, adding this needs to be handled swiftly, if the merger of Air India and Indian Airlines is to be a success.

The CAG also suggested restructuring of payment of performance linked incentive (PLI) which is being given as part of the salary to the employees.

"PLI should focus on On-Time Performance (OTP), as this is the most critical parameter in the airline industry, from the service perspective," the report suggested.

The structuring should be such that different categories of employees do not get incentives merely for completing activities within there limited sphere of work, without considerations of how such work contributes to the overall
efficiency of the organisation, it said.