Sixth CPC Report: (iii) Concepts of Pay Band, Grade Pay , Performance Linked Incetives

The Sixth Pay Commission has brought about certain significant changes in the pay fixation methodology. The newly introduced concepts are (i) Running Pay Bands (ii) Grade Pay (iii) Performance linked incentives.  The concept of running pay bands although familiar to Armed Forces is proposed for the first time in respect of civilian employees. Running Pay bands were earlier recommended for Armed forces by Fourth CPC but were again replaced with regular scales by Fifth CPC. The Commission has attempted simplification of pay structure by reducing the number of pay grades to 20 against the prevailing 39 scales.

These reduced numer of pay scales (now referred as grades) have been clubbed together to form several distinct pay bands named as -1S,PB-1,2,3,4.    Pay band -1S (Rs. 4400/--7400/-) corresponds to Group D scales marked as S-1 to S-3 by the Fifth CPC . The Commission has recommended gradual absorption of such employees in Group C posts and also recommended that no further recruitments be made in this scale of pay. The Scale would thus be phased out with passage of time. It has 3 grade pays in it’s span. 

The next Pay Band PB-1 (Rs.4860/- -20200/-) covers the Group C Scales which were classified  by fifth CPC as S-4 to S-8. PB-1 has 5 distinct pay grades within it. 

 PB-2 (Rs.8700/--34800/-) covers the Gr. B employees ( S-9 to S-15 Scales of Fifth CPC).  It includes 4  pay grades within it.

 PB-3 (15600/--391000/-) is the Pay Band corresponding to Group A services and has  a total span of 32 years. The old scales covered by the Band are S-16 to S-27. It has total of 8 grades embedded in it’s span. 

PB-4 (Rs.39200/--67000/) corresponding to Super time Scale covers S-28 to S-32 Scales of Fifth CPC and has 3 distinct grade pays corresponding to various stages of movement of the employee. 

Apex Scale (Rs.80000/-) corresponds to erstwhile scale of S-33 which is the pay Scale designated for officers of the rank of Secretary Govt. of India. The Cabinet Secretary’s Scale (Rs. 90000/-) corresponds to S-34 Scale of Fifth CPC. 

The Commission expects that the concept would lead to elimination of hierarchies and weed out several pay scales which had lost relevance. The concept of a continuous pay band would obviate anomalies which are generated at the various stages of pay fixation . It would also prevent stagnation in those cases where an employee has reached the maximum of his pay scale. It has been pointed out that when the recommendations of the Fifth CPC were implemented several employees reached the maxima of respective pay scales immeadiately. such a situation is required to be averted. In the proposed system any officer reaching maximum of Pay Band would be automatically rolled over to next Pay Band subject to the condition that the original grade pay would not change unless the official is formally promoted to higher Pay Band.   The Commission has tried to maintain the increase in scales to the approximation of 74% which is the % increase of DA which was admissible on 1/1/06 in the pay scales of Fifth CPC. 

Concept of Grade Pay:-In order provide fitment benefits in the new pay scales and also to provide for a hierarchy based structure for the various Pay bands the Commission has introduced the concept of grade pay. The grade pay for various stages have been fixed on basis of the span of original pay scale covered as well as the nature of the Fifth CPC  pay scale of the beneficiary. The grade pay has been fixed in the range of 40% of the maximum of the pre revised scales (of Fifth CPC). It would change in course of time when a promotion takes place within the pay band or to the next pay band. It would also help in earmarking posts against different grades depending on the job requirement. The Grade Pay would also be taken as part of the pay for calculation of allowances including DA. 

Performance linked Incentive Scheme have been conceived for PB-3 which covers the group A Services . The scheme suggests a higher rate of increment (3.5%) for good performers against standard rate of 2.5% per annum. It has been suggested that not more than 20% officers in a cadre should be covered with the higher increment category. The Commission considers this to be an innovative measure for promoting efficiency in Services. 

Other innovations : The Commission has maintained a ratio of 1:12 in the minimum to maximum salary. It has also suggested that henceforth all increments be released on 1^st of July.