DHI gives 24.5 to 32 percent pay hike to maintain 15 percent edge over civil service

The catch is that the performance based allowance has been increased

In what will be welcome news for 6,627 employees  of Druk Holdings and Investment (DHI) owned companies, the DHI board has approved a pay hike of 24.5 percent to 32 percent.

The hikes have been applied in a staggering manner so that the higher graded or salaried staff gets a lower hike with the highest hikes being kept for the lower grades.

The hike comprises mainly of a flat 23 percent corporate allowance for everyone.

It then has smaller hike of 8.5 percent to 1.5 percent hike on the basic salary. Here, the higher grade employees will get a smaller percentage with the highest grade getting only 1.5 percent while the lowest grade gets the full 8.5 percent.

The majority of the DHI employees who are junior and mid level will fall at the 8.5 percent to six percent hike category. The senior employees and management will fall in between the five percent and 1.5 percent level.

The annual implication of the hike will be around Nu 426 mn. Unlike the civil servants and state owned enterprises (SOEs) whose hikes are applicable from July 2014 the DHI pay hike will be effective only from January 2015.

There is also a catch in the pay hike, whereby the performance based allowance has been increased from 10 to 15 percent. This allowance is based strictly on allowance and employees are only entitled to it if their company, their departments and they themselves do well.

Earlier the pay structure before the hike was a five percent corporate allowance which everybody would get and then a 10 percent performance allowance depending on the individual and company performance. This 10 percent was paid only at the end of the year after an annual evaluation. So only if an employee did very well and met all goals then he or she would get the full 10 percent. On the other hand there were cases of entire companies not getting the 10 percent at all due to poor performance.

So, this means that while DHI employees will still get 15 percent higher salaries then civil servants the entire 15 percent will be subject to performance and only those doing well will get the full allowance.

The DHI Chairman Dasho Sangay Khandu said, “The DHI established a pay committee in September 2014 to propose the pay for DHI owned companies and a recommendation was sent to the Chairmen of all DHI companies’ boards. They made some changes and recommendations and the final report was then approved by the DHI board on Tuesday.”

The board had three options from which it chose the current one.

The chairman said that hike will not affect the pay of CEOs and senior management staff of DHI and DHI companies as they are all on contract.

Director of DHI Corporate Performance Department Damber S. Kharkha said that after the civil service pay hike the civil servants on an average were getting 12 percent more than DHI employees. He said added to this was the need to maintain a 15 percent gap for corporate employees.  This meant that DHI salary hike on an average needed to be around 27 percent in total.

The DHI owned companies who will be covered by the hike are Bhutan Telecom, Bhutan Power Corporation, Druk Green Power Corporation, Druk Air, Natural Resources Development Corporation, Dungsam Cement Corporation, Thimphu TechPark Pvt Limited, Construction Development Corporation and Wood Craft Center. The Bank of Bhutan which is a DHI Controlled company with 80 percent shares will also be included in the hike.

The hike will mean that the annual DHI Companies salary Bill will increase from Nu 2.115 bn before the hike to Nu 2.541 bn after the hike.

Meanwhile the Ministry of Finance on 16th February gave guidelines for a 19 to 25 percent hike in state owned enterprises like Food Corporation of Bhutan, Bhutan Broadcasting Service, Kuensel Corporation, National Housing Development Corporation, Bhutan Agro Industries Limited, Bhutan Development Bank Limited and National Pension and Provident Fund.


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