According to LIC sources here today, the proposals were placed for discussion before the unions last month. The unions included the All India Life Insurance Employees Association and the Federation of Life Insurance Employees' Union.

The unions, during their meeting on March 16, rejected the concept as being `too futuristic' for the insurance industry and that it would not be accepted by the employees.Sources in the unions said "we want the wage revision to be done as it has always been, that is, across the board", adding that rewards could be given based on performance or productivity.

Union sources said they had no objection to productivity per se but it should not be linked to their wages.

HH Farooqui, executive director of LIC, said they were discussing the proposals with the unions, who were asked by themanagement to submit their recommendations. However, according to the unions, the management had still not responded to their rejection of the proposals.

"Recently, we wrote a letter to the management, but they have not reverted to us," union sources said.

The managements of LIC and General Insurance Corporation (GIC) are both engaged in an exercise to de-link their wage structure from that of the banking sector and have the tacit approval of the union finance ministry to introduce a productivity-linked structure.

The formula, proposed by LIC, depends on three basic parameters -- the sum assured, number of lives insured and the premium income.

The premium income is again a function of the total business brought in. Interestingly, the formula proposed by LIC differs from that being worked out by GIC, in the sense that while LIC takes into account only the end result, GIC is also factoring in the means -- that is the contribution of each employee to the efficiency or productivity of the unit.

LIC alsofocuses on the total growth of the organisation in terms of business volumes in order to gauge productivity.