Do AIB employees finally have a little to cheer about?

Morale within AIB has been at a low ebb since the crisis really took hold two years' ago.

As well as the long-term threat of redundancy - the 2,000 cuts announced in April have still not been finalised - and cancelled bonuses, the bank had been overlooking its existing staff for promotion whenever a more senior employee departed, according to sources.

Instead, the bank had looked to recruit externally, due to its ongoing policy of not offering pay rises or promotions to existing staff, which had meant growing frustrations among the rank and file employees. From a recruitment point of view, however, this had meant a steady stream of roles coming out of the bank.

Recently, though, things have started to change. Since AIB implemented the new structure announced in May - when it launched three new units; personal & business banking, corporate and institutional banking and commercial banking - it's also started to recognise the contributions of its employees.

Over the last couple of months, our sources suggest, the bank has suddenly been open to the idea of formally promoting its employees - particularly those who have taken on extra responsibility over the last couple of years without the job title to match.

"AIB has recognised the importance of attempting to retain key staff during a period of upheaval," suggests one source close to the situation. "Obviously, it's not going to keep everyone happy, but it will certainly improve morale a little."

AIB tells us that it has been hiring "where we have a skills requirement", and that looks to "to recognise the added responsibility that staff have taken on or will take on, to ensure the bank can carry out business as usual".

Any pay rises will be considered on a job by job basis, it adds and "in the context of market norms for similar positions".

Still, while this can be considered an encouraging development, few AIB employees will feel reassured until the redundancy scheme is finalised. Currently there's still an ongoing wrangle between the finance union, IBOA, the bank and the government around the type of severance package that will be offered.

The IBOA is believed to be pushing for similar terms to the Ulster Bank job cuts in 2009 - 7.25 weeks' pay for every year of service, plus a retraining grant of over e9,000. This is ambitious; even during more buoyant times, redundancy schemes in the Irish banks came in at six weeks pay plus the statutory minimum and they have been getting less generous more recently.