23 November 2012

Zimbabwe: Perfomance Based Salaries Will Motivate Managers


The action taken by Government to have the salaries of bosses of parastatals cut is a welcome development that has been long overdue. For a long time the managers have been earning salaries

of between US$15 000 and US$20 000 a month, figures that were not commensurate with the level of performance of the parastatals.

It is common knowledge that most parastatals are struggling to the extent of failing to pay their workers yet the bosses continued to earn outrageous salaries in an economic environment where liquidity crunch has affected so many companies.

The crux of the matter is that there is no justification whatsoever for parastatals that are in the woods and failing to breakeven, let alone make a profit, to continue fattening the pockets of the bosses. Those that are performing well can obviously be excused and can pay high salaries.

We are shocked to learn that in this difficult economic environment where the dollar is difficult to come by there are still parastatals paying absurdly high salaries.

We would have thought that with the introduction of multi-currency in 2009 most companies would have adjusted their salaries to reflect the strength of the new currency yet most seemed to have continued pegging their salaries against the rate used in the Zimbabwe dollar era.

If the performance of the parastatals warrant very high salaries then surely let it be, but we begin, like everyone else, to worry when it is only the bosses earning that much when the company is sinking and the rest of the employees go for months without pay.

There are so many parastatals that are struggling to perform in this current economic environment where lines of credit have become difficult to get because of illegal sanctions imposed on the country. It becomes even more worrying when the bosses illegally award themselves salary increments without seeking approval from line ministries.

The motive becomes quite clear that we have people in positions of authority only worried about themselves and no one else.

We would have thought that the bosses' focus would be on bringing their companies back to viability and crafting turnaround strategies before putting money first. We believe this is the true making of real leaders. They do not place themselves ahead of everyone, but derive great satisfaction in seeing those they lead being happy.

We thus want to applaud the Minister of State Enterprises and Parastatals Gorden Moyo for taking the bull by the horns and cutting the salaries to US$5 000 a month. There is always need to adhere to set parameters where salaries are pegged between US$3 000 and US$5 000 a month.

In this current environment the US$20 000 a month salaries were not sustainable at all and it really beats us how the bosses illegally awarded themselves such high salaries.

We are sure most parastatals have boards of directors that approve salaries for top executives and how they agreed to such hefty salaries remains a mystery to us.

It is, however, encouraging that Government is now developing a comprehensive remuneration policy not just for the chief executives, but for the entire sector. There is no denying the fact that parastatals are key drivers of economic growth and that they should at all times maintain good corporate governance.

Indeed there is a need to have a policy that spells out the salary framework for all the people working in State enterprises and parastatals.

We believe the salaries for top parastatal and State enterprise bosses should be performance based and not ordinarily fixed.

Salaries that are based on performance are a catalyst to bringing out the best in the bosses, they help them think outside the box and spend more time thinking of strategies to drive the company forward, knowing fully well that their failure also extends to their pockets.

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