At
the outset, the Salaries and Remuneration Commission (SRC) made a big deal about
the ballooning wage bill for the public sector, but did little about it. After
painting a grim picture of the situation, the Commission launched a spirited
public relations campaign covering every county. It was not clear how the SRC had
arrived at the conclusion that the level of the public sector's wage bill was
unsustainable, or even how this had become the responsibility of the SRC to
worry about. The core mandate of the Commission was to set and regularly review
the remuneration and benefits for State Officers. Still, the Commission hit the
ground running, but, in the wrong direction!
First,
the SRC commissioned two job evaluation exercises to be conducted. One,
supposedly for the purpose of setting compensation and benefits structure for
the State Officers, and two, for the purpose of performing its second mandate -
that of advising the national and county governments on remuneration structures
for all the other Public Officers.
By commissioning
the two exercises, the SRC was repeating exactly the same mistakes that
occurred across the sub-Saharan countries in the 1980s and '90s, where wrong job
evaluation methods were adopted for the wrong purposes. Invariably, all failed
to produce desirable results.
In an email of
August 14, 2012, to the SRC, I made the following observations:
1)
Since
the era of the civil service reforms and restructuring in the sub-Saharan
Africa, (1980s/90s), country after country in the region, conducted job
evaluation exercises in an attempt to set up remuneration structures, under programmes
supported by the World Bank/IMF. None of
these efforts realized the desired outcomes!
2)
Revenue
allocation to different competing needs in the public sector, including appropriation
for the wage bill, is a factor of economic, fiscal, and other policy
considerations. It follows that the wage bill, and the salary base-line, must
derive from these considerations rather than from a job evaluation exercise.
3)
Job
evaluation, which the Commission seems to propose as the basis for remuneration
structuring, will not work. The purpose of a job evaluation exercise is to
eliminate or minimize disparities in a remuneration structure. It is also
important to note that a job evaluation exercise cannot be conducted
successfully across different entities of the public sector, and certainly not
in clusters, as your terms of reference for the Public Officers' job evaluation
suggest.
4)
The
proposed factor comparison methods, are designed for factory and operatives'
jobs, and not for salaried and executive jobs. Other robust systems exist that
are suitable for evaluating jobs at senior levels.
I further suggested that, the wage
bill in the public sector could be brought to manageable and sustainable levels
within a span of five to eight years, if the right approach was adopted. My
suggestion to the SRC was to consider adopting the following approach:
i.
Examine
the current distribution of remuneration packages (total wage bill) across the
public sector, and in collaboration with Treasury and other stakeholders,
determine levels at which the wage bill can be sustained. This should enable
the Commission to determine whether a ‘living wage’ (as has been done in some
countries) could be used as a basis for setting the minimum pay in the public
sector.
ii.
Get
all the stakeholders on board, as policy guidelines on salaries are agreed on, in
line with the assessed level of a sustainable wage bill.
iii.
Commission
an exercise on jobs rationalization (the need and the purpose for every job),
and a job audit exercise, where necessary, to ensure that the wage bill is for
actual, existing, and necessary jobs- (i.e. remove ghost workers from the
payroll, and eliminate unnecessary jobs).
iv.
With
the help of compensation/salary structuring experts, set initial minimum and
maximum salary levels for each of the entities identified in the terms of
reference (in the call for EOI).
v.
Incorporate
in the process, provisions for the forty-seven counties and deal with these after
the counties are fully constituted, functioning, and rationalized.
vi.
Job
evaluation exercises could then follow, as deemed necessary, for each entity in
the public sector, in order to remove, or minimize disparities in remuneration
structures.
It was a costly error for the SRC to start setting remuneration
structures using job evaluation exercises. After spending over a billion Kenya
shillings on exercises that can never be implemented successfully, the SRC has gone
a full circle! This time around, like in 2013/'14, the "ballooning wage
bill" is out of control, and unsustainable! The answer: cut salaries
across the board! A new approach? Dear SRC, be warned: It does not work that
way!
