The SRC has come full circle!

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!