Productivity vs remuneration

HARARE - Our current economic situation presents a case peculiar to us alone.

We have experienced a situation and travelled a journey unique not only in Africa but the world at large.

Imagine the years of economic strife.

As a result, our industry is facing serious productivity challenges.

For the past decade, the call to maximise productivity has reached alarming levels.

The greater part of the country’s private sector is pushing for productivity-linked wages.

Against this backdrop the key question then becomes: What should start productivity or increased remuneration?

This war between the employer and the employee has been like the proverbial egg and hen argument.

Key to all this, though, is for all partners to appreciate that productivity matters the most. All stakeholders should ensure that employees at individual level produce to expected standards. This is the reason why in most companies the focus has now shifted to productivity-linked wages.

According to  a local human resources consultant, the topic of productivity measurement in Zimbabwe has been under discussion for over 25 years now.

But despite the fact that the issue has been under the radar for such a long time no concrete framework has been put in place to implement this model which maybe is the best for our economy.

The lack of progress is partly due to the lack of coordination by the social partners and lack of know-how on the practical implementation of such a model.

The fact that most companies at the moment cannot meet the Poverty Datum Line related wages due to the liquidity crunch facing the country is real and all stakeholders should come to terms with this harsh reality.

There was a collective bargaining summit in 2014 where employers’ representatives, NECs and unions agreed that productivity-based remuneration was the way forward though there was need to incorporate some elements of status quo.

In my own view it is crucial for companies to design a remuneration model based on productivity levels.

While NEC negotiations are crucial, minimum basic salaries depend on individual companies’ level of productivity.

Where possible, companies should reward their employee above the stipulated NEC rates to harness their individual commitment.

Other companies in certain NECs are applying for exemption by virtue of poor performance, yet others are marginalising their workers through failing to award salaries above NEC rates yet they are able to do so.

What is critical is that remuneration planning is really concerned with retaining employees and deriving income by remunerating employees in such a way that motivates and encourages them to achieve their goals.

Notably for Zimbabwe, effective remuneration planning is therefore not just about paying employees but about rewarding employees for services rendered.

This may result in the need to attract, retain and motivate employees to ensure productivity takes place.

The urgent need for productivity-linked wages is not only important for the private sector but also for the public sector where the government has introduced the result-based system as a way of bringing accountability.

While it may be hard to ascertain the contribution of certain individuals, energy should be refocused towards productivity. Organisations are not charity institutions; they thrive on productivity.

Remuneration should correspond directly to the levels of performance.

Workers should analyse business trends of their companies before they demand that which they deem reasonable.

*Gauya is a student at Midlands State University (MSU). She writes in her personal capacity.

    Comments (1)

    The minimum wage is already set at too high a level such that many companies cannot afford while others are just managing. The minimum wages are set at too high a level without reference to productivity. The incentive scheme could work well, if the minimum wages were set low. But if the basic wage is unaffordable then the incentive will not work.

    Tom Vakai - 27 February 2015

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