The drastic action taken by the Government over the maximum pay for heads of local authorities and those parastatals and state entities that receive tax-payers’ grants or subsidies can only be a temporary, while necessary, measure while the comprehensive salary structures are being crafted.
Some of the salaries above the US$6 000 a month maximum might well be justified to attract and retain the sort of person needed to head a particular organisation. But the critical criterion is “justified”, and justified to hard-headed outsiders and the public, not to a group of insiders all in on similar deals in other public organisations, something we have seen in recent months as the whistleblowers became busy.
One size does not fit all. The head of a large and complex organisation that has a clear, fair and transparent remuneration policy might well need to be rewarded more highly than the head of a small, fairly simple organisation. The point is that the criteria, if public money is being used to pay the salaries in full or part, must be the sort of criteria that most members of the public would agree are fair.
But as the comprehensive salary structures are being crafted, we hope those doing this work will retain one critical concept that the Government has also brought onto the table, the need for modest gaps between pay grades.
When we look at the outrageous examples we have seen in recent weeks, we notice that there were usually huge pay gaps between the CEO and even the deputy head of an organisation, with those even moderately lower down, but still holding highly responsible managerial or skilled posts, paid very little.
The inequality that resulted was even more damaging than the actual looting. People will put up with a lot, so long as they know that the suffering is shared and that success will also be shared.
This rising level of inequality is a problem in many other countries, not just Zimbabwe. But the most successful economies tend to be ones with lower levels of inequality. Germany is frequently touted as the economic powerhouse of Europe, and it has this position for several reasons, including a decent education system, proper industrial training, highly innovative businessmen, and a passion for quality.
But one major secret for the German success, and the German miracle when that country climbed out of the bombed ruins of a lost world war, was a willingness to share suffering and share success. The boss of a good medium-sized German company might earn less than 10 times as much as the man who brings him his tea. The boss might drive a Benz to work, but his junior staff can afford to drive Volkswagens.
So the committee crafting pay scales has to look not just at the top post, but also at the bottom post. If a viable organisation can afford to pay its CEO US$15 000 a month, then it should be able to pay the person on the lowest rung well over US$1 000 a month. If it cannot meet that figure then it cannot meet the top figure.
This sort of calculation is fairly easy for State entities that generate revenue. It becomes harder for those who rely heavily on tax money. But even here it should be possible to create pay scales that are fair, transparent and are justified on the skills, experience and general competence required to fill a particular post. And these scales need to be more public than before.
The Government has shares in a number of profitable companies listed on the Zimbabwe Stock Exchange. These were not included in the list because they are run on different lines. But these companies have to present annual accounts promptly, have to have a very thorough audit, and have to indicate in their accounts the total remuneration paid to executive directors, in other words the top bosses. This is why these entities present so much less of a problem. Everything is out in the open, everything is checked, and some hard-headed outsiders query everything.
And let us not forget, that most organisations on those lists were not headed by men and women earning totally outrageous salaries after looting the till. Assuming the salary schedules we published yesterday were not doctored by the CEOs before submission, some CEOs in fact seem grossly underpaid.
We do not have to destroy the good to chop away the evil.