Gnashing, grinding of teeth for heads of State entities

via Gnashing, grinding of teeth for heads of State entities | The Financial Gazette by Maggie Mzumara 27 Mar 2014

ALL of a sudden the plush jobs are not so plum anymore. The pickings no longer as rich.  From a mountain top of US$15 000 all the way up to US$40 000 and an incredible US$500 000 a month to tumble down in free fall all the way to a valley of US$6 000 package per month, Zimbabwe’s heads of 181 parastatals, State enterprises and local authorities, the country’s crème-de-la-crème will now, like the majority of their compatriots, know what it means to eke out a living from an income that is just but a zillionth of one’s needs.

For sure, there is going to be the gnashing and grinding of teeth if indeed the stipulation by the Cabinet Committee on State Enterprises and Parastatals Development that the highest paid heads of these entities (on job level 1) earn a total package of salary and benefits of not more than US$6 000 per month. But let the nation not be fooled; announcing the directive is just but a barren start.

The proof of the pudding in this salary melee is in the implementation. Enforcement is also critical. How the Cabinet committee chaired by Finance Minister, Patrick Chinamasa, will ensure compliance is crucial going forward. Practicability — how practical the rationalisation of these salaries and benefits is — is also another critical aspect.

While many from the coal face of poverty have welcomed the announcement with both glee and malice, those affected are squirming in their ivory towers of opulence.  After lounging in plenty in the midst of poverty, they are now losing sleep at night over how they will maintain the lifestyles they were used to.  Will they manage to keep children in those same CHISZ schools — the Ivy League version for Zimbabweans?

Or whether the children — spoilt and pampered by the fat fleeced off taxpayers’ sweat — might have to find themselves sharing desks with some dusty poverty-stricken children at some St Nyoka School at the back of beyond. From wheeling trolleys full of gourmet goodies, will we see them slugging up baskets full of the bare necessities?

While the US$6 000 a month would be a windfall for the ordinary Zimbabweans, who have lived with poverty as a constant companion since the onset of the country’s economic meltdown in the 90s, for the heads of the state entities it will be a nightmare coming down with a such thud from the steep five-figure — and in the case of Cuthbert Dube of the Premier Service Medical Aid Society six figure — earnings. For sure, there will the gnashing and the grinding of teeth.

Riding on the back of the sky-high remuneration, some of the chief executives had taken new loans; others had enrolled their children in schools overseas; yet others were in the middle of building houses or other commitments not very easy to slide out of. Unless they had prepared nest eggs for a rainy day, servicing of loans and other commitments hangs in the balance.

However, as the announcement of the new salary structure for parastatals, state enterprises and local authorities last week Tuesday sinks in, there are a number of key questions that beg answers.  A critical one being how will it all be implemented considering, particularly where the executives had legally binding contracts?  Also, nagging are questions on whether the chief executives will take it lying down? Or will they try to contest it? Or flee from the jobs?

Although Members of Parliament, who themselves have been waging a relentless pursuit of the salarygate perpetrators, have scoffed at it, there is the likelihood of skills flight, as the executives in the jobs may now find them very lacklustre and opt out.

“In terms of human capital, we are endowed with that and I speak about this with pride that there are people in this country who are looking for these jobs,” smirked Temba Mliswa, MP for Hurungwe West, who has been very vocal about the obscene salaries and corruption prevailing in state entities. Another possible backlash could be litigation. Some corporate law experts have warned of possible lawsuits emanating from this; while others have a feeling to the contrary.

“From a purely legalistic point of view, where there is a valid contract, the employer cannot unilaterally review the contractual agreements,” lawyer Jonas Dondo said.

“But then in this situation, one has to ascertain whether or not there were contracts in the first place.  Some of them might have been cases of just instructions issued out that give so and so, so much.”

However, whatever the case, Dondo said, “From a moral point of view, these guys knew that what they were doing was wrong.  So they may not have the spine to take the issues up. Also most of these people are career chief executives so may not be willing to fight government. I really doubt they will take the issue up.” Chinamasa is unswayed by concerns for lawsuits being filed.

He said, “That is the least of my worries as a lawyer. I would want to hear on what moral authority anybody would stand up to challenge this.” There are, however, others who feel that although welcome, the reduction of salaries and benefits, do not address the root cause of the fleecing of public entities by their heads.

“This is merely dealing with the symptoms,” said Bradwell Mhonderwa, a behaviour analyst and ethics coach.

“By reducing the salaries, the government has not addressed the malpractice. The reduction helps to build confidence in the operations of these entities in particular and government in general, but there is need for behaviour change.” Mhonderwa added: “To achieve this, government needs to devise behavioural management processes that will inform these leaders and their staff.

“These can be a framework of ethics which can then be enforced, over and above the corporate governance code, which these entities were supposed to already have adopted. If that framework is there staff can raise a red flag if anything is going wrong.”