Salary disparities widen – Sunday Mail

via Salary disparities widen Sunday, 12 January 2014 by Enacy Mapakame Sunday Mail

SALARY gaps between executives and shop-floor workers continue to widen for a third consecutive year, climbing 7,8 percent in 2013 amid growing disgruntlement among the lowly paid employees seeking a pay rise to match the poverty datum line.

In 2012, the pay gap expanded 8,5 percent and is up more than 17 percent since 2011, as incomes for most ordinary workers have remained stagnant with employers citing low productivity as the major reason affecting incomes growth.

A salaries survey by a Harare firm, Stallone Consultancy, indicated the average ratio for highest paid executives and employees increased to 1:55 in 2013 from 1:51 in 2012. The ratio for 2011 was 1:47.

This means that, on average, one top manager in any Zimbabwean company earned 55 times more than any ordinary worker in 2013. For instance, if a factory cleaner’s monthly income is US$100, the production manager will be taking home US$5 500 — an amount the cleaner would earn over four and half years.

Low incomes among the blue-collar workers affect morale, and effectively results in slowed company productivity and profits.  Wide salary gaps create outright resentment for top managers and could lead to strikes, said the Stallone Consultancy survey.

The consultancy said the agriculture sector paid the lowest salaries ranging between US$65 to US$70 while the banking and telecommunication sectors remunerate salaries close and above the PDL.

Bank executives earned between US$7 000 to US$8 000 last year while managers in parastatals, medical or insurance companies as well as those in hospitals earned as much as US$6 000 and US$7 000 per month.

Executives in the manufacturing and mining sectors pocketed between US$4 000 and US$5 000 respectively. Stallone Consultancy managing consultant Mr Zack Murerwa said organisations have been moving towards results-based remuneration for their executives, which contributed to the widening salaries gap.

The boom in the mining sector in recent years, however, did not reflect on the salaries and wages of employees.
“We hoped the growth in the mining sector would bring an increase in the salaries, this is not the case. Most of them have services within mining complexes such as schools and hospitals,” he said.

Mr Murerwa urged for a back to basics model of addressing issues affecting the salary impasse between employers and employees in a stagnant economy badly affected by low production, low investor confidence and a biting liquidity crisis.

This is opposed to pressures exerted by employees calling for wages that are in line with cost of living and PDL. But Mr Murerwa argued this would only heap more problems and debts on the employer.

“If companies are to pay everybody according to PDL, this will not work but only worsen the situation, people must learn to address the proper fundamentals. Right now some companies that are still open are only in survival mode,” he said.

“For anyone to negotiate you should be productive, this is what is lacking on the bargaining table.”
He added that despite the “obscene” salaries reported in some sectors, it was important to note the country’s tax structure is too high and the same executives would take home only half of their salaries with the remainder going to the fiscus.

In post-budget meetings held in the capital recently, employers from different sectors also called for results-based salaries, and Mr Murerwa concurred this should start with executives and cascade down to the least paid employee.

In the debates for salaries, labour laws have been cited as too favourable to employees at the expense of the companies’ survival. Some economists have called for reviews of the laws.

Other laws have been described as outdated and repelling investment.  However, Finance Minister Patrick Chinamasa assured the nation while presenting the 2014 National Budget that Government would review some legal frameworks in order to attract investments.