Zimbabwe reviewing executive packages, cap unlikely to hold

via Govt reviewing executive packages, cap unlikely to hold | The Source April 23, 2014

Government is reviewing its move to cap public sector pay and working on a new salary structure, industry and commerce minister Mike Bimha said on Wednesday, amid skills flight fears and resistance by top executives.

Last month, the cabinet announced it had temporarily capped salaries and allowances for state enterprise executives and municipal managers at a maximum $6,000 per month after public outrage at revelations that some officials were earning over $500,000 per month in an economy where government workers are paid an average of $300.

On Monday, President Robert Mugabe said his monthly salary was pegged at $4,000 ‘because of hard times.’

However, a frustrated government has admitted that the enforced austerity had faced resistance from executives, and warned it could come up with legal instruments to give effect to the salary cap.

Addressing a business conference on the sidelines of the ongoing Zimbabwe International Trade Fair (ZITF), Bimha acknowledged that government faced an uphill task enforcing the pay cap and was working on a new salary structure for the public sector.

“By capping salaries you are demotivating the people who do the work. But this was not done to demotivate,” Bimha said, adding that a new salary structure would be benchmarked on competence and regional standards.

“(The capping) was done as a result of a crisis in some state entities; therefore government had to act swiftly. There is work that is now underway to objectively grade jobs and derive internal as well as external equity. In that regard, government will come up with a salary structure based on skills and qualifications. But before that, there had to be a cleanup exercise.”