This has been confirmed in a new report by Industrial Psychology Consultants. It says most company executives are earning a monthly salary of between $16,000 and $20,000 at a time other employees in the same companies are getting as little as $250.
This is widening the rich-poor gap. You do not have to possess a degree in economics to know that an economy characterised by such a wide rich-poor gap is skewed and sick. It means that wealth is unjustly distributed and the socio-economic equation is unbalanced. In addition, the top-heavy salaries affect production and ultimately negatively affect macro-economic performance.
Worse still, the huge salaries and perks that these executives get are not based on performance. In this regard, a loss-making company continues to pay an executive as much as $40,000 while the majority of employees go for months with nothing.
Most of these companies have too many managers earning massive salaries. This inflates the wage bills, drives up company expenses and thus affects operational sustainability. In the end, the company faces collapse and to save their skins, those at the top use this self-induced unsustainability as an excuse to retrench the already suffering workers.
We saw this happening at ZBC and PSMAS where Happison Muchechetere and Cuthbert Dube earned stratospheric salaries while other workers went for long months without getting a cent. While these two individuals have since been removed from their jobs, the trend continues, showing how selfish top management and employers are.
It is therefore vital that government should urgently engage in tripartite processes with labour and employers to establish a salary code. This code should address numerous issues, among them aligning salaries to worker performance and company balance sheets.
It must also set out models of remuneration that ensure that the gaps between levels of employee salaries are not too huge. This is vital for company stability and therefore performance – not to mention economic survival. Companies where there are huge disparities between employees are likely to be theatres of industrial action as disgruntled workers down tools and disrupt operations.
In addition, the code must provide for a tripartite monitoring committee and, ideally, must lobby for a law that ensures that the gaps in salary are justified and fair.
In the public sector, there is need to tighten screws so that executives do not have access to allowances and perks without a good reason. While guidelines in the public sector already exist and there is a new cooperate governance code, Zimcode, these instrument have been abused by greedy and selfish individuals. What is needed is some mechanism to ensure proper and effective implementation of existing provisions and boost them through a new salary code.Post published in: Editor: Wilf Mbanga