It has been a real challenge for the public sector to
wade through the murky waters of remunerations and benefits through CBAs. To
complicate matters, the arbitration processes have been thrown into disarray by
the entry of the SRC into the equation, with little to offer. Furthermore, the
negotiations have been conducted largely without the input from industrial
relations experts, or other experts in the trade.
The courts have also had their share of challenges,
leaving the ordinary Kenyan a little confused. Three different court decisions,
reported in the media recently, attest to this.
In the first case, where the challenge was on the constitutionality
of Parliament in nullifying "certain gazette notices issued by the SRC, in
respect of earnings by public servants", a three-judge bench ruled that
the SRC had acted within the law, and Parliament needed to be "alive to
the objects and authority of commissions and independent offices (as) provided
by the law."
In a second case, a high court Judge ruled that:
"unions whose members worked in state corporations should know their
members are public servants and the SRC was constitutionally empowered to
regulate their salaries." This, notwithstanding the fact that the SRC was
empowered by law to: “set and regularly review the remuneration and benefits of
all State officers", but, to "advise the national and county
governments on the remuneration and benefits of all other public officers.”
Yet,
in a third case, on November 27, 2014, another high court judge made a ruling,
that the SRC had "no powers to determine the salaries and benefits of
parastatal workers." The Judge further observed that, "the SRC could
not meddle in the collective bargaining agreements (CBAs) that employees of
state corporations have signed with their employers".
I
stand to be corrected here, I don't believe that the teachers, doctors,
professors and the lecturers in public institutions, all fall under the State
Officers classification. But, as a job analyst, I will stick to what I am best
qualified to comment on.
In the
year 2012, the Salaries and Remuneration Commission (SRC) invited consultants
to submit expressions of interest (EOI) to conduct job evaluation exercises for
two job classifications in the public sector. The exercise for the first job category, was to evaluate all
the jobs classified as State Officers. The deadline for submitting expressions
of interest for this category was June 4, 2012.
The
other exercise, was for “all Public Offices (excluding State Offices) in the
national and county governments.” And to “include all jobs in, but not limited
to: Civil Service; Teaching Service; National Security organs; over two hundred
State Corporations; the Judicial Service; the Kenya National Assembly; Kenya
National Audit Office; Controller of Budget Office; Office of Director of
Public Prosecution; Constitutional Commissions; Statutory
Committees/Commissions/Tribunals and Public Universities.” The deadline for
submitting expressions of interest for this category, was August 24, 2012.
Something, unexplained, must have happened to
the second exercise, because, two years later, in August 2014, the SRC sent out
a fresh invitation for consultants to submit expression of interest to conduct
a job evaluation exercise for public officers. This time the exercise was to
“cover all jobs in public offices, both at the national and county governments
including other public institutions within the public service.” But, this time,
the SRC had “clustered the organizations into seven (7) broad clusters/sectors”
Unfortunately,
by embarking on job evaluation exercises, which the SRC was to use as the
baseline for setting compensation levels for the State and Public Offices, the Commission
committed the first error of choosing the wrong platform for the job. The
Commission should have instead, realized that setting pay levels, was a matter
of economic considerations, the prevailing community pay levels, the employer’s
fiscal policies, and the employer’s ability to implement and sustain a
manageable compensation structure. Job evaluation exercises were designed for
different purposes. The most important among them being to minimize or remove
inequalities in a pay structure. This process would usually be initiated by the
organization that elects to do it.
Even if we were to assume that a job evaluation
exercise could be used to determine the basic pay in an organization -
something it is not designed to do – there are some rudimentary rules that
should be observed to ensure that such an exercise was meaningful. For
instance, the affected organization, as the key stakeholder, should be fully
prepared for participation in such an exercise. The preparation process would
require:
1)
Internal
briefings and forming a job evaluation team (job evaluation committee) under a
qualified job analyst – often an external consultant
2)
Identifying
the range of jobs to be included in the exercise
3)
Selecting
an appropriate job evaluation method
4)
Training
the job evaluation committee. The members of the committee should be drawn from
across functions, and should comprise people who clearly understand the jobs in
the organization.
5)
Collecting
information about the jobs to be evaluated, analyzing the jobs and preparing
jobs descriptions. The job descriptions so prepared provide the main source of
information for the steps that follow in conducting the exercise.
Ignoring the above rules, will, invariably, lead to generating
expensive reports that are of little value to the organization. I am afraid to
say that, this is the state of affairs in which the public sector in Kenya, finds
itself, right now.
It should be remembered that, right at the
outset, the SRC was very concerned about the size of the wage bill for the public
sector. On August 14, 2012, I sent
an email to the Commission suggesting that, the wage bill in the public sector could
be brought to manageable and sustainable levels within a span of five to eight
years, if the right approach was adopted. I suggested the following as an
appropriate approach:
i.
Examine
the current distribution of remuneration packages (total wage bill) across the
public sector, and in collaboration with Treasury and other stakeholders,
determine levels at which the wage bill could be sustained. This should enable
the Commission to determine whether a ‘living wage’ (as has been done in some
countries) could be used as a basis for setting the minimum pay in the public
sector. This would provide the Commission with the necessary baseline for
calibrating the remuneration and benefits structure for the public sector.
ii.
Get all
the stakeholders on board, as policy guidelines on salaries were agreed on, in
line with the assessed level of a sustainable wage bill. (This is the stage
where the CBAs become crucial).
iii.
Commission
an exercise on jobs rationalization (the need and the purpose for every job),
and a job audit exercise, where necessary, to ensure that the wage bill was for
actual, existing, and necessary jobs- (i.e. remove ghost workers from the
payroll, and eliminate unnecessary jobs).
iv.
With the
help of compensation/salary structuring experts, set initial minimum and
maximum compensation/salary levels for each of the entities identified in the
terms of reference (in the call for EOI).
v.
Incorporate
in the process, provisions for the forty-seven counties and deal with these after
the counties are fully constituted, functioning, and rationalized.
vi.
Job
evaluation exercises could then follow, as deemed necessary, for each entity in
the public sector, in order to remove, or minimize disparities in the
compensation structures.
It was going to be a costly error for the SRC to start setting compensation
structures through job evaluation exercises. An offer to make a free
presentation on compensation structuring and job evaluation practices was not
taken.
To my mind, the SRC ‘s mandate was too pervasive to be
ignored. There was an urgent need to ensure that issues of remuneration and
benefits for the State and Public Officers were approached correctly, since any
adverse impact would affect the entire public sector, and, at a very high cost.
My thought was to approach Parliament with the idea of offering a one-day
workshop for a select number of people. But, again, "one does not have to
attend some workshop to understand some things!", was what I heard coming
out of Parliament.
Already, by the beginning of 2013, there were signs
that all was not going well. The claim by the SRC that the salaries announced in a special issue of the
Kenya Gazette Vol. CXV No. 33 of March 1, 2013, were based on a job evaluation exercise
results, was inaccurate. I pointed out the same to the SRC giving the following
reasons:
· A
job evaluation exercise must have full participation of all the stakeholders.
Both the National Assembly and the County Governments were not constituted at
the time when the exercise was supposed to have been conducted.
· A
job evaluation exercise cannot be carried out across different entities. It
follows then that a job evaluation exercise could not have been carried out
across the legislature, the judiciary and the executive offices under one
system, as reflected in the published results.
· The
factor comparison method, supposedly used by the SRC, was never designed for
managerial and executive jobs. It was designed for operative and factory jobs
· The
salary curves generated from salaries announced in the special issue of the
Kenya Gazette Vol. CXV No. 33 of March 1, 2013, did not conform to results of a
job evaluation. As a psychometric measurement, a graphical representation of a job
evaluation results, should follow a geometric progression, according to Weber's
law.
In a one-way
communication with SRC, I noted that:
Increasingly,
organizations have become complex and workplaces difficult to compare or draw
parallelisms between them. The complexity increases with the dissimilarities in
different entities, particularly where the entities may have little in common
in terms of strategies and operational objectives. It is, therefore, not
possible to conduct one job evaluation exercise across such entities. Yet, this
is what the SRC has attempted to do, and proposes, or intends to continue doing
with the state institutions/corporations in Kenya, for purposes of remuneration
and benefits structuring.
Furthermore,
state institutions/corporations in Kenya include those that are in business,
education and research; others are in services that have high economic and
social impacts; yet, there are others that are engaged in environmental
management, and agricultural enterprises, all these, among many others, have each, their unique systems of operation.
Classifying such an array of institutions in clusters for the purpose of making decisions
on remuneration and benefits is untenable and indefensible.
Failure to follow the 'rules of the game', in setting
remuneration and benefits for the public sector, could easily lead to
disruptive actions in a demoralized public sector.
Finally,
I am using the information, which appeared in the media recently, to drawn
graphical representations of the remuneration structures for Parliament, the
Judiciary, and for the Doctors. Among the three data sets selected, only the
Doctors' remuneration structure shows both minimum and maximum pay for each job
group.
I
will make only passing comment on the other two that don't show complete story.
And then attempt to analyze the remuneration structure for Doctors, to
illustrate the points I have tried to make here.
The
data source for the graphs – here below - is from the remuneration structures
published on February 7, 2017, by The Standard. Although several of the data
published had numerous errors, the three data sets will provide adequate
illustration.
The
first thing that is noticeable is that the percentage differences between
successive grades are all erratic. The salary curves themselves are difficult
to describe. For a job analyst, they simply appear CHAOTIC! There is no job
evaluation system that can explain the graphs. My analysis will be focused on the
compensation structures for the Doctors' jobs.
PARLIAMENT
JUDICIARY
Doctors:
As the salary curves for the doctors’ monthly income indicate, here below, something is seriously wrong. Even if one were to accept that a job evaluation exercise could be conducted for the purpose of setting pay levels in an organization – something it is not designed to do – still, it would be prudent to use acceptable systems, and rules. Otherwise it would be double tragedy to superimpose the results derived from a faulty system onto an already defective compensation structure. And this is precisely what the SRC has attempted to do in this case and for the whole of the public sector.
Now,
when a job analyst is presented with the above information, the first
assumption is that the information represents the current status of the
organization under study. The curve for the minimum pay should provide the basis from which to investigate the fairness of the compensation structure.
We can see that there are eight
(8) job groups for Doctors. The lowest earns KES 196,989.00, while the highest
earns KES 472,060.00 per month. We know that disparities exist in the structure
just by looking at the percentage differences in basic pay between successive
grades. One way of removing the disparities in the pay structure would be to
find the common ratio for a geometric series between the minimum pay, for job
group L and the minimum pay for job group T. The equation for the geometric
series in this case is:
Where the last term in the equation is KES 472,060, and the first term (a) is KES 196,989, where r is the common ratio. By solving the equation for r, we get 1.13 as the common ratio for the geometric progression. The equation for this calculation is:
It is important to underline the importance of involving all the stakeholders in a job evaluation exercise, as would be the case for CBA. Failure to meet this condition removes the ownership of the process from the stakeholders.
Doctors
The
salary curves would look different if the compensation structure was designed to
incorporate pay for performance. In this case the salary curves would be three,
with the middle curve representing, an acceptable, average performance level. This
decision varies from organization to organization, and the organization's competences in managing
performance for productivity rather than for punitive purposes.
In
conclusion, it is important to note that, the public sector will have to built
adequate internal capacity in compensation structuring and job evaluation
methods, if the sector expects to succeed in the elusive area of job
evaluations and compensation management.
For
now, the SRC needs to get back on track and put its house in order. In the
meantime, the public sector has few options open outside the CBAs, for getting
just and fair compensation structures.
Footnote
Thankfully, the Doctors
are out of jail. After all, “The law
is an ass”.
There are still lessons to be learnt from Oliver Twist (1838), by Charles Dickens. "Mr. Bumble, the unhappy spouse of a domineering wife, is told in
court that ‘…the law supposes that your wife acts under your direction." Mr. Bumble does not
understand how the law can possibly hold him accountable for any crime
committed by his wife. Yet, the law holds him responsible!
"If
the law supposes that,’ said Mr. Bumble, squeezing his hat emphatically in both
hands, ‘the law is a ass - a idiot".
Indeed, who would have
expected to see a stand-off between the Judicial Service Commission (JSC), and
the Salaries and Remuneration Commission (SRC)? Yet, the law permitted it. In
this case, was, or, wasn't, the SRC overstepping its mandate in encroaching on
matters that did not concern it? Nevertheless, the protagonists had to make their
arguments in a court of law to get a ruling on whether the SRC could 'meddle'
with the sitting allowances for the members of the JSC. Well, "the law is an ass". Whichever way the ruling, it must be obeyed! Again, wading through
murky waters!
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