Productivity Based Remuneration

J.W. MufukareExecutive Director, EMCOZ

Parastalgate• Could PBR have prevented Parastalgate?

• If the parastatals were paying people based on productivity all of them would be very profitable and productive. If they had been using a productivity based wage model they would be a very high positive correlation between earnings and performance of the organisation. In this case salaries are high but performance is negative. They would never have been in this situation if wages and salaries where based on productivity.

• The productivity based wage model is the best for this country but we need politicians to start speaking in productivity terms for this to succeed.

IN THE BEGINNING

• Genesis 3:19– AND THE LORD SAID:• “In the sweat of thy face shalt thou eat bread…”

Buddhism

• To be idle is a short road to death and to be diligent is a way of life; foolish people are idle, wise people are diligent.

• Buddha•

Read more at http://www.brainyquote.com/quotes/quotes/b/buddha118312.html#DDgvOQHdHGuDDQ2m.99

ISLAM

• Prophet Muhammad (peace be upon him) was asked what type of earning was the best, and he replied: “A man’s work with his hands and every (lawful) business transaction.- Reported by At-Tirmidhi, Hadeeth.

•

Read more: http://islamic-quotes.com/post/16385025401/prophet-muhammad-peace-be-upon-him-was-asked#ixzz2lDfXEQAk

IN ZIMBABWE?

• AS A NATION DO WE BELIEVE IN “SWEATING FOR OUR BREAD”?

• WHAT OF ENTITLEMENT?

• HOW HAS THIS AFFECTED OUR COMPETITIVENESS AS A NATION?

The Vicious Cycle

Low Aggregate Demand

High Cost

Low Wages

Low Capacity

How to implement

• Remuneration positively correlated to Company Performance

• We have on the table at the moment ;– No increase.– All companies implement a productivity bonus scheme of for

every 1% increase in standard monthly production, 1% of monthly wage as bonus ie 10% extra productivity, 10% extra wage.

– All new employees come in at 30% less current minimum.– All new employees have a productivity bonus of 2% of monthly

wage for each 1% of increase in productivity.