Measuring Productivity And Public Sector Remuneration

Nigerian workers during a solidarity march.

The issue of minimum wage is one of the topics that have taken centre stage in many discussions in the country recently and many have argued for and against its increase with the arguments for its increase overriding that of maintaining the status quo.
As a result, the Federal Government decided to set up a tripartite committee to look into the matter and agreed to demand by labour to pay a new national minimum wage of N30, 000 while the state governors are still dragging their feet about the matter.
To buttress the importance of the implementation of the newly negotiated minimum wage, the two legislative chambers promised that the National Assembly would give the minimum wage bill accelerated hearing and passage.
On the economic aspect, Mr Godwin Emefiele, the Governor, Central Bank of Nigeria (CBN) also said that increase in the minimum wage would have an effect on the economy.
He had said at the November Monetary Policy Committee (MPC) news conference that the committee believed that, given the negative output gap, the proposed increase in the national minimum wage would stimulate output growth.
This, he said, was due to prolonged weak aggregate demand arising from salary arrears and contractor debt.
”Consequently, its impact on the aggregate price level would be largely muted, given that the monetary aggregates have largely underperformed in the 2018 fiscal year.
“In addition, the prevailing stability in the foreign exchange market would continue to moderate pressures on the domestic price level.’’
Nigerians in various sectors and walks of life have also lent their voices to the advantages of increasing the minimum wage as it engenders productivity.
The argument for labour has, however, gone beyond minimum wage but equal pay for equal productivity.
Labour is saying that remuneration should be equal to productivity as that was the only way to ensure job satisfaction and productivity from the workers.
At the 25th anniversary symposium of the National Salaries, Incomes and Wages Commission (NSIWC) which was held recently in Abuja, the issue of imbalance in remuneration and productivity was put at the front burner.
The symposium had as its theme: ”Overcoming the Challenges of Compensation and Productivity in Nigeria.”
Mr Ayuba Wabba, the President, Nigeria Labour Congress (NLC) decried the situation where the nation had more than 25 salary structures for the same system “when what should rather be operational was the principle of equal pay for equal productivity.
“Our compensation process should be a process that can stimulate productivity because the two work together. If a worker is not paid and cannot take care of his or her family and pay school fees, can he or she be productive?”
“With better condition of service and compensation, I will be able to think well, work well and therefore the two must work together.”
In his presentation, Dr Kashim Akor, the Director-General, National Productivity Centre (NPC), said that productivity was a management tool and a parameter for wage determination.
He said that the concept of productivity can and should be applied as a tool to manage and increase the productivity levels of the public sector.
He defined productivity as the expression of quantitative relationship between output and input.
According to him, productivity has not been fully mainstreamed in the public sector and this reflects in the lack of productivity consciousness among public officers.
Akor said that observable symptoms of low productivity in the public sector include lateness, absenteeism, loitering, wastes, delay in file movement, corruption, ineffective supervision, gross indiscipline, tardiness and poor work ethic.
He, however, said that models could be developed to link or integrate the productivity variable with wages in the public sector in Nigeria.
Akor said that a Productivity-Linked Wage System (PLWS) which establishes a closer link between wages and productivity to enhance productivity and competitiveness should be considered.
“It ensures that wage increases are commensurate with increased productivity.
“It is based on the philosophy that improved productivity (increased quality and quantity of goods and services, reduced wastes and, in the case of the public sector, a delighted citizenry) will lead to more profits.’’
Prof. Sola Fajana of the Department of Labour and Human Resource Management, University of Lagos, spoke on the topic: “Public Sector Remuneration Issues in Nigeria and Remedies.’’
He defined remuneration as the totality of pay (wages and or salaries) and other forms of benefit or entitlements for labour.
“It may be non-regular and non-pecuniary, including occasional allowances, paid vacation, provision of car/free transport, cars, residential accommodation, free medical-care, long-service award.
“These omnibus packages, together with wages/salaries, are termed staff remuneration or compensation.’’
He said that public sector remuneration was very important for a developing country like Nigeria, because government was a dominant player in the economy.
According to him, personnel costs, most of which are in the form of personal emoluments, constitute a large proportion of government budget and expenditure.
“Consequently, remuneration plays a good part in any effort at re-flating the economy.
“For example, failure to receive salaries has resulted in parents withdrawing or deferring studentship of their wards from school and a very good example is the Nigerian private universities.’’
Fajana said that the dependency burden in Nigeria was very high as the proportion of salaried workers may be low compared to the entire population.
“In the absence of a social security system that guarantees support for the unemployed, the heavy dependency burden exerts a serious toll on the welfare of salaried employees.’’
He also said that public service pay was very important to every citizen because of the outcome of a social comparison process.
Fajana said that public service remuneration serves as a pace setter because it has been historically referent in the determination of pay in all sectors, including the private sector.
According to him, most organisations take a cue from policies and practices in the federal public service, especially minimum wage, benefits in kind, and other non-pecuniary remuneration.
He said that some of the challenges in determining public service remuneration was salary differentials and salary relativities rather than cost of living which tends to drive demand for wage adjustment at the bargaining table which makes the exercise of wage adjustment perennial.
He also identified sectional supplementary remuneration by the boards of some agencies as a challenge, adding that they argue that they do not have to obtain any approval from government to implement such board-determined remuneration packages.
To remedy the situation, he said that a comprehensive and coordinated pay policy in the federal public service such as harmonised pay structures should dominate the pay policy to ensure equity and comparability.
He also said that a conscious and sustained reduction of the current pay disparities between the core Civil Service and other sectors should form part of the emerging pay policy.
“As a deliberate policy, the pay relativity between political and judicial office holders and public servants should be consistently and positively improved in favour of the public servants with future pay reviews.
“We need to recall the tendency is very rife for workers with perceived inequity to seek to remove the inequity by rational and or irrational strategies, including corruption, and low performance, among others.’’
He advised that performance-related pay schemes should be introduced in the public service provided a credible and reliable performance management system, such as the results-based management system of the United Nations is adapted and put in place.
Falarin writes for the News Agency of Nigeria.


Folasade Folarin

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