Home » General » Psmas Wage Bill Strategy the Way to Go

PREMIER Service Medical Aid Society’s decision to slash its annual executive wage bill by $6 million is the right way to go for all struggling State enterprises, parastatals and other authorities.

In the article we carried yesterday, PSMAS interim manager Dr Gibson Mhlanga said the move to slash executive salaries and merge positions was meant to ensure viability for the largest medical aid society in the country.

He also stated that most of the affected managers had agreed to the adjustments which will see the organisation now spend only $1 million annually, instead of $7 million.

PSMAS became the most notorious organisation in Zimbabwe when it was revealed that its then CEO Dr Cuthbert Dube and a cohort of chosen ones were creaming off sky high salaries from the health insurance and service provider while its paying members were suffering because they could not access the services they were insured for.

The problem is widespread and reaches into almost every State institution that is not staffed by direct civil service employees. The overstated salaries and perks of these executives who are presiding over failing institutions are directly impacting on the lives of ordinary people in a very negative manner. Somewhere along the line many of these organisations have become black holes in which a lucky strategically placed few can reach the heights of personal aggrandisement while forgetting their very raison d’ecirctre.

It looks like the accepted corporate culture in this group is to acquire top heavy staff complements at whose apex sit many individuals who would be hard pressed to explain just what it is that they do to earn their breathtaking salaries.

We must surely be one of the few countries in the world where it makes more sense to work for the Government rather than for the private sector. Unfortunately this is only true for those right at the top, while the ordinary workers in those organisations usually earn a mere pittance, if they get paid at all. For example while Happison Muchechetere and his lieutenants allegedly earned huge salaries at Zimbabwe Broadcasting Corporation, the ordinary worker went for months without a salary.

The people on the ground who ensured that the national broadcaster carried out its mandate of providing radio and television services to the nation had to make do with obsolete equipment and pitifully inadequate resources while the man responsible for the whole mess enjoyed a luxurious lifestyle courtesy of the license paying audience who were then subjected to shoddy programming and pathetic service.

In another example currently the City of Harare is paying exorbitant salaries to its executives while the rate paying residents must go without clean water, endure potholes that almost defy that tame description and put up with uncollected refuse as well as no street lighting. This situation has been worsened by the failure of the municipality to pay its workers thereby further prejudicing the ratepayer of whatever little service they have been rendering.

City of Harare and many fellow local authorities are reportedly spending up to 70 percent of their income on wage bills which is not a sustainable situation if ever they are to get to a point of actually giving service delivery.

GMB, Air Zimbabwe, Zupco, ZESA, NRZ and CMED are other under-performing State enterprises whose operations desperately need to be turned around so they can once again be viable profit-making ventures. To achieve this the responsible authorities need to bite the bullet and introduce sweeping changes starting with a similar strategy as undertaken by PSMAS.

Anyone who happens to be that highly paid and underutilised executive should be able to see the logic of the proposition to downgrade and or downsize.

And as shown in the PSMAS case, most incumbents will accept the more realistic and sustainable option because the alternative is to watch the institution go into liquidation with the executives being the biggest losers.

Source : The Herald