Thursday, 20 December 2018


A survey has revealed that 66 percent of local firms will pay bonuses this year, an increase of 16 percent from last year. The survey by Industrial Psychology Consultants covered a sample of 71 companies.

Those not paying bonus cited economic challenges. Distribution of the participating economic sectors included manufacturing (13 percent), non-governmental organisations (13 percent), financial services (11 percent), Public Service and Local Government (8 percent), mining (7 percent) and petro-chemicals (6 percent).

The agro-processing and agriculture, education, engineering, retail, tourism and hospitality sectors all had 4 percent. Construction and real estate, IT and telecommunications, medicine and pharmaceuticals and product distribution had 3 percent set to pay bonuses.

The automotive sector, law and legal services, media, marketing and advertising and transport and logistics had one percent each. Other key outcomes of the IPC study show that 26 percent of the surveyed organisations will not pay bonuses, while 8 percent are uncertain.

At least 45 percent of the firms factored in both company and individual employee performance to calculate the bonus for each employee, while a significant 27 percent of the participants did not consider performance.

IPC managing consultant Mr Memory Nguwi said: “The worrying trend though is that a sizeable number of participating organisations are paying the bonus not because they performed but are fulfilling a contractual obligation. The contractual obligation comes from the bonus being part of a collective bargaining agreement (CBA) or being part of an individual employee contract.”
The economy has been negatively affected by multi-tier pricing, which has seen prices of goods and services rising.

National Business Council of Zimbabwe (NBZC) president Langton Mabhanga said the three-tier pricing system was most prevalent in the medical field.

“The three-tier pricing system, especially for medication, but across all sectors, has led to the sky-rocketing of prices. Ever since firms were instructed to charge in real time gross settlement (RTGS) and bond notes, their prices tripled and some even quadrupled to match the equivalent in United States dollars,” he said.

The erosion of disposable incomes due to the three-tier pricing system (despite the official US dollar-Bond note/RTGS rate remaining at 1:1) has been reflected in the jump in the annual inflation rate for November to 31 percent, by 10,16 percentage points from 20,85 percent in October, according to Zimbabwe National Statistical Agency (ZimStats) figures.

Notwithstanding the increased cost of living, firms in both the public and private sectors have not been able to reviews wages.

“Given the dire economic situation that most companies find themselves in, it may be time for these companies to renegotiate the CBA or the individual contracts so that these take into consideration company performance and individual employee contribution,” said Mr Nguwi.

The establishment of a productivity-linked wage/remuneration model for Zimbabwe is being stalled by lack of coordination among the country’s social partners.
The topic of productivity measurement in Zimbabwe has been under discussion for over 30 years.
The study also revealed that most of the participating organisations intend to increase employee salaries by 10 percent for both executive, managerial and National Employment Council (NEC) next year.

At least 68 percent of the participating organisations believe that their companies are performing well but can do better.

It said 15 percent said they were struggling to remain viable while 17 percent said they were performing extremely well.

“There is a positive relationship between willingness to pay a bonus and whether the bonus is performance-related. However, most of the participants (67 percent) who are forecasting to pay bonuses this year said that bonus will be a guaranteed cheque.This suggests that, overall, bonuses this year will be paid not because the company has performed (well), rather because the bonus is contractual (guaranteed),” said Mr Nguwi.

He added: “There is a significant relationship between whether the bonus is performance-related and what is considered when calculating the bonus. Most of the participants who factor in both company and individual performance said their bonus is performance-related. Those participants that do not link bonus to performance said they provide guaranteed cheques.” Herald


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