• December 2nd, 2020

Performance management framework for SOEs underway

WINDHOEK – The Ministry of Public Enterprises said last week it is busy with the development of a performance management framework for all public enterprises (PEs), which will be supported by a fully-fledged electronic integrated performance management system.

The ministry’s chief public relations officer Johnathan Swartz said once the system is in place, remuneration will be based on performance.

“This is a simple but fundamental requirement to cultivate a performance culture within PEs,” he said.

“It will be irresponsible of the state to continue to allow high salaries for employees in public enterprises while they are either insolvent or have huge losses,” he added. 

But he said performing enterprises would be rewarded accordingly in line with the new performance management system that will be introduced soon. 

“It is important for the nation to take note that this government is serious about accountability and performance, thus government is doing everything in its power to reduce the high wage bill and to ensure that wages are aligned to performance,” he said.

He added that all PEs’ performance will now be monitored and those not performing will be held accountable from board to senior management level up to lower level.

Furthermore, Swartz said since the establishment of the Ministry of Public Enterprises the ministry has tried its utmost best to curb personnel expenditure and enforce remuneration guidelines. 

According to him, the ministry has also been collecting data on this area and has thus revised the guidelines and as a result also introduced further measures to curb wage increments. 

So far, he said, various measures have been introduced and implemented, among them: a moratorium on granting exemptions for CEO and senior management that are above the remuneration guideline thresholds. 

“From 2018, the ministry has stopped granting exemption on salary increment of CEOs and senior management that are above set guidelines until a new remuneration framework is developed,” he emphasised. 

He said the ministry has also put a moratorium on reclassification of PEs from lower tier to higher tier until the new law is operationalised and new classification is introduced. 

In addition, he said, boards of PEs with CEOs and senior management remunerated above approved guidelines were directed to freeze the salary increments of those employees and when a new CEO or senior manager is appointed they will be appointed within the approved remuneration. 

“Then there’s limitation on the annual salary increment for employees within the bargaining unit,” he said, adding that due to economic and fiscus challenges that the country is experiencing, the ministry has introduced an annual directive when it comes to annual salary increments for employees within the bargaining unit. 

The new directive, he said, requires all PEs “to negotiate annual salary increment only within the annual inflation rate as set by the Bank of Namibia”. 

Swartz says should a PE agree to an annual salary increment above the inflation rate, the board must apply for an exemption and submit demonstrated company performance and audited financial statements to support affordability of the salary increments. 

“These measures have helped the government to control massive salary increments that are not aligned to the performance of PEs, especially for most PEs that are fully subsidised by the treasury or those receiving regular bailouts,” he said. 

However, he said this does not mean government does not recognise the right of the unions to negotiate benefits for their members, but it is critical, especially at this stage, to consider affordability and ensure sustainability.

Kuzeeko Tjitemisa
2019-05-29 15:24:43 | 1 years ago

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