Renowned labour expert, Austin Gamey has urged firms to adopt the Broadband salary administration model, describing the Notch salary system which is mostly used in Ghana as the laziest and unfair remuneration system.
“The notch model is the laziest form among the salary administration models because it doesn’t match salaries to the contribution of workers towards productivity,” he said.
In an interaction with ADR Daily in Tema, Mr. Gamey described the broadband model which matches remuneration and salary increases to the contribution of workers, as the most civilized model being used across the globe by countries that aim at productivity and competitiveness.
The three main salary administration models are the Spot Pay, Notch and Broadband (or Hay) systems.
Under the Spot pay system, specific salary is constantly paid to a worker, mostly with a special professional expertise over a specified period without any increment.
With regard to the Notch system, workers are paid pre-determined salaries based on job levels and positions irrespective of the level of their contribution to productivity.
However, the Broadband system is a differentiated pay system that goes beyond the entry scale, and a worker’s salary is determined by the level of contribution to productivity.
For instance, Mr. Gamey explained that under the Notch salary system, increases are enjoyed across- board by all workers irrespective of whether some worked more than others in a particular period.
“So you find an unproductive worker who virtually didn’t contribute anything to productivity enjoying equally or even more from an across-board 30 per cent salary increase than the worker who really worked to achieve an increase in productivity and profit.
“But under the Broadband, the actual contribution of workers are known through productivity rating and those who are rated higher would benefit more from the salary increase,” he said. He further explained that, those who secure the maximum point would enjoy the full 30 per cent increment, while those who secure middle scores would be given an increase of 15 per cent, and those who fail would be given a token increment of five per cent.
Such a system, he observed provides an impetus for competition among workers which in turn drives creativity and increased productivity.
With the Broadband system, he said employers and workers would have to strictly adhere to performance targeting and Key Performance Indicators (KPIs) culture which is lacking in many private and public organizations across the country.
He said the use of a poor salary administration system such as the notch model, is a major weakness for economies in Africa.
“The evidence is the frequent agitation for pay increase of workers and the situation where we use about 73 per cent of the national income to pay a section of public sector workers,” he said.
The reason, he noted, was that an efficient salary administration, which should weave around Performance Management System and Performance Management Appraisal is either non-existent or ineffective in the country.
He quoted Section 98(g) of the Labour Act, 2003 Act 651 which stipulates the principle of matching remuneration with productivity, saying “although the law requires that workers should be paid adequately, it also required that the pay must be based on a worker’s contribution to productivity.”
Adotey Mingle/adrdaily.com
