Of Wages And Productivity In Ghana’s Public Service
Date published: February 21, 2013
By Emmanuel Kwami
The phenomenal rise in the public service wage bill following the migration of over 90 percent of Article 190 public servants on to the Single Spine Salary Structure (SSSS) has naturally drawn attention to the disproportionate chunk of the national revenue that goes into paying public servants alone, leaving a paltry 30% for other development programmes.
Now, perhaps more than any other time in the history of Ghana, many well-meaning Ghanaians are demanding that public sector wages be linked to productivity. The Monday, February 4th edition of the Daily Graphic carried a story captioned ‘Public sector wages consume 70% of national revenue. According to the story, attributed to Dr. Sulley Garibah; ‘Ghana risks using up all its revenue in paying public sector workers if careful consideration is not given by all to their work and their contribution to value addition to goods and services in the country.
The story continued; ‘Tackling the huge public sector wage bill and productivity of public workers, would be one of the key challenges that would be looked at by the government within the first six months of its tenure.
Perhaps it might interest some Ghanaians to learn that the Single Spine Pay Policy currently being implemented by the Fair Wages and Salaries Commission is not limited to migrating public servants onto a new salary structure called, the Single Spine Salary Structure or for that matter to salaries allowances and benefits.
Indeed the object of the Fair Wages and Salaries Commission as stated at section 2 b(iii) of the Fair Wages and Salaries Commission Act, 2007 (Act 737) is ‘to develop and advise Government and ensure that decisions are implemented on matters related to performance management and indicators,
Section 3 (j) of the Act says; To achieve its objects, the Commission shall ensure that the balance of internal consistency, external competitiveness and employee performance are fully reflected in the public service pay system.’
To further amplify the issue, Section 4.6 of the Government White Paper on the Single Spine Pay Policy makes the following observations;
‘Government did not find any linkage in performance management and productivity in the Single Spine Salary Structure. Government recognises that improved compensation must be driven by improved performance or productivity. In effect, there would be the need to establish a link between the new salary policy and performance management. This aspect of the policy is what government will actively engage its social partners to accomplish and thereby properly orient Single Spine Pay Policy as a fair and equitable way of remunerating public servants. Government endorses the introduction of a robust public service-wide performance management, monitoring and evaluation system. Once the system is in place, annual salary increments for public servants will no longer be automatic, but based on annual performance assessment.’
Perhaps, we should also remind ourselves of section 98(g) of the Labour Act, 2003 (Act 651), which provides as follows,
without prejudice to the other provisions of this Act and subject to any agreement between the parties, a collective agreement may include provisions on the principles for matching remuneration with productivity.
What is productivity and why should Ghanaians be concerned about productivity in the public sector?
Productivity is traditionally defined as the measure of the amount of output generated per unit of input. However, this output = input concept has lately come under some re-examination. A more recent approach to explaining public sector productivity is towards determining the outcomes achieved by the public sector. In other words, what many people have in mind when they mention public sector productivity is ‘what value they receive from public services in return for the utilization of public funds.’ Linna, Pekkola, Ukko and Melkas (2010).
Putnam (1993), however, rejects the idea of including outcomes in productivity measurement, arguing that to focus on outcomes, (for example, changes in the health of the populace rather than the number of patients treated for malaria,) would mean judging the government on factors that government has no control over. The debate on the operational definition of productivity rages on and it would be absolutely necessary that stakeholders have a common understanding of productivity even as the Government commences the tortuous journey towards linking public sector wages to productivity. It would seem to this writer that a good starting point would be a national forum, involving the national tripartite committee and civil society.
As to why people should be concerned about productivity in the public service,
Thornhill (2006) maintains that there are three main reasons why public sector productivity is important for a country’s economic health. According to him, the reasons are as follows;
- I. The public sector is a major employer
- II. The public sector is a major provider of services in the economy
- III. The public sector is a consumer of tax resources.
In a nutshell, it is considered that productivity in the public sector is equally important to the overall economic performance of a country as that of the private sector.
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