The Sunday Mail
THE 13th cheque is a veritable age-old rite used to induce a year-end cheer for workers who would have put their shoulders to the wheel throughout the year.
By temporarily transforming even the most austere of workers into spendthrifts, the extra income has always helped oil business and commerce.
Companies ranging from those that subsist on fast-moving consumer goods to domestic household goods often strategically position themselves for November, a month when most of the extra cash disbursements are made.
But the latest report from Industrial Psychology Consultations (IPC) has put a damper on expectations that many workers will be able to draw on the traditional bonus payments.
Results from the latest IPC’s Annual Bonus Survey Research Report indicates that about half of the companies, representing 50,4 percent of those surveyed, will not be able to pay a bonus this year.
Of the figure, 27 percent are certain that they will not be paying, while 24 percent are not yet sure whether they will be able to make the payments.
Encouragingly, 49,5 percent of the companies interviewed — albeit a decline from last year — confirmed that they will be able to pay a bonus this year.
Last year, 67,4 percent of the companies met the bonus payments.
In its survey, the IPC, which mainly engaged human resources practitioners, managed to solicit the views of 93 companies cutting across industry from construction and real estate, manufacturing, mining, education, finance services, petro-chemicals, IT and telecommunications, tourism and hospitality and transport and logistics.
The headcount from the participating organisations ranges from a minimum of three employees to a maximum of 12 372 employees.
Local firms are presently groaning, stalked by an illiquid environment, working capital shortages and limited consumer spend.
Last month, the Confederation of Zimbabwe Industries (CZI) reported that capacity utilisation in industry fell to 36,3 percent from 39,4 percent a year ago.
But of the companies that have committed to paying the annual bonus, there seems to be a shift towards linking them to productivity.
According to IPC, there has been as 0,6 percent increase in respondents who said their bonus would be performance related.
In fact, 36,6 percent of the respondents, compared to 36 percent in 2013, said they will peg the extra income to performance.
However, “the trend of paying bonuses that are not performance related seems to be continuing”, as 39,8 percent of the firms indicated that their bonuses will not be linked to performance.
Currently, business, labour and Government are trying to refine the country’s labour laws as it is felt that remuneration has to be linked to both performance and outlook.
It is widely viewed that the country’s labour laws are skewed in favour of employees, a situation that is believed to be a put-off for potential investors.
Wages continue declining
But while workers might be trying to come to terms with the possibility of not receiving a festive season cheer, they are also bracing for less than forecast salary adjustments next year.
This could be a double whammy considering that wages and salaries also declined this year.
IPC’s August 2014 National Salary Survey covering more than 13 sectors of the economy revealed that while most of the companies had budgeted for a 9,7 percent wage increase this year, salaries actually plummeted 0,5 percent.
“There are a number of reasons to explain this, amongst them, the “salarygate” scandal which helped put the issue of salary increases into the public domain, consequently many organisations are more cautious when adjusting salaries now. This has also resulted in the Government putting a salary cap on executive salaries in state enterprises although it seems this directive was ignored by the majority of these organisations for various reasons.
“The reduction in salaries only occurred at managerial level and not at the NEC employees according to the data in our latest salary survey report. The reason is that it’s more difficult to negotiate salary cuts with unionised employees covered in the National Employment Councils,” said the report.
The budgeted average salary adjustments are, however, expected to increase by 5 percent next year, with some companies awarding as much as 15 percent salary increments.
Although local economic conditions continue to be challenging, most firms are holding back on laying off workers.
Only 26,4 percent of companies indicated that they retrenched this year, while 73,6 percent said they did not, raising expectations that job losses will not be worse than initially feared.
In addition, most companies remain bullish about the future prospects of their businesses, as 57 percent of the companies that were interviewed noted that their companies are doing well.
Conversely, 36,6 percent of the companies indicated that they are struggling to remain viable.
Although the percentage of those who feel that their companies are struggling increased by 7,4 percent (from 29,2 percent in 2013 to 36,6 percent in 2014), the percentage of those who feel that their companies are doing extremely well has also climbed by 5,3 percent (from 1,1 percent in 2013 to 6,5 percent in 2014).
Difficult collective
bargaining forecast
IPC projects that the collective bargaining process is likely to be very difficult next year as companies struggle to meet their obligations.
More retrenchments are also predicted.
“It is our prediction that we are likely to see even fewer companies paying bonuses this year because of poor performance by companies. Many companies that have guaranteed a 13th cheque will likely struggle to pay the bonuses due to the current performance of the economy.
“Further, we believe that the 13th cheque system perpetuates a culture of entitlement where employees simply expect a bonus without delivering results that help sustain the business.
“We are likely to see more retrenchments in 2015 as employers continue to rationalise staff in an effort to contain costs. However, the challenge that many employers will continue to face is funding the retrenchment. As a result more people will be retrenched in 2015 but they will go home empty handed as most employers have resorted to negotiating payment terms after a retrenchment. We are also likely to see more company closures and liquidations where employees walk away with nothing,” explained the report.
Industry representative CZI said last year it was impossible for some companies to pay bonuses as they were already struggling to pay salaries and wages consistently.
It is largely expected that companies in sectors such as tobacco, beverages and food sectors will be able to meet their obligations.
