True to common belief, government jobs are among the worst paying in Kenya, with employees earning only a small fraction of what their peers in the private sector take home.

According to the results of the 2009 survey conducted by PricewaterhouseCoopers, the monthly salaries of chief executive officers of state corporations fall way below the average cost of hiring that calibre of employees in the private sector.

The chief executive officers of government agencies earn Ksh1,033,292 (just about $12,500), way below the average pay an individual in that position across all sectors, which is put at Ksh1,380,391 ($17,697).

The best-paid private-sector chief executive, according to the 2009 National Human Resource Survey, are in the financial services sector.

The salary of one CEO in the financial services sector, can pay three of his peers heading state corporations, and still have about Ksh0.8 million ($8,000) left over.

Besides financial services, other sectors that pay their CEOs handsomely are insurance services, manufacturing, processing and agriculture, health, professional services, trade, hospitality, and non governmental organisations respectively.

The salaries of CEOs, the PwC survey reveals, seems to have no relationship whatsoever to economic performance, outpacing the latter by a huge margin.

Whereas the average salary of a CEO across all sectors grew by about 30 per cent over the past two years, the economy grew by a paltry 1.7 per cent last year and 7.1 per cent the previous year.

The CEOs in the ICT and multimedia sector were awarded the highest pay rises at about 32.8 per cent while the insurance sector had the lowest at 3.6 per cent.

Besides outlining the highs and lows of CEO pay, the survey — which covered a cross-section of positions in Kenyan organisations, comprising 161 management positions and 21 non-management positions — reveals the large variations in remuneration among workers of similar grades in different sctors.

Low grade workers in some sectors are taking home many times more than what individuals who would be their seniors, with management positions to boot, earn in other sectors.

The financial services sector does not just pay the CEO well, several other top employees have a high cost of employment as well.

At least five out of the top 10 positions ranked in order of the cost of employment can be traced to this sector.

The top 10 positions in order of the cost of employment across all sectors are: Head of corporate banking; divisional general manager; head of personal banking; department chairman; investment manager — banking; director of medical staff; director of laboratory services; head of finance; operations manager and credit risk director.

The management position recording the lowest salary level is a purchasing officer in the manufacturing and processing sector, at Ksh13,203 ($165) a month.

In a 2007 survey, also conducted by PwC, the lowest paid management position was the assistant accountant in the professional services sector, costing Ksh10,000 ($125) per month.

Section head/supervisor, audit assistant, supply and services manager, warehouse manager, assistant marketing manager, secretary, assistant project officer and executive housekeeper are also among the lowest paid management positions across all sectors.

Other sectors

A supply and services manager in the manufacturing, processing and agriculture sector earns Ksh13,203 while an assistant project officer in the health sector takes home Ksh11,112 ($138).

These salaries are only a small fraction of the Ksh188,219 ($2,350) earned by a receptionist in the financial services sector and the Ksh238,548 ($3,000) bagged by a cashier in the insurance services sector. (Both pays having been earned through accumulated long service).

The two positions are among the highest paid non-management positions across all sectors. Others in this category include clerks, messengers, storekeepers, technicians and headwaiters.

Apparently, many factors come into play when it comes to awarding pay rises to employees, including aligning the increments to inflationary trends and balancing salary competitiveness with business performance.

Over the past year, for instance, the survey found that organisations have awarded average annual increments of 10.9 per cent for management positions and 10.3 per cent for non-management positions, against an average annual inflation rate that was estimated at 22.68 per cent.

In extreme instances, some have had to freeze salaries or forced employees to take salary cuts in a bid to cope with adverse economic conditions.

There is a shift in human resource policies too, with many organisations instituting policies that consolidate pay packages.

This is borne out of the realisation that there are no tax advantages to splitting their pay into different components.

With the vulnerability of business performance to external factors such as the global economic recession, drought and the political environment, it has been challenging to maintain remuneration competitiveness.

As a result of the global economic recession, organisations resorted to retrenchment programmes that improved efficiency in certain instances, but also led to loss of skills and institutional memory besides hurting employee morale.

The human resource situation has not been made any better by the effects of returning citizens who previously worked abroad but lost their jobs in the global crisis.

Other factors

The survey indicated that most of these professionals returning from the diaspora were recruited at middle management level and the most available skills were in the areas of finance and information technology.

The introduction of performance contracting and a formal career-mapping tool that guides career management and career progression are increasingly becoming a feature of human-resource management.