Is '13th cheque' bonus a net positive or negative for Zimbabwe?

Nov 14, 2011

The end of the calendar year is when many formally employed Zimbabweans, especially civil servants, expect to be paid a bonus in the form of a ‘thirteenth cheque.’ Can the country still afford this popular, deeply entrenched entitlement?

To even ask the question is to invite the possibility of being stoned to death in public. The automatic 13th cheque has long gone beyond being a ‘thank you’ for loyal service to being a social expectation. An employer, especially government, has to offer an unusually compelling reason for not offering it. Even then, there will still be hell to pay for the employer for a long time for breaking the bonus rule, whatever the reason.

Private companies can plead poor performance during the year as a reason for not offering a 13th cheque bonus. However, it takes unusually good relations and communication between management and workers for this to be believed, and for it not to result in tensions and even lower productivity the following year.  

There are significant short term social and economic effects to the annual bonus. For instance, a newspaper recently reported how some retail shops are inflating their prices in anticipation of many consumers having more spending money in November and December. Coupled with the end of the year holidays and general consumerist hoopla, this is the short but important calendar period when some sectors of the retail economy make a disproportionate amount of their annual income, making up for the comparatively slow rest of the year.

Civil servants are the biggest single block of Zimbabwe’s formally employed. Their influence goes faster beyond their numbers, said to be in the low hundreds of thousands. Their salaries may be relatively low compared to the private sector (another reason bonuses in government have become an ameliorating expectation) but they are stably, reliably employed.

For this reason retailers to whom credit sales are an important part of their bottom line can feel much more confident about extending stretched out sales terms to civil servants than they would be to, for instance, the many self employed in today’s Zimbabwe, some of whom may earn more but don’t have the all-important, re-assuring monthly ‘pay slip.’ for civil servants, the credit sales and monthly deductions can be arranged directly through their employer, government, making them fairly safe and trouble free for the retail shop.

With the society’s intricate extended family system, the benefits of the bonus extend far and wide as many of the formally employed visit their rural areas for the end of year holidays. Farming relatives who might struggle to afford seed and fertilizer for the just-started cropping season can look forward to assistance from salaried relatives, who obviously are in a better position to offer such help during ‘bonus season.’

There is little doubt that the annual bonus represents a significant ‘stimulus package’ for the economy. It is particularly welcome at a time of continuing but early recovery from a ten year recession.

On the other hand, the country is technically ‘broke,’ as we are frequently reminded. Given Zimbabwe’s struggling economy, civil servants and salaried employees in general are the privileged few in many respects, regardless of their complaints about their salary and other work conditions.

For a country still in deep economic trouble struggling to find ways to dig itself out, is an automatic 13th cheque salary bonus, for government employees in particular, defensible? Are not other, more innovative and economically realistic ways to ‘reward’ civil servants required?    

Among other civil service ‘incentive’ schemes recently in the news are a reported proposal to allow them duty free vehicle imports (an idea apparently then shot down). A farming inputs purchase scheme was announced for them last week. There are no doubt various other programmes to soften what are seen as the unique ‘sacrifices’ of being a civil servant. These various schemes may be a lot more realistic, particularly for a country in Zimbabwe’s dire economic situation, than the idea of an automatic bonus.

‘Bonus’ suggests ‘extra,’ both in terms of the performance of the person receiving it as well as in the means of the entity offering it. No one even pretends that the Zimbabwe-style bonus is in any way related to extra or unusual performance. It is an entitlement programme given to everybody regardless of their performance on the job. How then can such a programme be justified in a particularly low-productivity country, and one that is economically on its knees? 

No politician dares cross the civil servants, and many actively line up to be on their good side, especially with an election in the offing. At the beginning of the year President Robert Mugabe, apparently speaking unilaterally, promised civil servants a salary increase to come from the country’s new cash cow, Marange diamonds. The finance minister tried to argue that the country couldn’t afford that yet, but that was not a fight he could sustain or win as all parts of the body politic scramble to get their hands on diamond revenue.

The salary increment deal negotiated for civil servants earlier in the year had a provision for an end of the year (now) review. In addition, last week arch Mugabe rival, Prime Minister Morgan Tsvangirai, is reported to have ‘promised’ civil servants a bonus from diamond revenue. Was he speaking off the cuff, or had he checked with his party’s finance minister, Tendai Biti, to verify that all was in place for such a bonus?

Long before these politicians have thought of any plan to put the country’s finite asset of diamond revenue to productive use for the country’s long term benefit, they have no trouble parceling it out for consumption purposes. This certainly makes them typical politicians, but hardly great leaders.

A representative of a civil service union, when asked, said he had heard nothing to suggest that the bonus would not be paid, and that they were expecting it. That is to be expected from the union’s virepoint, but from a broader national perspective, this is not a year when there can be anything necessarily ‘automatic’ about a government bonus. There have been countless needs the country has had to forgo because the money has simply not been available.

In financial/economic terms, a 13th cheque ‘bonus’ should not be any more automatic than the many other needs the country has had to do without. However, in political terms it is completely different.

No politician will want to be seen to be taking on the powerful civil servants. In any case, given the perks for which the political class of all parties in the current coalition government make sure they get access to, none of them are in a convincing position to call for austerity from anyone else. It is perhaps with this knowledge of the political realities in mind that the union official said he took the granting of the 13th cheque as the automatic, default position. Which politician is going to dare challenge him?

But if this demonstration of their political power makes civil service unions happy, it does nothing to take away from the validity of questioning whether the 13th cheque ‘bonus’-for-everyone is still appropriate for a country like Zimbabwe.        

What does it say for an all-inclusiveness ‘bonus’ to be given to every salaried government employee when that same government also says the country is broke? If we are giving ourselves automatic ‘extras’ in the form of a 13th cheque when the country/economy/government really cannot afford it, under what sort of circumstances are we going to make sacrifices for the good of the country?

For Zimbabweans who are not civil servants, dealing with any branch of government can be one of the most stressful, demoralizing experiences. Sloth, indifference and rudeness abound and are arguably the norm. The very few civil servants who make any effort to strive above this level of what Zimbabweans have come to expect from government departments do indeed deserve a performance ‘thank you’ of one sort or another. But on the contrary, the current 13th cheque system is actually anti-performance in treating all government workers ‘equally,’ regardless of their performance. The rude, under performing civil servant feels every bit as ‘deserving’ of the 13th cheque as the rare courteous, helpful one. It is now a political entitlement, not at all a performance bonus. 

Government itself has shown that there are many other effective ways to provide retention or other ‘bonuses,’ rather than just dishing out cash it does not have, and which could go to citizens who are even needier than those in salaried employment.

Housing, transport and other allowances, credit guarantees and many others a few examples. These are quite considerable benefits in a country like Zimbabwe, and civil servants can be considered quite privileged to being among the tiny few with access to them. They have the additional benefit for a financially struggling government/country in not being outright cash grants like a 13th cheque.

Most of these ‘perks’ are structured in a way that the government gets all, most or a good part of the investment back. The employee gets something he would not be able to afford on his or her own on comfortable terms according to his/her salary, and the employer/country gets (hopefully) the goodwill and loyalty of the civil servant, as well as repayment in installments of the cost of the perk. It is win-win in being both a significant incentive for the worker, as well being ‘affordable’ for the country.  

The 13th cheque, on the other hand, may still have elements of a retention incentive, but by being available to all, it has absolutely zero aspects of being an incentive to do one’s job better than before, or than the other person.

What it does do well, is send a message that we as a country can expect something for nothing even at a time of crisis, and get it. This is a quality that is usually only associated with the ruling political class, but the long-entrenched automatic bonus system has spread it to the rest of us. We don’t have to sacrifice or work harder/better to get ‘extra’ reward: all we have to do is stretch our political muscles. 

The entrenched idea of the automatic 13th ‘bonus’ cheque may be a political hot potato that nobody dares challenge, but it is arguably a practice that is very much out of step with the vastly changed Zimbabwean times. At a time that it has been demonstrated that there are better, more sustainable ways to achieve the purpose for which it was originally achieved, perhaps the country would benefit from an honest discussion of its continued usefulness.   


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