How SRC Sets Salaries For Public Servants.
The Salaries and Remuneration Commission (SRC) was recently in the spotlight over its ongoing review of compensation for State Officers and other public servants.
President William Ruto was among those who weighed in on the debate, publicly calling on the SRC to exclude the top-cadre officials from the review.
The SRC, which is constitutionally independent of the executive, is however still expected to close out on what will be its third review cycle and gazette changes to the remuneration structure for the public service later this month.
What is the basis for the SRC salary review?
The 2010 Constitution requires the SRC to set and regularly review the remuneration of benefits of all State officers and advise the national and county governments on the remuneration and benefits of all other public officers.
In doing so, the SRC is expected to ensure that the wage bill is fiscally sustainable but must ensure that the public service attracts and retains the skills required to execute its functions.
Compensation must also recognise productivity and performance and instil transparency and fairness.
The SRC closes public participation in the proposed review of remuneration this week.
Can the SRC skip a review cycle?
The SRC has previously considered the macroeconomic environment and suspended salary reviews for the entire public service, including State officers, over the past two financial years following the economic fallout from the Covid-19 pandemic.
How does the SRC set salaries for State officers?
At the start of each review cycle, the SRC carries out a benchmarking survey on internationally selected countries.
The commission will, for example, benchmark salaries for the President, the Chief Justice and the Speaker of the National Assembly who represent the three arms of government in democracies across the world.
The SRC will then apply a price parity ratio to set the salaries for the three respective offices domestically
The commission subsequently uses this base to set down salaries to other State officers, including the Deputy President, Cabinet Secretaries, Senators and Members of Parliament down to the lowest cadre of State officers, including magistrates and members of county assemblies.
The set salaries will then be subjected to public participation before being made official via gazette notices.
How does the SRC consider salary review for other public officers?
The SRC undertakes a secondary survey in the local market and will benchmark salaries to comparable jobs across the entire civil service and the private sector.
The survey samples compensation to workers in mid-level companies which would ideally be representative of the country’s labour market.
Through the survey, the commission can establish the average salary for every respective role in both the public service and the private sector, which gives it a feel of where compensation should be set for other public sector workers.
How will the SRC use the survey to set salaries for other public officers?
Take the review of the salary of a driver, for example. Both public and private firms will hire drivers earning different salaries over time.
The SRC will map out the salaries of drivers across the civil service and will recommend that the salary of a driver in public service be set at the mid-point (median/50th percentile)
If a driver in the public service has a salary below the mid-point, the SRC will recommend that his or her employer effect a salary increase to set the remuneration at or near the median.
Should a driver in the public service have a salary above this mid-point, the SRC will not recommend an increase in their remuneration.
Using this example, the SRC has already indicated it would not recommend a salary increase to workers in State corporations and secretariat staff in commissions and independent offices whose salaries already average above its 50th percentile sweet spot.
On the flip side, State officers, workers in civil service at both national and county governments, teaching service and public university employees will qualify for an upward review in salaries.
The salaries of State officers have been proposed to rise by eight percent in this financial year and by seven percent in 2024/25.
Other public officers will meanwhile see their salaries rise by nine percent and seven percent respectively over the next two fiscal cycles.
The review covers automatic annual increases at an average rate of three percent per year.
Does the SRC review process align with internationally set standards?
The SRC has adopted the World Bank’s salary compensation ratio, which defines the relationship between pay
for the highest salary to the lowest salary on the salary scale of the organisation.
The World Bank defines the salary compensation ratio as the ratio of the highest-paid employee to the lowest-paid employee.
The SRC has adopted this definition and approach in reviewing, setting and advising on remuneration and benefits for State officers and other public officers.
Did President William Ruto undermine the independence of the SRC in differing with the proposed review of the remuneration of State officers?
According to the chairperson of the SRC Lyn Mengich, the President’s comments would amount to valid sentiments shared with the commission at the public participation stage.
Ms Mengich says the President reserves the right under the Constitution to seek information, including explanations, from constitutional commissions.
However, the President cannot stop the salary review process as it is enshrined in the Constitution.
According to Ms Mengich, President Ruto has the personal prerogative to reject an increase in his salary as a holder of the office as the SRC only sets the salary for the respective office and not the holder of the office.