The corporate salary revision

The suspense continues.  It has been six months since the civil servants’ salary was revised with the 20 percent housing allowance they enjoyed getting clubbed to the raise.

The trend in the past was that an automatic raise followed for the thousands working in companies under the Druk Holding and Investment (DHI) and the state owned enterprises or corporations. The silence on the raise for the corporations is speaking volumes. Should there be an automatic raise for the corporations?  What should the corporations be paid in relation to the civil service? What would the pay difference imply?

Surprisingly, there is no fervor, unlike in the past, among those working in corporations on a salary raise. Perhaps this could be because the latest civil service salary revision was debated so much for being too little that many felt that there was not much difference. Perhaps the handsome salary and perks Parliamentarians approved for themselves, including the ministers, filled the public psyche that nobody felt civil servants received a raise.

If employees of government-owned corporations are not being patient or not becoming noisy like in the past demanding a raise, perhaps, the attitude that corporate employees should be paid higher must be changing. As we wait for any indication from the government, it is worth reflecting why the so-called commercially driven corporations should be paid higher than civil servants.

There is a theory that salary and privileges in the corporations were better to attract people away from the civil service. The difference in salary was based on the reasoning that working conditions and culture was different. Times have changed. Jobs are scarce. If the civil service is saturated, there are only limited jobs in the public corporations. Many are willing to work for a meagre salary.

Even with so much focus on corporate culture, not much has changed in the public corporations. Working culture is very much government-like. Where is the difficult working culture when they enjoy summer and winter timing, job security, public holidays and overtime payments?  This may be true only in the private sector where firing and hiring are rampant and perks and benefits are based on performance.

Those that claim to be contributing immensely to the government exchequer stems not so much from their innovations, but from being monopolies protected by the government. We blame the civil service for cumbersome bureaucratic procedures in delivering services. There is not much difference with our public corporations. It will be a bad decision to let corporations revise salary based on their profitability.

Salaries will have to be revised from time to time to cover inflation, for instance. But a revision for one section of the society will have impact on others. Through experience, we know a pay revision raises the cost of living. A revision has to be justified. What will happen to those in the private sector? What about our farmers and villagers who do not receive monthly salary?

1 reply
  1. irfan
    irfan says:

    It’s very true that state owned enterprises or public corporations do enjoy a monopoly or a natural monopoly; and it’s considered necessary as these corporations need to produce services or products at reasonably lower prices for the people or for the state. So, citizens have every reason to expect them to be a lot more professional in managing cost in the economy. But if operational profits are targeted by the corporations through state provided subsidies or other fiscal measures, outputs of state owned enterprises may not be effective enough in bringing the cost down in any economy. When it comes to the monetary policies within the economy, once again we need to refer to the civil services. Once again it’s difficult to refer to civil services without mentioning bureaucracy, but even in public corporations, some have the opinion that there exists a parallel bureaucracy, one internally inspired and other one externally influenced. Yes that working environment is different in state owned corporations from the government offices, but organizational culture needs not necessarily be very different to advocate for the salary differences. If there is a difference, it’s more inclined towards what shapes the monetary policies. When there is a strong demand for any change in some of those policies, we may see a salary hike even in state owned corporations and that’s bound to drive the cost upward in the economy. The state can control the prices, but cost is going just one way where it is defined to go.

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