Does small salary affect employees' productivity?
Does small salary affect employees' productivity?
JAKARTA (JP): Many people's view of civil servants is that of
someone who chats with colleagues or on the telephone in a
crowded room with the radio blaring, while those who need their
help patiently queue outside.
They blame their small salaries for their slow and
bureaucratic attitude. The secret to getting quick and adequate
service is 'uang pelicin' (bribe).
"The quality and productivity of civil servants isn't that bad
actually, it's their inadequate salaries that has led them to
commercialize their positions by complicating their jobs," said
noted economist Kwik Kian Gie. "If we are willing to bribe them,
they will provide us with excellent and quick service. Some of
them are even willing to break the law as long as we pay them."
For idealists who refuse to pay bribes, everything becomes
difficult and inefficient.
"The result is a high cost economy," Kwik noted.
Low salaries are also the reason for the poor quality of human
resources in the government's administration.
"The nation's best workers undoubtedly prefer to work in the
private sector, where remunerations are higher," said economist
Arsjad Anwar.
"From my observations, many highly qualified people opt to
work for private companies. The government has problems
recruiting the best university graduates because it cannot match
the salaries offered by private companies," the economics
professor at the University of Indonesia said.
The business sector's rapid growth in the 1980s, robbed civil
servants of the prestige they enjoyed in 1960s and 1970s. The
only remaining advantages of a government job are guaranteed life
time employment and a secure pension plan.
Many cabinet ministers have also complained about the brain
drain from the government sector to the private sector in recent
years.
Arsjad admitted that he had never researched the issue and
could not ascertain the gap in salary levels between the private
and public sector. He said, however, that he knows that the gap
is disturbingly wide, especially for highly qualified people.
An article on Human resource development and management in
Indonesia written by Mari Pangestu and Mayling Oey-Gardiner in
The Indonesian Quarterly XXI no.4, 1993, said that in 1989, only
11 percent of Indonesia's civil servants had at least a
bachelor's degree.
"As a result, the administrative capacity of the government is
seen to be weak and, in fact, has been in the past and continues
to be, a major burden on enacting government policy in an
efficient and transparent manner that will minimize the cost of
doing business," the report stated.
Arsjad also argued that an increase in salaries would
eliminate embezzlement, corruption and other forms of malpractice
in the administration.
Director General of Budgeting of the Ministry of Finance
Darsjah was quoted by the Kompas daily as saying that it is
impossible to drastically raise civil servants' salaries because
of limited government funds.
The government spends Rp 17 trillion (US$7.72 billion) a year
on the salaries of the 4.5 million civil servants and members of
the Armed Forces. An extra Rp 800 billion, 7.5 percent, is
allocated for various allowances.
With the recent 10 percent raise announced by President
Soeharto in the draft budget for the 1995/1996 fiscal year, the
government must add at least Rp 1.7 trillion to the sum.
"It is a big amount because besides the salaries, we have to
finance development as well," Darsjah said.
Economists agree, however, that salaries aren't the only
factors affecting productivity and efficiency.
"I'm afraid the connection between salaries and quality of
work is not that straightforward," said Hadi Soesastro of the
Center for Strategic and International Studies.
Mari Pangestu, also from thee center, who has said that the
recent 10 percent raise was merely an adjustment to last year's
inflation of 9.24 percent, said the question of productivity
relied more on management.
"If we want to improve productivity, do it according to a
management's rule: there should be an incentive. It doesn't have
to be money, it can be a promotion or just recognition," she told
The Jakarta Post, adding that normally a raise in salary is given
only if productivity increases, not the other way round.
Pangestu and Oey-Gardiner say in their article that besides
providing adequate compensation, ongoing training to improve
human resources is also paramount.
Arsjad suggested the government cut the size of the civil
service and draw up exact job descriptions for each employee to
promote optimal efficiency and productivity.
"I support the idea. The government should reduce the number
to those who are capable and are really needed. Then salaries
should be raised," Kwik said.
Cutting the number is not that simple, argued Pangestu.
"We have to simplify all the regulations, computerize and
study which fields can be handled by the private sector," she
said. (hdj/pwn/als)