In a dramatic shift in policy, Next Media Limited, has announced that monthly payment for staff will now be based on the achievement of set targets.
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Sources have told us that the payment policy was supposed to come into effect at the beginning of February but it was delayed for unknown reasons.
We now understand that management has communicated that the policy will be implemented starting this month (March) making a number of employees uneasy.
The policy will affect the “per diem” bit of the salary.
Unlike other organizations which pay workers a consolidated salary at the end of the month, Next Media pays its staff twice a month. The first installment, which is paid between 17 and 20th, is usually referred to as “per diem” or “allowance” and usually constitutes 40% of the total salary. So if one earned Shs 1 million, they would be paid Shs 400,000 in the middle of the month and the remainder at the end.
The last installment which is referred to as “the salary” comes at the tail end of the month.
Under the old arrangement, per diem or salary were not pegged to monthly performance of the employee.
According to the nine page policy document, the company says the arrangement is aimed at encouraging employees “to perform at their best by tying their expense allowance/incentive directly to their performance.”
The company says by linking pay to performance, the policy “aims to drive and improve employees’ skills, productivity, and effectiveness in their roles.”
The company also says its confident that this new payment policy will attract and retain top talent because in their view, “employees who are confident in their ability to earn competitive compensation based on their performance are more likely to stay with the organization where opportunity for financial rewards is commensurate with their contributions.”
How it’s going to be implemented
Usually Next Media sets targets employees in each department are supposed to hit every three months. The targets are known as Key Performance Indicators (KPIs). So evaluation has always been done every three months and it is scored out of 100%.
Under the new arrangement, employees will be required to write a weekly report, showing their status as far as achieving the KPIs is concerned. These weekly reports will now form the basis on which marks will be awarded and pay effected.
According to the policy, the company says an employee who will score between 70% and 90% will earn their full “allowance”.
Those who score between 50% and 69% will get 80% of their allowance meaning that if someone earns Shs 300,000 as per diem and scores within this range, they will get Shs 240,000.
The lower the score, the lower the pay. Those who score between 0 and 4% will get nothing at the end of the month.
“The supervisor and the People Office shall have the discretion to determine and assign weights depending on the practicability, and the nature of the deliverables or performance specification/KPI related to each assignment,” the policy notes.
The company also makes it clear that there “shall be no circumstances where an employee can earn back any deducted amount from their expense allowance or incentive and he or she shall not be given an opportunity in the subsequent month or near future to earn back.”
Many staff see the policy differently.
One employee speaking to us on condition of anonymity said by introducing the new policy, the company was trying to reduce its wage bill in a “clever way.”
“I think the company is trying to cut costs so the softest thing is to target pay,” said one employee.
Another staff told us that given the fact that the setting of targets at Next Media has always been a contentious matter, the new payment arrangement has already caused uproar.
“Usually top management decides what the targets are rarely consulting us. Some of the targets are not realistic,” said the staff.