Senior Policy Advisor at the Organisation for Economic Co-operation and Development (OECD), Lech Marcinkowski, has warned that poorly designed performance-based contracts could result in biased evaluations and unfair pay

🇰🇪 Breaking It Down

Lech on Thursday, June 18, cautioned that the government must first establish credible and transparent performance measurement systems before linking employee rewards to their performance.

“Poor design leads to subjectivity, gaming, and across-the-board payouts that kill incentives," he warned while addressing stakeholders at the Performance and Productivity Conference held in Nairobi.

He noted that managers responsible for evaluating employees must be adequately trained and supported to ensure decisions are based on evidence rather than personal opinions.

📌 What You Need to Know

"Performance-related pay (PRP)can boost motivation, but only if well designed. It must supplement, not replace, a solid basic salary and rest on a credible performance framework with clear, balanced indicators," he told stakeholders.

Lech further revealed that institutions also need reliable performance data and strong human resource management systems to guarantee consistency and fairness in payment allocations.

“Managers need training, human resource support, and reliable data so decisions are evidence-based and consistent,” Lech stated.

Marcinkowski further warned that performance-based pay should not replace workers' basic salaries, arguing that incentives work best when they are offered as additional rewards for good performance.

He said international experience shows that successful performance-pay systems mostly allocate between three and five per cent of the total wages to bonuses rather than making them the primary source of employee salary.

His comments come just two days after the government announced plans to introduce performance-based contracts and real-time monitoring of payroll processing.

📰 Source: Kenyans.co.ke