SRC releases new grading and pay structure for parastatals

Sarah Serem Chairperson Salaries and Remuniration Commission and vice-chairman Philip Kagunda as they released grading and salary structures for State Corporations at Kenya school of Government, Lower Kabete. ON 30/06/2017 PHOTO: JENIPHER WACHIE

The Salaries and Remuneration Commission (SRC) Friday released a new grading and pay structure for State corporation chiefs where the highest paid chief executive officer will not earn more than Sh1 million.

Under the structure, which has used Paterson grading system, CEOs are graded between E, which is the highest grade, and D1, the lowest, while state corporations have been categorised as service and regulatory, and commercial.

The lowest paid CEO in service and regulatory State corporations will earn Sh253,333 while the highest will take home Sh812,970 per month.

Charge a fee

This sector comprises 98 parastatals that offer services or are regulators in the market. They include the Kenya Institute of Curriculum Development (KICD), which offers a service, and the Retirement Benefits Authority, a regulator.

Some service sector institutions charge a fee for their services, while others depend purely on the National Treasury for funding.


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Under the 49 commercial state corporations such as Kenya Power and KenGen, the highest paid CEO will earn Sh903,300 while the lowest will take home Sh281,481 per month.

“The total number of jobs evaluated in service and regulatory corporations were 9,843 while those in commercial were 6,270,” said SRC Chairperson Sarah Serem. The CEOs’ job evaluation was undertaken by consulting partner Deloitte and Touche.

The new pay structure, which is expected to bring equity and harmony in the public sector, takes effect from July 1.

Serem said the commission considered a number of factors while preparing the pay structure, including budgetary allocation from the Exchequer, ability of the institutions to pay and salary survey.

She said the aim of the job evaluation was to determine internal equity of jobs within an institution and external equity between institutions to facilitate the development of a harmonised grading and salary structure in the public service.

The Commission however clarified that CEOs currently earning more than Sh1 million will continue to do so as the law does not permit revision of salaries downwards.

“The structure is for a period of four years when the next pay review will be done. So those who are earning higher than our recommendations can continue to draw their pay. It’s only those starting CEOs who will be subjected to the new pay structure,” Serem said. She was accompanied by SRC vice chairman Dan Ogutu and CEO Anne Gitau.


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“The Commission’s desire in the long run is to have a salary structure that will ensure the principle of equal pay for work of equal value. This is important in ensuring stability and fair play of public institutions.”

She said it will also break the cycle of public servants moving from one Government department to another due to pay alone without change in productivity.

Serem added that this productivity can also be enhanced through partnerships with unions in an endeavour to establish healthy industrial relations.

She told the more than 100 CEOs and senior managers of State corporations that jobs in their institutions will be placed in salary grades as evaluated with a salary structure of a minimum of 12 notches for each grade to ensure adequate progression and compression ratio.


“While implementing the model salary structure, the following should be adhered to: Retain current salaries where they are above the model salary structure; and adopt the model salary structure where current salaries are lower or within the model salary structure, depending on affordability and sustainability,” explained Serem.

Ogutu said parastatals which are yet to align workers’ Collective Bargaining Agreements (CBAs) with the SRCpay structure will be allowed to hold discussions until the matter is resolved.


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“Some of the State corporations will have to wait a little longer as we resolve issues raised during and after the job evaluation clinics,” Ogutu said.

“We know some of the corporations in the sugar industry have issues.”

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