Why SRC plans to peg wages on productivity and performance

The launch of the Strategic Plan 2025/2026 – 2029/2030 of the Salaries and Remuneration Commission (SRC) marked a significant milestone in the collective journey towards achieving a fair, transparent, and sustainable remuneration framework for Kenya’s public service.

The journey matters because harmonisation of salaries, allowances and benefits in the public service is not a quick fix, but a monumental task that requires a whole-of-government approach.

When this Third Commission was sworn into office on January 20, 2025, it was evident that promoting stakeholder engagement was a critical cog in a complex wheel. This commission embarked on meeting several key stakeholders to better understand the remuneration challenges that have ailed the public service for decades.

Over the years, the First and Second Commissions played a pivotal role in transforming Kenya’s remuneration landscape in the public service by promoting equity, transparency, and fiscal prudence in the management of public resources.

Indeed, the past commissions played a significant role in managing the public wage bill despite the intricacies that came with such an enormous task. The new strategic plan, therefore, is a bold step towards fixing the pending thorny and deeply-rooted historic challenges that have impacted remuneration in the public service.

SRC is looking at addressing the challenges from a different lens. The Constitution is clear on principles that SRC must consider while performing its functions. Article 230(5)(c) indicates: “the need to recognise productivity and performance.” If handled with soberness, mainstreaming productivity in the public service is the panacea that will fix the remuneration regime in Kenya, while harmonising salaries and creating a motivated workforce.

To understand the direction we are taking, this new strategic plan is anchored on five key result areas, with the first being “Recognition of Productivity and Performance.” Others are Sustainable Wage Bill Management for Equity and Fairness; Policy, Legal, Research and Compliance; Communication, Stakeholder Engagement, Public Awareness and Partnerships; and Institutional Strengthening and Digital Transformation.

SRC will focus heavily on “Recognition of Productivity and Performance”. 

According to data from the International Labour Organisation in 2025, Kenya’s labour productivity ranking stands at 155 out of 189 countries globally. Within Africa, the ILO data shows that Kenya ranks at 27 out of 53 countries. We all know that Kenyans are known the world-over for being hardworking, but how can this poor ranking on our labour productivity be explained?

It is with this in mindset that SRC will focus heavily on productivity within the public service. How about incentivising the public service to be as competitive as the private sector? Can wages go in tandem with productivity, and thereby, promote fiscal sustainability? The answer is yes.

Kenya’s fiscal space is thin. Projections from the financial year 2024/2025 show that the wage bill is already at approximately Sh1.2 trillion out of a revenue projection of about Sh3 trillion. The public service gobbles just over 40 per cent of that revenue, yet the Public Finance Management Act, 2012, requires that the wage-bill-to-revenue ratio should not exceed 35 per cent.

Therefore, this means that Kenya must increase its revenue through productivity-based initiatives. As soon as SRC concludes the review of its “Framework for Rewarding Productivity and Performance in the Public Service,” the public sector should expect a roll-out of bonus and reward schemes that will inject the much-needed impetus to enhance productivity across the public service.

It is evident that the remuneration space in the public service is not where it should be due to a dwindling fiscal space occasioned by competing national priorities. The national debt must be settled, wages for over a million public servants must be paid, and recruitment in the security, health and teaching sectors will bulge with resultant wage bill increases.

Within this fiscal juggling, resources must be allocated to development and service delivery. Enhancing labour productivity, therefore, means increasing the output with less input, which will then spur increased revenue, and result in economic growth. This is the answer to the current remuneration challenges.

SRC will play its part by providing a mechanism for linking financial rewards to measurable productivity and performance. It is imperative for the leadership in public service institutions to reinforce a performance-oriented culture to spur Kenya’s socio-economic transformation.

The total alignment across the public service will ensure that we collectively address productivity concerns. Together, we can realise a public service that is productive, and committed to integrity, fairness, accountability and objectivity.

SRC seeks to build a professional, motivated, and high-performing public service that is well remuneration, and one that serves Kenyan with integrity and excellence.