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Our View: Populist politicians ignoring the value of management

Green party leader Giorgos Perdikis

GREENS leader Giorgos Perdikis, a ruthless populist highly-skilled in identifying and playing up issues that he believes would cause a public stir gave another demonstration of this expertise last Tuesday. During a discussion of the CyBC’s 2015 accounts at the House Watchdog committee he took great exception at the €80,000 annual salary for the general manager, which the corporation had not even been paying for quite some time now because the post had been vacant.

“We cannot be talking about contracts of the general manager of the CyBC that touch €80,000 a year at a time when the corporation has these huge debts and huge holes,” said an outraged Perdikis, aware that the mere mention of the sum would get him a mention in the news and cause anger. But is this salary the main problem of a corporation that has a deficit close to €120 million in its pension fund and the liabilities of which exceeded its assets in 2015, by €9 million? If the general manager’s salary was reduced by €30,000 a year, to keep Perdikis happy, would it make the slightest bit of difference to “these huge debts and huge holes”?

The CyBC’s finances were “developing into a big gangrene and the solutions needed now, unfortunately, have to be very painful, but should not be directed at the employees,” Perdikis said. So who should they be directed at? Presumably the taxpayer, who would have to cover the €100 million-plus deficit so that many of the corporation’s retirees could carry on being paid pensions of €40,000 per year – more than most people are paid for working full-time – for contributing nothing to the economy. But the socially sensitive environmentalist did not want to touch the labour aristocracy’s privileges, nor did he mention the absurdity of a CyBC full-time secretary/telephonist being paid four grand a month.

The real problem in the Cyprus public sector is not the relatively high salary of general managers but the very high salaries being paid to the rest of the workforce. It is these and the super-pensions that created the gangrene that Perdikis hopes to tackle by moaning about the general manager’s salary. The concept of wage differentials, which exist in any smooth-run organisation, has been all but eliminated in the public sector because of union rule that protects the interests of the mediocre and indolent, who receive big annual pay rises irrespective of their performance. Is it fair for someone with the responsibility of running a big organisation to receive only €2,000 a month more in salary than someone with next to no responsibility?

The CyBC should be prepared to pay 150 or 200 thousand euro a year to a capable general manager with a proven track record because he or she could make a big difference. Such a big salary, even if it made smoke come out of the ears of Perdikis and his fellow populist socialists, would be more than justified if the general manager cut spending by a million a year and substantially increased revenue. Good management, however, is not valued in a country controlled by unions and political parties because it diminishes their power and influence in the running of public organisations.

They prefer a mediocrity with party links ineffectively running a public organisation because this maintains their control. The last CyBC general manager was exactly such an individual. He was appointed by the late Tassos Papadopoulos because he was an obliging yes-man not because of his management skills, integrity, vision for public broadcasting and leadership qualities. Such qualities are frowned upon by our political elite and their union accomplices with their socialist values and dislike of strong management.

But what would have happened to the Bank of Cyprus if it had not hired a proven top executive to run it after the bail-in of deposits? Would it have survived if some mediocrity approved by the union/party establishment was placed in charge at that most critical time? We very much doubt it. It survived because the board had the sense to hire a very capable and experienced executive with all the qualities a top manager should have. And his earnings were close to a million a year. By Perdikis’ logic, this was an outrageous amount for a bank that had bailed in depositors and was on the verge of bankruptcy; it should have hired some inadequate willing to do the job for €100,000 per year.

It is time the importance and value of good managers was recognised. A capable, experienced manager can make a big difference to an organisation, adding value that would more than justify a big salary. This is the reality even if it does not sit well with the cheap populism of some politicians.

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