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5/24/2007

pay according to performance

NWC linked pay hike with productivity The NWC recommendation suggested that employers should pay employees more when there is an increase in productivity. I think this is a bit tedious to compute. An easier way will be to commission a salary survey on comparative wage levels and then adjust the salaries accordingly when they are found to be lower than the market. It will be more objective and impartial if done by a neutral party. This is especially effective and applicable when productivity is very difficult to measure. And sometimes the lower productivity or performance could be due market forces or events beyond the employees control. And at the lower level, their performance will often be affected by many more factors, including those of their bosses.

4 comments:

Matilah_Singapura said...

The NWC — anothe bunch of central planning morons who BUM off the taxes paid by people who do REAL work.

It is obvious these fruggers would FAIL spectacularly in true private enterprise.

In the free market, what you earn is what you are worth. No one can earn more than what they are worth, unless of course you join the government are a top-dog.

What happens if you, say, as a businessman, pays your talented people less... they simply, sooner or later, either get poached by the competition or leave and seek a "better deal" elsewhere.

Because the economy looks like it is doing well, around the globe, specialised labour is costing a premium.

Labour costs go up and down. Not too long ago locals were complaining that Indians were willing to work for less. At the moment, Indian professionals are commanding premium salaries.

Labour prices, like prices every other market, goes up and down, depending on demand.

redbean said...

the market price is the real price and no one can run away from it. like the civil service trying to adjust salaries to market price. if they adjust the new graduates by X dollars, they would have to adjust those earlier intakes by the same amount or risk losing them.

what could happen is that they just ignore those earlier batches that were grossly underpaid and hope nothing will go wrong. but once these smart people know that the organisation does not care about them, they definitely will leave when the next offer comes.

Anonymous said...

In that case, should the pay of civil servants be computed by neutral parties in the interest of impartiality and objectivity, if productivity is difficult to measure?

redbean said...

productivity is difficult to measure but can be measured. anyone trying to assess another person's productivity but claims that he cannot put down what he is assessing cannot be allowed to make the assessment. the reason, if a person does not know what he is measuring, how can he measure?

there are alternative ways or indirect ways of measuring productivity. both the appraiser and appraisee must know what are the criteria of measurement. otherwise it is pure bullshit, mismanagement.

the issue here is the recent startling discovery that the civil service has been underpaying their new graduates for the last few years. and they are going to raise the starting salaries of their new recruits. in any compensation and salary adjustment exercise, the adjustment would have to be made down the line so that the earlier intakes do not lose out to the new intakes, especially when they have already been underpaid for a few years.

this is standard HR practice.