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[Editorial] Performance-based pay
Push for meritocracy facing growing resistance
By 김케빈도현Published : May 11, 2016 - 17:12
The government’s push to introduce a performance-based pay system at public institutions is facing growing resistance from trade unions.
As part of its campaign to reform the public sector, the government has been pressuring 120 public institutions to introduce performance-based pay by the end of this year.
But progress has been slow. The Ministry of Strategy and Finance said Monday has said that only 53 institutions have adopted merit-based pay and promotion systems so far.
Resistance to meritocracy is especially strong among state-run financial corporations. Of the targeted nine entities, only one -- Korea Deposit Insurance Corp. -- has managed to reach an agreement with its employees on performance-related pay.
Other corporations, including the Korea Development Bank and the Export-Import Bank of Korea, are embroiled in internal strife over the matter.
The CEO of Korea Housing Finance Corp. tendered his resignation last week after more than 85 percent of the company’s unionists voted against a proposal on performance-based pay.
Korea Asset Management Corp. has also failed to introduce a performance-based pay system as more than 80 percent of its employees rejected it.
In the face of tough resistance from unions, the government has decided to impose penalties on institutions that reject meritocracy. Under the plan, public institutions that fail to shift to meritocracy by the deadline -- June 30 for the 30 state-run corporations and Dec. 31 for the 90 semi-government institutions -- will see their personnel budgets frozen in 2017.
The government stepped up pressure on the public institutions as President Park Geun-hye is due to review the progress on the issue at a meeting scheduled for June.
The government’s move, however, prompted the nation’s two umbrella union organizations -- the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions -- to team up to put up more determined resistance.
The two groups announced Wednesday they would hold a joint protest in Seoul on June 18. They also threatened to go on a general strike in September if the government continued to press ahead with its campaign.
One reason for unions’ objection to performance pay is their misgivings about the fairness of performance evaluations. They argue that the systems pushed by the government could be abused by superiors in assessing subordinates they do not like.
The change in the domestic political landscape following the April 13 general election is another factor behind unions’ increased resistance. Opposition parties that have gained the upper hand in the National Assembly are in support of trade unions.
To persuade unions to embrace meritocracy, the government needs to create a transparent performance evaluation system that addresses their concerns about unfair assessments.
The government also needs to understand that the lack of trust in the management-labor relationship is the underlying factor that hinders the adoption of performance-based pay.
One reason employees at public institutions lack trust in their CEOs is the government’s practice of appointing unqualified politicians or government officials to lead them. Such a practice makes it difficult for employees to trust or respect their CEOs.
As part of its campaign to reform the public sector, the government has been pressuring 120 public institutions to introduce performance-based pay by the end of this year.
But progress has been slow. The Ministry of Strategy and Finance said Monday has said that only 53 institutions have adopted merit-based pay and promotion systems so far.
Resistance to meritocracy is especially strong among state-run financial corporations. Of the targeted nine entities, only one -- Korea Deposit Insurance Corp. -- has managed to reach an agreement with its employees on performance-related pay.
Other corporations, including the Korea Development Bank and the Export-Import Bank of Korea, are embroiled in internal strife over the matter.
The CEO of Korea Housing Finance Corp. tendered his resignation last week after more than 85 percent of the company’s unionists voted against a proposal on performance-based pay.
Korea Asset Management Corp. has also failed to introduce a performance-based pay system as more than 80 percent of its employees rejected it.
In the face of tough resistance from unions, the government has decided to impose penalties on institutions that reject meritocracy. Under the plan, public institutions that fail to shift to meritocracy by the deadline -- June 30 for the 30 state-run corporations and Dec. 31 for the 90 semi-government institutions -- will see their personnel budgets frozen in 2017.
The government stepped up pressure on the public institutions as President Park Geun-hye is due to review the progress on the issue at a meeting scheduled for June.
The government’s move, however, prompted the nation’s two umbrella union organizations -- the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions -- to team up to put up more determined resistance.
The two groups announced Wednesday they would hold a joint protest in Seoul on June 18. They also threatened to go on a general strike in September if the government continued to press ahead with its campaign.
One reason for unions’ objection to performance pay is their misgivings about the fairness of performance evaluations. They argue that the systems pushed by the government could be abused by superiors in assessing subordinates they do not like.
The change in the domestic political landscape following the April 13 general election is another factor behind unions’ increased resistance. Opposition parties that have gained the upper hand in the National Assembly are in support of trade unions.
To persuade unions to embrace meritocracy, the government needs to create a transparent performance evaluation system that addresses their concerns about unfair assessments.
The government also needs to understand that the lack of trust in the management-labor relationship is the underlying factor that hinders the adoption of performance-based pay.
One reason employees at public institutions lack trust in their CEOs is the government’s practice of appointing unqualified politicians or government officials to lead them. Such a practice makes it difficult for employees to trust or respect their CEOs.
