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A knee-jerk rejection

May 25,2017
The performance-based salary system pushed by the Park Geun-hye administration is doomed by the Moon Jae-in government. Kim Jin-pyo, chairman of an advisory committee for state affairs planning, which serves as a transitional committee, said the committee will thoroughly review the new payment system. Despite his use of the term “review,” unions, companies and the government sector all know that is a de facto abolishment of performance-based pay.

In fact, the ruling Democratic Party has consistently opposed the introduction of the system. President Moon pledged to end it starting with the public sector. The Seoul Central District Court ruled last week that the introduction of a performance-based pay system by the Korea Housing & Urban Guarantee Corporation without the consent of its labor union was null and void.

The system pressed by the Park administration had its flaws. It came under fire for the contradictory logic that it was not aimed at getting rid of low-performing employees even though it was supposed to improve competitiveness in the public sector. As a result, 48 of the 120 public institutions involved in adopting the new system only did so through an agreement reached by their board of directors.

But Moon’s government can’t deny the need for a new system. Due to the huge size of public organizations, they are known for lax work ethics and low efficiency. Many experts pointed out that the unions of salaried workers are more eager to protect their own jobs and perks and care little for inefficiencies or correcting bad practices. The public wants to see productivity rise and that means getting rid of bad employees. If our current sclerotic labor structure is not changed, we cannot cope with the tough challenges of the so-called fourth industrial revolution.

If there are problems with the way the system was applied, the government can change it. If the government attempts to throw away all policies from the past administration and push whatever promises Moon made during the campaign, rational reform is hardly assured. That could boost the tax burden for ordinary citizens. The Moon administration must weigh its priorities carefully. The first step is to find workable alternatives rather than blindly trying to, shall we say, repeal and replace.

JoongAng Ilbo, May 25, Page 34