Gov’t trials pay system based on job, ability

Kim Boo-kyum, ministry of the interior and safety, shakes hands with employees at the Central Government Complex in Sejong in this photo from Dec. 27 to celebrate their transition from contract to salaried positions. [YONHAP]

The government is testing a performance-related payment system as it struggles to find a way to turn 200,000 public sector contract workers into permanent employees by 2020.

The Ministry of the Interior and Safety plans to turn 3,076 irregular workers into permanent employees by the end of 2019 under a new performance-related pay system. The system organizes employees into pay bands based on the nature of their job, not how long they have worked for the organization. Government employees are currently paid solely based on longevity.

Under the new wage system the 3,076 workers will be sorted into one of seven categories.

For instance, low-skilled jobs that only require repetitive labor such as sanitary workers will be sorted into the lowest pay grade, level one. Level seven roles will go to employees in high-level managerial positions.

Within each level there are six incremental wage increases, or stages.

It will take somewhere between two and four years to move up one stage.

According to the wage plan, a level one sanitary worker will receive 1.57 million won ($1,476) a month for the first two years of his or her employment as a permanent worker at stage 1. Approximately 15 years later, when the employee reaches the highest possible wage, stage 6, they will only make 1.73 million won a month, just 10 percent more than the initial salary, as the wage increase reflects the nature of the job itself, not its longevity.

The story is similar for the top level seven employees. At stage 1, the employee will make 2 million won a month. Once they reach the highest stage, they will earn 2.45 million won a month, a 20 percent increase.

The new task-based wage system dramatically differs from the decades-old, seniority-based salary system used for the 1.02 million workers on government payrolls.

The current system has nine grades, with nine being the lowest. Within grade nine there are 31 incremental wage increases. A public servant climbs a stage every year, so in theory it takes 31 years to reach the top of the wage ladder. But the current system doesn’t take into account the nature of the work or job performance.

“While there are many different tasks among the grade-9 positions, I get paid the same as other grade-9 workers who started their career in the same year as I did, regardless of our different tasks,” said a grade-9 public servant surnamed Kim, who works at the agricultural bureau at a county office in North Chungcheong.

Under the seniority-based system, a grade-9 civil servant will receive 1.39 million won a month at stage 1, according to the 2017 salary system for civil servants. Fast forward to stage 31, the grade-9 worker will make 3 million won a month, a 115 percent hike from the starting base of 1.39 million won. For grade-7 civil servants, the starting pay begins at 1.73 million won a month at stage 1. At stage 31, the pay rises by 100 percent to 3.63 million won a month.

“Seniority-based wage is leftover from past decades marked by fast economic growth [through the 1960s, 70s and 80s] when companies and state-run bodies alike tried to retain labor forces for a long time by promising them rewards for long longevity,” said Bae Kyu-sik, a senior researcher at the Korea Labor Institute.

“And it did play its part successfully over such a high economic growth period when the country was full of young job seekers. But it cannot be sustained in the future, as the country is rapidly becoming an aged society with so many in their 50s on payrolls,” continued the labor policy expert, who was involved in drafting the new wage model.

In fact, the Moon government is planning to expand the new wage system over the next 10 years. To that end, the Ministry of Strategy and Finance has been examining the pros and cons of a performance-related pay system for the public sector and will announce the outcome of its study in March. But it is far from clear whether the bureaucratic community will welcome the new wage system that offers less-generous rewards for its veteran employees.

“I personally prefer a task-based salary to seniority,” said Kim, whose job entails frequent on-site inspections at local farms to prevent and contain contagious disease. “I think I perform more physical tasks such as inspections than my fellow grade-9 workers who do administrative work behind desks, to be honest,” she continued.

But she is skeptical about the application of the performance-led model for rank and file civil servants because of the huge number of beneficiaries of the seniority system.

“The backlash from those who will be affected by the new wage system will be enormous,” said Kim, in her fourth year in public office. “I don’t think the government could risk or withstand such a backlash.”

Bae of the labor institute said the key to expanding the task-based wage system would be to come up with a universal and fair wage system based on job characteristics that can be accepted by the business and government community alike.

“We need a rigorous process to classify and categorize different tasks in the right way so that people can accept the new model. While the new performance-related pay model for the 3,076 workers isn’t perfect, it can be a good starting point to lead us in that direction.”

Under the Moon government’s initiative to turn 200,000 irregular workers in the public sector into permanent positions by 2020, other state-run institutions are following the footsteps of the interior ministry.

Incheon International Airport Corporation announced on Dec. 26 that it plans to turn 10,000 irregular workers into regular employees.

The state-run body said it will directly hire 3,000 of the 10,000 temporary workers, some involved in fire and security services, while its affiliates will employ the rest on full-time contracts. The wage model for the newly transitioned employees is still being worked out.

Other public institutions, such as the National Assembly and the Korea Development Bank, have also followed suit by offering sanitary workers permanent positions.

The National Assembly declined to disclose the wage increase for around 100 of its janitors who have been offered permanent positions over the last year, saying it is “confidential.”

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]