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Make Incentives More Effective

Published: 05 Jan. 2003, 12:39

With the awarding of piece rate bonuses to civil servants and teachers coming up at the end of this month, there is some agitation in the public sector. Under the piece rate bonus system, which was instituted as a means of increasing competitiveness in public service jobs, the 710,000 civil servants who are third-grade section chiefs or below are rated and 70 percent of them are given incentive pay ranging from 50 to 150 percent of their monthly salary. The government has set aside a budget of 203.5 billion won ($180 million) for this purpose. Beginning in July, an extension of this is to be introduced in stages, whereby the salaries of fourth-grade government employees and above will be based on performance, as is done in private corporations.

Some civil servants, the Korea Federation of Teachers' Associations and the Korean Teachers' and Educational Workers' Union object to this bonus system, saying that the ratings are based on paternalism, seniority and allegiance to superiors. The educators' organizations have announced their intention to boycott the bonus awards, explaining that "without a full-fledged system for rating teachers, the bonuses are awarded at the discretion of school principals and the boards of education and are thus likely to foment dissension and dissatisfaction among educational workers."

A look at the working environment in the civil service and in schools makes it easy to understand why there are objections to the bonus system. Of course, we cannot buck the contemporary trend toward increasing competitiveness in the workplace, and this means we do need some means of raising the level of competitiveness in public service jobs, too. Performance evaluations for promotions and for determining salaries are one incentive that can help us achieve that goal.

The problem is what criteria should be used. And what principles should be followed. It is said that in some workplaces, a seniority cutoff point was used and those who were left off the bonus list this time will be given special consideration next year. How is this sort of "splitting the divvy" supposed to lead to better competitiveness? The government needs to institute objective standards. Once the ratings have been given, there is no recourse for appeal, forcing each person to simply "wait his turn" and possibly even worsening abuses. Instead of just rushing ahead, the government could consider approaching this problem gradually, giving consideration to all factors.