Performance-based reform

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Performance-based reform

The city of Ulsan started making efforts last year to break the rule that civil servants are never fired.
Such moves have spread to 15 government agencies and even to public corporations.
For example, Seoul Metro has suggested reforms to its management structure, as it judged that it was in bad shape.
The company has an accumulated deficit of 5.4 trillion won ($5.5 billion) as a result of careless management and high wages.
It is worth nothing that Seoul Metro started to carry out reforms before President Lee Myung-bak started privatizing public corporations as he promised to do as a presidential candidate.
It is more desirable for both companies and workers to make voluntary efforts to restructure and reform management, rather than the government doing the job.
The content of Seoul Metro’s reform plans bodes well for the future. The key of the plan is to get rid of a seniority system of promotions.
Such a system allows people to advance to higher posts after a certain period.
The new plan is to emphasize promotion based on merits, as in the private sector.
In addition, the number of jobs will be reduced by 38.6 percent and the total number of workers will be cut by 3.9 percent, or 404 workers, by the end of this year, and by 20.3 percent, or 2,088 workers, by 2010.
The average manpower for every kilometer of subway run by Seoul Metro is double the average manpower at the eight companies that run the subway systems, and three times higher than in advanced countries.
The average annual salary for a Seoul Metro employee is 52.43 million won, 60 percent higher than the average annual salary for all workers, which is 32.2 million won. Seoul Metro selected 94 incompetent workers as candidates to be fired in the first phase of the reforms.
Included is a worker who received a full year’s salary but worked less than 171 days in a year.
Privatization is certainly the most efficient way to shake up lax management in public corporations. However, it is not possible to privatize all public corporations at the same time.
It is good that public corporations have set out to restructure on their own. Privatization is the next step.
We truly welcome the courageous decision made by Seoul Metro and expect that its reforms will become successful.
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