Don’t make workers suffer
Employers and business management scholars are interested in generating the most output from an employee while taking into account the business environment and profit. Various theories have been experimented with, including motivation. Employees were paid based on their output, but that did not work, so employers tried paying workers according to working hours. They also gave employees performance goals to motivate them to work more aggressively for rewards. But that put too much pressure on workers because employers set goals too high, focusing on corporate profits instead of motivation. When output increases, cost per production decreases, which slows increases in pay. All the experiments proved ineffective during the transition from industrial production to the information society where technology and automation increasingly replaces human labor in mass production and manufacturing flexibility is required to meet diverse consumer taste and needs.
Interest and emphasis in pay differs according to where one stands in economic activity. An employer must decide how to structure base salary and allowances, and whether to link base salary to the period of work in the same company, the value of the work’s responsibility or performance and competence. At the same time, the management has to decide whether to pay by the hour, day, month or year. A company controls wage levels with the total labor costs, or else labor costs productivity. It tends to neglect other factors - work procedures, technology and market conditions, corporate philosophy, organization culture and labor-management relations - that should influence wages.
Empirical studies over the last 100 years have failed to prove the benefits of performance-based wages. Many studies concluded that performance and salary should not be connected in order to motivate employees and generate greater accomplishment. Employees are more moved by clear corporate vision and prospects, job security, satisfaction in the workplace through empathy between the management and employees, and a sense of self-achievement that comes through work. Few would argue for moves that generate more profit and competitiveness for the company. But despite years of corporate attempts and encouragement from the government, performance-inspired salaries still are only questionable in their effectiveness. This is because Korean wage levels do not fully compensate for basic livelihood and are not objectively assessed for fairness. Lack of equality in labor-management relations and social security also makes employees doubtful about their salary levels.
Translation by the Korea JoongAng Daily staff.
JoongAng Ilbo, March 29, Page 28
*The author is the general secretary of the Federation of Korean Trade Unions.
By Lee Jung-sik