Base public salaries on performance

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Base public salaries on performance

Unlike what many people would assume, the matchlock musket was not a new weapon in late 16th century Joseon and Japan. It was introduced decades earlier by Portuguese merchants, but because of the slow firing process, the Joseon military’s main force was infantry. But Japan was different as it went through the period of warring states. In order to make up for the musket’s slow firing speed, the unit was divided into three rows, each row loading, aiming and firing in cycle to constantly fire at the enemy. And the difference put Joseon in a deadly crisis. Joseon adhered to the expensive hardware of infantry and was defeated by the software-like innovation of running fire.

Efficient software bringing victory over heavy hardware is a meaningful message to the public sector. Public agencies are very competitive as jobseekers favor them for employment stability. But can we expect high performance with a talented workforce who passed the fierce competition?

The current management system at public agencies, where seniority determines position and wage, cannot urge workers to make extra efforts. A performance-based salary system is necessary software for public sector reform, offering more rewards to those who work harder and perform better and give those who come short of expectations motivation.

Introduction of performance-based salary system is on the same track with paradigm change of public service. The public agencies that have provided monopolized service through enormous financial input cannot avoid changes. More agencies need to think from the perspective of the users and improve the quality of services. When fair evaluation systems are supported, the performance-based salary system will become the foundation for healthy internal competition.

In April, the Korea Trade Insurance Corporation has reached an agreement to introduce a performance-based compensation system (the first time for a state-funded financial institution), with 72 percent support from the union members. Evaluation focuses on developing competency, not weeding employees out, through agenda-setting through consultation, mid-year evaluation and monitoring and appeals process.

Organizations that don’t seek innovation are destined to be faced with a crisis. Citizens demand healthy internal competition. A performance-based compensation system is not the end but the beginning of a general performance-based system in the public sector. Pioneering changes in the public sector would win the trust of the citizens with solid performance. We hope the culture will spread to the private sector and the overall economy.

CEO of the Korea Trade Insurance Corporation
Kim Young-hak
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