Government Pushes Seoul to Implement Performance-based Salary System

by YuGee / Oct 03, 2016 11:03 AM EDT

A British architectural critic names Seoul's Lotte Worl Tower as one of the "buildings to look out for in 2016." (Photo by Chung Sung Jun / Getty Images)

In order for public bodies to become more competitive, the South Korean government on Friday asked Seoul city officials to implement a performance-based wage system for the organizations under it.

In a Yonhap News Agency report, the Ministry of the Interior and the finance and labor ministries issued a joint statement that urges the Seoul Metropolitan Government to show more interest in dropping the outdated seniority-based wage system.

One of the main economic focus of President Park Geun Hye is the adoption of the wage system that is based on an employee's performance both in the public and private sectors. This is essential in bringing down costs and developing more jobs for the youth amidst the sluggish domestic labor industry.

The South Korean government stated, "The performance-based wage system aims to improve the efficiency of public organizations through reorganizing the payment structure. All public bodies should adopt the system within this year. Seoul-based public organizations cannot be exceptions from the efforts to spread the performance-based system."

The government also stated that it will take actions against public organizations that have not yet used the system, and it will give incentives and compensations to those companies who have already adopted the proposed wage system. Some of the penalties that could be given to organizations include the freezing of wages for organizations and corporations that fail to adopt it.

On September 29, workers of the South Korea's subway service concluded their three-day strike after getting a response and compromise with the management on the adoption of a performance-based pay system.

The agreement asked the management to reach an agreement with the workers before implementing the new salary system. The two parties also reached a deal to not fire under-performing employees.

On Friday, some subway workers from Busan also decided to temporarily halt their protest which has lasted for four days. The workers ask the management to hold a talk in the near future. The protest is also focused on the new salary system.