Do we have the minimum wage to make ends meet?

Singapore does not have any minimum wage law and does not implement a minimum wage system. It postulates that wages should be determined by free market forces of supply and demand. Employers and workers should be allowed to negotiate and mutually agree on the wages to be paid before they enter into an employment contract.

The National Wages Council (NWC) was established in 1972 to advise the government on wage policies and also issue wage guidelines in line with long-term economic objectives. The NWC’s recommendations, when accepted by the government, serve as a basis for wage negotiations between employers and unions. NWC’s recommendations apply to both the public and public sectors

The key function of the NWC is to enhance Singapore’s competitiveness in global markets by adjusting wages in an orderly manner. With this as its purpose, the goal of the NWC is to recommend wage policies and guidelines that attract foreign direct investments into the country, and in its process provide jobs for its local and overseas residents.

A minimum wage is defined by International Labour Organization as:

The minimum amount that must be paid to the majority of the workers of a country, generally on an hourly, daily or monthly basis; and which is ideally fixed in such a way as to cover the minimum needs of the worker and his/her family, in light of the prevailing national economic and social conditions.

According to the conditions for work and employment information sheet published by the International Labour Organization, minimum wage laws are now enforced in more than 90% of all countries.

Adjustments to the minimum wage are driven by two criteria: social, and economic. The social criteria takes into account the needs of the workers and their families, the cost of living and / or inflation, general level of wages, and the level of social benefits. The economic factors are the economic situation and / or development of the country, the capacity of enterprises to pay, employment, and productivity.

There have been commentaries on introducing minimum wage legislation in Singapore. Many supporters of the minimum wage assert that it is a matter of ethics and social justice that helps reduce exploitation and ensures workers can afford what are considered to be basic necessities. Others, however, claim it hurts businesses by reducing profit margins, and also increases unemployment. While the discussion on minimum wage continues, Singapore (Incorporated) does not have a legislation on minimum wage.

The National Wages Council (NWC) has completed its deliberations on wage and wage-related guidelines for 2008/2009. In its deliberations, the Council took into account the prevailing national economic factors, such as its economic performance, labor market conditions, productivity, wages and inflation trends, Singapore's cost competitiveness, uncertain economic outlook, and high inflation.

The Singapore government has accepted the NWC’s recommendation covering the period from 1 July 2008 to 30 June 2009. As in previous submissions, the recommendations by NWC were driven mostly from an economics perspective such as affordability of employers, increase in productivity of workers, and wage flexibility.

In addressing the high inflation in Singapore, the council recommends a one-off special lump sum payment for rank-and-file workers with heavier weightage for low wage workers. The one-off lump sum payment has been hailed by main stream media as an innovation of NWC, and was reported to be widely received by both employers federations and union members.

Although the lump sum inflation buster payment is meant to assist rank and file workers to make ends meet, the council could not prescribe the quantum to be payable. Hence, the amount of the one-off lump sum payable and its implementation are left to the creativity of companies and perhaps the devices of compensation and benefits practitioners.

NWC recommendations on wage and wage-related guidelines did not, in my opinion, delve adequately into the social factors such as the ability of workers to pay for what are considered to be basic necessities. As inflation sets in, a higher benchmark in terms of pricing for a basket of food will be re-established, and the affordability of workers to purchase basic necessities threatened.

Why do workers work? At the basic level, rank and file workers work to bring bread (and rice) to the table for themselves and their families. With the price of food and commodities reaching dizzying heights, are they still able to bring bread crump to the table?

Singapore could introduce an inflation-indexed wage system for its rank-and-file workers. Inflation indexed wage system means that wages would automatically go up by the extent of consumer price index (CPI) increase. The idea of an inflation-index wage system is not far fetched because the CPI indicator may be embedded as a key performance measure for rewarding public service administrators. Perhaps, the amount of the one-off special inflation buster pay could be index to consumer price index, and made variable according to employee levels. After all, the one-off special lump sum payment recommended by the NWC is intended to fight inflation, or isn't it?

Will we have the minimum wage to make ends meet?

Can we work anywhere we please so long as we get the job done?

One of the most difficult question facing employers is on “how to keep the people who keep you in business”. As history reveals, the traditional method to attract and retain talented people is to throw money and more money at them. While this “old school” approach appears effective until greed consumes some of them, an appealing solution is to engage talented employees particularly the younger generation with flexible work practices.

According to Marcia Hall, owner of Reputation Counts, an American Severna Park-based firm that provides workforce development and productivity training, a work-life balance is particularly important to members of the "millennial generation" who were born in the early 1980s. They not only grew up under intense pressure to get into the best schools but also have become more aware of their mortality with the terrorist attacks of Sept. 11, 2001, and other tragic events, she said. "The effect has been that their tomorrow is unpredictable," Ms. Hall said. "That means time for family and time for their personal life."

Money isn't the key to keeping Kiwi workers either - it's improving their work-life balance and supporting their careers. Remuneration consultants DSD Consulting reported on the importance of work life balance in their recent remuneration and market trends survey of 65 leading companies in New Zealand.

"Companies need to realize that, for many New Zealanders, their career and work-life balance is increasingly important. They want to work and be appreciated for what they do but they also want to be able to spend time with their families and pursue their other interests," says DSD director Susan Doughty.

DSD says the research shows bosses also need to accept that Generation Y employees don’t stay in jobs more than three or four years, so notions such as long-service bonuses don't appeal anymore. Employers need to think differently to remain interesting to their work force, especially when unemployment is so low and jobs are readily available.

Technology has allowed people to stay connected from anywhere. Perhaps, flexible working practices and "family-friendly policies" that help employees achieve a balance between work and life should be the alternate reward management practice as baby boomers retire later and employers search for talented people in a tight labor market.

With escalating fuel prices, additional taxi fee surcharges, increase on mass rapid transport (MRT) and bus fares, and more recently, an increase in the number of electronic road pricing gantries in Singapore, there is really no merit in merit pay increase.

Compensation and benefits management practitioners need to work harder than simply rely on benchmarked salary surveys to stay on the job. Instead of the 5 C’s in Singapore, "we talk about the four Fs being the key to what employees value - that's finance, future, fun and features. It's the combination of pay with a range of other factors - both financial and non-financial - that determines whether your staff will stay or not." DSD director, Una Diver commented.

Should we rethink the traditional boundaries of a “9 to 5” workday? Are flexible working arrangements and unstructured work environments crucial for recruiting and retaining talented people? Can we cultivate a flexible work culture by allowing people to work anywhere they please so long as they get the job done. Can we retain employees by introducing job sharing?

More importantly, can we work anywhere we please so long as we get the job done relevant to the (overseas)Chinese work communities?

Is Grow 2.0 the Growth Bonus?

Based on the response from the Singapore Teachers Union on the Ministry of Education's (MOE) announcement of its new renumeration scheme, Grow 2.0 may have the effect of attracting talented people to the education profession and positioning teachers and educators more than "a step child" to the other professions.


http://www.todayonline.com, 29 December 2007, More Apples For Teachers

From a reward management perspective, money is never enough. Simply throwing more cash at a problem may motivate teachers to behave like mercenaries. It may also have the undesired outcome of attracting more people into the profession for the wrong reasons, as semi-retired military officers and the unemployed may have once dream of becoming teachers in our schools.

The internet poll conducted by Channel News Asia (accessed on 31 December 2007, 0535 hr Singapore time) re-enforces the notion of "money for nothing" syndrome.

http://www.channelnewsasia.com/polls/index.php?action=vote&id=74&ranid=7757&voteNr=1

Perhaps, Grow 2.0 may address the "money not enough" mentality fueled by debates on ministerial salaries and pay hikes of public servants. The most significant change in Grow 2.0, in my opinion, is that public servants at the Singapore Ministry of Education may no longer be perceived as "money-grabbers" conducting the business of education.

Competitive salaries, as the Singapore Minister of Education commented, are "a necessary condition, even if they are not sufficient to ensuring a top-class teaching service.” He adds that “there is no trade-off between ensuring that we pay teachers competitively and sustaining the commitment and passion for teaching”.

More importantly, the Growth, Career Development, and Well-Being components of the MOE's reward program may be relevant in attracting and retaining people who have the passion to teach, to share knowledge, and to do something useful with their lives. After all, it has always been the non-tangible rewards that attracted the "people sculptors' into the teaching profession and education in the first place.

In addition, Growth 2.0 may be a breath of fresh air in an otherwise "Gordon Gekko" playground. Resource allocation, continuous learning, career mobility, balance in work life for teachers and their spouses regardless of gender, work performance differentiation, spot bonuses, and the refinements contained in the connect (gratuity?) program could spark an "education revolution" within the teaching profession. Whether it stays a revolution in the classroom remains to be seen as the devil is always in the details.

On a positive note, Grow 2.0 may not be contingent on the exceptionable growth (?) of the Singapore economy. Inspiring young people to be entrepreneurs through education is very different from motivating "bottom-line" results-oriented behaviours regardless of ethics, morality, and its undesired consequences.

An English teacher from a secondary school sums up the MOE reward initiative aptly, “Performance-based pay is a double edged sword because it benefits those who shine the most.” The teacher who declined to be named adds “But there are teachers who are more low-profile, yet doing very good work that might go unnoticed.” But then, if you are starving, it is better to be in the kitchen.

Regardless, the anonymous English teacher has a point. We want our teachers to mould our kids and young adults into thinkers, and reflective practitioners. In the realm of "Gordon Gekko", people may have substantial form and dubious substance. These are the extrovert "money-grabbers", and the highly successful players in the game. As we frame our performance indicators for teachers and educators, we should avoid the folly of "rewarding A while hoping for B".

Incidentally, GROW is an acronym for the MOE pay package for "the professional and personal Growth of education officers, through better Recognition, Opportunities, and seeing to their Well-being". What a mouthful !!! and how creative can our public servants at MOE get?

Version 1.0 was announced on 4 September 2006, and version 2.0 on Friday. Perhaps, our technocrats are migrating from Web 1.0 to Web 2.0 metaphorically. Can we stop dehumanizing people by digitalizing them with alphanumeric labels? Otherwise, we may get to GROW version 3.0, release 8A in quick time.

Tomorrow will be a brand new year. If there is a new year message, it would be a "keep it simple, stupid" (KISS) message. The success of a reward program lies in its simplicity, and the ability to communicate its value. Not many of us will comprehend the details of our hospitalization benefits or our insurance policy until we are warded, strapped to our hospital beds, and search frantically for that additional insurance cover presented in small prints.

Happy New Year and Good Health !!!

Are we willing to match an offer from a competitor firm to retain a key employee?

"A key employee has just presented his business manager with a job offer for significantly higher pay from a competitor firm. The threatened departure of the employee catches the business manager by surprise. Alarmed, the business manager contacts the human resource manager seeking to counter the external recruitment effort. An impassioned plea is made to authorize an exceptional pay package to match the offer. Under pressure and constrained for time, the human resource manager accedes to the business manager’s request, retaining the employee and in the process undermines the integrity of the company’s overall pay policy and practice."

As practitioners, we encounter a dilemma when the extension of a counteroffer is necessary to retain key employees. On one hand, we are reluctant to participate in an upward pay spiral by matching competitors’ offers with counteroffers. On the other hand, the bidding may be justified when the potential contributions and/or the difficulty of replacing the employee are great. In addition, matching offers of competitor firms promulgate a 'greed is good' culture whereby opportunistic employees solicit bids from competitor firms to extort higher pay from the company.

Simply aligning employee pay rates with the market median rates may not be sufficient to keep the headhunters at bay. Also, it would be naïve to presume that adherence to a market median, or an upper quartile pay practice should automatically translates into employee retention.

It is time to focus on market pricing of jobs and institute retention tactics in anticipation of the prospect of employees receiving job offers from competitor firms. Regardless of perceived pay equity challenges, market pricing of jobs is individual centric.

In anticipation of competitive bids in the war for talented people, should we offer key employees salaries commensurate with the alternative jobs (real or hypothetical) they could hold, or can we afford not to?

A recent employment outlook survey suggests that the "barbarians are already at the gates" ...

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Employers see strong hiring in Q1 next year: survey
Business Times Singapore, 11 December 2007
By Chow Penn Nee
(c) 2007 Singapore Press Holdings Limited

THE hunt for talent shows no signs of abating, as Singapore employers will actively recruit qualified staff from January to March next year, according to a quarterly survey measuring employers' intentions to hire or fire employees.

Conducted by US-based Manpower Inc, the Manpower Employment Outlook Survey polled 52,000 public and private companies in 27 countries.

Of the 736 employers polled in Singapore, net employment outlook - the percentage of employers looking to hire minus those expecting a decrease in employment - was 51 per cent. This indicates that employers throughout Singapore will continue to hire at a vigorous pace, said Manpower. This is nine percentage points higher than in the fourth quarter of 2007.

Forty-five per cent of employers said they expect to hire more people during the first quarter of 2008, while 2 per cent expect to reduce staffing levels, and 24 per cent report no change in hiring intentions.

C K Goh Rosa, country manager of Manpower Singapore, noted that job seekers are more selective with job offers and are more demanding in negotiating salary packages. 'With the consistently strong hiring outlook, we may see a continuous trend of rising salary packages to attract and retain talent. This will drive up operating costs and is a source of concern for most companies.'

She added: 'It will be a good time to invest in training the mature workforce to narrow the gap of talent shortages.'

Employers in the public administration and education sector report the strongest hiring outlook of 70 per cent, which is a marked increase from the previous quarter, and from a year ago. The finance, insurance and real estate sector was the second strongest with a net outlook of 67 per cent, a slight drop from the previous quarter, and a fall from a year ago.

The mining and construction sector was the third strongest in hiring outlook, with 59 per cent, up from a quarter ago, but a drop year-on-year. Employers in the wholesale and retail trade sector report the slowest hiring pace with an outlook of 33 per cent, higher than a quarter ago but a fall from the previous year.

'The sharp increase in the public administration and education sector outlook is likely due to the increase in enrolments in training institutions and learning centres in Singapore,' said Ms Goh Rosa. 'More people are looking to invest in personal advancement and marketability. We are seeing signs of companies sending their mature employees to courses to improve their skill sets and knowledge in an effort to extend their employment.'

In the Asia-Pacific, hiring activity is expected to be positive, but employers in Australia, China, Japan, New Zealand, Singapore and Taiwan show a slower pace of hiring from a year ago. On a quarterly basis, however, net employment outlook improved in China, Hong Kong, Singapore and Taiwan.

Globally, the strongest first quarter hiring expectations were reported in Peru, Singapore, India, Argentina, Costa Rica, Hong Kong and South Africa. Employers in Ireland reported the least optimistic hiring plans.

Piloting for more pay?

TodayOnline, 20 November 2007, Singapore

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Airfinance Journal, 01432257, Jun2007, Issue 301

Singapore Airlines ordered to pay A380 pilots a premium by arbitration court
©Euromoney Institutional Investor PLC
www.euromoneyplc.com

The Industrial Arbitration Court (IAC) in Singapore has decided in favour of the Air Line Pilots Association (Singapore) and ordered Singapore Airlines to pay flight-deck crew operating the A380 more than a premium compared with those operating other aircraft in its fleet. Although the decision will not create a precedent outside of Singapore from a legal perspective, it is nonetheless possible that the decision will set a benchmark for other carriers.

Under the ruling, the minimum salary for captains on the A380 will start at about $7,000 per month, which is $460 more than captains earn on the 747.

The union had asked for a salary scale starting at $8,618 for A380 captains, arguing that pilots operating the larger aircraft have added responsibilities and should be paid more. The carrier took the position that because of advances in technology, operating the A380 is no more difficult than other aircraft fly-by-wire.

The IAC panel concluded that the "ease with which modern airplanes may be manoeuvered in the air and on the ground is, by itself, not a reason for reducing pilots' salaries".