FLEXIBLE WAGE POLICY

FLEXIBLE WAGE POLICY: **

(Update and implementation): **

16.

Mdm Ho Geok Choo asked the Minister for Manpower (a) what is the status of progress of the flexible wage policy made by employers; and (b) what is the percentage of companies, local and foreign, now implementing a flexible wage policy.

Dr Ng Eng Hen: The Tripartite Task Force in January 2004 recommended three specific measures for companies to adopt:

(a) A maximum-minimum wage ratio for the same job at 1.5 or less;

(b) A Monthly Variable Component ; and

(c) Payment of bonuses if Key Performance Indicators (KPIs) are achieved.

Our data show that at end 2005, 81% of the private sector workforce was under some form of flexible wages (ie, that their employer has implemented at least one of these three measures). 90% of the workforce in large enterprises is under some form of flexible wages, as compared to only 68% of the workforce in small and medium enterprises.

In terms of the specific measures, the narrowing of the maximum-minimum wage ratio has been most extensively adopted. The least common measure is the introduction of a monthly variable component in the wage structure. This is found in 37% of large enterprises and 13% of SMEs.

We will continue to work with the tripartite partners to facilitate the adoption of the recommended measures to make our wages more responsive to changing business conditions.