VARIABLE WAGE SYSTEM

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VARIABLE WAGE SYSTEM

17.

Mr Steve Chia Kiah Hong asked the Minister for Manpower whether the proposed variable wage system is applicable to all employees, including foreign talents and permanent residents, or just applicable to Singaporeans only.

Dr Ng Eng Hen: The Tripartite Taskforce on Wage Restructuring has recommended that companies implement a flexible wage system which comprises a basic wage and a sizeable variable component that is linked to company and/or individual performance. This allows companies to better tie rewards for workers to performance.

The flexible wage system is applicable to the entire workforce including Singaporeans, permanent residents as well as foreign employees. This is because all employees, whether local or foreign, contribute to the performance of the company, and in achieving the key performance indicators. Such a wage system will enable employers to incentivise and reward employees with a higher variable payment when companies perform well. When times are bad and the company's performance is adversely affected, they can adjust wage costs for the company to remain viable and to save jobs.