MARK BARNES: Linking pay to performance could fix SOEs - and government
The concept of incentive-based remuneration requires little explanation or justification, but it will require a mindset change
I remember my first wage negotiations with the unions. It went something like this. Union: We demand a 10% increase! Me: We've only got eight apples and there are 12 of us - we have to share what we've got, or produce more apples with the same people. If you're looking for a 10% increase, we'll have fewer apples to share. I think it's better to share than tell some of our people they have to go without, so that the rest of us can have a whole apple each. If you tell the truth, the logic is compelling.
We decided we'd share what we've got and then try and grow some more apples, rather than have fewer people (although we'd only encourage good apple producers to stay, and let those who weren't pulling their weight go - now, or later)...