Types of pay system
□ Seniority-based pay system: Wages are decided according to the number of consecutive years of service, widely used in Korea.
□ Job-based pay system: Wages are decided according to the level of work difficulty, workload intensity, level of work responsibility, required skills. Wage adjustment in principle can not be made without changes in given job.
□ Competency-based pay system: Wages are decided according to knowledge, skills and experience. The level of knowledge and skill is linked to the seniority to a certain extent, as wages go up according to the number of consecutive years of service.
□ Function-based pay system: It is widely used in Japan. Experts in Korea see the system as the mix of 'job-based pay system with competency-based pay system' or 'job-based pay system with performance-based pay system'.
□ Performance-based pay system: Wages are decided according to the performance. It is difficult to see it as an independent wage-setting system.
After the public institution steering committee under the Ministry of Strategy and Finance on June 16 decided to rescind the performance-
based pay system which had been imposed to the public institutions by the former Park Geun-hye administration, now attention is growing to what kind pay system would be applied to the public institutions. The pay system which has been discussed most is the job-
based pay system. It is the wage-
setting system that decides the wage according to the level of work difficulty, workload intensity, level of work responsibility and required skills.
President Moon Jae-in expressed his opposition to the Park Geun-hye style performance-based pay system during his presidential election campaign and also stressed that it is important to introduce the job-based pay system to overcome the structural problem of seniority-based pay system. Park Soon-
ae who is heading the public institution management assessment team said that the Ministry of Strategy and Finance should study the job-based pay system to prepare a new pay system.
However, Park Kwang-
on, spokesperson of the Presidential Advisory Committee for State Affairs Planning said that nothing has been decided to replace the performance-based pay system. Labor experts raise concerns that conditions are not yet addressed to introduce the job-based pay system.
reported by Kim Hak-tae
translated by Kim Sung-jin
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