Friday, April 13, 2007

Dangers of Benchmarking Minister's Salaries

WidgetBucks - Trend Watch -

To ensure I get a nice balance view of the world, I do not just read our usual govt approved media (ranked 147th in terms of free speech), but also some online, alternative view publications. I am not saying which is right or wrong, but having multiple views is good way to get the brain thinking. I rather not end up like some mindless autoMAN of an engineer in the future.

This is the latest article from theonlinecitizen, and i feel its a pretty good read.


From “boboshooter”

I would like to add to the discussions and debates regarding the latest round of ministerial and civil service pay increases.

Firstly I applaud our Prime Minister for taking the lead and donating his increments to charity. I hope the other ministers will follow suit. However, even if they do so, what they do only masks the symptoms but do not solve the root cause of the problem that caused the public’s anger in the first place.

Benchmarks are supposed to be external indicators which people measure themselves against. They are supposed to be independent and immovable numbers that people (at least individually) cannot influence or change. Hence when a law firm pays a top lawyer a remuneration package based on law industry benchmarks, the lawyer is just a “taker” - he cannot engineer changes in the industry to increase the benchmark so he gets a higher pay.

Influence over benchmarks

However, the same cannot be said of the collective efforts of the entire top echelon of the civil service in Singapore. By the force of the laws, the rules and the policies they formulate, their pervasiveness in all aspects of Singapore life, I would argue they have considerable, if not an all-encompassing influence over the benchmarks that they use to measure themselves against. So in other words, the “benchmark” has instead become some sort of collective “performance indicator” for top civil servants and it is one that potentially rewards the wrong performance targets.

Any basic management text would tell you that people are influenced to behave in a certain way through incentives and disincentives given to them. In the case of our top civil servants, their pay is directly linked to the pay of a small group of top private sector earners in Singapore. As such, if top earners earn more, they earn more too. Is this not a clear cut incentive for our top civil servants, ministers included, to collectively ensure that the group whose pay that they are benchmarked against, do even better?

An “elitist” malaise

Many people feel that our national policies are increasingly “elitist” - designed to nurture few “winners” that “take all”. Better still, why not just import a number of highly paid “foreign talents” and make them Singaporeans or PRs? This will have immediate impact on (their) bottom lines. Therefore is there any wonder why, in the period of a few years, the benchmark figure gone up while everybody else is scratching their heads and asking ” I where got increment“?

This is precisely the malaise that has affected our country - In the recent years since this benchmark has been in place, top salaries in Singapore have sky rocketed, while middle incomes have stagnated, and bottom incomes have fallen off. We see more Ferraris on the street nowadays just as we see more homeless people. Is this inevitable with globalisation?..........

full article

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