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SINGAPORE: A local company has managed to turn a problem into profits, by changing how it pays its staff.
Singapore Cruise Centre saw a 90 per cent drop in passenger traffic during SARS.
Instead of laying off their workers, management chose to their make wage structure more flexible.
The result - workers got to keep their jobs and are now more committed.
Many companies like the Cruise Centre have been able to introduce better pay structures by working with their respective unions.
Today, about 97 per cent of the workforce within the unionised sectors practice some form of flexible wage system, such as having the Monthly Variable Component.
During the SARS crisis, 40-year-old Albert Wong could have been retrenched, but he got to keep his job when his bosses at the Singapore Cruise Centre reformed its wage structure.
Says Cheong Teow Cheng, President of the Singapore Cruise Centre, "When we restructure the wages, our cost is controlled. It doesn't spiral out of control. And jobs are now being paid based on performance, job-size, rather than seniority.
"And these are the factors that control our cost and all we now need to do is to grow our top line so that our profits will turn out better. If we didn't embark on this wage restructuring, in another downturn of the economy, then we'd have no choice but to lay off some workers."
And when staff are rewarded for how they perform, this company notices that its workers are more motivated.
"In the past, some of my colleagues, I noticed that they'd just do the routine things, whatever you ask them to do, they'll just do it. But with this wage restructuring, what happens is, they put in more effort. I can see some kind of passion or fire in them.
"Sometimes, we offer them jobs, or they'll volunteer for jobs. So they know at the end of the day, when we do appraisal, we'll look at all these extras that they do," says Albert Wong, Operations Manager, Singapore Cruise Centre.
The cruise centre, which operates three terminals at Harbour Front, employs about 90 workers.
Since the company made its pay structure more flexible, it has been able to retain and cultivate talented employees.
The company is also in a better position now to re-hire older workers.
For Keppel Shipyard, what works is the introduction of a Monthly Variable Component or MVC.
Says Chee Jin Kiong, Executive Director, Human Resources, Keppel Shipyard, "Since the completion of the MVC, the trend of the company bonuses are on the rise. It was from three over months to last year of 7.2 months.
"With this wage reform, there is a lesser chance of retrenchment because when the business is not doing well, the first to go is the variable portion. And then there comes retrenchment and we hope that'll never happen to us."
Companies say they successfully implemented the flexible wage structure, with the help of unions who managed to explain to their members, why changes to their pay were necessary. - CNA/yy
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