Labour incentives in Singapore

Abstract

The objectives of this report are to find out the various forms of incentive schemes that are commonly implemented in Singapore and their reasons for doing so. This study also seeks to provide suggestions on factors contributing towards the implementation of a successful incentive scheme. For the purpose of this study, the authors have randomly selected a total of 200 listed and unlisted companies as their sample for the questionnaire survey. In addition, interviews were conducted with two selected companies (one listed and one unlisted) for a detailed study of their incentive schemes. The analysis indicated that most companies in Singapore have implemented some forms of incentive schemes for their managerial and non-managerial staff. Amongst the different forms of schemes available, financial incentives are more commonly adopted and practised as compared to non-financial incentives. The bonus scheme is the most popular form of financial incentive while the provision of training emerges as the most widely practised form of non-financial incentive for employees. In addition, share ownership scheme seems to be another popular form of financial scheme, especially for the managerial staff. The results have also shown that there is no significant difference in the types of incentives implemented by listed and unlisted companies. The two main objectives that are cited by companies in implementing incentive schemes are to promote employees' loyalty and to increase their productivity. Lastly, several limitations and recommendations are highlighted towards the end of this report for further consideration and discussion.