Exploring the impacts of 1987 nwc's wage reform recommendation on the profit sharing practices in electronics companies

Abstract

The inflexibility in the old wage system, as adopted by many companies in the past, has brought to it many shortcomings, making the system ineffective to a certain extent. Many problems have cropped up due to these shortcomings. As such, to remedy t~e effects and to allow Singapore's wage cost to remain competitive, the flexible wage system, which adjusts the wage according to changing circumstances, is recommended by National Wage Council (NWC) in 1986. Hence, this report purports to give a descriptive analysis of the research on the flexible wage system that so far has been adopted by companies in the Electronic industry. Chapter one gives an introduction to Singapore's wage history, followed by the objectives, scope, limitation and methodology of this research. Chapter two, three and four give a general and descriptive view of the past and present wage systems which are based on authors' literature review. Pertaining to the above mentioned chapters are the description of the structure of the old wage system, the shortcomings and problems inherent in the old system, the roles played by NWC in Singapore's wage practices, and the features of the flexible wage system as recommended by NWC. This research has been aided primarily through a series of interviews conducted with companies in the electronic industry. The next few chapters (5, 6, 7, 8 & 9) give an evaluative study based on the . interviews conducted with the selected companies. These include companies' old and new wage systems, reasons for them to adopt the flexible wage system, extent of NWC roles particularly the companies' decision over the choice of the recommended models, procedures in structuring the flexible wage system and impacts of flexible wage system on companies' performance. Last but not least, an overview of the whole report and suggested recommendations are provided for in the concluding chapter.