Flexible wage system in Singapore : acceptability and prospect.

• Main Authors: Chen, Weiting., Ku, Lai Mei., Ye, PeiShi.
• Other Authors: Chew Soon Beng
• Format: Final Year Project
• Language: English
• Published: 2011
• Subjects: DRNTU::Social sciences::Economic development::Singapore
• Online Access: http://hdl.handle.net/10356/44192
• Institution: Nanyang Technological University

The objective of the study was to investigate the acceptability and prospect of Flexible Wage System (FWS) in Singapore, examining impact of union status and establishment size on FWS uptake rate. FWS allows establishments to make necessary adjustments to their wage system according to economic fluctuations, as well as reward employees based on establishment and individual’s performance. Till date, even with FWS available for establishments to adjust their cost, there is still a reliance on Central Provident Fund (CPF) to tide establishments through economic downturn. Given CPF’s safety social net function, it should not be used for cost adjustments, thus there is a need to investigate the relationship between CPF and FWS. To achieve the objectives, analysis of Singapore Wage Report published by Ministry of Manpower was done. Thereafter, interviews were conducted with National Trade Union Congress and ten establishments of various industries and sizes to gather their opinions regarding FWS to substantiate the analysis. The results revealed that the success rate of FWS was attributed largely to unions’ effort, while establishment sizes have relatively less impact on the uptake rate of FWS. Additionally, from the interviews, other factors like nature of industry, administrative cost of implementing FWS and psychological barriers of employees, too influence the uptake rate of FWS. Also, the analysis reveals a complex relationship between FWS uptake rate and CPF, which is greatly dependent on each employer’s perspective. In view of obstacles hindering the uptake rate of FWS and dimming the prospect of FWS, the author had came up with several recommendations such as, an one-stop FWS agency, tax exemption and further research on employees’ opinions on FWS. In all, with more FWS knowledge and time for adjustment, FWS would be more acceptable by establishments.