ALOR STAR: The progressive wage policy (PWP) will require meticulous implementation supported by a comprehensive policy to ensure fair performance evaluation among workers.
In lauding the government's move to implement PWP this year, Malaysia Trades Unions Congress (MTUC) president Mohd Effendy Abdul Ghani said PWP was a crucial reform towards achieving social justice and fairer economic distribution.
He said PWP would ensure companies that recorded huge profits share their windfall through fairer wage structures.
"It is a strategic move to address the issue of static wages, particularly among long-serving workers who are trapped in a minimum wage structure without a fair increment.
"For companies, PWP offers flexibility to adjust wages based on budget and needs, while ensuring that high-performing employees are rewarded fairly.
"This will improve the workers' satisfaction as they are rewarded for their experience and skills, creating a win-win situation for companies and employees," he said.
However, he stressed that it was necessary for the policy to be implemented objectively, based on a clear understanding between employers and their employees.
"For workers, the pressure to achieve a certain level of performance to qualify for a wage increment may cause stress or burnout, if not properly managed.
"In certain industries, difficulties in gauging performance objectively may lead to injustice, while excessive focus on progressive wages may risk triggering an over-competitive work culture that may compromise teamwork.
"Poor balance between work and personal life may also affect workers' personal lives if they are too preoccupied with achieving progressive wage targets," he told the New Straits Times.
Effendy said those were among the challenges of PWP that have been identified by MTUC.
He added that the key challenge is coordination among all stakeholders, which can be addressed through continuous dialogue between the government, employers and the workers.
"Companies have to ensure that the performance criteria are clear, objective and measurable so that the employees truly understand what the employers expect from them.
"Periodical performance assessment is essential to provide constructive feedback, with flexible wage increments that suit specific job scopes or departments.
"Wage increments also have to be realistic and align with the company's capability without putting pressure on the organisation's finances," he said.
Effendy also pointed out the importance of the effectiveness of training provided by employers, stressing that it must be carried out with proper accreditation as it helps the workers in achieving their performance targets.
He added that the success of the policy depends heavily on firm enforcement and close supervision to ensure that it is being carried out properly.
"MTUC wishes to stress that active support from the government is very important, and this includes providing incentives such as tax relief and subsidies to companies that support and adopt the policy.
"Continuous dialogue between the government, the employers and the trade unions is the key to addressing these issues so that the PWP will create a balanced benefit for all parties," he said.
He added that Malaysia may learn from the success stories of PWP policies in developed countries such as Germany, Sweden, Canada, Norway, Australia and Singapore.
Last Friday, Prime Minister Datuk Seri Anwar Ibrahim announced that pushing for better wages from government-linked investment companies (GLIC), government-linked companies (GLC), and companies with massive profits was one of his main focuses for this year.