OPINION> FROM THE CHINESE PRESS
Performance-based pay has some flaws
(China Daily)
Updated: 2009-09-09 07:53

The State Council executive meeting has decided to implement performance-based pay system in public health and basic medical institutions from Oct 1, 2009. The system will be extended to other public institutions next year. But before implementing the reform, authorities should define what is meant by performance of public institutions, says an article in China Youth Daily. Excerpt:

A performance-based pay system links employees' salaries to their personal performance. So implementing such a system will lower costs and help workers improve their efficiency.

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But in contrast to private enterprises, "public institutions" are non-profit social organizations. Their aim is to serve the public, while private firms' top priority is to make profit. Therefore, the criteria of "performance" in private firms and public institutions should be different.

The goal of public institutions, unlike private firms, should be to serve the people selflessly and without an eye on making profit.

The aim of some public institutions that do focus on performance is wrong because their motto is to make profit by prescribing expensive medicines in hospitals and admitting more students to educational organizations.

Such acts violate the very philosophy of public institutions.

The authorities need to balance the implementation of performance-based pay with the maintenance of public institutions' welfare nature. Only thus can more people share the fruits of institutional reform.

(China Daily 09/09/2009 page9)