Lewis
Andrew Green, Acting Business Co-ordinator
DON'T GET too excited about the arguments coming from unions that they are aiming for wage settlements reflecting the level of inflation.
Rather than handing out generalised pay increases, Herbert Lewis, Jamaica Employers' Federation president, says pay increases need to be linked to productivity. But implementing this has been an uphill task.
"What we find is that over the years we have been giving across-the-board increases," Mr. Lewis said. "This has not always been in keeping with any level of productivity to justify those increases, so we are advocating performance-based pay."
But Vincent Morrison, National Workers Union vice-president, said that when the inflation rate was in single digits, wage settlements were generally in single digits. With inflation projected at 13 per cent by the Bank of Jamaica, he said, "certainly the settlements will have to be around 13 per cent or more."
Mr. Morrison said there was a danger of wages and prices spiralling upwards, but he said this could be stopped by the private sector containing profit margins.
Unions will not win the inflation battle by pushing up wages, said economist Omri Evans. Higher salaries drive inflation, which then gobbles up the salary advances negotiated.
As well, "workers don't have very strong bargaining power now," Dr. Evans conceded. In Jamaica's present economic environment, "a wage push would cause layoffs and even company closures."
Unions have to be cautious given the need to save jobs, Mr. Morrison said. "Whatever we do, I think the most important consideration will be how we protect jobs out there. That is why we cannot rush to a position before carefully studying it."
CHALLENGE
The challenge Jamaica faces is that its productivity has not been growing, Dr. Evans said. "Without a productivity rise, there is no justification for a salary increase."
Mr. Morrison said, "if we don't have high productivity, we will not be able to contain inflation."
The Government, Jamaica's biggest employer, plans to implement a performance-based payment programme for teachers, its largest group of employees. Education Minister, Maxine Henry-Wilson said it is to start in January 2004.
Substantial segments of the civil service and the wider state sector are being shifted over to productivity programmes. With 2,000 workers formerly assessed on their years of service, the Jamaica Urban Transit Company (JUTC) is one of the latest to attempt the switch.
The programme concept is one that should be attractive to both employees and employers, requiring that performance criteria be clear, sensible, and measurement equitable.
But there can be problems with the implementation as in the case where employees do not meet the performance criteria. As well, a fully effective programme requires that an organisation reshape itself to give employees the leeway to maximise their performance.
"You cannot measure what does not exist," Wentworth Gabbidon, newly-elected Jamaica Teachers' Association's president, said on Monday. He said performance measurement would be inappropriate before the required inputs are made in the educational system to allow it to function effectively.
OBSTACLE
One obstacle has been a lack of incentives that the Government could offer to encourage such programmes, Dr. Evans said. The main obstacle over the years has been Jamaica's protected economy, Mr. Morrison said. With the high protective barriers that existed around the economy, firms could simply raise prices to cover higher costs.
"When you came to talk about productivity, these were foreign phrases," the union executive said. "Now the economy is becoming more competitive, you don't have that leverage to manoeuvre with prices."
Under the new circumstances, Mr. Morrison said, "unions have to ensure that whatever impediments there are regarding productivity arrangements, we do what is in our power to ensure that the workplace is productive."
