Source: MoF

KUALA LUMPUR, Oct 11 -- The implementation of Productivity-linked Wage System (PLWS) is expected to benefit both employers and employees and would ensure that both sides obtain a fair share of the gains from productivity or performance improvement, says the Finance Ministry (MoF).

In its Economic Outlook 2020 report released today, the MOF said the PLWS would also provide a more flexible wage structure that can withstand economic uncertainties as well as ensure job stability and reduce the likelihood of retrenchment during down-cycles.

"Hence, synergies between the private sector and government agencies should be strengthened to ensure industries reap the benefits from the implementation of PLWS, to enhance firms' competitiveness and support the country's aspiration in achieving the Shared Prosperity Vision 2030," it said.

According to the report, PLWS comprises fixed and variable components, whereby the fixed component consists of basic salary, annual salary increment and contractual bonus.

Whereas the variable component is based on employees’ productivity, it said.

"Both components are then mapped onto three PLWS models, namely productivity, profitability and combined models.

"Other elements in the variable component include piece-rate system, attendance incentives, service charge and skills allowance," it said.

MOF said various efforts had been undertaken by Human Resources Ministry and Malaysia Productivity Corporation (MPC) to intensify the adoption of PLWS, including training, workshops, seminars, briefings, consultancies, showcases of best practices, as well as PLWS Awards programme.

However, it said PLWS adoption remained low in the country, contributed by factors such as unawareness on the benefits of PLWS, and assistance provided by the government in adopting the system.

"Resistance from trade unions and high implementation cost also contributed to the slow adoption," it said.

Hence, it said concerted efforts will be continued to widen the implementation of PLWS to ensure that wages correlate with productivity level, and the Human Resources Development Corporation would continue to focus on upskilling and reskilling programmes and expand the coverage of sectors to enable more employees to be trained.

“A comprehensive study on the implementation of PLWS could be conducted to further analyse the adoption of the system across sectors, states, firm size and employment categories.

-- BERNAMA