State Firms Urged to Adopt Performance-Based Salary System

Jakarta (Antara) - The State Enterprises Ministry is encouraging state firms to link employees' salaries with their performance to ensure good corporate governance and justice to staffers. "We are encouraging state firms to apply a fair remuneration system and create clean companies by curbing corruption-tainted practices," said State Enterprises Minister Dahlan Iskan after a meeting of state firms' leaders at the head office of state port operator PT Pelindo II here on Thursday. A performance-based salary system will create a better work culture, he noted. "Don't let companies pay equal salaries to diligent and lazy employees, and clever and stupid employees. The term 'equal salaries' will no longer exist," he added. It will be easy to apply the remuneration system because it makes a distinction between diligent and lazy employees, he observed. "The salaries of fellow division heads and fellow managers will no longer be the same. It will depend upon their (level of) achievement. The policy is designed to treat employees who have made an achievement differently from those who have not," he said. The salaries will be determined depending upon the financial capacity of each state firm, he stated. Therefore, the minister said he will ask all of Indonesia's 141 state firms to incorporate payrolls in their business plans next year. "The remuneration system will be decided at each state firm's general meeting of shareholders," he said. A number of state firms, including state oil and gas company Pertamina, state gas company PGN, and state telecommunications operator PT Telkom, have applied the system, he added. (*)