Premier Sean Chen (陳冲) has decided to allow employees of state-run companies to be paid large year-end bonuses despite public incredulity that staff are to be rewarded despite these companies registering huge losses. Chen has said he will assume political responsibility for the policy.
Considering that many legislators are unhappy with the situation and the Control Yuan has raised the possibility of impeaching Minister of Economic Affairs Shih Yen-shiang (施顏祥) for his failure to introduce corrective measures, one can only imagine that Chen must be bracing himself for a further drop in his already desultory approval ratings.
The end of the year is a time of reckoning. Some companies have done very well over the year, some have not. Some people will be getting a fat bonus, while others will receive a token red envelope and still others will not get a single cent.
Take the case of King-Town Rice Co, which retracted a recall in November because a test report about pesticide residues on their rice was misread. It was a farce that badly hit the company’s sales. It goes without saying that bonuses were thin on the ground in King-Town two months later, and the company also had to cut between 70 and 80 percent of its workforce.
Then there are the unwieldy state-run giants, CPC Corp, Taiwan and Taiwan Power Co (Taipower) with their monopoly or oligarchy holds on the market. Regardless of how well they do, virtually everyone employed there can count on a decent bonus. According to the Ministry of Economic Affairs, Taipower employees will get bonuses equivalent to 1.6 times their monthly salary, and some will receive bonuses 3.65 times their salaries.
The government explained its decision by saying that these companies’ losses were due to changes in government policy and staff still deserve to be rewarded for their hard work. This stance does not make sense.
Of course, if the government feels it has compromised the employees of these companies by introducing policies that place an undue burden on the firms’ ability to turn a profit, then it would make sense to further subsidize the company by way of mitigation.
However, it is completely unacceptable to reward huge losses with generous bonuses. The principle behind bonuses is simple: the better the performance, the higher the bonus. If one performs badly, one forgoes reward.
However, the government has decided to allow the bonuses anyway. They are too generous, especially when one considers what employees of private companies can expect. Furthermore, it is the salaried workers slaving away in these private companies who will ultimately be footing the bill for state firm employees’ year-end bonuses through their taxes. The government is being criminally insensitive by throwing around taxpayers’ money when taxpayers themselves are having to tighten their belts and purse strings trying to get by.
According to a recent survey by an employment agency, about 48 percent of workers will go without a year-end bonus, and of those that do receive one, more than 70 percent will receive less than a month’s salary. These people have worked hard during the year and many are finding it difficult to accept that CPC or Taipower employees, despite those companies losing money, will still be generously rewarded.
The legislature has yet to approve the budget for these state-run companies, but the allocation of bonuses is a done deal. However there should be repercussions. It is too late to do anything about it now, but the state-run businesses must conduct a transparent review of how they give out bonuses.