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WHAT IS PROGRESSIVE
WAGE MODEL?
WHAT IS PROGRESSIVE WAGE MODEL?
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HOW DO THE FOUR LADDERS WORK TOGETHER?
WHAT IS IN IT FOR COMPANIES?
THREE KEY MYTHS
RESOURCES
NOTES
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Businesses need to improve the
productivity of their operations through
innovation, as well as attract, retain and
make better use of every worker. To grow
wages in a sustainable way, employees
need to upgrade skills, improve
productivity and take on higher value jobs.
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HOW CAN COMPANIES GET STARTED?
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As Singapore faces a new reality of slower
employment growth and restructures itself
towards a high productivity economy,
new mindsets must be undertaken to
overcome the impending challenges.
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The Progressive Wage Model (PWM) is
a four-in-one model of skills upgrading,
productivity improvement, career
advancement and wage progression. It enables companies to make better use of manpower and pay higher wages,
commensurate with larger job scopes and higher productivity levels.
The PWM is for workers at all levels,
for all sizes of companies, across
all industries and sectors. It has
been implemented for Professionals, Managers and Executives (PMEs) in
sectors including hospitality, healthcare
and petroleum, as well as low-wage
sectors such as cleaning and security.
SKILLS
UPGRADING
PRODUCTIVITY
IMPROVEMENT
CAREER
ADVANCEMENT
CAREER
PATH
SALARY
PROGRESSION
PROGRESSIVE WAGE MODEL
CONTENTS
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HOW DO THE FOUR LADDERS
WORK TOGETHER?
The PWM illustrates a clear progression
of wages with skills upgrading and career
progression; allowing pay increase to
move in tandem with productivity gains.
All four ladders are integral and equally
important components of the PWM,
and must go hand in hand to ensure
sustainable wage increase.
If wages go up without an eventual rise
in productivity, there will be an erosion
of business competitiveness and
subsequent loss of jobs as the business
downsizes itself and eventually ceases to
exist. At the same time in the domestic
market, consumer prices will rise and will
hurt everyone. It is not a sustainable or
acceptable solution either for businesses
to maintain competitiveness and profits by keeping wages down.
WHAT IS IN IT FOR COMPANIES?
FOUR
LADDERS
Future Ready Company
Innovation and technology will
be key drivers for future ready
companies. Companies need to
reinvent themselves with vision
and capabilities to deal with the
future challenges. PWM is a
continuous process that requires
companies to constantly seek
process improvements, job
redesign and innovation to
capture new opportunities.
Future Ready Workers
Future ready companies
have to be supported
by future ready talent
and capabilities. With a
structured framework for all
workers to reskill and upskill,
the workforce will be better
trained, agile and adaptable
to the future requirements.
CAREER
Better Attraction and Retention of Workers
A clear career progression pathway
will provide workers with more
clarity on career advancement
opportunities, helping to attract
and retain talents.
More Sustainable Wage Increase
Wage increases will be linked
to productivity improvements
to ensure the sustainability
and competitiveness of the
company over the long term.
PROGRESSIVE WAGE MODEL
PROGRESSIVE WAGE MODEL
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THREE KEY MYTHS
2
MYTH
PWM requires licensing for implementation.
FACT
PWM does not require licensing to be implemented.
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However, in sectors plagued by low wages and low skills,
PWM needs to be mandated through a licensing framework to
protect the vulnerable workers.
MYTH
PWM is Minimum Wage.
So far, only the cleaning industry has mandated PWM through
a licensing framework. Companies across different sectors
(e.g. hospitality, services and healthcare) which have seen the
advantages of PWM have started their own
journey on PWM.
FACT
PWM is NOT equal to Minimum Wage.
By definition, a minimum wage is the lowest hourly, daily or
monthly wage point that employers must legally pay to workers.
PWM, on the other hand, stipulates a progressive wage
structure that stretches beyond a single legislated wage point.
In countries with a minimum wage, some employers refuse to
pay beyond the legislated minimum wage. This stagnation hurts the workers as well as the company, as workers will not be motivated at work and companies are less driven to be innovative.
3
MYTH
PWM assures promotion once the worker attains the
skill set specified for the position.
FACT
Promotion to a higher grade is based on merit.
Acquiring the skill set enables the workers to better position
themselves for career advancement. PWM requires clarity
in skill competencies for workers to do the job well, and
transparency on promotion criteria to meet the aspirations of
the workers.
PROGRESSIVE WAGE MODEL
PROGRESSIVE WAGE MODEL
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HOW CAN COMPANIES
GET STARTED?
STEP 3
STEP 2
JOBS
STEP 1
Every company and every
sector is unique with their
own set of challenges.
Review your business
operations, the areas that need enhancement
and are of priority.
Identify the gaps
Productivity
• Can there be further multi-skilling,
multitasking or job
enhancements?
• Can the jobs be made
easier, smarter and safer
through adoption of
technology?
• Is there a formal
productivity management
structure established
within your organisation
to ensure productivity
improvements
are continuously
implemented?
• If your company is
unionised, work together
with your union to
brainstorm ideas to
manage these gaps.
Set up a workgroup,
develop an action plan
by prioritising which
ladder to work on first
and explore available
resources, e.g. Inclusive
Wages
• Was a salary review done
in the last three years in
your organisation?
• Do you have a
competitive wage
structure in place?
Skills
• Are there relevant training
available that enable
workers to upskill,
e.g. Workforce Skills
Qualification (WSQ)
courses?
REVIEW THIS FRAMEWORK CONTINUOUSLY
Growth Programme
(IGP) funding from
NTUC’s Employment and
Employability Institute
(e2i) to kick start the
PWM journey.
• If your company is non-unionised, you can
approach NTUC’s e2i for a consultation.
• Are your workers aware
of the required skill set to
move up the career path?
Career
• Are clear career
pathways in place in your
organisation?
• Do your workers face
obstacles in moving up
their career paths?
E.g. pre-requisite of
academic qualifications.
PROGRESSIVE WAGE MODEL
PROGRESSIVE WAGE MODEL
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RESOURCES
Scan the QR code for more resources
on the Progressive Wage Model, e.g. case studies and videos.
For general enquiries
If you need to speak with someone on
the Progressive Wage Model, please
contact NTUC Industrial Relations
Department at [email protected] or
NTUC’s Employment and Employability
Institute (e2i) at [email protected]
NOTES
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