People Respond to Incentives
Regular EclectEcon reader, Kevin, sent me this link about the changing wage structure in Cuba.
Cuba is to abolish its system of equal pay for all and allow workers and managers to earn performance bonuses, a senior official has announced. [emphasis in the original as a sub-headline]
Vice-Minister for Labour Carlos Mateu said the current system - in
place since the communist revolution in 1959 - was no longer
"convenient".
He said wage differentiation should improve production and services. ...
The minister pointed out that the current wage system sapped
employees' incentives to excel since everyone earned the same
regardless of performance.
"It's harmful to give a worker less than he deserves, it's also
harmful to give him what he doesn't deserve," the newspaper article
said.
The principles are sounds. It must be the people in charge! That's it...