In Guatemala people are now suffering from the "labor agreements", which come from the same strain of virus as the "Collective agreements" which have made the State Costa Rica sick, distorting the labor market and generating inequality.
The editorial "Harmfulness of labor agreements in the public sector", published today on Elperiodico.com.gt, might have been written some years ago to describe Costa Rica. Guatemala still appears to have a chance to react to the disease, with proper medication. In Costa Rica, however, the disease is so widespread that major surgery is needed which today does not seem feasible, and the only thing left is to wait for the inevitable final crisis.
Performance bonuses and other variable compensation schemes weigh increasingly on the total compensation of senior managers.
In order to motivate and retain executives companies are tending more and more to compensate their executives with salary schemes where the variable proportion and that dependent on performance is increasing.
Paying with company stock, profit sharing from stocks or performance bonuses are some of the payment methods being used by companies for senior managers, as detailed in a report by consulting firm PriceWaterhouseCoopers.
Entrepreneurs and ALL presidential candidates agree on the need to eliminate privileges and unfair wage abuses in the public sector.
"On this point the five candidates that top the polls agreed during a debate organized by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP)," reported an article in Ameliarueda.com.
Businesses are warning that raising the minimum wage to a level higher than proposed will make the prices of goods and services more expensive, generating inflation.
The National Council of Private Enterprise (CONEP) confirmed that it has submitted a proposal to adjust the minimum wage. "The proposal from the business sector meets the objective of establishing the highest minimum wage in the region," said Gabriel Diez, president of CONEP.
The approved increase applies to the first half of 2014.
"The amount approved by the National Wages Council factors in projected inflation of 2.47%, 0.77% of cumulative inflation for the first half of this year and the adjustment for GDP growth in the last five years (0.54%)," says Patricia Recio in Nacion.com.
Entrepreneurs had proposed an increase of 3.60%, unions 3.96% and agriculturalists 3.24%.
The business sector has proposed a raise between 3.24 and 3.60% in the workers´ wage for the first half of 2014.
The first proposal was presented by the National Chamber of Agriculture and Agribusiness, who believes that the increase should be 3.24%.
Nacion.com reports: "... considers the projected inflation figure and compensation for inflation in the first half of this year and does not take into account the adjustment of GDP growth, because the industry has presented a constant deceleration in recent months," said Juan Rafael Lizano, president of the Chamber".
The regulation increases the size of the "aguinaldo" (extra salary at the end of the year), depending on the number of worked years.
Those who have been working in a company for between 1 and 3 years will receive 15 days worth of 'aguinaldo' (end of year salary payment), those with between 3 and 10 years will receive 19 days worth of aguinaldo, and those who have worked for more than 10 years, will receive 21 days worth of aguinaldo.
The unions proposed to the National Wages Council an increase of 3.03%, plus an extra 20% over the next four years for minimorum minimum wages.
"This 3.03% corresponds to 2.47% for projected inflation and 0.56% for an outstanding debt. In addition, we propose that the minimorum minimum wage should be increased to 20% over four years until the percentage is reached, therefore in July there would be 8.03% for those workers, 3.03% of the normal rise 5% for the outstanding amount" said Edgar Morales, a member of the Union of Public and Private Sector (SITEPP).
Bonuses to personnel must be balanced with the company’s short and long term perspectives.
Jorge Londoño, president of Grupo Bancolombia, explained how they applied the Shareholder’s Value Added System (SVA) in this bank, in such a way to prevent short term problems or distortions when applied.
Caribbean-Central American Action (CCAA) is a private, independent organization that promotes private sector-led economic development in the Caribbean Basin and throughout the Hemisphere.
Operates in Panama, Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica and Caribbean Community
Phone: (202) 331-9467