The chief of South Korea's financial regulator vowed Monday to introduce a performance-based wage system for most of the employees at nine state financial institutions this year to cut red tape and boost competitiveness.

The pledge is in line with the government's decision last week to get a majority of workers at public agencies to adopt a merit-based payment system by the end of this year as part of labor reforms. Currently, only executive members of public institutions are subject to such a system.

Under the merit pay system, employees will be paid differently based on their achievements, with the rate of increase in their annual salary expanding to an average of 3 percent from the current 2 percent.

"Given the significance of their roles and responsibilities as well as their higher salaries, workers at financial entities should face toughened criteria in setting their wages," Yim Jong-yong, chairman of the Financial Services Commission, said in a meeting with chiefs of nine public financial agencies under its arm.

The average annual wage at public financial firms reached 85.25 million won ($70,571), some 1.4 times higher than that for a worker at private firms with more than 500 employees. 

All officials at the nine entities, excluding the lowest-ranking workers and those in technical posts, will come under the new pay system, he said.

It means that a total of 11,821 officials, or 68.1 percent, will experience changes in their payrolls, up from the current 7.6 percent.

"A culture that centers on individual performance is not a choice but a must to stay afloat in this competitive world," Yim said, vowing to extend support for institutions that take such an initiative in close cooperation between labor and management.

"The competitive system will be employed further in overall aspects including personal affairs, job training, and recruitment,"

the chief said, expressing his hope for the system to spread further into the private financial sector.(Yonhao)