Wednesday, January 6, 2010

Nonperformance incentive pay

Employment law in Spain is a case study in good intentions gone bad. What began as measures to protect employees have turned harmful as everyone figured out how to game the system. The finiquito is a great example of this. If you are a full employee and your company decides that they no longer need you, they generally have to pay you 1.5 months of salary per year worked to avoid legal trouble. If you leave on your own, you get nothing.

Given how costly it is to lay people off, most young people work on one year contracts (which is renewed one year, then bye-bye). The end result is that the population on average has less job security than in many countries that have lower protections.

Since I’ve been at the same company about 17 years, I would get an insane amount of money if my company laid me off. Enough to get me wondering about how hard I should really be working.

Needless to say, the phrase "you can't fire me, I quit!" is not often heard in Spain.

1 comment:

mondraussie said...

"Good intentions gone bad" - I completely agree! Working as an english teacher is a fantastic example of this... it is almost impossible to get any sort of permanent contract because the law is too restrictive so we all go through the same charade every year (even those of us who are clearly here for the long-haul): our contracts are terminated in july/august, we march off to inem to collect the dole and back again in sept to start a new contract... all because the company doesn't want the hassle of permanent employees (or the expense of paying holidays)...