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Salary & Productivity

As a foreigner living in Romania, its no question to me, that I have to assimilate to the romanian lifestyle and accept the way, life is going on here. Otherwise, I could leave the country as I was often told during the first months in Bucharest.

Meanwhile, after a few years, I enjoy living in Romania and starting to defend the country when visiting my friends or family in Austria, Germany and Switzerland.

But there are still issues (car drivers in Bucharest, the birocratie) I will not shut up and complain.

But since this is an economic site I will focus on the third issue I have troubles to understand.

How is it possible, that after 25 years of economic freedom, the salaries in Romania are still only a fraction of those in the west – and in recent years also fell far behind of other former east block countries like the Czech Republic or Poland, where the average paycheck is now more than twice as high as in Romania.

Whoever I asked why, I got a different answer,  who’s to blame. But remarkably often the 3 C’s (Ceausescu, Corruption, Centralization) came up as the reason for today’s low payments and consequently lousy pensions in Romania.

But not a single answer was given to me about the best key for better salaries and higher living standards. This key has a name: Productivity.

The concept of productivity is often miss understood in Romania as I found out in a pub in Lipscani. As so often the talk was about money or lack thereof in Romania. When I mentioned the rather low romanian productivity as an important reason, I got some bad looks from the table next to us: “Shut up! We are working more hours per week than you the west”.

Well, productivity has actually not much to do with the number of hours someone is working per week. But it has a lot to do, what economic value is created and contributed to the GDP in each hour of work on average.

According to Eurostat, a romanian employee, on average, is producing in one hour of work an economic value of 5.40 Euro.

The number for Poland is 10.40 Euro, the Czechs produce already 13.20 Euro per hour. That’s one of the main reasons why salaries in these countries are much higher than in Romania. The highest productivity in europe has Norway with 69.50 Euro per hour.

So the question is: What can be done to improve productivity in Romania?

First and foremost, each boss of a romanian company has to accept, that the success of a company is not purely based on him, but mainly by the performance of his employees.

To improve, here are some clues:

  1. provide the employees with training on and off the job
  2. offer incentives for the staff
  3. offer a modern work place where employees feel good
  4. challenge employees to come up with solutions if there is a problem, don’t just give orders
  5. offer a letterbox where staff members can deposit proposals to improve the workflow. Make the change and give a benefit, if a proposal is working
  6. treat your employees respectfully

Employees on the other hand should stop ducking away and active ask for changes and more responsability. Again and again and in an well organized manner.

This list might look simplistic and one can question it, if a foreigner would really know how to improve the productivity and the level of salaries in Romania.

Well, I really don’t know if it works. All I can say is, that these points are in my view the biggest differences I observed while working in high salary countries (Germany, Austria, Switzerland) and then in Romania.

So my question is – why shouldn’t these points work in Romania? It’s up to the romanians and I would very much encourage it to try it out.

——

After you improve your productivity you have all the right for a better salary (check Salary section too).

How to negotiate with success is the topic in the next chapter: http://www.theleader.ro/negotiations-the-price-tag-syndrome/

 

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