With a view to enhancing the stimulative effect of wages on productivity, Zhivkov proposed a basic reform of the wage system that would be carried out gradually in the 1973-80 period. In presenting his proposal to the BKP Central Committee plenum, Zhivkov dwelt on some of the major principles to be embodied in the new wage system. The minimum wage must be higher, and the rise in wages must be more rapid than before. Increases in basic wages must be closely linked to individual performance and to overall labor productivity in general, pay would be based on performance rather than on formal qualification or length of service. To this end the sectoral approach to wage determination is to be abandoned in favor of a functional approach that would establish a uniform economy-wide wage scale for jobs in relation to their complexity and hardship and to the specific conditions of work. Rigid pay scales are to be replaced by flexible schedules providing a range of pay for each job depending upon the ability and performance of the worker.
The reform would also gradually eliminate the egalitarian aspect of the current wage system by providing appropriate differentials for workers with higher qualifications. Under the current system, for example, the salary of economists has been below that of engineers, and the salary of engineers has been equivalent to the wages of skilled workers. This problem has been repeatedly considered in the past, but its solution was delayed for lack of funds.
Zhivkov also cited shortcomings of the prevailing piecework system and suggested some long-range remedies for the ills. About 60 percent of all workers have been employed on the piecework system. Production norms under the system have been low because of technological advances and the infrequency of adjustment of norms. Under these conditions workers have been able to exceed the basic norms to such an extent that payment for work above the norm has become a large, and in some cases the predominant, portion of the workers' earnings. Striving to increase their wages, workers under the piecework system have often resorted to shortcuts that have lowered the quality of output.
Zhivkov's proposal for improvement included the introduction of more realistic and more flexible quantitative and qualitative production norms and a gradual transition to hourly rates of pay with bonus payments for superior work whenever the quantity and quality of output is not directly dependent on individual workers. Under these conditions bonus payments would be linked to the performance of the entire working personnel, and the importance of the bonus in wage payments would be enhanced.