POSCO’s new system sets standard for a successful workplace

Posted on : 2012-10-16 14:05 KST Modified on : 2019-10-19 20:29 KST
With more rest and self-development opportunities, factory is safer, more productive and profitable
 the number of workers watering the plants and feeding the fish saw a large increase. (provided by POSCO)
the number of workers watering the plants and feeding the fish saw a large increase. (provided by POSCO)

By Kwack Jung-soo, business correspondent

Oct. 17 will mark the first anniversary of POSCO’s four-team, two-shift system. In that twelve-month period, it has proved a smashing success at improving worker quality of life and instituting a new workplace culture.

Under this system, two teams work 12 hours each while the other two take the day off. Previously, the POSCO had a system with four teams and three shifts.

Nam Myeong-woo, a section chief at the Pohang Works electric plating factory, was all smiles as he talked about the changes. “When the company first made the change to a four-team, two-shift system, I was worried about not being able to use my vacation time,” he said. “But now things like pastimes, traveling with my family, and self-development have become a regular part of my life.”

Kim Jae-myeong, who works at the #3 steel plant, said that the extra time off has allowed most of his co-workers to take on two or three hobbies apiece, including sports and music, and that many of them are involved in club activities.

Indeed, the company is actively supporting such involvement. Lee Seong-taek, manager of iron making at the Gwangyang Steel Works, (POSCO’s second mill in the country) said the changes have been welcomed at home. “The wives and children love it that they have so much more time with the family,” he said. “There are a lot more couples gatherings and activities than there were in the past.”

Group excursions overseas have also become a frequent occurrence. Employees who take four working days’ leave (two day shifts and two night shifts) between regular days off can enjoy nearly a fortnight’s worth of rest, allowing for long-distance travel.

Park Jong-il, leader of the human resources and service group for the Gwangyang Steel Works, said, “It’s to the point where we’re actually having problems with placement because of all the permanent workers doing only day shifts who want to switch to shift work.”

The workers’ drinking culture and company dinners also appear to have changed a lot. They are down from drinking three nights a week to one, with none of the gatherings going beyond a single round. Instead of bars, the company dinners are being held at pizzerias, pasta places, and taverns. Often, the workers will finish up quickly to enjoy a late-night movie together.

The biggest change, though, may be education. Workers have taken advantage of their new spare time to engage in some lifelong learning.

Park Jong-eon, a worker at the #2 steel plant, said a number of workers are taking it on themselves to visit the company’s human resources development center on their day off. “There’s a lot of different study programs going on, including English, Chinese, and other language classes, as well as certification in industrial safety and machine repair,” he explained. The company also designated one eight-hour stretch of time off during the month as a “paid education day,” with a number of different options for professional and general education.

The evidence suggests an increase in what the company calls “knowledge productivity.” The number of employee patent applications has risen from 62 in 2009, prior to the test run of the new two-shift system, to 234 in 2011. The rate of employee proposal participation has risen by six percentage points from 85.4% in 2009 to 91% in the first half of 2012.

“Both the employees and the company seem to have taken a big step forward because of the improved quality of life and self-development,” said Park Jae-byeong, deputy chief of the #2 steel making factory at the Pohang Works.

The workplace has gotten safer, too. The number of accidents at the Pohang Works amounted to three or four per year in the past. For the past year, there hasn’t been one. Meanwhile, per worker crude steel production is up by 31.8% from 1,052 tons in 2009 to 1,387 tons in the first half of 2012.

In 2010, the percentage of products produced that were found to be faulty was 3.07, which declined to 2.33 in 2011. Production costs have also dropped. As recently as 2010, yearly production costs at the Pohang Works were falling on the order of 200 billion to 300 billion won (US$180 million to US$270 million) per year. In 2011, they dropped by 730 billion won (US$660 million); so far in 2012, the number has been 900 billion won (US$890 million). Observers are pointing the new shift system as the secret to POSCO’s success at keeping solidly in the black while other steel makers around the world are languishing in or near the red.

“Now that they have leisure time in their lives and sufficient rest, workers are concentrating more on their duties,” said Pohang Works superintendent Cho Bong-rae.

“The workers’ self-development has improved their working abilities, and quality and competitiveness have risen naturally as labor-management and employee relations have improved,” Cho added.

The new two-shift system at POSCO also seems to be contributing to job creation. As of late June, the company had 17,550 workers, a rise of 1,034 (6.3%) from the 16,515 in late 2009, before a pilot study was conducted at the different works.

POSCO attributed the increased hiring to a combination of facilities expansions and the new system, adding that the number of new jobs would actually be even greater if the numbers took into account outsourcing for non-core areas.

Over the past decade or so, around 300 South Korean businesses have introduced this “new paradigm” of benefiting labor and management alike through an innovative model of two shifts and increased learning opportunities.

A POSCO official noted that around a dozen South Korean companies that are benchmarking the steel maker, including corporations like Nippon Steel, Samsung Corning Precision Glass, and Honam Petrochemical, as well as food maker Pulmone and public enterprises like Incheon International Airport.

Lee Young-ho of the Sungkyunkwan University human resources development center said a foundation of trust between labor management and thorough preparations would be needed for the two-shift model to succeed.

“The positive functions of the four-team, two-shift system, including shared benefits for labor management and new job opportunities, are also highly significant in terms of economic democracy, which has gotten a lot of attention recently,” Lee added.

 

Please direct questions or comments to [english@hani.co.kr]

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