No more worn-out values

Yang Sunny

Recently, the Financial Times reported a unique situation in Korea, citing statistics from the Organization for Economic Cooperation and Development (OECD). Korean workers sleep an average of 7 hours and 49 minutes a day, the shortest sleeping hours of 18 countries surveyed. Koreans work 2,237 hours a year, the second highest among OECD members and 393 hours more than the average. However, the labor productivity is only 66 percent of the average. Why is the productivity so low when Koreans are working so hard and sleeping less? In fact, labor productivity per worker is 28th among 33 OECD members and a third of that of Norway, which boasts the highest productivity.

Of course, the long work hours are skewed because of the high percentage of small business owners in Korea. However, companies also acknowledge that corporate efficiency lags. LG Economic Research Institute published a report titled “Diligent Inefficiency” on the problems of Korean companies.

Last week, we witnessed the low production capacity of the largest Korean auto company due to the Hyundai Motor strike. It takes 14.8 hours to produce a car in the United States and 27.8 hours in Korea. Hyundai workers emphasize the long hours they are working. Each worker puts in 2,800 to 3,000 hours per year, including overtime. But they say they work overtime because of the extra pay. Their base salary is so low they have to do overtime for extra income. An HR manager said all labor problems converge into wages. Hyundai Motor’s union is radical, indeed. But its productivity problem is an example of the failed wage system.

The design of the wage system at Hyundai Motor allows workers to justify inefficiency and low productivity. The quality of life for employees has also been undermined because the wage system lets workers make more money for being less efficient and working longer.

In fact, the overall Korean wage system is bound by the salary schedule and hourly wages, and it needs to be reformed. In March, the Ministry of Employment and Labor announced a wage system reform manual to focus on the base pay and increase the portion of the performance-based bonus. While the contents were considered reasonable, not many people remember this manual.

Why did it fail to be instituted? Last week, I discussed the issue with experts, labor issue reporters and young employees. They also acknowledged the problems in the wage system. But perhaps the real cause of low productivity and efficiency may not be the wage system. Unfortunately, workers today cannot trust their employers. After a series of economic crises, many people have lost their jobs because of layoffs and restructuring, and companies seek cheap labor and prefer contract-based workers. While the companies argue they are introducing an annual salary system to differentiate wages depending on performance, they actually exploit the salary schedule system to reduce benefits. The performance review cannot be trusted as personal connections or relationships with the boss often affect the evaluation.

The goal of many workers is to “make big and escape from the company.” Companies are no longer a “community” pursuing one value; they are turning into mercenary organizations where each member pursues individual interests The mercenaries boast their bravery amongst themselves, but often become cowardly when they face the enemy. Moreover, Korean organizations still obsess over pre-modern virtues such as diligence, faithfulness and formality. Just by having the patience to stay with one company, one can be recognized as a model employee. So there is no incentive to care about becoming more productive.

But in the 21st century, knowledge, creativity and leisure hours, not diligence and faithfulness, are the engines for growth and development. But companies’ HR management is very backward. The reality reflected in the labor-related statistics is that Korea is not just lacking productivity, but falling behind because of zeitgeist. It is truly worrisome, as we still need to grow in the 21st century.

JoongAng Ilbo, Sept. 3, Page 30

*The author is an editorial writer of the JoongAng Ilbo.

BY Yang Sunny