Korea District Heating Corp. (KDHC) CEO Kim Seong-hoe has been presented with the 2015 Korea Creative Economy Grand Prix in Responsible Management in recognition of his work in enhancing the public interest by fixing lax management, improving productivity, contributing to sustainable development and committing to environmental and social duties.
The 2015 Korea Creative Economy Grand Prix, marking the third year since its establishment, is designed to recognize companies and their CEOs who have spearheaded economic innovation through the reinvigoration of the creative economy. The award is hosted by the Korea Chamber of Commerce and Industry (KCCI) and sponsored by the Ministry of Science, ICT and Future Planning and the Korean Commission for Corporate Partnership (KCCP).
KDHC has been honored with the prize for contributing to social responsibility management as a public entity by taking the initiative in the realization of the creative economy.
Meanwhile, KDHC has been classified as first class (excellence) at the outcomes of an evaluation into integrity execution of public entities, conducted by the Anti-Corruption & Civil Rights Commission of Korea (ACRC) and the top among 31 bodies in the Public Entity II Group category.
KDHC was also honored with the Korea Ethics Management Award in public entity category this past March.
Management and Labor at KDHC Agree to Reform Lax Management Practises
Last year, KDHC was the first company among a group of public entities that were subject to intensive management surveillance after labor and management agreed to reform of lax management.
It is rare for management and labor at KDHC to reach a settlement on the thorniest issue of excluding severance pay from performance-based benefits in the evaluation of business performance. KDHC is the first company of the group of public entities to reach an agreement on all categories required by the government to normalize management.
The labor-management settlement was credited to management’s smooth communication with labor, which has led to bottom-up changes and paved the way for normalization.
KDHC was among the 11 public entities removed from the list of public organizations subject to intensive surveillance for normalization of management by the Ministry of Strategy and Finance. The ministry announced the outcome of an initial evaluation into whether they had revamped their lax management July 31, 2014. KDHC presented its success story at a symposium, which took place following the announcement of the evaluation results.
KDHC was once the subject of public criticism over welfare benefits for employees. The company saw their employee’s payment of welfare benefits rise to 6 million won per capita in 2013, a 1.5 fold surge from 4 million won in 2007. KDHC management established a plan to put its management on the right track, calling for an improvement of 20 tasks, including a reduction of welfare benefits from 6.07 million won to 4.6 million won after it was put on the list of public organizations subject to intensive surveillance for normalization of management in December 2013.
Management and labor initially appeared far from a settlement toward the normalization of the business. The biggest hurdles included strong opposition from KDHC’s labor union.
Management resorted to a strategy to communicate with labor in which executives allowed labor’s participation in a decision-making process. The outcomes of the once-per-week meetings between labor and management were shared among all rank-and-file employees. KDHC employees began to shift their attitude toward the CEO — seeing the CEO as a hard-working CEO, not a one who was parachuted from a government agency or other related organization, thus establishing improved labor-management relations.
The management side devoted itself to persuading on-site employees to its cause. Executives have made the rounds at 16 branches across the nation and met with branch chiefs and on-site employees to improve mutual communication. Unionists and employees joined in the bottom-up paradigm shift by collaborating on a voluntary basis.
KDHC CEO Kim ordered the inauguration of the new Safety Operation Team as a way of addressing branch chiefs’ long-standing issue of a feared failure in responding to accidents due to different administrative jurisdictions.
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