Standard Chartered vs Korean standards
How do you bring about the longest and largest strike in the history of the South Korean banking sector? Attempt to impose a British model of individual performance pay that would ruin the South Korean tradition of workplace co-operation.
Some 3000 employees walked off the job on 27 June, shutting bank branches across the country, after the British management of Standard Chartered First Bank (the Korean subsidiary) sought to impose an unfair performance-based pay system that would pit colleagues against each other, and demote, or give a pay cut, to those failing to hit their targets. It has also refused to lift an effective four-year pay freeze unless the workforce rolls over on this.
This might sound familiar, especially for those working in Britain’s banks. And that’s exactly where the idea has come from – the mean-spirited parts of the City’s HR manual.
As the Koreans explained to me, they are worried that this will undermine a workplace culture built on teamwork that has a strong track record in delivering productivity, customer satisfaction, and employee loyalty. It is a model of collaboration that has played a strong role in driving South Korea’s stellar economic growth over the decades.
But this issue is not just about so-called Korean culture and working traditions. It cuts to the heart of the sort of workplaces we want: collaborative and supportive ones that deliver results, or ones driven by competition and fear?
The Korean union is also worried that this could be the thin end of the wedge – as they explained to me in London this week. Standard Chartered is the first bank to try to introduce such changes in South Korea. Others could be forced to follow.
That is the heart of a complaint filed under the OECD Guidelines for Multinational Enterprises by UNI, the global union federation representing bank workers against Standard Chartered yesterday at both the UK and South Korean National Contact Points – the national complaint bodies set up under the Guidelines. Put simply, UNI alleges that Standard Chartered is trying to impose working standards that are worse than the rest of the industry.
Employees at the Korean subsidiary are also increasingly “embarrassed” at the legacy of the new management: an over emphasis on short term lending and speculation, harsh loan terms for small and medium enterprises, excessive executive remuneration, and lower customer satisfaction. More things that sound familiar?
Exasperated union leaders from the Korean Finance Industry Union (KFIU) came to the City this week to make their case direct to Peter Sands, the London-based CEO of Standard Chartered Global. He refused to meet with the delegation but did send the head of HR to collect a joint letter from Unite, the TUC and UNI calling on him to urge his Korean subsidiary to sit down at the negotiating table.
Instead, the British CEO of SC First Bank offered a traditional Korean apology earlier this week for the ongoing strikes. It’s time he respected another Korean tradition – that of collaborative working – and worked with the union to build on it, rather than undermine it.