- Labor and management agree to increase link to performance and competence in reward system

The labor union of the Korea Housing Finance Corporation (KHFC, CEO Joo-jae Lim; labor union chief Jeong-han Yoon) announced on October 18, 2009 that it has agreed to a 5% wage cut for all employees.

On the same day, in a meeting to negotiate salaries and revision of the collective agreement, representatives of labor and management agreed to a 5% wage cut as part of an effort to share in the post-crisis burden and actively participate in the government’s policy to advance public organizations.

The parties also agreed to reduce the eligibility requirements for labor union membership to a reasonable level and to abolish from the collective agreement clauses that might infringe on rights to administer personnel issues.

Labor and management also agreed to change the current reward system to one based on performance and competence. For instance, the basic salary, which was previously calculated based on rank, will be calculated based on position so that a graduated wage can be paid according to job difficulty.

※ KHFC has been operating an annual salary system for all employees since it was established in March 2004.

Earlier, on October 8, 2009, labor and management had agreed to make it mandatory to use 25% of the annual paid holiday, to abolish sabbatical and convalescent leave, to reduce overtime pay, and to charge rent for company housing.

This year, KHFC has made all-out efforts to boost efficiency in management by cutting up to 46% in executives’ basic salary, downsizing 13.4% of full-time employees, requiring management-level employees to return 5% of their salaries, and cutting 23% of new employee salaries.