Shandong Qilu Huaxin Industrial Co., Ltd.: Addressing the problems of employees’ career development after reorganization of state-owned enterprises through human care and innovative management

Company Profile
Shandong Qilu Huaxin Industrial Co., Ltd. (hereinafter referred to as Qilu Huaxin), established in April, 2004, is a private company with register capital of 50.22 million yuan. It was restructured from Sinopec Qilu Petrochemical Corporation in accordance with the policy of “separating the auxiliary body from main body and settling surplus employees through restructuring”. Upon the approval of the SASAC, 406 employees were reassigned to this restructuring company. It is mainly specialized in the production and sales of new molecular sieve products and also engaged in the sales of new additives products, aluminum sulfate, sodium aluminates, non-hydro-dewaxing catalyst, plastic packaging products, chemical technology services, manufacture and installation of anti-corrosion equipment, engineering construction, aluminum processing and catering services.
Challenge
After the state-owned enterprises were reorganized, the change from “the stable lifelong job” to “unsecured job” produced belonging anxiety among the workers and they were worried about their career development. In many restructuring companies, the mismanagement and other factors caused so much negative impact on the thoughts and emotions of workers that they organized collective appealing to higher authorities for help.
At the beginning of reorganization in 2004, more than 400 employees at Qilu Huaxin had to face the irresistible trend and worried about their precarious jobs. Facing this challenge, we have recognized that, as a modern enterprise, we must safeguard the safety, health and rights and interests of employees from our operating philosophy, cultural construction, management method and other aspects, which is an important approach to increase cohesion, mobilize their enthusiasm and keep stable workforce, and also the foundation for our long-term development.
Solution
We have taken our management philosophy, decision-making mechanism, enterprise spirit and other aspects in our overall strategic planning and made employees be the main force to support our long-term development.
First of all, listening to all useful opinions and firmly relying on employees to seek common development plan for the company. We have carried out the activity to propose reasonable suggestions among employees and encouraged them to offer new and better ideas through writing, network, suggestion box, hotline and other channels. Every month, the excellent recommendations are rewarded and implemented in relevant departments. In the meanwhile, these recommendations will be the effective decision-making basis for leaders. This approach has not only aroused the self-awareness of young employees and their sense of independence, innovation and ownership, but also mobilized their family because most of them are the only children of the family. To address the concerns of employees in these approaches, our management team have worked out five objectives and measures: to put the development and stability in the first place, hold on to the strategy of sustainable long-term development, keep to standardized management, effectively protect the vital interests of the employees and carry on management innovation. Besides, these proposals have also prompted the company to make continuous improvement in its management.
Secondly, persevering in standard operation and combining the enterprise development with employee career development. We continue to improve our various qualifications, regulate related transactions and make coordination between internal management and the coordination of external relations. While upholding the strategy of stable and long-term development, we have closely linked the enterprise development with employee career development. No matter what kind of employees you are, you will be a part of Huaxin and given the same treatment. At the end of the year the shares held by employees will be offer dividend according to business performance. In a word, our business benefits have directly affected the income of employees.
Thirdly, making management innovation on the basis of employees’ interests and growth. We have carried out a series of management innovation based on the interests of employees and their growth. We have established a training system for all staff and provided them with various training programs according to safety policy, equipment safety operation regulations, post operation and special jobs. We have also introduced policies to encourage employees to make self-learning and self-improvement and be professional in their positions. Besides, we have organized related training for management and leaders and established the mechanism for the management of Party members and the acceptance of new Party members.
We have formulated the policies on occupational health and safety and environmental protection, implemented our safety and cleaning program and established fire safety prevention and drill system to organize regular drills. Besides, we have made it a rule to offer three physical examinations each year.
At Qilu Huaxin, we implement reasonable remuneration and benefits policy. In addition to five social insurances, the employees can participate in the accidental injury insurance and well-being insurance on a voluntary basis. We have mobilized all employees to join the employees’ medical fraternity and established the female workers mutual aid foundation. All of employees are provided with basic living and welfare facilities including shuttle bus, free shift meals, recreation venues, lockers, clean toilet and bathroom and clean portable water.
We give full play to the role of unions in the protection of employees’ rights and interests, improve the workers' congress system and convene a workers’ congress each year. We have formulated Collective Labor Contract, Collective Wage Contract and Contract for the Protection of Female Workers’ Rights and Interests between trade union and enterprise, and established the effective procedures for employees’ appeals, complaints and suggestions to earnestly safeguard their legitimate rights and interests. We implement working hour system strictly, eliminate unpaid, super-long or forced overtime and provide employees with statutory holidays. We also send our care and condolences to employees at the periods of illness, weddings and funerals, set up the files of needy employees and visit them regularly, and carry out different cultural activities.
We have created the innovative management featured with “making dynamic management of three types of worker”. In other words, we divide our employees into excellent, qualified and probation workers, and provide them with different salaries and benefits. According to their business performance and contribution, they will be promoted or degraded at regular intervals.
Achievement
Enhancing staff cohesion and achieving rapid development
Based on our trust, care and encouragement, we have achieved rapid development and effectively enhanced staff cohesion. According to investigation, our employee satisfaction rose from 82% in 2007 to 96% in 2010. Many restructuring state-owned enterprises encountered business crisis, petitions of employees and other events caused by the contradictions, but at Qilu Huaxin, our employees have worked together and increased production efficiency, total output and business performance by a wide margin. By the end of 2010, our net assets increased to 180 million yuan, fifteen times as much as that at the initial period of restructuring. Besides, we have adopted more advanced technology, equipment and management tools and taken stringent energy conservation measures, through which, according to statistics, we achieved energy consumption of 0.54 ton of standard coal per 10000 output value in 2010, a year-on-year decrease of 18%.
Improving employees’ skills and increasing their income
Our employees have greatly improved their working efficiency and skills and won numerous awards in the technical skill competitions sponsored by Qilu Petrochemical Corporation and the local government. Their income has been on a continuous rise over past years. Their average income increased to 13,500 yuan in 2005 and 51,000 yuan in 2010, three times as much as that at the beginning of restructuring. In May 2011, the company increased post wage again with the average monthly increase of 400 yuan. As a result, their post wage, skill-based pay and bonuses are higher than the other companies in the industry.
Prospect
The reorganization of state-owned enterprises is a sensitive “nerve” in the social transformation period of China. Through our more democratic and transparent decision-making manner, innovative incentives and humanistic management tool, we have relieved the belonging anxiety of employees and addressed their pressing concerns about enterprise development and their own competitiveness. This is of great typical significance in the reform of state-owned enterprises in China. In the future, we will continue to implement our philosophy of “people-orientation, technological innovation, health and safety, environmental protection and the benefit of mankind” and follow our CSR guidelines featured with “winning the social recognition and praise”, and rely on the power of all employees to get stronger and better.