By Tom Coyner
Although there is no system of lifetime employment in Korea, employees are expected to remain with their companies for a long period of time. Loyalty to a company and long-term employment are generally regarded as virtues, a sentiment that is eloquently expressed in the Korean adage, ``One must be devoted to the digging of a single good well.’’ On the other hand, employers are expected by society to secure employees’ long-term well-being. It has also been the government policy that business organizations shoulder the major responsibility for social welfare. In this climate, the firing of employees becomes a sensitive and delicate task. One has to be extremely cautious and prudent in handling the situation.
Some considerations may help expatriate managers to be more successful in this area. Though situations involving the dismissal of employees vary greatly, firing in the Western fashion is rare in Korea. It is done rather discreetly, preserving the ``face’’ of the dismissed employee. One should not expect to be able to fire a local staff member overnight. This should be done with a well laid-out plan, employing various indirect means, over a period of time. If at all possible, the actual contact and communication should be handled through a local executive.
A common Korean practice _ one that may not jibe well with one’s international human resource policies _ is to keep the terminated employee in the office for two or three months but without pay. This applies best when there is a business slowdown _ the employee is not working out professionally despite good intentions, etc. Obviously this does not apply to an employee who has intentionally harmed the company’s interests. The reason to consider this form of internal outplacement is to save the terminated employee’s face to improve chances of finding work elsewhere. Otherwise, the employee will likely be much more traumatized _ as may be the coworkers who may wonder how they may be treated if future business conditions mandate head count reductions.
Demotion
In a hierarchical society such as Korea, each person has a well-defined position in the organization. If one is left out from annual promotions either in the salary table or in title, it is an almost unbearable situation for the employee. One may endure it once but not a second time, even though one's livelihood would be threatened by resignation. Bad performers may be left out of promotions, and if they still do not improve, they may be again excluded from either promotions or salary increases the following year.
Traditionally, nine out of 10 terminations have been ``voluntary.’’ The above-stated method may be time-consuming and costly, but it is without unnecessary ruffles. The down side to this traditional Korean approach can be disgruntled employees who cause problems until they are able to find acceptable employment elsewhere. Furthermore, the likelihood of a problem employee working with a chip on his shoulder increases each year as younger employees display more individualistic behavior.
Regardless, hanging on to the low-performing company member can put the overall employee morale at risk. Retaining a problem employee, rather than early on dealing with the problem straight up, can be expensive in the long run. Also, management may in time be deemed incompetent by the rank and file for ineffectively dealing with a difficult issue that may impinge on the other employees’ performance and welfare. When that happens, the in-house union may fill a power vacuum; or a once union-free company may soon find itself with a union knocking on the door.
Disciplinary Action
While there are cultural issues to take into account, if one has ever managed in a litigious environment such as California or New York, one will find the basic rules there also apply to modern Korea. The reasons may vary between the U.S. and Korea, but the methods end up being pretty much the same. Today, in both the West and Korea, hasty actions are for the foolhardy. Managers need to be extremely self-disciplined when they undertake disciplinary action.
For example, a well-documented set of work rules and employment regulations should be signed by the employee at the time of employment. Any foreign organization, whatever the size, should have such a document to serve as a guideline for employees. The rules usually stipulate that such undesirable behavior as poor performance, absence without notice, insubordination and misdemeanors are subject to a series of actions that include a letter of apology by the employee, a warning by the company, disciplinary action, and as a last resort, dismissal. This also means that managers must obey these guidelines as they manage their staff.
An employee may be asked to submit a letter of apology for any undesirable behavior displayed within the company. If an employee has three incidents that require action, it can be company policy for dismissal. The difference with many Western countries is, of course, rather than the supervising manager issuing a letter of reprimand, the Korean employee may be asked to write a letter of apology. If one’s company feels more comfortable with the letter of reprimand approach, then that approach is an acceptable alternative to the letter of apology.
The above methods are commonly exercised in lower and mid-level management, but often they are not appropriate for high-level executives. In such cases, it may better to get outside help, perhaps from a human resources consultancy or a legal firm.
Another disciplinary action is deprivation of responsibility. The employee continues to come to the office, but is not given an assignment. This is a very Korean approach to discipline and may not be appropriate for many multinational companies. Furthermore, in smaller operations, this approach is obviously impractical. Still, from the employee’s perspective, killing eight hours a day without any duties can be more than torture.
Transfer
Another universally popular method is transferring the unsatisfactory employee to another position or location. Here again, the work rules can be handy, if there is a stipulation that any employee may be transferred to another location.
If the employee, however, is generally undesirable as a member of one’s operations, it is usually a big mistake to transfer ``bad news’’ from one department to another. In effect, general management is not facing up to its responsibilities _ both to the company and to the problem employee. Furthermore, if the employee hangs in there and later management has no choice but to terminate the employee, the prolonged employment record will work against the management’s case should matters go to litigation. So, if an employee is not working out, it best is to do the right thing, for both the employee and the company, by promptly forcing the employee out on to the road where he or she may have the chance to become a more productive and happier person elsewhere.
Separation Settlement
An employee with many years of service may be asked to change his position to that of a part-time advisor. A generous separation payment, in addition to some form of recognition, such as a citation or a plaque, may be presented. In many cases, a long-serving local staff member in a foreign organization has accumulated considerable leverage, and this should not be overlooked. In the settlement, the benefit must exceed, by far, the minimum requirements of the labor law. This not only benefits the departing staff member, but also stands as an example of good will to the remaining staff.
Trained and Skilled Management is Essential
When one considers that most major labor grievances can be traced back to incompetent management, it is critical that managers be trained beyond their operational tasks. Today’s manager _ local or expatriate _ needs to be trained in supervisory skills, including progressive discipline and coaching. While a good human resources department can be invaluable in this area, it is a mistake to leave everything to personnel. In-house training by qualified staff, or possibly by outside consultants, can be a prudent investment against expensive business disruptions and legal fees resulting from poor personnel management. Good personnel policies can provide for fair and consistent employee treatment only when all managers are properly skilled and compliant in disciplinary and termination procedures.
Prudent diplomacy
Making staff adjustments in Korea is not easy _ especially for the expatriate manager who may be used to quicker methods of effecting the desired changes. It is good to remember that one is dealing with another social structure that views hasty action as imprudent. In both hiring and firing, the expatriate manager will have greater success acting patiently, moving methodically, step by step through a well thought-out plan, preferably with the help of a local associate or a consultant when necessary.