In 2004, POSCO introduced a performance sharing system, which is celebrating its 20th anniversary this year. The performance sharing system is a mechanism where companies jointly tackle improvement tasks in the industrial field and share the results. POSCO has been operating this system since 2004 to promote collaboration with small and medium-sized enterprises.
Through this system, when financial benefits are achieved from the tasks, POSCO rewards participating companies with 50% of the cost savings and provides various incentives to motivate autonomous improvement activities. According to a POSCO official, participating companies can enhance their technical capabilities and profitability, while POSCO can strengthen its competitiveness in the long run by securing products from companies with expertise and capabilities.
Since its introduction in July 2004, POSCO has completed a total of 5,565 improvement tasks across various areas such as localization, cost reduction, safety and environment, and sales expansion with 2,344 companies. The cumulative amount of performance rewards is approximately 825.5 billion KRW.
POSCO’s performance sharing system has been recognized as a model case of mutual growth between large and small-medium enterprises, leading the government to establish the “Act on Promoting Mutual Growth of Large and Small-Medium Enterprises” in 2006. Currently, 593 companies, including major corporations and public enterprises, are operating performance sharing systems in Korea.
A POSCO official stated that they will continue to provide a platform for companies to grow through the performance sharing system and enhance mutual competitiveness by expanding the application of developed technologies in the future.