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2009 Winner: New Zealand Aluminium Smelters
New Aluminium SmeltersEmpowering Employees
A shining example of a board truly committed to ethical governance is New Zealand Aluminium Smelters (NZAS), which takes top honours this year for engaging employees in co-creating an exemplary response to address the global financial crisis.
The 2008/2009 global financial crisis made a significant impact on NZAS, with the aluminium price dropping a staggering 60 per cent, coupled with an unexpected transformer failure resulting in the loss of 28 per cent capacity. It was imperative that cost savings were made immediately.
NZAS was faced with a number of options. The fastest way of immediate cost savings would have been to cut jobs without facing the medium to long-term consequence of such a strategy. This was not viewed as a sustainable strategy. Therefore the decision was made to empower the workforce to develop the response to the crisis, through ensuring each person at the NZAS site was on board by providing open communications, seeking input and acting on advice given.
Idea Generation Sessions were carried out throughout the NZAS site, with all employees attending these sessions. Over 1,400 ideas were developed by employees, with $7.5 million in savings ideas accepted and taken forward for implementation. Contractors were also requested to make savings. This approach recognises that engaging all employees and contractors to identify value improvements is crucial and will result in changes being accepted in the workplace a lot more readily.
Around 90 people, ranging from those with young families through to those nearing retirement, took up the option of the Leave Without Pay and Reduced Working Hours programmes. The Extended Leave Without Pay programme offered employees the opportunity to try other jobs elsewhere or take an extended holiday, with the advantage of knowing they could come back to NZAS at the end of their leave period.
An Early Retirement programme was also implemented, giving long serving employees who had completed over 20 years service the option to retire. A total of 32 people took up the voluntary offer.
These and other options have enabled NZAS to provide flexibility, create an inclusive environment and reduce costs, which will lead to recovering the financial position
NZAS was the only site within the Rio Tinto Alcan group to actively promote these voluntary programmes and completely engage the workforce to develop the solutions. It gave employees choice. Significant forced redundancies occurred at other parts of the business. This was something that NZAS certainly did not want to do and has done everything in its power to ensure this doesn’t happen.
NZAS employees have been very accepting of the many changes made during late 2008 and throughout 2009. This reflects the excellent culture at the smelter where people share a common set of values and beliefs about who they are as an organisation and where they are going. From the board to the factory floor they recognise the importance of everyone supporting each other through difficult times.
The NZAS Strategic Map identifies six Key Result Areas the business needs to focus on in order to achieve its vision and management is required to report progress to the board monthly and annually. These include People Commitment – ‘NZAS is a place where all people feel valued and want to be part of a winning team.’ The response to the global financial crisis demonstrated that this commitment is a fundamentally part of the NZAS culture. Whilst others may struggle to understand ethical governance, NZAS has yet again shown that principles pay. NZAS has reaffirmed through ethical governance its position as a flexible, resilient business, poised for a better future for its employees and the community.
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