THE ROLE OF TOP MANAGEMENT IN BUILDING SAFETY EXCELLENCE AND OPTIMIZING HUMAN PERFORMANCE

1. THE ROLE OF TOP MANAGEMENT IN BUILDING SAFETY EXCELLENCE AND OPTIMIZING HUMAN PERFORMANCE Anton VAČKO, Human Resources Manager, Kappa Štúrovo, a.s. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

2. ITEMS • THE DEVELOPMENT OF THE WAY OF THINKING AND ATTITUDES TOWARDS SAFETY MANAGEMENT ISSUES IN SLOVAK ENTERPRISES AFTER THE YEAR 1989 • IT IS ALL ABOUT CORPORATE CULTURE • THE ROLE OF TOP MANAGEMENT IN MANAGING CHANGES IN EMPLOYEE´S WAY OF THINKING, ATTITUDES AND BEHAVIOUR • EXPERIENCE WITH CORPORATE CULTURE CHANGES IN KAPPA ŠTÚROVO, A.S. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

3. THE DIFFERENCES IN THE WAY OF THINKING AND ATTITUDES I. • Today´s Slovak management spent their early youth and most of their studies during the socialist regime • The thinking of middle and older generations was formed in „socialistic attitudes to work“ • The limiting factor was, and still is, the attitude towards property • We lived under the illusion that „all property is held in common“ • It was accepted that everybody must defend socialist property but hardly anybody did (stealing, frauds, ...) • Corporate management underestimated risk management issues – just a few special departments existed (often working formaly) Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

4. THE DIFFERENCES IN THE WAY OF THINKING AND ATTITUDES II. • Similar attitudes towards employee´s health care and work related accidents • Fulfilling the plan was „dogma“, real working conditions and size of risks were forged • Working accidents were taken as natural and unavoidable • Transition to the market economy was not, and still isn´t, carried out at appropriate levels - concerning the treatment of employees • The majority of employees are very slowly beginning to change their attitude towards company property and its technologies Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

5. THE DIFFERENCES IN THE WAY OF THINKING AND ATTITUDES III. • „The enterprise used to belong to communists but today it belongs to capitalists. We have been exploited by all of them...“ • The conditions in some enterprises became even worse – the owners worship only profit and employees only high wages and salaries • Earnings often prevail over safety, employees health, property loss (insured) and environmental damage • Unemployment has a very negative influence too – often misused • People often do not care (Just tell me what to do and I will...) Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

6. THE CURRENT OPINIONS OF RISK MANAGEMENT AND H&S I. • Within the last few years some Slovak enterprises have been starting to deal more effectively with risk management issues – mostly under the influence of their international corporations • There is also big pressure from insurance companies • Risk management issues are becoming a substantial part of company visions and missions, and are being incorporated into company culture and company image Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

7. THE CURRENT OPINIONS OF RISK MANAGEMENT AND H&S II. • Barriers to the incorporation of Risk management into company culture depends on: • International corporation – if Risk Management Policy belongs to their priorities or not • Whether the company is already consolidated and restructured. When not, company management priorities are somewhere else • Subjective, the human factor – is company management willing and able to grasp and realize Risk management ideas? Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

8. IT IS ALL ABOUT CORPORATE CULTURE • „Fifteen years ago, I would have said that if you want to bring about change, you need to understand corporate culture along with the company's products, markets, financials and human resources.” “Now, if you want to change an institution, I would say it's all about corporate culture." Luis V. Gerstner, long-time CEO and president of IBM, October 2002. • Corporate culture definition: CORPORATE CULTURE IS THE BELIEF, VALUES AND SYMBOLS THAT A COMPANY USES TO DEFINE ITSELF. IT'S ABOUT PEOPLE AND HOW THEY GO ABOUT DOING THEIR WORK AND RELATING WITH EACH OTHER. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

9. CORPORATE CULTURE AND COMPANY MANAGEMENT TEAM • MD and MT members – critical factor in creating and maintaining corporate culture • CC must be addressed in the organization's mission, vision, and goal statements, and emphasized in company communication • Only company management can implement values like safety and health care into the company culture • Critical question is – how to do it? Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

10. EXAMPLES FROM KAPPA STÚROVO, a.s. • Kappa Stúrovo, a.s. – Pulp and Paper producing company, part of international Kappa Packaging company (The Netherlands) • Production: 185 ths. tons of fluting (paper on corrugated layers of corrugated board), plus different types of boards • Turnover: 80 mil. EUR/Year • Profit (EBITDA): 16 Mio. EUR (2002) • Number of employees – 700 • Export: 80 % (Spain, Italy, France, Denmark, Czech rep., ...) • ISO 9001, ISO 14 001, OHSAS 18 001 Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

11. KAPPA ŠTÚROVO, a.s. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

12. EXAMPLE – CORPORATE CULTURE (VISION) • Kappa Stúrovo - Company VISION of 2000: „The main goal of the company is to take over the leading position in our segment of the European paper industry. From this dominant position we would be able to achieve a higher shareholder value evidenced by a return on net operating assets (RoNA) comparable with the best in our industry. We will, through long term relationships, permanently supply our clients with products of a declared quality. Additionally we will provide our customers with satisfactory services and meet their needs. We will also take into account the increasing demand for environmental protection. We would also like to be the most attractive employer within the Slovak paper industry“ Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

13. INBETWEEN • This company (at that time) AssiDomän was taken over by Kappa Packaging – in 2001 • One of the priorities – Health and Safety, Risk management • Launched: Company H&S Policy, Risk management Policy, Crisis managemnet Policy, ... • 2001 – Training in H&S led by DuPont • Company management started to deal with these issues very seriously Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

14. EXAMPLE – CORPORATE CULTURE (VISION) • Kappa Stúrovo – Company VISION of 2002: „As part of an international company to take over the leading position in our segment and maximally use existing potential. To deliver goods to our custommers steadily in the long run and declare quality services with more solutions. Through all activities to respect the increasing demand for environmental protection. To be the most attractive employer within the Slovak paper industry and as one of the highest priorities to consider safety and employee´s health protection“. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

15. EXAMPLE – LEARNING BY EXPERIENCE • November 1993 - Big fire on Paper Machine No. 3 • Fire caused by sparks during welding on the ceiling • The building and PM nearly completely damaged • The fluting production stopped for approx. 6 months and then had to be rebuilt and renovated • 496 employees lost their jobs • Company lost some customers • About 200 empoloyees were taken back after the event Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

16. EXAMPLE – LEARNING BY EXPERIENCE • Consequences of 1993 fire on management and employee´s behaviour • Fire protection became extremely important and respected • Company took many measures and precautions in this respect • Company fire brigade improved its work substantially • Employee´s behaviour changed - became very careful regarding fire prevention... Unfortunately, this attitude regarded only fire, not H&S. Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

17. EXAMPLE – IMPLEMENTED BY MANAGEMENT I. • 15 years ago - Health & Safety Protection issues were in place • Company followed all regulations • Work Safety Committee existed and worked • All PPE given to employees • Trade union H&S representatives in operational departments • Reports on results in H&S regularly in management meetings • ... but THE NUMBER OF ACCIDENTS WAS STILL VERY HIGH Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

18. EXAMPLE – FORCED BY MANAGEMENT II. • Number of accidents (WWC) development in Kappa Stúrovo PRIVATIZATION OUTSOURCING OF MAINTENANCE KAPPA „FOCUS“ Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

19. EXAMPLE – REASONS WHY SO MANY ACCIDENTS • Only fatal accidents were taken seriously • Company did not have to pay salaries during illness (only the state) • Company could do without ill employees (overemployment) • Employees misused accidents (got extra money, could stay and work at home, private accidents claimed as working accidents...) • No efficient system of working procedures, poor state of equipment, poor technology... Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

20. EXAMPLE – TOP MANAGEMENT ROLE IN KAPPA STÚROVO • Focus on Corporate culture • Cleanliness, tidiness and order • Integrated Systems (ISO, OHSAS) • Influence on employees behaviour • Ethic code • Personal example set by MT´s • Internal audits (advising, not punishing) • Communication (newsletter, intranet, working meetings, ...) Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

21. CONCLUSIONS(How to remove barriers) • THERE IS NO DIFFERENCE AMONG EMPLOYEE´S POTENTIAL TO ACCEPT CHANGES IN ANY SLOVAK COMPANY • ALL PEOPLE CAN LEARN - BUT SOMEBODY MUST SUPERVISE • IT IS NECESSARY TO CAHNGE BEHAVIOUR AND THE WAY OF THINKING (ATTITUDES) • BY CREATING APPROPRIATE CONDITIONS YOU CAN CHANGE EMPLOYEES OPINION IN RELATION TO THE COMPANY • COMPANY MANAGEMENT MUST TAKE RESPONSIBILITY • SOCIAL-ECONOMIC SITUATION AND THE WHOLE ATMOSPHERE HAS BIG INFLUENCE ON BARRIERS TOO... Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava

22. THANK YOU VERY MUCH FOR YOUR ATTENTION Current State of Human Factors Knowledge in Slovakia and Barriers, Which Need to be Removed to Improve Human Performance, 30th – 31th October 2003Bratislava