Sinopec, China's largest State-owned oil refinery enterprise, canceled its employment contracts with more than 800 college graduates. A spokesman for the headquarters responded that it was because the affiliated units violated the notice on employment this year and issued more offers than they could accommodate. Frankly speaking, Sinopec violated its economic and social responsibilities in the first place, says an article of the 21st Century Business Herald. Excerpts:

Sinopec canceled the employment contracts at the costs of their credit. The incident exposed the ill management, at least, of its employment and personnel systems. It is not only wasting time for the college graduates but also wasting actual taxpayers' money.

Sinopec has 1.06 million employees, 12.3 times that of Exxon Mobil. But Sinopec's personal output of profit on average is only 7 percent of that of Exxon Mobil.

It is a fact Sinopec has huge costs of human resources and employment. So it is necessary to tighten the employment link to improve working efficiency. But it is also an open secret that the "inbreeding" problem in Sinopec is serious, as parents working for Sinopec, as well as many other SOEs, tend to look for jobs for their children in Sinopec because the SOEs' payment and welfare for their employees are not only stable but also much higher than private companies.

Thus, it is understandable that the opportunity for fairness and procedural justice takes a huge toll in the employment process of Sinopec. More than 5,000 college graduates whose parents work for Sinopec are exhausting all opportunities to join the firm each year.

Sinopec needs to reform the employment system and build up a proper performance assessment system for new employees. A survey on domestic oil companies shows that 15 percent of new employees quit their jobs in the first year, 24 percent in the second year and 48 percent in the third. It means many incompetent people are controlling key positions. Bad money drives out good money in an ill-managed enterprise.

So the cancelation of contracts for 800 students is by no means a small problem for Sinopec. It is a rare glimpse by society into the complicated employment and personnel problems of the large State-owned enterprise.