“Give Genesis and then Sonata”… The controversy over the performance pay of large corporations sparked

“(The company) said it would give me Genesis, but it was a Sonata in the late 20 million won mark on the passbook.”

On the 29th of last month, an executive of Samsung Electronics, who received an incentive pay, said, “The’real winner’ is like the National Tax Service.” This means that after tax and employment insurance premiums were removed, the income in hand actually decreased.

In this way, the performance-based pay for large corporations, which has been a topic mainly among office workers, is rising to the field of public debate. On the 1st, Tae-won Choi, chairman of SK Group, declared, “I will return the compensation received from SK Hynix to the members.” After SK Hynix recently announced that “20% of its annual salary is paid in excess profit distribution (PS),” employees’ complaints were raised, and the total number of companies took an unusual measure.

Last year, the company’s sales were 3,190 trillion won and operating profit was 5 trillion won. In response, employees, including the SK Hynix union, responded, saying, “Operating profit has nearly doubled compared to 2019, and it is difficult to understand that the incentives are the same.”

An official from SK Hynix said, “Chairman Choi expressed his willingness to solve the problem.” Chairman Choi received 3 billion won in 2019 and 1.75 billion won in the first half of last year from SK Hynix.

As the controversy spread, SK Hynix CEO Lee Seok-hee said in an in-house message on the 2nd, “I will try to meet the expectations of members this year.” “I will expand communication on the PS expected level and scope throughout the year.”

Samsung Electronics, which recorded sales of 72.86 trillion won and operating profit of 18.81 trillion won in the semiconductor business last year, is relatively quiet. On the 29th of last month, 47% of the annual salary was paid to about 50,000 employees as OPI, which is estimated to be around 8% of operating profit. OPI can receive up to 50% of annual salary, up to 20% of excess profit when target profit is achieved.

The establishment of an incentive payment system is sometimes cited as the secret of Samsung Electronics’ high growth. Seoul National University Business School professor Lee Kyung-mook said, “There is no need to fight to raise the salary by 1-2% among employees through the message,’If you make a profit, share it together.’ “Let’s focus on work at that time,” he said.

However, performance pay does not necessarily depend on the performance of business units or individuals. LG Electronics paid 1 million won each to employees of the smartphone (MC) business division, who suffered from a deficit last year. The character of encouragement is strong, but in the business world, it is interpreted that LG’s unique corporate culture is also reflected in performance pay.

This year, the polarization of performance-based pay has intensified. This is because the travel, aviation, and hotel industries were hit by a direct hit in the aftermath of Corona 19, resulting in wider variations by industry. With the spread of non-face-to-face culture, semiconductors, home appliances, and household loans have increased, and only the banking and financial investment industries are blowing’hot winds’ due to the’Donghak ant’ effect.

The key issue in the controversy over SK Hynix’s performance pay is’disclosure of the calculation method’. Prior to this, an employee of SK Hynix, who identified himself as a’four-year employee’, sent an e-mail to 28,000 employees, including President Lee Seok-hee, saying, “Please disclose the method of calculating the performance pay and the maximum percentage of payments if the goal is achieved. Insisted.

In fact, the process of determining incentives for major companies such as Samsung Electronics and SK Hynix is ​​close to’blooming’. Except for key executives and employees, we do not know the detailed calculation method. Chairman Tae-won Choi said that he would return the remuneration, but inside SK Hynix, “It is not a solution. There is a high proportion of public opinion, saying, “The effectiveness is also poor.”

Experts say the culture of performance pay needs to change. In particular, he emphasizes that the MZ generation (a generation born in the late 1980s to 2000s) who clearly express their dissatisfaction and are interested in digital financial technology should change in a more rational direction as they begin their work life in earnest.

Lee Chan, head of the career development center of Seoul National University, said, “Companies that are making noise due to incentive pay now set their overall margin at the end of the year and simulated’how much, let’s leave a little.’ “Rule setting” in which standards are shared in advance, and a performance management system must be established accordingly.”

“In order to minimize complaints and side effects from incentive payments, it is necessary to set clear goals in the beginning,” said Choi Seung-cheol, head of HR research institute. “In addition, periodic management should be carried out by separating the organizational and individual perspectives.”

Reporter Kwon Yujin [email protected]