Recently, internal conflicts over incentives for large corporations have spread and have emerged as a social concern. Employees who received what the management gave them so far are now directly asking the company, “What is the basis for calculating the amount?” The growing voice of the MZ generation (a generation born in the late 1980s to 2000s) that values fairness and practicality is considered one of the backgrounds of the growing controversy over performance pay.
According to the business world on the 6th, the start was SK Hynix. When the company announced last year’s incentive pay as ‘20% of annual salary’ on the 28th of last month, employees rebelled that the operating profit doubled from last year, but that the same amount as last year was unreasonable. As a result, SK Group Chairman Choi Tae-won announced the return of his salary and started to evolve, but the flames did not subside.
Controversy over major conglomerates incentives. Graphic = Reporter Park Kyung-min [email protected]
A similar controversy arose in SK Telecom, SK Hynix’s parent company. SKT’s union recently pointed out transparency on the criteria for calculating incentives, saying that it is concerned that incentives will be given to vice chairman Park Jung-ho, and demanded a complete reorganization of the incentives system. President Park Jung-ho communicated with employees and paid 3 million points for the Lunar New Year holiday, but the union continues to protest, saying it is a temporary measure.
Samsung Electronics is also in full swing. Samsung Electronics recently reported that the DS division in charge of the semiconductor business pays 47% of its annual salary, the IM division in charge of smartphones 50%, the video display division in the consumer electronics (CE) division 50%, and the home appliance division 37%. Announced. Then, the DS division’s employees, who led the company’s company-wide performance with the most operating profit last year, responded that they did not receive adequate compensation. Employees in the home appliance sector also showed record high performance last year, and are complaining that they are being discriminated against.
LG Electronics plans to determine and announce incentives for last year during this month. As employees compare with other companies or business units and express concerns about incentives, LG Electronics is likely to experience similar conflicts. When LG Energy Solutions recently presented 245% of the basic salary as an incentive in the process of labor-management negotiations, complaints arose that it was a payment rate that was less than that of the business division of the same group.
The voice of the MZ generation that emphasizes fairness and practicality is growing
The industry cited the characteristics of the MZ generation that values fairness and practicality as one of the backgrounds of the growing controversy over performance pay this year. Since we do not regard the company as a “lifetime job,” if you think that it violates the principles or principles, you are not patient and express your dissatisfaction clearly. They are in the position that it is difficult to understand the opaque standard of performance pay. Because equity and transparency are not guaranteed, the deterioration of morale is also serious because the idea that you may not be rewarded for what you work.
Material: People
In fact, in the controversy over SK Hynix’s incentive pay, an employee who has been in the company for four years publicly sent an e-mail to 28,000 employees, including the representative, to clarify the method of calculating the incentive pay. It is analyzed that it is natural that generations who express their intentions confidently are not satisfied with the current incentive system.
In addition, in-house bulletin boards, social network services (SNS), and the office worker community have amplified interest in the diversification of channels through which office workers express their opinions and spreading quickly to the outside.
On the other hand, companies are embarrassed as the backlash from employees is growing. Companies believe that the basis for calculating performance pay is’corporate confidentiality’, and whether or not to disclose it is the company’s own authority. Also, unlike basic pay, incentive pay is not a matter of consultation between labor and management. Since it is impossible to calculate the performance pay that all employees are satisfied with, it is appropriate for the manager to set the appropriate amount.
In particular, the prolonged period of the novel coronavirus infection (Corona 19) is a time to prepare for the future. If excessive incentives are paid by public opinion, the investment resources may be insufficient and the competition with other companies may fall behind. If similar controversy arises every year, labor-management harmony can also be distant.
However, companies agree that overall improvement is needed following the controversy this year. One 4 group vice president-level executive said, “We are simply raising issues not only about the amount, but also the compensation system, standards, and transparency.” . Another business official also said, “It seems to show that the culture of Korean companies has changed from a system that used to be’taken from the top’ to a direction that emphasizes horizontal relations.” .
Some criticize that the controversy over incentive pay is’their own league’ that only applies to employees of some large companies. The oil refining industry, which usually paid 300-400% of the basic salary, decided not to pay incentives this year. It is estimated that last year’s cumulative loss of 4 refineries hit by Corona 19 was 5 trillion won. It is also difficult to expect incentives for the aviation industry, which is suffering from the’worst barley pass’ due to Corona 19. In the case of shipbuilding and heavy industries, where the industry remains sluggish, few companies pay incentives.
Reporter Hae-Yong [email protected]