The controversy over performance pay from the’MZ generation’ is hitting the industry. SK Hynix’s labor and management met in person last week to resolve the issue of incentive pay raised by young employees, but the controversy does not stop there and spreads to major companies such as information technology (IT), chemicals, and steel.
MZ generation (born in the early 1980s to early 2000s), which encompasses millennials and generation Z, has become a key generation, accounting for 60% of domestic workers. Experts emphasize that as the identity of the MZ generation, who demands fair and transparent compensation for performance, is clearly revealed through the’SK hynix performance pay wave’, the expansion of internal communication of companies and organizational innovation are urgently needed. According to the industry on the 7th, in the social network service (SNS) of corporate office workers, questions about performance-based pay are constantly popping up.
Millennial new recruits revolt… “What is the performance pay standard”
MZ generation rises to the mainstream of workers
Pursuing reliable performance rewards and work-level
A generation that speaks regardless of status
Connect with employees of other companies through SNS
Amid controversy over performance pay for IT conglomerates
Successive promotion of transparent performance system
Daily live broadcast of CEO/employee conversation
“Creating a sense of incongruity between companies”
The industry’s hardship is deepening at the unstoppable cry of the MZ generation (born in the early 1980s to early 2000s) demanding fair compensation such as incentives. Following SK Hynix’s recent measles over calculating incentives (basic pay of 400%), major companies were also controversial over similar incentives. It is estimated that the MZ generation accounts for 34% of the domestic population (about 17 million) and 60% of major corporate members. That is why the MZ generation has emerged as the mainstream of domestic office workers. Companies are embarrassed by such a new generation’s cry, but are also struggling with innovation, such as strengthening internal communication and improving the performance-based pay system.
Following SK Hynix, SK Telecom’s union sent a letter to SK Telecom’s chief executive (CEO and Vice Chairman) Park Jeong-ho in the name of Chairman Dong-Hee Dong-hee to raise a question about the incentive pay, which is estimated to have decreased by 20% compared to the previous year. In addition, LG Energy Solutions employees are criticizing that despite the record-high profit last year, they received incentives that were less than those in the petrochemical division (400% incentive) and the life science division (300%) within LG Chem.
Experts believe that corporate executives raised the anger of MZ generation members with opaque incentive calculations. Companies said that they calculated incentives by reflecting last year’s performance and future expenses such as investment and taxes, but it is explained that unfair controversy has increased as the detailed formula has not been disclosed. Firms do not disclose exact calculation methods for reasons of trade secrets.
MZ generation workers are not putting up with this management method and are raising issues openly. It is a voice calling for fair and transparent compensation according to individual performance. SK hynix became a hot topic in the industry by sending an e-mail from the fourth-year technical office employee A, asking President Lee and all employees to “clarify the criteria for calculating performance pay.” Furthermore, MZ generation office workers are publicly pressing on the management by practicing digital solidarity between affiliates and industries with social network services (SNS) such as blind and KakaoTalk.
With this incident, the voices of MZ generation workers shouting for innovation in organizational culture as well as the salary system are expected to increase. As a result of a survey of HR managers at 451 major companies in August of last year by a domestic employment research organization,’In person,’ MZ generation demands work-life balance (work-life balance) from the company, and personal interests rather than organizations. It was investigated that the tendency to prioritize was remarkable. In addition, the importance of free and horizontal culture and fair opportunities was also characteristic of the MZ generation.
Experts say that active and transparent communication is the most important for companies to capture MZ generation. It means that they cannot change their minds simply with material benefits.
Professor Lee Jeong of Hankuk University of Foreign Studies said, “In MZ generation, individualism and rationality are the most important values. Rather than trying to overcome their dissatisfaction with material gains, it is important for the management to eliminate the source of dissatisfaction through active communication.” “If you avoid communication with them, companies may promote MZ generation office workers to join the union, and eventually provide a new blue ocean to the National Federation of Democratic Trade Unions and the Federation of Korean Trade Unions, which has become a union tax.” Professor added.
In the midst of this, companies that have engaged in proactive cultural innovation and communication stand out. On the 4th, GS Caltex urgently conducted an employee survey for’innovation of a horizontal organizational culture based on autonomy and responsibility’. As the dissatisfaction of MZ generation workers increased due to the controversy over SK Hynix incentives, it is a will to change the organizational culture by actively reflecting their position. A GS Caltex official said, “We know that the company will introduce a variety of systems, including measures to maintain the work balance based on the survey.” In addition, the CEO of a large electronics company has been reinforcing communication by broadcasting a’conversation with executives and employees’ live once a week immediately after taking office. However, there is also a view that the controversy over performance pay creates a sense of incongruity among workers.
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