“The generation has changed”… Reasons for the spread of’performance pay controversy’ in the electronics and IT industry

Controversy is spreading in the electronics and IT industry, which reached the time of paying incentives last year, and whether or not to pay incentives to each company. As SK Hynix, the first to set fire to the incentive issue, came up with the chairman, vice-chairman, and the president to deal with the situation, the controversy over incentive pay is spreading to other companies.

It is analyzed that the fact that, unlike in the past, the 2030 millennials, who are forming the mainstream of executives and employees, began to speak out honestly. It is evaluated that these generations who are active in communication are creating a consensus centered on the in-house information network and the community of external workers, creating a new wind in the culture of large corporations.

According to related industries on the 5th, SK hynix held a central labor-management council with two labor unions consisting of full-time employees in Icheon and Cheongju, and the management led by Seok-hee Lee and CEO of SK hynix. The purchase of stock shares and the payment of in-house welfare points were discussed and an agreement was reached.

First, the existing PS calculation standard’EVA (Economic Value Added and Operating Profit minus corporate tax or capital expenses)’ will be abolished, and a plan will be applied to link the bonus standard to annual operating profit. Operating profit is a publicly disclosed matter, and it is expected that it will be able to meet the transparency of the incentive calculation standards that executives and employees strongly advocate in that it can increase the predictability of the amount of incentive pay.

Also, on the premise of approval from the board of directors, a plan was discussed to issue employee stocks to give employees the right to purchase them. The policy is to make it possible to purchase employee stocks at 200% of the basic salary through additional procedures.

Lastly, SK Hynix decided to pay 3 million Hi Well Points, an in-house welfare point, to all employees. Focusing on the core debate on the basis of incentive pay calculations, the evaluation is said that the controversy over the incentive pay can be closed sooner than expected, with additional employee compensation plans to some extent.

The problem is that, along with SK Hynix, complaints are spreading throughout the electronics and IT industry over whether such incentive payments are paid and whether the standard is valid. In addition to Samsung Electronics, which is known to receive the industry’s highest annual salary and incentives, major affiliates of the LG Group and other affiliates, such as SK Telecom, who have seen SK Hynix’s precedent, are raising issues related to performance pay.

The industry believes that the so-called’millennial generation’, which has emerged as a new mainstream of executives and staff members, has had a significant impact on the increase in performance-based dissatisfaction compared to the past. Even in the case of SK Hynix, which is at the forefront of the controversy over performance pay, complaints from executives and employees were infested under the water, and decisively, an employee who has been in the 4th year of the company threw a written proposal to the CEO.

It is also interpreted that the culture of executives and employees of large corporations is also beginning to change because the tendency to pursue’pragmatism’, which is one of the representative characteristics of millennials, and values ​​sensitive to’fairness’ are the basis. The fact that the recent 2030 generations are showing a change in values ​​that fit the issue rather than one ideology regarding social and political phenomena, and the fact that they think more thoroughly than the older generations on the economics is also applied to work life.

In addition, the habit of millennials who are active in communication, where they can freely express their own voice from a relatively young age, can be interpreted as affecting their work environment. The controversial performance-based standard was also able to form the same consensus as it is now as opinions began to be shared mainly in the in-house online community or the online community of office workers who can operate anonymously.

In addition to this trend, the total number of major conglomerates and the generational change of management are expected to be added, leading to a change in the existing conglomerate culture and overall performance distribution system. With the death of Samsung’s late Chairman Lee Kun-hee, the era of vice chairman Lee Jae-yong has begun in earnest, and LG Group’s young general manager Koo Kwang-mo is starting to change. Here, as the 2030 generations gradually become the core workforce, the change is expected to accelerate further.