“The money was made by semiconductors”… Samsung DS, TV and smart phones are less dissatisfied
LG Electronics, who complained about incentives last year, burdened ahead of announcement at the end of February
Conflict over Hyundai Motor’s 150% incentives last year… Embers still this year
“The labor-management bonus standard must be agreed in advance… Need for sufficient communication, empathy, and sharing”
▲ A view of SK Hynix’s Icheon Campus (photo provided by SK Hynix)
The controversy over performance pay that has sparked in the domestic semiconductor industry is heating up. As the group leader and CEO (CEO) are evolving, the business community is worried that the conflict over performance pay will expand across the industry.
According to the semiconductor industry on the 3rd, following SK Group Chairman Choi Tae-won’s declaration of’return of annual salary’, SK Hynix President Lee Seok-hee’s internal message, SK Hynix employees’ dissatisfaction with incentives does not easily subside.
SK Hynix recently announced that this year’s excess profit distribution (PS) is around 20% (400% of basic salary). PS is an incentive paid when the previous year’s performance exceeded the target profit.
Members protested that the amount received was the same as the previous year, when the performance was not good even though the management performance last year was good. SK hynix did not pay PS at the beginning of last year due to poor performance in 2019, but paid’special contribution to future growth’ equivalent to 400% of the base.
The controversy heated up when a younger-year-old employee sent a protesting e-mail to all members, including the CEO, asking’what is the standard for paying incentives?’ On the 1st, at the M16 completion ceremony held at the headquarters in Icheon, Gyeonggi-do, the union protested, and Chairman Choi Tae-won declared that he would return all the salary he received from SK Hynix last year.
Next, CEO Lee Seok-hee said through an in-house announcement, “I will try to provide PS that meets expectations this year,” but internal complaints have not subsided. As Samsung Electronics and Micron in the US recently started hiring career positions, there are even employees who want to change jobs.
Samsung Electronics also has some complaints. Samsung Electronics recently paid OPI for each business division, the IM (smartphone) and VD (TV) divisions received 50% of the maximum annual salary, and the DS (semiconductor) division received 47%. Internally, a complaint was raised that “the semiconductor made the most money, but why is the OPI less than that of a smartphone or TV?”
LG Electronics, which is about to calculate incentives, is also under pressure. LG Electronics will soon set an incentive pay and explain it to the union that is entering into a collective bargaining agreement with wages and announce a payment plan at the end of February.
LG Electronics also suffered a performance pay conflict last year. This is because the HE (TV) headquarters’ performance pay has shrunk from 500% in the previous year to 100% in one year. Moreover, the MC (smartphone) headquarters, which recorded a deficit, received 1 million won in the name of encouragement last year, and employees complained that the HE headquarters, which made another trillion won, received only 2 million to 3 million won.
▲ President Ha Eon-tae (right) and Lee Sang-soo, head of the labor union, shake hands at the signing ceremony of the 2020 wage bargaining agreement held at the Ulsan plant last September. yunhap news
Labor-management conflicts over incentives are recurring regardless of industry. Last year, some of Hyundai Motor’s unions protested, saying that the 150% incentive wage raised in the provisional wage bargaining agreement was low. Labor and management accepted the provisional agreement amid the Corona 19 crisis, but this year’s performance-paid conflict remains alive. Kia Motors also rejected the company’s 150% incentives offer, and succeeded in concluding a labor agreement at the end of the year.
Experts agree that it is necessary for the labor and management to agree on the rules for paying incentives to calm the controversy. It means that labor and management should specifically agree in advance on what to judge performance based on and how to distribute the performance to whom.
Kang-Sik Kim, a professor at the Department of Business Administration at Korea Aerospace University, said, “It is necessary to agree and communicate with each other when setting standards for sharing rather than making sharing fair, and to share sympathy or sharing with each other.” Even if consensus is difficult, communication is necessary in the decision process, and at least it must be notified in advance.”