Employees who work in Samsung's electronic memory department in South Korea told the media that he recently received a "service bonus" from the company worth three months' salary in january salary, which brought his total bonus last year to 11 months' salary.
In December last year, all employees of the Samsung Group had received a "profit bonus" equivalent to half a year's salary and a "special bonus" equivalent to two months' salary. Together with the service bonus just received, the total bonus amount of the memory department employees last year reached 11 months' salary, and the annual income reached "23 salaries".
Generous employee benefits
The late Samsung founder Lee Byung-cheol, the third son, and the second president of the Samsung Group, Lee Kun-hee, broke with Samsung's tradition and implemented a reward salary system of "rewards for promises". In 2001, he proposed the concept of compensation by distributing part of the company's profits to employees.
There are two kinds of income that Samsung cadres and employees are tied to the company's performance, one of which is the annual evaluation of "PS" (profit sharing), which is the source of the "profit bonus" for all employees worth six months' salary in 2021.
Every year, Samsung headquarters will issue a profit target to the following subsidiaries, and after the end of the operating year, if the actual profit exceeds the target profit, 20% of the excess part will be distributed as a bonus. Samsung was also one of the first companies in South Korea to introduce the "employee sharing company profits" system.
According to Samsung's annual report to the Korea Exchange, as of December 31, 2020, Samsung employed 109,490 people in South Korea, with an average annual salary of 127 million won ($106,000), up 26% from five years ago. Given the strong earnings in 2021, the average salary, including bonuses, is likely to climb even higher.
In addition, during His reign, Mr. Lee introduced many other benefits: Employees could enjoy free breakfast, lunch and dinner in the company's cafeteria, and the company paid most of the tuition for their children.
The "robbery war" is white-hot
The outside world believes that Samsung issued a "service bonus" worth three months' salary in January this year, the main purpose of which is to retain key talents in the core department. With the steady rise in global demand for semiconductors, a chronic shortage of engineers has plagued companies in the industry.
Bonuses are the most common means of competing for employees, and other companies are naturally not lagging behind. SK Hynix, a rival in Samsung's semiconductor business, paid all employees the equivalent of 10 months' salary bonuses in January after a strong performance in 2021.
As gaming and internet companies such as Naver and Kakao become increasingly popular, the pool of engineering professionals in South Korea is shrinking further. Naver's average annual salary jumped nearly 50 percent in five years to nearly $86,000 by 2020, sending Samsung, long at the forefront, down South Korea's "list of most popular businesses for employees."
The South Korean government has also recognized that the talent shortage is a serious threat to a core industry and has taken steps to promote the development and reserve of talent, such as encouraging leading universities in the country to set up semiconductor-related courses.
In addition to domestic, Samsung is also facing a talent battle at the international level, and the company hopes to use internationally leading incentives to recruit and retain employees in neighboring countries. This is particularly detrimental to Japanese companies, whose compensation structures are mostly rigid.