Huawei: Successes and Challenges of Employee Compensation and Benefits Policies
Huawei is a giant in China's tech industry and has a global reputation. As a private enterprise, Huawei's development and growth are inseparable from its unique corporate culture and human resources policies. Huawei's compensation and benefits policy for employees has been attracting attention and praise.
Employee Stock Ownership Plan: The embodiment of wealth sharing
Huawei has implemented an employee stock ownership plan since the mid-1990s, which is a reflection of the company's shared interests and risks with its employees. Under the plan, Huawei grants a certain percentage of its equity to its employees free of charge, and employees can share in the company's profits by holding shares.
This approach is not only conducive to retaining talents, but more importantly, it embodies Huawei's core values of "striver-oriented". Ren Zhengfei once said: "We must let the strivers get the rewards they deserve, and let them share the fruits of the company's development." "Through the Employee Stock Ownership Plan, Huawei and its employees are closely linked to their destiny and form a community of interests.
Huawei's employee stock ownership plan is second to none among domestic enterprises in terms of coverage. According to reports, as of 2022, about 110,000 Huawei employees hold shares in the company, accounting for 98% of the shares. This means that the vast majority of Huawei employees can benefit from the company's development.
High dividends: an important source of employee wealth
In addition to the employee stock ownership plan, Huawei also rewards employees with high dividends. Every year, about 35% of Huawei's annual revenue is used for employee dividends, which is the highest in the industry.
In 2021, for example, Huawei achieved sales revenue of RMB 636.4 billion and distributed dividends of about RMB 2.4 million per employee to employees. This level of dividends is not only much higher than the industry average, but also one of the highest among global technology companies. Much of the wealth of Huawei's employees is due to the company's high dividend policy.
The introduction of the high dividend policy is also related to Huawei's "striver-oriented" philosophy. Ren Zhengfei once explained: "We want to let the strivers get the rewards they deserve, so that they can share the fruits of the company's development." It can be seen that Huawei regards its employees as the fundamental driving force for the company's development and is willing to reward employees for their hard work through dividends.
The formation of a group of wealthy employees
Under the dual effect of employee stock ownership plans and high dividend policies, a large number of "Huawei billionaires" came into being. According to incomplete statistics, as of 2022, Huawei has about 3,000 "rich" employees with a personal wealth of more than 10 million yuan.
Most of these "Huawei billionaires" are veteran employees of the company, and they have received considerable wealth returns by virtue of their years of hard work and contributions to the company. There are reports that the personal wealth of some senior employees is even as high as hundreds of millions of yuan. They are the biggest beneficiaries of Huawei's compensation and benefits policies.
It is these veteran employees who have witnessed Huawei's development from a small company to a tech giant, and they have unique insights and cognitions of the company's policies and culture. This may be the reason why the title of the article refers to "the rich old employee sees it most clearly".
Huawei's policy towards veteran employees
Huawei not only rewards its employees through its compensation and benefits policies, but also attaches great importance to the contributions and status of its veteran employees in terms of corporate culture.
Huawei firmly opposes age discrimination and will not eliminate or discriminate against employees based on their age. Ren Zhengfei has repeatedly publicly stated that Huawei will not lay off employees over the age of 34 and encourages everyone to continue to struggle. This is in stark contrast to the "ageism" that exists in many companies in the industry.
Huawei attaches great importance to the experience and wisdom of its veteran employees. The company encourages veteran employees to pass on their work experience and skills to the younger generation. Huawei will also give priority to internal promotions and key positions for veteran employees. This reflects the company's respect and trust for old employees.
Huawei also offers a variety of post-retirement development options for older employees. On the one hand, the company encourages veteran employees to work for Huawei after retirement as consultants or mentors. On the other hand, Huawei also supports veteran employees to start their own businesses or engage in other businesses after retirement. This flexible arrangement allows veteran employees to continue to use their strengths after retirement.
It can be seen that in addition to salary and benefits, Huawei also attaches great importance to the status and role of veteran employees from the perspective of corporate culture. This kind of respect and care has undoubtedly further enhanced the sense of identity and belonging of the old employees to the company.
The existence of a "midlife crisis".
Despite this, there are also reports that there is a so-called "midlife crisis" problem within Huawei. The so-called "midlife crisis" refers to the decline in work motivation and morale of old employees after achieving financial freedom.
The existence of this phenomenon may have something to do with Huawei's high salary and welfare policies. Once employees have gained considerable wealth, their motivation to continue working hard will be relatively weakened. In particular, some older, older employees are more likely to be in this situation.
This "midlife crisis" is not unique to Huawei. In many large enterprises, the problem of declining morale exists to varying degrees as employees grow older and more senior. This is an inevitable challenge for businesses in the development process.
Huawei's response
In the face of the challenge of the "mid-life crisis", Huawei has not turned a blind eye. Instead, the company has taken a variety of initiatives to address the issue.
Huawei has stepped up incentives for its employees. In addition to material rewards, the company also provides employees with abundant opportunities for promotion and development, encouraging them to keep learning and improving. Huawei also vigorously advocates the enterprise spirit of "never stopping" and calls on employees to set lofty ideals and goals.
At Huawei, we focus on cultivating employees' sense of responsibility and mission. The company instills the concept of "creating value for mankind" in employees through various channels, so that employees are aware of the importance of their work to society. This helps to increase the enthusiasm and motivation of employees.
Huawei also provides diversified career development channels for employees. In addition to the technical route, employees can also choose different development directions, such as management or innovation. This flexible arrangement is conducive to meeting the different career pursuits of employees and avoiding a single career bottleneck.
Huawei has taken a multi-pronged approach to address the challenges of the midlife crisis. Through both material and spiritual incentives, the company strives to keep employees enthusiastic and motivated for a long time.
Looking back at Huawei's compensation and benefits policy and corporate culture, we can see that the tech giant has made a fruitful attempt to attract and retain talent. Through the Employee Stock Ownership Plan (ESOP) and high dividends, Huawei and its employees have formed a community of interests, allowing them to truly share in the fruits of the company's development. The company's policy towards older employees also reflects a high level of respect and care.
With the development of the company and the continuous accumulation of employee wealth, new challenges such as the "mid-life crisis" have also begun to appear. How to maintain the enthusiasm of employees and avoid a decline in morale will be a long-term problem for Huawei.
Judging by Huawei's current initiatives, the company is not standing still. Through continuous motivation and innovation, Huawei is working hard to resolve the impact of the "midlife crisis" and strive to ensure that every employee maintains a never-ending spirit of struggle.