Bonus time at Samsung
The total sum is believed to be roughly the same or slightly more than was given in 2010, with the key difference being that less money was distributed among its LCD and LED divisions due to their poorer-than-expected performances.
In contrast, the group’s mobile communications teams were rewarded for acquitting themselves well in the face of Samsung’s protracted battle with Apple over smartphones and tablet PCs.
Sales soared in this segment despite much bad press concerning a series of ongoing patent disputes between the two.
As was the case last year, shops, restaurants and businesses in the retail sector - particularly near Samsung Electronics’ headquarters in the affluent Seocho-dong area of southern Seoul - have high hopes of getting a seasonal sales boost. Koreans dub the area “Samsung Town.”
The mega-conglomerate, which has over 80 affiliates in areas such as electronics, engineering, finance, textiles and hospitality, has been doling out the so-called “PI bonus” - short for product incentive - since last week.
The performance-based system evaluates business units based on an A, B and C grading system. Employees at units that receive the top A grade are entitled to a full month’s salary, while B-graders get 75 percent of this as a lump sum and those with C rankings are entitled to 50 percent.
Since last year, Samsung has been providing this specific bonus in December, one month earlier than was normal, to boost private spending during the holiday season.
Along with exports, private spending is a key growth engine of the Korean economy. And most business conglomerates in the country feel an obligation to give back to society and contribute to the economy.
This sense of self-imposed guilt has been sharpened in recent months by the globalization of the “Occupy Wall Street” rallies, social outcries against corporate greed and also a furor over credit card transaction fees in Korea that has seen many companies buckle under pressure and scale back charges.
Given its size and stature, Samsung is certainly in a position to influence private spending, especially considering that it has 180,000 employees in Korea alone.
“[Management] decided to distribute the PI bonus earlier than usual in hope of boosting domestic consumption, and also in light of the fact that many affiliates have advised their workers to take a winter break from around Christmas Eve,” a Samsung official said.
While Samsung’s affiliates, save those in the financial sectors, have advised their employees to take days off from Dec. 24 to Jan. 1, it is not mandatory. And most CEOs and executives are still expected to come to work to evaluate this year’s performance and devise strategies for 2012.
Also, while Samsung Electronics mobile communications, visual display and non-memory chip units, plus Samsung Mobile Display, Samsung SDI and Samsung Engineering all got the A grade, according to Korean media reports, not all of Samsung’s employees are enjoying such a lucrative end to the year.
Samsung Electronics’ LCD unit, for example, as well as Samsung Corning Precision Materials and Samsung LED all got low grades.
The LCD unit posted a weak performance this year due to the struggling LCD market, resulting in a C-ranking. And Samsung Corning, which makes the glass that goes into LCD panels, also took a beating in the market, resulting in a B grade. Workers at Samsung LED, which recently merged with Samsung Electronics, will receive no PI for failing to meet their targets.
“More affiliates failed to meet their initial business targets and were not entitled to receive the top grade,” a Samsung official told local media.
Meanwhile, Samsung will dole out profit sharing, another type of bonus, in late January, according to insiders familiar with the matter.
This is awarded to business units that have exceeded their profit targets, with a portion of the additional profit being distributed among staff. This second bonus system usually works out to be more of a windfall and can often equate to half a year’s salary.
By Kim Hyung-eun [firstname.lastname@example.org]
More in Industry
Hyundai Motor is new darling of the stock market
Doosan Tower sells for 800 billion won as financial woes continue
Hyundai E&C wins big rail project contract in Philippines
Spud sundaes and ugly apples as retailers rush to help farmers