Annual Salary System Widespread Among Companies

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Annual Salary System Widespread Among Companies

The number of business groups that have decided to introduce an annual salary system are rapidly increasing, nowadays.
Before the International Monetary Fund(IMF) bailout of Korea last year, domestic companies were waiting to see how the wind was blowing, hesitating over the system's introduction.
However, the trend to adopt an annual salary scale rather than the traditional monthly salary scale with quarterly bonuses steadily gained favor. This year almost 75 percent of business groups decided to make the switch.
In addition to that, employing workers on a contract basis as well as internships are also popular and more aligned with western formats.
According to the Korea Chamber of Commerce, 28.9 percent of domestic companies are already using the annual salary system while another 44.8 percent are preparing to implement the system, with more than half of those set to switch this year.
Roughly two-thirds of foreign companies operating in Korea are using the annual scale for salaries.
Unlike foreign companies, there is no secret in Korea on what each person's salary is, which causes a lot of comparisons.

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