Samsung: Proposal for New Human Resource Strategies to
Survive the New Business Environmental Volatility
Byungcheol Shin and Jeonguk Jo
Kwangsik Choi and Myojeong Kim
University of Seoul
The business environment have become more volatile due to economic crises and changing markets. Samsung, a leading conglomerate of Korea, is not an exception. Samsung is undergoing many issues related to human resources, and will not survive if it chooses to stay passive to the upcoming business environmental volatility. In this report, Samsung’s current policies and issues related to human resources are examined and discussed. The topics concerned are job retaining, job satisfaction, job security, global recruitment, job relevance, motivation, and employee rights. The purpose of this report is to focus on finding recommendations about what Samsung should do on each according situation, with ideas and concepts backed up from journal article references and textbook. Ultimately, Samsung may be able to handle its human resources and issues related with more efficiency and effectiveness by accepting recommendations suggested on this report,.
Keywords: Recommendations for Human Resources Strategy, Efficiency, Effectiveness.
Foundation of Samsung and its Current Strategies on Human Resource The Samsung Group, which was founded in 1938, is a leading global conglomerate composed of numerous businesses, including electronics, construction, chemical, financial industries and etc. Samsung has economic values over 318 trillion Korean won, with 64 domestic and 311 foreign affiliated companies. Samsung focuses on human rights, technology, social contribution, and development as a global conglomerate as main principles for its corporate philosophy, as well as placing importance in creativity, challenging attitude, and resolution ability in human resource to meets the new paradigm of the upcoming digital era. The recruitment system of Samsung is composed of physical check-ups and SSAT, a test created by Samsung that measures applicants’ basic intellectual ability. Samsung also support employees with various development systems; MBA support programs for more professional education, and the Local Expert System, designed to build specialists dedicated to global situations by placing them into parts of the world. The pay structure of Samsung is divided into three sections. With annual salary system as the basic pay system, Samsung provides additional compensation with bonuses named PI (Productive Incentives), and PS (Profit Sharing) that effectively relates organizational outcomes to personal outcomes. Also, Samsung supports a large scale of employee benefits, such as providing employee apartments, education of dependants, housing system, recreation, medical fees, and its own pension system. But as the business environment these days face new social and economical volatility, Samsung currently experience many issues related to human resources, mainly because of its large size and passive attitude toward problems. The issues have become so large that Samsung have been giving impression of a company that most employees would like to leave only within a few years after their employment, on the contrary to it being the most wanted company to start their career. This issue is becoming vital for the human resource team in Samsung because the turnover in this situation is dysfunctional, and is critical because as MA Abelson & BD Baysinger (1984) states, such turnover affects organization’s overall image and intellectual security of the company. This report reviews what problems Samsung face, and contains discussion about strategies that Samsung could implement in order to react to this situation and raise effectiveness and efficiency in human resourcing. The proposals of new strategies related with human resource for Samsung in order to survive from the new business environment volatility are as listed...
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