Samsung Reduces Executive Ranks and Abolishes Rank Tenure... Personnel System Reform for 'New Samsung'

Scheduled for implementation next year... "Strengthening Competitiveness with a Future-Oriented Organizational Culture"
Includes introduction of absolute evaluation and establishment of hub offices

[Image source=Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Samsung Electronics announced on the 29th a personnel system reform plan that abolishes the executive director rank and integrates it into the vice president rank, reducing the number of executive ranks and eliminating the standard tenure period for each rank to establish a foundation for nurturing young executives. The plan also includes introducing absolute evaluation instead of relative evaluation and setting up hub offices to create a work environment free from constraints of time and place.

On the 29th, Samsung Electronics unveiled an innovation plan for a 'future-oriented personnel system' focusing on promotion systems, development systems, and evaluation systems to respond to changes in the global management environment and lay the groundwork for sustainable mid- to long-term growth. Samsung Electronics stated that it prepared the direction for personnel system innovation through online large-scale discussions with employees and listening to opinions by hierarchy, and established detailed operational plans after gathering feedback from labor-management councils, labor unions, department heads of various organizations, and about 1,000 organizational culture managers.

Samsung Electronics explained that the new personnel system is restructured to prioritize talent regardless of age, foster young executives early, provide various career development opportunities and foundations for talent cultivation, and promote a culture of mutual cooperation and communication. This personnel system innovation plan is scheduled to be applied starting in 2022.

First, Samsung Electronics decided to reduce the number of executive ranks by boldly integrating the 'vice president and executive director' ranks into the 'vice president' rank. Additionally, the standard tenure period for each rank, which was a basic condition for employee promotion, will be abolished, and a 'promotion session' to verify performance and expertise, as well as a 'senior track' system allowing outstanding personnel to work beyond retirement age, will be introduced. The rank and employee number information displayed on the company intranet will be removed, the official promotion announcement held every March will be abolished, and the use of honorific language among employees within the company will be established as a principle.

Alongside this, shared offices will be installed at major hubs, and in-house autonomous work zones such as cafes and library-style spaces will be created, introducing a 'Work From Anywhere' policy. To enhance employee capabilities, a new 'in-house free agent (FA) system' will grant employees who have worked in the same department for over five years the qualification to transfer to other departments, and a 'STEP system' will be newly introduced to select outstanding personnel from domestic and overseas subsidiaries for mutual exchange work for a certain period. Furthermore, to minimize career interruptions due to parental leave, a 'parental leave reboarding program' will be established to support smooth re-entry upon return to work.

Another key aspect of this personnel system reform is the shift from relative evaluation to absolute evaluation. While the top evaluation will still be operated within 10%, Samsung Electronics believes that this change will enhance the overall competitiveness of the company. Additionally, a 'frequent feedback' system where department heads regularly consult on work progress and a 'peer review' system where colleagues describe each other's collaboration contributions in writing will be piloted.

A Samsung Electronics official said, "Through this personnel system innovation, employees will be able to immerse themselves more autonomously in their work, and a future-oriented organizational culture that grows together with the company will be established," adding, "We plan to continuously collect employee opinions and improve the personnel system to strengthen competitiveness in the future."

This content was produced with the assistance of AI translation services.