Human resource management of samsung PDF

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Rahul m
1011531
Samsung HRM policies, practices and new trends
In the recent time human resource management (HRM) has assumed new prominence because of
continuing concerns about global competition, the internationalization of technology and the
productivity of labor. It is argued that these market imperatives require manager to change the
way in which they manage the employment relationship in order to allow for the most effective
utilization of human resources (HR). Managers and academics argue that the traditional
approaches to managing workers are inappropriate ‚can no longer deliver the goods. Harnessing
workers full potential and producing the attitudes and behavior considered necessary for a
competitive advantage require three aspects of managerial control to change: organizational
design, culture, and HR policies and practice. Current managerial orthodoxy therefore argues the
need for a restructuring towards hierarchical structures, an enlargement of job tasks with greater
employee autonomy and managerial leadership to shape the more intangible aspects of the
workplace, for examples beliefs, norms and values.
1. The strategic human resource management (SHRM) and its practice in the one of the world
biggest company Samsung group. And evaluate how Samsung is practicing human resource
management.
2. HR functions and various models and how Samsung adopt vertical and horizontal integration
in their human resource department and then give some recommendations for Samsung
according to the discussion.
Strategic Nature of HRM
Perhaps the most significant feature of HRM is the importance attached to strategic integration,
which flows from top management vision and leadership, and which requires the full
commitment of people to it. Most of them believes that this is a key policy goal for HRM, which
is concerned with the ability of the organization to integrate HRM issue into the strategic plane,
to ensure that the various aspect of HRM cohere, and to encourage line managers to incorporate
an HRM perspective into their decision-making.
It is considered that one of the common themes of the typical definitions of HRM is the human

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resource policies should be integrated with strategic planning. suggested that a future
increasingly associated with HRM is a stress on the integration of HR policies both with one
another and with business planning more generally. suggested that the concepts locates HRM
policy formulation firmly at the strategic level and insists that a characteristic of HRM is its
internally coherent approach.
Strategic Human Resource Management
Strategic HRM is an approach to making decisions on the intentions and plans of the
organization in the shape of the policies, programs and practices concerning the employment
relationship, resourcing, learning and development, performance management, reward, and
employee relations. The concept of strategic HRM is derived from the concepts of HRM and
strategy. It takes the HRM model with its focus on strategy, integration and coherence and adds
to that the key notions of strategic capability and strategic fit.
According to Hendry and Pettigrew (1986), strategic HRM has four meanings:
1. The use of planning;
2. A coherent approach to the design and management of personal systems based on an
employment policy and manpower strategy and often underpinned by philosophy;
3. Matching HRM activities and policies to some explicit business strategy;
4. Seeing the people of the organization as strategic resource for the achievement of competitive
advantage
The form of SHRM used is represented by the management commitment to the:
Objectives
Policies
Practices
Relates to all employees within the organization. It is not simply a matter of rhetoric. Objectives
and policy are formalized within the framework of a corporate strategy as reinforced by the
seminal work that was in at the start of formal discussions on SHRM. He believed that strategy
must be explicitly started rather than be a philosophical mission because only then can
organizations develop and balance planned action with entrepreneurial effort. A SHRM is as
essential as other strategies for two reasons:
Individual members of the workforce need to be able to cooperate in order to achieve mutual
reinforcement Individuals (who comprised the organization) need to be able to cope with
changing environmental conditions

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Johnson and Scholes (1999) delve deeply into strategic matters stating that a strategy is the
lifeblood of any organization. They make some key points which are relevant to SHRM:
If there is not an explicit strategy individuals may work at cross-purposes.
The top management must clearly communicate the strategy to those whose job it is to
implement usually employees at the bottom.
Individuals are creatures of habit and tend to be suspicious of new patterns of working.
Change must be part of overall strategic planning
Strategic statements are creative and thus an art.
Strategic planning requires individuals to change their attitude and thus behavior.
Strong, deliberate analysis is critical in order for SHRM to be defined and well documented. It
will not happened accidentally there has to be a proactive desire to make policies integral to the
realization of objectives defined by the other key strategies, which includes:
Finance
Production
Customer quality
Marketing.
HRM managers have to strongly articulate their developmental and employment strategies
among those already strongly recognized within the organization because, otherwise, the
achievement of the totality of the business objectives may be vulnerable Aims of Strategic HRM:
The aims of strategic HRM are to:
Generate strategic capability by ensuring that the organization has the skilled, committed and
well-motivated employees it needs to achieve sustained competitive advantage;
Provide a sense of direction an often turbulent environment so that the business needs of the
organization and the individual and collective needs of its employees can be met by the
development and implementation of coherent and practical HR policies and programs;
Provide unifying frameworks which are at once broad, contingency based and integrative
Strategic HRM Models
High-performance
Management A clear line of sight exists between the strategic goals of the organization and those
of its departments and employees at all levels.
Management defines what it wants in the shape of performance improvements, sets goals for
success and monitors performance to ensure they are achieved.
Leadership from the top engenders a shared belief in continuous improvement.
Focus on promoting positive attitudes, which leads to the development of a motivated and

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committed workforce.
Performance management processes are aligned to the objectives of the organization to ensure
the people are engaged in achieving high standards of performance.
Capabilities of people developed at all levels to support performance improvement.
People provided with opportunities to make full use of their skills and abilities.
People valued and rewarded according to their contribution.
High-commitment
Management The development of career ladders and emphasis on trainability and commitment as
highly valued characteristics of employees at all levels in the organization.
A high level of functional flexibility with the abandonment of potentially rigid job descriptions.
The reduction of hierarchies and the ending of status differentials.
Reliance on team structure for disseminating information, structuring work and problem solving.
Job design which increases the intrinsic satisfaction derived from work.
No compulsory redundancies.
New forms of assessment and payment systems.
High involvement of employees in the management of quality.
Management Treating employees as partners in the enterprise who have a voice on matters that
concern them. Establishing a mutual understanding of what is to be achieved and a framework
for managing and developing people to ensure that it will be achieved.
Strategic Human Resource Management Practices in Samsung:
Samsung overall introduce the legendary tycoon, Byung-Chull Lee in 1938, founded Samsung.
In 1995, Samsung sales rose to $87 billion and its assets totaled $87 billion (Samsung
Corporation, 1995a). Samsung is the second largest chaebol composed of 35 enterprises, which
employ 233,000 employees in 66 countries. Samsung is a major global competitor in electronics,
machinery, chemicals and finance. Other areas of Samsung operations include the auto
manufacturing, newspaper, hotel, and entertainment industries.
HRM challenge in Samsung chaebol Chairman Kun-Hee Lee, the third son of the founder,
manages this huge conglomerate. Chairman Lee and his family own core companies, which in
turn own other affiliated enterprises. Samsung has been one of the most important vehicles for
Korea remarkable economic growth and has received numerous awards from the government for
its contributions.
Not only has Samsung been a major catalyst for Korea economic growth, but it has also been a
pioneer among the chaebols in terms of the development of formal HRM systems. Samsung was

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the first chaebol to use a competitive recruiting system in the early 1960s. At that time, most
firms relied on referrals based on connections when they recruited employees. The company is
also well known for managing its people based on their performance and capabilities. In almost
all chaebols, family members provide the core of management, but Samsung has the highest ratio
of non-family-member executives. The effective management of employees at Samsung led to
the use of the term Samsung man to denote competent, well-trained employees of the chaebol.
Samsung leadership in effective HRM, however, has been seriously challenged as the chaebol
has begun to compete with the world most competitive firms in both its domestic and global
markets. The success and pride of Samsung largely stemmed from being the best in Korea -
where foreign competition was almost non-existent because of trade barriers maintained by the
government. However, these trade barriers are being reduced due to pressures from the USA, the
beginnings of the World Trade Organization (WTO) and the General Agreement on Tariffs and
Trade (GATT), and the requirements to join the OECD. As Samsung increasingly competes with
foreign firms, it has begun to realize that it must build competitiveness in its management and
HRM practices in order to succeed in the global marketplace.
People valued in Samsung
Samsung strategy can be described as an effort to consistently meet customers' needs across
three critical dimensions-quality, time-to-volume, and being easy to do business with. The
company is constantly changing and reinventing itself in support of these goals. Each of these
elements has significant implications for the people employed by the firm, and they are reflected
by design in Samsung management systems. In part, this phenomenon is linked to Samsung
emphasis on product development and operations teams, which frequently shift and change
composition as products move through their life cycles. This &quota; constant
reorganization" places considerable pressure on the HR function to assist in the placement,
evaluation, and reintegration of employees. To some extent all assignments at Samsung are
temporary, and moving around a lot within the firm is considered the norm, but the "
glue" that holds it all together is the firm's common culture. Because of the very short
product life cycles in this business, Samsung must continually push the technology envelope. In
this context, and consistent with the firm's emphasis on engineering and product development,
the firm has developed considerable competencies around systematically defining where they
want to be as an organization.
Recently the firm has collected some data about why people in high tech came to (and stayed at)
Samsung. It was found that " interesting work" and the quality of the work
environment were key attributes that reinforced Samsung commitment to the way people are
managed. Samsung, for example, has identified the development and maintenance of an
Extraordinary Environment as a key driver in the implementation of its competitive strategy. The

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emphasis on the extraordinary environment emanates from CEO Kun-He Lee office. Samsung
disdains formal bureaucracy, with a number of respondents noting that " rules here are
made to be broken" Moreover, it doesn't have formal policies and programs that one might
usually associate with " progressive" organizations. There is no flextime scheduling;
people just come and go as they please. There are no empowerments programs people are just
empowered to do the job.
Investing in people
Samsung develop a lot of courses for Samsung staff to learn, and give them opportunities to go
outside to learn. E.g.: The design center staff can go abroad or have chance to work with famous
talents. Moreover, Lee (Kun-He Lee) led launched a design revolution, he personally invited the
IBM design wunderkind Tom Hardy from the United States to make the Samsung's designers to
broaden their thinking.
There are 307 designers in Samsung design center. Samsung company give their chances go to
the best art design school in United States. As result, they design more than 700 pieces of
product model each year. Samsung Electronics win 5 awards in IDEA competition (Industrial
Design Excellence Awards), which is as many as Apple Company.
HTP concept
in 1994, Samsung established the Human-Tech Thesis Prize. The goal of the Prize is threefold:
1.to search for creative and driven young people who will lead the field of science into the future
for Korea;
2.to encourages research at the collegiate level; and
3.to increases the awareness of the importance of technology in society. The Prize has gone
beyond its expectations of nurturing creativity and research among young scientists to become
the major driving force behind the intellectual passion for college students to succeed in
research. Currently,
The Prize has gone beyond its expectations of nurturing creativity and research among young
scientists to become the major driving force behind the intellectual passion for college students
to succeed in research.
Currently, the Prize encourages student participation from domestic and foreign high schools,
colleges and graduate schools in order to broaden and enrich the basis of research and
development of the sciences in Korea.
Through the Prize competition, Samsung has and will continue to discover and cultivate gifted
human talent in science and technology. This human talent will serve as the foundation necessary
to compete in the global environment in which technology has become both a weapon and an
asset to the nations.

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Samsung strives deepen and expand the research in core technological areas through the Human-
Tech Thesis Prize. The Prize itself will develop into a renowned award for students all over the
world.
Employee Development
In an environment where talent is scarce and external opportunities are plentiful, Samsung
believes that employees will stay with the firm only as long as they feel that their contributions
are valued, and they are able to do meaningful work in a stimulating and challenging
environment. While managers are to some extent held responsible for the development of their
subordinates at Samsung, there is some concern that due to the speed of the firm's recent growth,
this process is not occurring as quickly as it needs to, especially around the development of
competencies for the firm's many types of teams.
Diversity & inclusion
as an employer of around 126 nationalities, with 58 nationalities among their top one thousand
managers, Samsung is an inherently diverse organization. They have consumers from many
different cultures and backgrounds, and diversity in their workforce helps them better understand
and respond to their needs.
Samsung approach to diversity is to focus on building an inclusive culture in order to make
everyone feels they are valued, sense of belonging and unique. In 2004 they conducted a
company-wide review of diversity. They now have a global diversity board and detailed and
regular diversity monitoring. Women continue to hold over 35% of management posts.
Respecting rights
they seek to ensure that the human dignity and labor rights of theirs employees are maintained.
Samsung Code of Business Principles embodies theirs commitment to human rights.
Role of the HR Function
The role of the HR function is to enable is to organization to achieve its objectives by talking
initiatives and providing guidance and support on all matters relating to its employees. The basic
aim is to ensure that the organization develops HR strategies, policies and practices that cater
effectively for everything concerning the employment and development of people and the
relationships that exist between management and the workforce. The HR function can play a
major part in the creation of an environment that enables people to make the best use of their
capacities and to realize their potential to the benefit of both the organization and themselves.

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Essentially, the HR function provides the advice and services that enable organizations to get
things done through people. It is in the delivery business. Ulrich (1998) points out that the
activities of HR appear to be and often are disconnected from the real work of the organization.
He believes that HR should not be defined by what it does but by what it delivers.
The more sophisticated HR functions aim to achieve strategic integration and coherence in the
development and operation of HRM policies and employment practices. Strategic integration
could be described as vertical integration the process of ensuring that HR strategies are
integrated with or fit business strategies. The concept of coherence could be defined as
horizontal integration the development of a mutually reinforcing and interrelated set of HR
employment and development policies and practices. (Armstrong, 2006, p-54)
HRM and organizational performance
HRM can make a positive impact on organizational performance in many ways, these are:
Develop and successfully implement high performance work practices, particularly those
concerned with job and work design, flexible working, resourcing, employee development,
reward and giving employees a voice.
Formulate a clear vision and set of values (the big idea) and ensure that it is embedded, enduring,
collective, measured and managed.
Develop a positive psychological contract and means of increasing the motivation and
commitment of employees.
Formulate and implement policies that meet the needs of individuals and create a great place of
work.
Provide support and advice to line managers on their role in implementing HR policies.
Manage change effectively.
HR Models
A number of models classifying types of roles have been produced, as summarized below. These
simplify the complex roles that HR professionals often have to play which, in different contexts
or times, may change considerably or may mean adopting varied approaches to meet altering
circumstances.
Author (date) Categories for the HR roles
Reasons for differentiation

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Use HR Function to operate
Samsung history is interesting in this regard in that the firm's founders wrote their value
statement before they wrote their business plan. That is, they decided how they wanted to deal
with the " people" elements of the business before they began to focus on product
specifications and capital requirements. In broad terms, Samsung operational goals are the
following:
1. Increase the value of the company
2. Increase market share
3. Build a company with an extraordinary work environment as stated in company documents,
the firm's notion of an " extraordinary environment" includes:
4. achieving long-term business success
5. Ensuring that Samsung employees feel valued
6. Ensuring a sense of pride of association with the company
7. Instilling a sense of camaraderie and that " all of us are in this together"
8. Ensuring that each employee has the opportunity to reach his/her highest potential personally
and professionally
9. Generating a sense of excitement and fun.
Core to this extraordinary environment, however, is a strong set of values, and everyone lives
them. For Samsung, the development of an extraordinary environment is an outcome in and of
itself, to be considered as valuable as increasing market value and market share.
Samsung has nine associated " key behaviors" that help support its values system
and the creation of an extraordinary environment.
In addition, Samsung has developed measurable attributes for each of these nine key behaviors.
Key behaviors include the following:
Maintaining a results focus.
Making decisions with the best interests of Samsung in mind.
Working together collaboratively.
Finding problems and fixing them.
Setting high standards.
Being open, honest, and direct.
Staying flexible and adaptable.
Taking initiative for one's own development.
Resolving issues in an objective manner.

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Samsung prefers the use of a series of key behaviors, as opposed to the more common set of
competencies because employees are action oriented (e.g., tell me what you did, not what you
can do). Samsung uses these key behaviors to direct and drive employee behaviors throughout
the organization.
They spend considerable effort in communicating these values to employees, including materials
such as posters and laminated cards to carry the message; " all hands" meetings
where the company shares values, survey responses, and planned actions; an upward feedback
process for employees to provide feedback to managers on the extent to which they are
exhibiting the Value Behaviors; and perhaps most importantly, 50% of everyone's performance
review is linked directly to the performance on the value behaviors.
Samsung Vertical Integration
Vision and strategy
as an aspiring leader in the Digital Convergence era, Samsung will develop technologies for the
progress and prosperity of mankind. With ethical management that respects the needs of the
shareholders, customers, and the society, and they will maintain the course of progressive and
responsible management as they continue their push to be a leading firm of the 21st century.
The vision of Samsung is leading the Digital Convergence Revolution, with the goal of
becoming a top 3 firm in the electronics industry by 2010. The mission to carry out this vision is
Digital- Company. Digital means using product and technology innovation to create new
lifestyles and new business, product and service opportunities. The part ‚means to maximize
management efficiency by building processes for world-class production capabilities based on
cost effectiveness.
The last part of company is about being a trusted and preferred global company, one that attracts
customers through dynamic culture of understanding and innovation. Samsung will be a world-
class corporation leading the digital convergence revolution through 6parts of innovation,
product, technology, marketing, process, global operation, and organization culture.
Samsung well recognizes that coexistence and co-prosperity are the essence of corporate
existence. Therefore, they strive to be an organization that places great importance on
contributing to human society and social responsibility. Through charitable activities such as
support for the disabled, environment preservation, and pro-bono IT services, were making
continuous efforts for societal advancement by working together with customers, cooperators,
and various social groups.
Today companies face endless competition and diverse changes. As time goes by, there will be

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increased need for corporation role and responsibilities in the society as the calls for its greater
social and environmental contributions grow.
Samsung upkeeps and expands responsibility to sustain the activities of environment
preservation for the future human society, increase efforts to share prosperity with the local
community, and create new values for the customers as the leading digital company of the 21st
century.
Corporate governance and management system
Samsung decision-making and supervisory process enhances corporate transparency and
accountable management and thus, constitutes an environment where creative and progressive
entrepreneurship can be maximized. Samsung pursues the management philosophy favorable for
every stakeholder in order to prevent certain stakeholders disadvantaged.
Board of directors
Samsung decision-making and supervisory process enhances corporate transparency as well as
accountable management and thus, constitutes an environment where corporate value can be
maximized.
The Board of Directors, the chief decision-making body of the company, consists of thirteen
Directors, including six Executive Directors and seven Independent Directors. Independent
Directors account for over 50% of BOD to secure independent and transparent decision-making
processes.
There are two types of Board Meetings: regular and extraordinary Board Meetings. Regular
Board Meeting is generally held once a quarter to make resolutions on issues including approval
of quarterly financial statements and quarterly reports, and Extraordinary Board Meeting is held
whenever deemed necessary. Total 8 Board Meetings were held in 2005.
The chairman shall convene the meeting of the Board of Directors. The chairman shall present
agendas and reasons for the meeting 2 or 3 days before the meeting by mail, e-mail, or verbal
notice provided that such notice may be omitted with the consent of all directors.
The presence of the majority of the Directors shall constitute a quorum for a meeting of the
Board of Directors and the resolutions of the Board of Directors shall be adopted by a majority
of the votes of the Directors attending the meeting; provided that Board meetings may take place
via electronic means, such as conference call, within the scope provided by relevant laws. For
fair review and reasonable decision-making, a Director having a special interest in the resolution
of a general meeting cannot exercise his/her voting rights thereupon. In such case, his/her voting
shall not be counted.
BOD makes a resolution on matters provided for by the relevant laws and regulations or the
Articles of Incorporation, matters delegated by generals meeting of shareholders, matters related
to basic policies in the company management, and matters concerning directors.
BOD recognizes the significance of the issues related to the company sustainability including

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environmental and social issues as well as business-related financial issues, and is fully serving
as the chief decision-making body of the company.
Emblem of Samsung
While the two ellipses at the center represent the beauty of and space for creative endeavor, the
circumferences around represent the heaven, earth, mankind, and universe. Thus, the emblem in
its entirety symbolizes technological creativity to build an ever more perfect environment for the
human being.
Rewarding
Samsung is committed to providing its staff with an environment in which they can flourish.
They look for people with energy, creativity and commitment and give them the tools they need
to fulfill ambitious goals, whilst striving to attain the highest standards of professional excellence
and integrity. Samsung reputation as one of the world most admired employers is hard-earned.
They have achieved it by offering opportunities for their people to pursue their goals, both
professionally and personally. Because they operate a truly global business, they recognize the
importance of diversity; of understanding individual ways of working, and how employee can
complement each other to deliver outstanding results.
Employee welfare
Samsung helps support employees in the areas of family health, children education, housing, and
retirement preparation. The Company allocates large sums of employee welfare investment to
support their housing, children tuition for high-quality educational opportunities, medical
treatment, and leisure activities.
Employee wage and welfare
the total employee wages and bonuses totaled 2.7 trillion Korean Won in 2003, 3.3trillion Won
in 2004, and 3.6 won in 2005. The Company also provided benefits such as family healthcare,
children education, housing, post-retirement plans, and other life needs to enhance the quality of
life for each and every one of our employees.
Support for housing
Samsung offers housing support to suit the lifestyles of employees. Dormitories or rental
apartments are provided for singles. The Company flat is also provided for employees who are
transferred away from their families.
Children education
The Company provides tuition for the children of employee from pre-school to college.
Support for leisure activities
The Company provides in-house cultural programs and sports and leisure facilities, paying for
full or partial expenses when employees pursue cultural and leisure activities.

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Medical support
Top quality medical treatment, healthcare measures, and medical expenses are provided for
employees health concerns. The in-house health-screening center carries out a periodic medical
examination.
Support for retirement
So that retirees can live comfortable lives, the Company facilitates a retirement pension and
other solutions.
Contribution to the national economy and global communities
Samsung, known to be the largest business establishment in Korea, continues to strive toward
achieving high-performance with every employee accepting responsibility for the betterment of
the community and the national Economy.
Taking a broad view of the Company contribution to the Korean Economy in 2005, the
Company18.8trillion Korean Won in value ads represented 2.3% of the national GDP, and US$
46.56 billion in export reached 16.4% of the total amount of national export. In the equity
market, Samsung market capitalization amounted to 108.3 trillion Korean Won, representing
16.5% in 2005.
This is clear evidence of Samsung being a main driving force behind the Economic development
of the country. Samsung is keenly aware that it owes much of its success to the support of the
national and global communities. Therefore, the Company is pleased to share corporate profits
with communities far and wide.
Conclusion
With the increasingly importance of human resources in modern business the management of
people is highlighted to be strategic. Samsung Management Philosophy is devoted human
resources and technology to create superior products and services, thereby contributing to a
better global society. Quot ;( Kun-He Lee, 2006) the strong determination to contribute directly
to the prosperity of people all over the world. The talent, creativity and dedication of people are
key factors to Samsung efforts, and the strides Samsung have made in technology offer endless
possibilities to achieve higher standards of living everywhere.