Case Study Analysis: Huawei's Reward Practices and Strategy

This case study examines Huawei's human resources management, specifically focusing on its approach to rewarding innovation within the company. The analysis begins with an overview of Huawei's business strategy, core values, and its emphasis on R&D, customer needs, and employee development. The case study highlights Huawei's transformation of its HR model and its competitive reward system designed to attract and retain high-quality employees. The document then discusses the alignment between Huawei's business strategy, core values, and reward practices, identifying both advantages and disadvantages of the current reward management system. The analysis explores the appropriateness of the reward system for different business models and provides recommendations for improving the reward management framework, particularly for R&D professionals, based on motivational theories such as Maslow's hierarchy of needs. The case study also addresses concerns such as employee workload, lack of transparency, and the need for employee input in management decisions. Finally, the document suggests improvements for recruitment, training, and the overall reward system to enhance employee satisfaction and innovation.

Human Resources Management.
Case study 6.1
REWARDING INNOVATION AT HUAWEI

Facts Problem and concerns Solutions
1- Huawei is a global leader
in the information and
communication
technology industry.
2- Emphasize innovation
relevant to customer
needs and advancing its
technological leadership
through R&D.
3- Invests 10% of its annual
sales revenue in R&D.
4- Core value: costumers and
costumer needs are the
major driving force for
the company.
5- Human Recourses:
A- Employees are the
most valuable asset to
the company, and the
key to retaining
competitive
advantage and
leadership position.
B- Huawei transformed
its HR model from
“function-based
platform” to an
“employee-based
platform”.
6- Huawei recruitment
encourages sourcing local
talents and compliance
local labor laws and
regulations.
7- The reward system at
Huawei is competitive
and aims to attract and
retain high quality human
resource to accelerate the
company’s development
and growth.
1- 3%-5% of employees are
being laid off annually
due to low performance.
2- Questionable competitive
practices.
3- Concerns that the
company’s products may
pose national security
risks.
4- Huawei has been
criticized for extreme
workload and excessive
employee overtime.
5- Lack of transparency in
relation to various reward
practices including
implementation of its
stock option scheme and
the employee evaluation
process.
6- Employees do not have a
voice in management
decisions.
7- Foreign employees are
not eligible to hold
company shares.
1. The employees need to be
provided with proper
training and skill
development program.
2. The competitive reward
system needs to be
transformed through
organizing seminars and
programs on performance
appraisals.
3. Quality Standards set by
the government to be
maintained and cross
checked through every
product of the company.
4. Recruitment of local
talent needs to be
accompanied by highly
talented personalities in
order to create balance in
working.
5. Digital Tools to be
undertaken like softwares
or cloud computing for
sharing information and
thus transparency could
be created.
6. The transformation to
employee based practice
needs to be accompanied
by lassie faire leadership,
this would help in
creating a new trend in
the company.
7. Company shuld try on
opening its shares for the
foreigners with a view to
gain foreign investment
and thus create a path to
expand in foreign
countries.
1. How would you characterize the alignment between Huawei’s business strategy, core values and
reward practices?
- The case clearly describes an alignment between Huawei’s business strategy, core values and
reward practices. Huawi's core values is that it succeeds through its ‘customers’ success’.
Serving customers and responding to their needs represents a major driving force behind its
growth and development. Moreover, the long-term value it creates for its customers is used as
a yardstick to gauge its work and performance. Moreover, R&D at Huawei emphasizes the
development and innovation of key ICT technologies, architectures and standards.

Furthermore, Huawei considers, its employees its ‘most valuable treasure’ and the key to
retaining competitiveness and a leadership position. Finally, Huawei describes its reward
system as competitive and aims to attract and retain high quality human resources to support
and accelerate the company’s development and growth.
2. Huawei’s competitive strategy emphasizes R&D and the development of innovative capabilities.
What are the advantages and disadvantages of its current reward management practices in
relation to such a strategy?
Advantages Disadvantages
- Retains employees and attracts new
employees.
- Avoids the cost of hiring and
training new employees.
- Builds sense of satisfaction, loyalty
and honesty.
- Stimulates Development and Career
Progression.
- Creates a Strong Employer Brand.
- As per table 6.6, ' Professionals' such
as R&D personal receive low
remuneration when compared to
management.
- Ethical questions over its competitive
practices and concerns that its
products may pose national security
risks.
- Huawei has also been criticized for
its extreme workloads and excessive
employee overtime.
3. Would Huawei’s reward system be appropriate if the company’s business model were any
different (e.g. a low cost strategy)?
- No, Huawei’s reward system would not be appropriate if the company’s business model were
different. In this case a new reward system has to be developed.
4. Is Huawei’s reward management framework appropriate for rewarding and incentivizing its R&D
professionals. What changes should be recommended, if any?
- Based on Maslow's theory, motivation increase as needs are met. Therefore, R&D personal
must have more incentives –economical and noneconomic-