Analysis of Samsung's Strategic HRM: A 2015 Case Study Report

This report analyzes Samsung's strategic human resource management (HRM) practices, focusing on a 2015 case study where the company's mobile handset department faced sales decline. Despite the downturn, Samsung provided bonuses to employees to boost motivation and maintain ope...Read More

Running head: ANALYSIS OF SAMSUNG STRATEGIC HRM
ANALYSIS OF SAMSUNG STRATEGIC HRM
Name of the Student
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Author Note

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Executive Summary
The report is based on the analysis of the case study of Samsung in the year 2015, when the
sales of the mobile handset department had fallen. The employees of the same department
were however provided with incentives and the increase in motivation had led to the
continuous operations of the department. This case study is analysed based different aspects
of human resource management including, diversity, performance management, rewards and
employee retention. The report is concluded by stating that Samsung had taken the most
appropriate step by motivating the employees with the help of rewards.

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Table of Contents
1.Introduction.................................................................................................................3
1.1 Background to the report......................................................................................3
1.2 Scope of the report...............................................................................................3
1.3 Aim of the report..................................................................................................3
2.Isuues with the current practices.................................................................................3
2.1 Fairness................................................................................................................3
2.2 Team based bonus................................................................................................4
2.3 Lack of strategy....................................................................................................4
2.4 Nonexistence of credibility..................................................................................4
3.0 Suitable recommendations to resolve the issues......................................................5
3.1 Managing human resources..................................................................................5
3.2 Reward and motivation........................................................................................5
3.3 Diversity...............................................................................................................6
3.4 Development and learning...................................................................................7
4.0 Conclusion................................................................................................................7
References......................................................................................................................9

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1.Introduction
The analysis in this report is based on the case study of Samsung related to the year
2015. The organization did not perform quite well in this financial year 2015, however, the
employees still received the highest amount of bonus. This bonus was awarded to the
employees based on their contribution to the operations and sales of Samsung (Al Ariss,
Cascio & Paauwe, 2014).
1.1 Background to the report
The main aim of the organization behind this step was to keep the employees satisfied
and motivated so that the division can be kept running. The reduction of employee turnover
was the main aim behind the decision taken by Samsung (Sung & Choi, 2014). The main
department of the organization which had shown poor performance was the mobile handset
department. The consumer division employees of Samsung were awarded around 10% bonus,
the TV staff department was awarded around 21% bonus and the network business related
staff were provided 20% bonus (Androidauthority.com., 2018).
1.2 Scope of the report
The report is mainly based on the analysis of the case study of Samsung based on the
different theories of strategic management, fairness, bonus provided to the employees. The
issues faced by the employees will also be analysed in the report.
1.3 Aim of the report
The aim of the report is to examine the reasons behind the decision taken by Samsung
based many theoretical concepts like, strategic human resource management, challenges
related to employee relationships, management of diversity, management of performance,
rewards and motivation, retention and employee turnover. The step taken by the organization
for the welfare of the employees will be analysed in the report based on the above mentioned
theories.
2.Isuues with the current practices
2.1 Fairness
Unfair distribution of wages is related to the way by which the employees of an
organization are given unfair amount of wages with respect to the job that is being done.
Fairness in the distribution of wages is sometimes related to the gap between the wages of the

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male and the female employees (Campbell, 2015). The unequal or unfair distribution is a
major issue in the case study of Samsung as the organization has provided bonus to the
employees who belong to the least performing sector (Sabharwal, 2014). Samsung has shown
unfair distribution of wages by providing bonus to the employees of those departments which
have been unsuccessful. This is the major issue related to the case of Samsung which had
caused discontentment among the employees (Chen & Hsieh, 2015).
2.2 Team based bonus
This process is related to the way by which the members of a team are provided with
their rewards or bonuses based on the performance. The trust in the team is based on the fair
bonus provided to the employees (Olafsen et al., 2015). The process of team based payment
is used in some of the organizations and it is mainly related to the success of the team in any
particular task or job. The team based bonuses have the ability to motivate the members of
the team to provide better performance (Choi & Rainey, 2014). Some part of the wages of the
employees are related to the success of the team members in any department. The team
members in this case receive similar kinds of payments or incentives. Samsung has provided
to bonus to a team which was a part of the unsuccessful mobile handset department. The
rewards have been effective for the mobile team; however, the other teams were not quite
happy regarding this decision made by Samsung (Chuang, Jackson & Jiang, 2016).
2.3 Lack of strategy
The step that was taken by Samsung related to the bonus provided to the employees in
spite of the financial losses was a strategy that was undertaken to retain the employees to
keep the production department running (Mekler et al., 2017). The strategic HRM is mainly
related to the process by which the organization aims to attract, develop, reward and thereby
retain the employees so that the employees and the organization are benefitted from this
practice (Clarke & Higgs, 2016). Strategic HRM acts as the partner in the success of an
organization. Samsung had also taken this decision based on the different departments of the
organization and the problems that are being faced by these departments. The lack of proper
strategy of the organization is another major issue in the case (Dhar, 2015).
2.4 Nonexistence of credibility
The other major issue that has been considered by Samsung while taking the decision
is the relationship with the employees. The relationship with the employees helps in
improving the credibility of the decisions taken. According to, Chuang, Jackson and Jiang,

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(2016), the relationship that is developed between the employees and the organization plays
an important role in their stress and motivation levels (Knies et al., 2015). The level of good
relationship between the employees and the organization increases the motivation levels and
leads to the improvement of credibility as well. Samsung has tried to improve the relationship
with their employees by providing them with rewards (Kuvaas, Buch & Dysvik, 2016). This
will help the company to reduce the turnover of employees and further improve the
operations as well. The improvement in relationship with the employees of Samsung will also
help them in continuing their production even after the losses that were incurred by the
company (Malik, Butt & Choi, 2015).
3.0 Suitable recommendations to resolve the issues
3.1 Managing human resources
Management of human resources is mainly related to the ways by which the manager
of any organization performs his functions with respect to the needs of the employees. The
allocation and planning of the resources is also a major part of the human resource
management. The choice of the employees who need training and those who are assigned the
best projects is the decision of the managers of the organizations. The human resource
managers also work towards providing the goals, vision and the direction to the employees
and the organization. The manager also has a major task of creating an environment in the
organization which helps in the motivation of the employees. The managers of Samsung need
to make sure that the employees are motivated enough to give their best to the company. The
company needs to formulate effective strategies which relate to the ways by which the
managers can control the performance of the employees. The major duty of the managers is
to maintain an environment in the company where the employees can learn constantly and
improve their performance in the process.
Example – The HRM strategy of Samsung had led to innovation in the 2014 when
the talent management strategy of the company had been a huge success.
3.2 Reward and motivation
The rewards that are provided to the employees play an important role in their
motivation process. The offer given by the organization of any additional monetary rewards
motivates the employees to give their 100% to the company. Rewards can also non-monetary

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which are related to the work environment and the efforts that are taken by the organization.
One of the most effective reward that can be provided by an organization is incentive, which
is related to the extra financial benefits that are provided to the employees. Motivation
provided to the employees in the workplace is also important for the effective performance of
the employees. Samsung had decided to provide motivation to the employees with the help of
the bonus which was given in spite of the poor performance of the organization in the year
2015. The employees of the mobile handset division which had to face many challenges in
the market were provided their bonus. Samsung did not show a strong performance in the
same year, however, the company decided to take this step in order to continue the operations
of the department. The employees were provided with 50% bonus in the same year when the
department performed in a poor way. This step was the major motivating factor for the
employees and they helped the organization in keeping the department in a running state. The
rewards system should be set in such a manner so that the employees are motivated to
perform in the organization. Samsung had provided bonus to the employees in spite of the
losses that were incurred by the organization in that division. This was a reason for
discontentment for the other employees of many other departments.
Example – Samsung has a specific employee benefits strategy which has been in
operation since the year 2012 and this has led to innovations in the different processes of the
company.
3.3 Diversity
Diversity management is related to the process by which the differences and the
similarities of the employees can be managed by the organization. The diversity management
process of an organization is mainly related to some values which are laid by the company.
This process helps in creating an environment in the organization which helps the employees
in contributing towards the goals of the organization and the personal growth of the
employees as well. Samsung has taken many steps related to the management of diversity in
the organization which includes physically disabled employees, female employees and many
more. The organization has taken many efforts to manage the diversity in their working
environment and this has helped Samsung in retaining employees even during the tough
phases. Samsung has shown flexibility in their operations based on the inclusion of female
staff in the leadership and their adaptability in the different environments. The recruitment of
disabled employees is another major step taken by Samsung towards management of diverse
environment. The case study has also shown diversity management by Samsung as they have

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provided rewards to the employees of all the divisions including their mobile division which
had not performed well that year. The diverse group of employees can be managed by
Samsung with the help of the policies that have been set by the company to manage the
female and the disabled employees.
Example – Samsung had employed more than 600 staff with disabilities in the year
2005 and the number of staff has been increasing since then till 2010. The electronics unit of
Samsung has also started recruiting graduates who have some disabilities.
3.4 Development and learning
The strategy related to learning and development in an organization relates to the
articulation of the capabilities of the workforce, the competencies and the skills that are
requires and how these are developed so that a sustainable and successful organization cam
ne established. The development and learning process in an organization is a part of the HR
policies which is aimed towards improving the individual as well as the group performance of
the employees. The training and development program of an organization is a major part of
the talent management related strategy laid by the company. The individuals need to identify
the gaps that have occurred in their skills so that these gaps can be fulfilled with the help of
training. Samsung had to face major challenges from new Chinese players in the mobile
handset market which had led to the fall in their sales. However, the organization still
managed to retain their position in the market with the help of the motivation that has been
provided by Samsung to the employees in the form of bonus. The employees were also well
trained with respect to the different departments in which they were working. Samsung can
be recommended to organise a program related to learning and development of the employees
regarding the various processes of the organization.
Example - Samsung has aimed towards updating their training and development
programs by introducing tools related to virtual reality at the workplace. The improvement of
training and development in the organization has further helped in improving the operations
of Samsung. The employees were also given sufficient training before the implementation of
cyber training equipments for training.
4.0 Conclusion
The case study has been analysed in the report with the help of the different concepts
related to human resource management and the ways by which the organization has utilised

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these concepts. The different concepts related to human resource management that are
analysed in the report are strategic HRM which is applied to formulate strategies so that they
can manage the employees. The case study is related to the phase of Samsung when their
mobile handset division did not perform well. The organization however provided rewards to
the employees in the same year to keep them motivated. The different concepts related to
which the case study has been analysed are, the relationship with the employees, the
management of diversity, management of performance, development and learning, rewards
and motivation and retention and turnover of employees. The report has been concluded with
the learning that the different concepts of human resource management are necessary to fulfil
the needs of the employees and to achieve the goals of the organization.

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