Samsung's HRM: Employee Rewards, Performance and Strategic Challenges

This report provides an in-depth analysis of Samsung's human resource management (HRM) practices, particularly focusing on the company's approach to employee rewards and motivation, even during a year of poor financial performance. It begins with an introduction to the selected news story and the importance of strategic HRM, then provides a background on Samsung and its objectives. The report examines key HRM topics such as strategic HRM, employee relationship challenges, diversity management, performance and career development, motivation and reward systems, and employee retention strategies within Samsung. It highlights the company's hierarchical structure, its efforts to encourage innovation and creativity, and its policies on diversity and inclusion. The report discusses both the advantages and limitations of Samsung's reward structure, emphasizing the importance of employee performance and the challenges associated with workload and stress. The report concludes with recommendations for improvement and references relevant academic sources.

Running head: MANAGING HUMAN RESOURCES
Managing human resources: Samsung rewards Mobile division employees despite poor
performance in 2015
Name of the Student
Name of the University
Author’s note

1MANAGING HUMAN RESOURCES
Executive summary
The aim of the report is to understand and evaluate the human resource management of the
Samsung. Out of the three news stories that one that is selected for this assignment is the reward
announcement of Samsung. The structure of the assignment follows the academic report format
which is logically divided in headings and sub-headings. Some of the common topics of human
resource management like employee relationship challenges performance management, career
development etc are discussed with reference to the organisation. The news story deals with
motivation and reward structure of the organisation, some of the advantages and limitation of the
process followed by the company has been discussed in the report.

2MANAGING HUMAN RESOURCES
Contents
1. Introduction..............................................................................................................................3
2. Company’s background............................................................................................................3
3. Strategic human resource management....................................................................................4
4. Human resource challenges......................................................................................................4
5. Managing diversity...................................................................................................................5
6. Managing performance and career development opportunities...............................................6
7. Motivation and reward.............................................................................................................7
8. Employee retention...................................................................................................................9
9. Conclusion and recommendation.............................................................................................9
10. Reference list:.....................................................................................................................10

3MANAGING HUMAN RESOURCES
1. Introduction
The news story that has been selected for this report is “Samsung rewards Mobile
division employees despite poor performance in 2015”. The story deals with the details and the
information regarding the incentive and bonus structure that the company had incorporated after
having a difficult business year. The human resource management is one of the most significant
management departments of any business enterprise. This department ensures that the strength of
an organisation which is the employees are satisfied with their job in turn develop a commitment
towards the organisation. Strategic human resource management helps the company build
policies and take decisions regarding the staff and the employees (Jackson et al., 2014). One of
the topics of discussion in this report is motivation and how it impacts the performance as well as
the commitment of the employee. With the help of the news stories several topics of human
resource management like employee relations barriers, understanding diversity, managing the
performance of the employees, career development and learning opportunities, motivation and
rewards and employee turnover and retention etc.
2. Company’s background
Samsung group is an organisation that operates in the electronic and technology industry.
Established in 1938, the headquarters of the organisation is in Seoul, South Korea. The
organisation with the help of innovation has been able to make a mark in the industry as well as
in the minds of the consumers. Pricing the latest technology within a reasonable reach of the
target customer is one of the major principles that the company operates in. the organisation is
known to encourage and welcome innovation and creativity and gives the employees significant

4MANAGING HUMAN RESOURCES
position in the business operation as the motto of the company is “Inspired by people, creating
the future” (Samsung.com, 2018). Some of the objectives of Samsung are:
 To achieve valuable consumer relation
 To provide the customers with new and improved technology
 To achieve success and develop a sustainable future
3. Strategic human resource management
To build a valuable and healthy relationship with the employees it is importation to
develop a strategic human resource management plan. The human resource department is
responsible for employing people ensuring their health and safety as well as their career
development in the organisation so that they are able to commit to the organization and grow
with the company. In Samsung, the focuses of the human resources are to ensure the workplace
environment is healthy, work-friendly, stress-free and safe for all the employees. The
management of the organisation focuses on innovation and wants to encourage the employees to
use their creativity in their work therefore the policies and the decision that are taken by the
organisation are based on flexibility of the employees. The performances of the employees are
directly responsible for the growth and expansion of the department and in turn of the business.
These performances are managed and encouraged by the HRD in Samsung and the bonuses and
incentive structure are also decided accordingly.
4. Human resource challenges
Samsung follows a hierarchal corporate culture in the organisation which ensures that the
employees understand the structure of the organisation easily. This helps the people to approach

5MANAGING HUMAN RESOURCES
the right person when required. Samsung focuses on developing job satisfaction among the
employees as the company understands the role the human resource department plays in the
operations of the business. Some of the most common challenges faced by any business
organisation are: workplace harassment, workplace bullying, dissatisfaction with the
remuneration structure, out of expertise job role, work load, work-life balance issues and
miscommunication etc (Cloutier et al., 2015). These issues result in an employee who is not
satisfied with the job and increased employee turnover of the company. In the news story, the
people of the organisation are provided with the incentive even when the profitability of the
company is significantly lower than other financial years; this is a positive approach of the
company. The human resource department of Samsung formulates the process of employee
performance and ensures there is transparency in the process so that there is no issue or conflict
in the long run. One of the major challenges that is faced by the employees is the work load and
the work stress in this industry, the organisation keeps the employees engaged in several
extracurricular activities and refreshment opportunities, this is also the responsibility of the
human resource department.
5. Managing diversity
As Samsung is a multinational organisation it is evident that the population of the people in
the organisation will be diverse in nature. Some of the issues that employees face in a diverse
environment are workplace racism and workplace bullying. In such instances, if a complaint is
logged with the management, actions should be taken immediately in order to understand the
gravity of the situation as well as analyze the role of the victim and the accused. Samsung has
rules and regulation against racism and workplace bullying (O'Leary & Sandberg, 2017). The
employees of the organisation and expected to maintain professional discipline and decorum

6MANAGING HUMAN RESOURCES
within the workplace. In order to maintain the diversity the organisation should encourage and
respect every culture and every ethnic background employees. Holidays and leave approvals
based on festivals, occasions are one the policies that Samsung have to encourage diversity in the
organization. The organisation does not have a biased perspective of an individual based on their
diversity, Samsung believes in the skill and expertise of a person during recruitment. The
organisation encourages and recognizes the importance of sharing knowledge therefore the
departments have a diverse population. Samsung has many policies and programs for people
with disabilities and exceptional talents form high school. The company views diversity as an
opportunity and encourages the same for the development and betterment of the organisation
(Kundu & Mor, 2017).
6. Managing performance and career development opportunities
Job satisfaction among the employees are dependent on several factors like: healthy work
environment, satisfaction of the job role that has been allocated for example a person who is
a management expert in finance is asked to undertake the responsibilities of human resource
will be unsatisfied with the job role. Other aspects are like: rapport with the colleagues and
peers as well as the seniors, work pressure, work-life balance etc. Similarly performance of
the employees is also one of the reasons for the people to be satisfied with the job, if an
employee is continuously performing poorly then it is the duty to examine the reasons and
help the person to grow (Gerrish, 2016). Every company has their own performance
management procedure and policy, depending on this evaluation is the appraisal that the
people are entitled to get. Samsung has a transparent system of performance management
which is also dependent on the departments; the factors that are associated with the
performance management procedure in Samsung. Samsung has developed the process based

7MANAGING HUMAN RESOURCES
on the situational environment and the departmental requirement. The results of the
performance prove to be the strengths and weakness evaluation of the employees, the
organisation encourages the people to use their strength to gain an edge over the
opportunities. The bonus structure is also based on the performance but on the performance
of the department and the department’s contribution to the profitability of the business.
Based on the evaluation of the performance people should be given an opportunity to
learn and grow in their career as well. It has been observed that many people leave a
company as they do not find any future prospects of their career with the organisation. The
ambition of an individual should relate to the growth and expansion of the organization only
then the commitment of the employee will be ensured. Samsung ranked third in talent
development in 2015. The awards are organized by the Association for Talent Development.
Samsung has employee an internal system called MOSAIC which will help the employees in
developing collective intelligence as the company believes in innovation and creativity for
the growth and development of the business (News.samsung.com., 2018). Samsung have
several skill development and training program planned for the employees so that the people
get an opportunity to grow in the process of working with the company. Samsung has
provided help and support for training and education of around 34 thousand students from
over 54 countries, the objective of this program was broadening the horizon for talented
youth creating jobs opportunities etc. The country specific details about the program make it
unique and effective in achieving the objectives (Ploom & Haldma, 2013).

8MANAGING HUMAN RESOURCES
7. Motivation and reward
According to the theory developed by Douglas McGregor, there is a positive and a negative
approach of an individual towards work. According to theory X, the people are not motivated to
work by themselves they need external push in terms or rewards or penalties to keep the
employees engaged and focused in their work. In this theory he says that people lack ambition
and willingness to improve hence they also run away from taking risks and responsibilities.
Therefore rewards and penalties play an important role in ensuring high performance of the
employees (Lawter et al., 2015).
However, in the theory Y he states that the interest of the employees is associated with the
objective of the organisation which is like a positive situation for both the employees and the
employer. Rewards and appreciation are some of the added advantages for the employees who
are already performing and putting their best effort (Lawter et al., 2015).
Encouraging or inspiring an individual or a group of people in achieving an objective or an
aim is called motivation. Motivation can be wither intrinsic or extrinsic depending on the
behaviour of the person and the situational condition of the environment the person is in. In the
news story Samsung announced the rate of bonus of the employees despite of having a rough
financial year. The step taken by the organisation seem to be encouraging for the employees as
they recognise that the company is accepting and rewarding the hard work and the effort the
employees put in their jobs throughout the year (Mafini & Dlodlo, 2014). The human resource
department structures the bonus rate with the help of the management. Motivation plays an
important role in helping the employees improve the performance the impact of motivation can
be long term or short term depending upon several factors. Motivation can also lead to job
satisfaction and retention. For example: if an employee is unhappy with the work environment

9MANAGING HUMAN RESOURCES
and complains regarding the same to the concerned person and necessary steps are taken in the
process to ensure that the problem is resolved, then the employee will be affected positively and
motivated (Yoon et al., 2015).
One of the major limitations of the bonus structure that has been discussed in the news story
is that the individual performance in the process of evaluation does not get importance. The
collective performance of the department is taken into consideration; this is an unfair situation as
the performance of an individual may be better than the collective performance and they may
feel in this case that their efforts are not getting their due recognition. This situation is a negative
impact as the people who have good performance record may get de-motivated a start
underperforming (Khan et al., 2017).
8. Employee retention
Motivation and reward are some of the most important aspects of ensuring employee
retention. This situation is also directly responsible with the rate of job satisfaction. The
employee retention rate of Samsung is considerably low owing to the employee friendly policies
that the company have (Yoon et al., 2015).
9. Conclusion and recommendation
It can be concluded from the discussion that though the company wanted to establish a
healthy and valuable relationship with the employees with the bonus scheme, in order to
align the interest of the employees with the objective of the company, many employee may
have felt negatively from the situation. With the help of innovation and creativity Samsung
ensures to stay on the league of the industry, the dynamics of the industry is dealt with the

10MANAGING HUMAN RESOURCES
help of the employees and the company ensures skilled development and training for the
employees who are promising and talented.

11MANAGING HUMAN RESOURCES
10. Reference list:
Cloutier, O., Felusiak, L., Hill, C., & Pemberton-Jones, E. (2015). The importance of developing
strategies for employee retention. Journal of Leadership, Accountability and
Ethics, 12(2), 119-129. Retrieved from
https://search.proquest.com/docview/1726791378?accountid=30552
Gerrish, E. (2016). The impact of performance management on performance in public
organizations: A meta-analysis. Public Administration Review, 76(1), 48-66.
Jackson, S. E., Schuler, R. S., & Jiang, K. (2014). An aspirational framework for strategic human
resource management. Academy of Management Annals, 8(1), 1-56.
Khan, A. A., Bashir, M., Abrar, M., & Saqib, S. (2017). The effect of organizational culture on
employee's creativity, the mediating role of employee's cognitive ability. International
Journal of Information, Business and Management, 9(2), 217-230.
Kundu, S. C., & Mor, A. (2017). Workforce diversity and organizational performance: A study
of IT industry in india. Employee Relations, 39(2), 160-183.
Lawter, L., Kopelman, R. E., & Prottas, D. J. (2015). McGregor's theory X/Y and job
performance: A multilevel, multi-source analysis. Journal of Managerial Issues, 27(1-4),
84-101,7
Mafini, C., & Dlodlo, N. (2014). The relationship between extrinsic motivation, job satisfaction
and life satisfaction amongst employees in a public organisation.SA Journal of Industrial
Psychology, 40(1), 1-13.

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News.samsung.com. (2018). Samsung Receives ‘2015 ATD Best Awards’ for Excellence in
Talent Development. news.samsung.com. Retrieved 5 February 2018, from
https://news.samsung.com/global/samsung-receives-2015-atd-best-awards-for-
excellence-in-talent-development
O'Leary, J., & Sandberg, J. (2017). Managers' practice of managing diversity revealed: A
practice-theoretical account. Journal of Organizational Behavior, 38(4), 512-536.
doi:http://dx.doi.org/10.1002/job.2132
Ploom, K., & Haldma, T. (2013). Balanced performance management in the public education
system. Baltic Journal of Management, 8(2), 183-207.
doi:http://dx.doi.org/10.1108/17465261311310018
Samsung.com. (2018). About Us. www.samsung.com. Retrieved 5 February 2018, from
http://www.samsung.com/aboutsamsung/home/
Yoon, H. J., Sung, S. Y., Choi, J. N., Lee, K., & Kim, S. (2015). Tangible and intangible rewards
and employee creativity: The mediating role of situational extrinsic motivation.