Essay Sample on Human Resource Management: Samsung Electronics Compensation Strategy

Paper Type:  Essay
Pages:  4
Wordcount:  1035 Words
Date:  2022-11-14


In today's competitive markets it is crucial for companies to hire and maintain the best talent from the job market. This is especially so in the consumer electronics sector where technologies are changing almost on a daily basis. Companies such as Samsung Electronics will strive to have the top performers and ensure that they continue working for them to attract and maintain their market. Therefore, these companies ensure that their workforce does not only love what they do but also share in the company's vision (Grant, 2016). Because routine tasks can become monotonous killing the initial excitement, Samsung Electronics' compensation strategy incorporates employees' engagement through lifestyle, continuous education and training, and offering an opportunity for career advancement. The company is guided by "Performance-based Compensation" and "Nondiscriminatory Compensation" principles to ensure fairness and competitiveness in its compensation structure (Kuo & Ho, 2010).

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Compensation Structure

Cash Compensations

Samsung Electronics uses cash compensation as its first strategy to remunerate its workers. As part of its management, the company has a Compensation Committee made up of at least three members of its Board. The main responsibility of the Committee is to ensure that Samsung complies with applicable regulations in the various regions that the company operates (Ongel, 2014). Samsung prohibits the members of its Compensation Committee from participating with members of other companies' compensation committees to ensure uniqueness of its compensation system in respect to its competitors. Currently, Samsung Electronics is not only complying with minimum wage laws in different regions but pays up to three times the minimum wage. This strategy sets Samsung aside from its competitors by helping its employees improve their welfare and quality of life. It was for this reason that Samsung Electronics South Africa branch was awarded the Top Employer Certification in 2017 (Kim & Bae, 2017). The award recognizes companies in the country that display the highest standards of employee conditions through their HR policies and procedures.

Incentive Compensations

In addition to cash pays in wages and salaries, Samsung Electronics uses incentives to motivate its employees to give their best to the company. The incentive structure is a performance-based type of payment which may include cash bonuses, benefits or holidays. The incentive at the company is paid based on individual performance, team, or a whole business unit. To implement incentive-based pay, the company evaluates both individual and team achievements on a yearly basis along with its competency evaluations (Samnani & Singh, 2014). For instance, in 2017, the semiconductor division was awarded a special bonus worth 400% of their basic salary after posting the record high profits for the company that year. More than 40,000 employees benefited from the bonus which was meant to encourage the division to maintain their high performance.

Interestingly, home appliances and smartphone divisions did not receive the special bonus. Team-based incentives are further divided into profit sharing and productivity incentives. In profit sharing, a portion of the profits is given out to the employees of the team that exceeds its target goals. On the other hand, productivity incentive is paid to employees for working efficiently resulting in increased profits (Jun & Rowley, 2014).

Employee Benefit

Other than incentives and cash compensation, Samsung Electronics provides its employees with benefits aimed at improving their welfare to create more job satisfaction. Some of the welfare programs by the company include mortgages, health insurance for employees and their families, and children education. Additionally, the company provides a national pension scheme, industrial accident insurance, and medical expense support. Work-life balance is a crucial aspect that many employees consider as part of their job satisfaction (Bratton, & Gold, 2017). Accordingly, Samsung Electronics ensures that it complies with labor regulations regarding working hours for its employees. The company maintains working records of every staff member to prevent overworking. Employees who work more than they are legally required by the company as par employment contract are given warnings. Besides, Samsung encourages its workforce to take annual leaves. This strategy is also meant to reinforce the company's emphasis on the importance of maintaining a balance between work and social life of the employees (Chang, 2012).


Compensation strategies are not only crucial for retaining current employees but also for ensuring that companies attract the best talents in the job markets. With the help of strategic compensation and reward system, Samsung Electronics enjoys having a workforce that is not only motivated to work for the company but also shares in its mission and vision. Furthermore, because it offers a competitive compensation structure, it acts as a motivation for the employees towards their positive behavior. Performance-based reward system used by the company has resulted in its innovation and efficiency in production making it one of the largest producer of consumer electronics in the world. The company believes in performance so much that it prefers to promote its employees to management positions rather than hiring from outside. The result of this strategy is that every employee strives to beat their own records and targets so that they get to be in the management positions.


Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.

Chang, S. I. (2012). Study on human resource management in Korea's chaebol enterprise: a case study of Samsung Electronics. The International Journal of Human Resource Management, 23(7), 1436-1461.

Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley & Sons. Retrieved from

Jun, W., & Rowley, C. (2014). Change and continuity in management systems and corporate performance: Human resource management, corporate culture, risk management and corporate strategy in South Korea. Business History, 56(3), 485-508. Retrieved from

Kim, D. O., & Bae, J. (2017). Employment relations and HRM in South Korea. Routledge.

Kuo, T. H., & Ho, L. A. (2010). Individual difference and job performance: The relationships among personal factors, job characteristics, flow experience, and service quality. Social Behavior and Personality: an international journal, 38(4), 531-552.

Ongel, E. (2014). the Relationship Between Employee Engagement and Organizational Performance: Implementations of Organizations. The International Journal of Social Sciences, 25(1), 1-10. Retrieved from

Samnani, A. K., & Singh, P. (2014). Performance-enhancing compensation practices and employee productivity: The role of workplace bullying. Human Resource Management Review, 24(1), 5-16. Retrieved from

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Essay Sample on Human Resource Management: Samsung Electronics Compensation Strategy. (2022, Nov 14). Retrieved from

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