Prioritizing Talent Regardless of Age... Early Development of Young Executives
Samsung Electronics Vice Chairman Lee Jae-yong is returning to Korea through the Seoul Gimpo Business Aviation Center after a ten-day business trip to the United States on the 24th. Photo by Kim Hyun-min kimhyun81@
[Asia Economy Reporter Kim Heung-soon] Samsung Electronics has established an institutional foundation to produce CEOs in their 40s at any time. This initiative aims to break away from the traditional hierarchical corporate culture that emphasized seniority, to actively utilize talent regardless of age, and to implement a system that can nurture young executives early. An absolute evaluation standard has been introduced to fully recognize expertise and work performance, and a system has been put in place to encourage internal collaboration, communication, and a horizontal organizational culture. Through this, the ‘New Samsung’ vision of Vice Chairman Lee Jae-yong, which emphasizes an organization where employees and the company grow together, is expected to accelerate.
On the 29th, Samsung Electronics announced an innovation plan for a ‘future-oriented personnel system’ centered on promotion, development, and evaluation systems to respond to changes in the global business environment and lay the foundation for sustainable mid- to long-term growth.
Vice President and Executive Director Ranks Unified as Vice President
Abolishment of Standard Tenure Period for Promotion
Creation of a Culture of Mutual Cooperation and Communication
A notable change in the personnel system innovation plan is the introduction of the ‘Samsung-style Fast Track.’ First, the ranks of Vice President and Executive Director have been unified into ‘Vice President,’ reducing the number of executive rank levels. Additionally, the ‘standard tenure period,’ which required up to 10 years in each of the four rank levels (CL) for promotion, has been abolished. Instead, a new ‘promotion session’ has been introduced, strengthening the personnel authority of team leaders. This is an attempt to establish a foundation for early promotion of young and capable executives. Samsung expects that through this, not only executives in their 30s but also CEOs in their 40s will be boldly promoted as a common practice.
Previously, although generations in their 40s, such as former Presidents Jin Dae-je and Hwang Chang-gyu, led specific business divisions within Samsung Group including Samsung Electronics, there was no precedent for a CEO being appointed at such an age. In Samsung Electronics, the youngest record was President Noh Tae-moon, appointed at age 50 in 2018 as head of the IT & Mobile (IM) wireless business division, but he was not a CEO.
From next year, absolute evaluation will also be expanded in employee performance evaluations. Except for the top 10% high performers, the remaining 90% will be able to receive higher grades based on their performance. Furthermore, to supplement the existing evaluation process conducted by a single department head and to encourage collaboration among employees, a ‘peer review’ system will be piloted. This system centers on peer evaluation but minimizes side effects by not assigning grades and instead using descriptive assessments of collaboration contributions. After piloting in some organizations next year and collecting employee feedback for improvement, official operation is planned to be considered from 2023.
Samsung Electronics will also not disclose employees’ ranks or employee numbers on the company intranet, considering a horizontal organizational culture. Promotion announcements at year-end will also be discontinued. To spread a culture of mutual respect and consideration, the company plans to make the use of honorific language among employees the standard within the company.
Providing Career Development Opportunities and Foundations
Various career development opportunities will also be provided. A company internal free agent (FA) system will be introduced, granting employees who have worked in the same department for more than five years the qualification to transfer to other departments. Under the goal of nurturing the next generation of global leaders, the ‘STEP (Samsung Talent Exchange Program)’ system will operate, selecting young talented personnel from domestic and overseas affiliates to conduct mutual exchange work for a certain period. To minimize career interruptions due to parental leave, a ‘Parental Leave Reboarding Program’ will be established to support smooth re-entry upon return. A ‘Senior Track’ system will also be introduced to allow talented personnel to continue working beyond retirement age.
Additionally, shared offices will be installed at major hubs to enable work immersion regardless of time and place, and cafes and library-style autonomous work zones will be created within the company to support a flexible and creative work environment.
Samsung Electronics stated, “Through this personnel system innovation, we expect employees to be able to immerse themselves more autonomously in their work and to build a future-oriented organizational culture where the company and employees grow together. We will continue to collect employee feedback and improve the personnel system to strengthen competitiveness for the leap to a 100-year company.”
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