Vice Chairman Lee Jae-yong visions ‘New Samsung’

Samsung Electronics Vice Chairman Lee Jae-yong is bringing a major innovation in the company’s personnel management system for the first time in five years. The key is to get rid of seniority rules, such as the number of years required for promotion from one position to another. This means there will be executives in their 30s and CEOs in their 40s at Samsung, just like startup companies.

The South Korean tech giant on Monday unveiled its new personnel management system, saying it is bringing innovation in personnel management system and organizational culture in order to usher in a new era and new changes.

Samsung will abolish a rule requiring employees a minimum number of years before getting promoted from one rank to another. For example, a CL4-level employee had to work for five to seven years in order to get promoted to an executive. But from now on, they can be promoted to an executive position regardless of age or minimum number of years required if they bring about improvements in performance. Samsung also integrated senior vice president and executive vice president positions, reducing steps required to be promoted to the CEO position. The company said it is “Samsung fast-track” aimed at nurturing young executives.

For employees, Samsung is adopting a free-agent system, which qualifies employees to move to another department after working in the same department for more than five years. In addition, an employee exchange system, where a competent employee in the headquarters is given an opportunity to work at an overseas office, and vice versa, is being introduced. For employee eval‎uation, the “360 degrees eval‎uation” will replace the existing top-down eval‎uation and an absolute eval‎uation system will replace the current eval‎uation on a curve. This is a Silicon Valley-style eval‎uation system also adopted by Google, Netflix and Microsoft.

Industry watchers say Vice Chairman Lee’s new personnel management system is a vision to transform the company into the “New Samsung” that creates something completely new rather than stopping at being a manufacturing giant.


Do-Young Kwak now@donga.com · Hyung-Seok Seo skytree08@donga.com