This detailed report has been written to analyze the Samsung HRM strategies. If you need the full report, then you can buy the PDF.
Samsung is one of the largest electronics manufacturing companies in the world, whose annual revenue comes around 17% of the South Korea’s total GDP, which is the home country of Samsung. The company has faced a decline in its smartphone sales during the period of 2010-2013. However, Samsung didn’t cut the bonuses of its employees working in the smartphone department. This decision has many HRM, retention, motivation, and reward implications. This report has been written to analyze these strategies of Samsung, to understand the enormity of this decision, while providing recommendations to the concerned organizations. In the first part, recognition and analysis of the decision are made, then the impact of reward and motivation based on sales of the organization is discussed, then impact of employee retention policies are discussed, and finally some recommendations are made for the concerned organizations.
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Samsung is one of the world’s largest conglomerate companies that deals in various industries like electronics, insurance, food processing, textile, securities, retail, etc. Samsung has become the world’s first electronics manufacturing company, having the most number of sales of its smartphones during the year 2013. The net worth of Samsung is around $1 trillion Korean dollar. Recently, during the period of 2010-2012, the sales of the smartphones made by Samsung company had declined due to the increasing financial clout of some other companies like Xiaomi and iPhone. However, the company still didn’t decrease the amount of bonuses provided to the employees of the Samsung mobile branch, which was around 50% of their salary. There may be many reasons of this decision by the company, like employee retention, motivation, reward, and HRM strategies (Jung, 2014).
The main motivation behind writing this report is to make a detailed analysis of the decision made by the Samsung company, while analyzing some of its crucial factors like its current market condition, employee retention and rewarding strategies, and HRM strategies. This report can provide brief insights to the organisations working in respective industries. There may be many reasons for this type of courageous decision by the company, like: to retain the employees whom the company has invested lots of amount in training; or to maintain the unpredicting market of mobile phones, while hoping for a future sale; or to maintain the brand equity of the Samsung mobile in front of the potential customers. This report will provide brief insights to the reader about the various aspects that might be the reason of Samsung’s decision.
Many experts in the field of marketing of smartphones are arguing that the decision made by the Samsung to provide full bonus instead of decline in the sales is an ambitious decision. However, if all the aspects of marketing, HRM, rewarding, and motivation are considered, then this decision will become plausible. In order to understand the decline in sales of the Samsung mobiles, first it is mandatory to look at the annual sales of the Samsung mobile phones, which is shown in the figure below: —
Figure 1. Annual Sales of Samsung Mobiles from 2010 (Statistica, 2016)
The experts in the field of smartphone marketing are arguing that the main reason behind the decline of the Samsung’s smartphone sales is due to the entry of some early startups like OnePlus, Xiaomi, Oppo, etc. Earlier, when there were only Samsung and iPhone in the market of smartphone, selling smartphones in the range of $100 to $1000 USD price was blown down by the new startups like Xiaomi, who started to sell quality smartphones and that too within the range of only $50 to $500 price tags. So, this was the story of Samsung’s decline in sales. Meanwhile, in spite of the low sales of the Samsung mobiles during the year 2015, the company didn’t cut the bonuses of its employees and paid the full bonus, which was around 50% of the total income paid to them (Kuruvilla & Ranganathan, 2008).
The main reason behind this decision is to retain the employees of the Samsung, whom the company had trained to work for the particular positions, while spending thousands of dollars. Another reason is to maintain the motivation of the employees, so that they can perform well in the next fiscal year. The Smartphone market is quite unpredictable, it cannot be said that a newly launched smartphone, which is performing high in the first year, would retain its position in the coming year or not. The introduction of new technologies and increasing demands of the consumers make the smartphone market volatile. However, it is also evident that the same smartphone market is also resilient, which means that a reputable company like Samsung would get the sales figures back at the launch of its next smartphone (Kim & Sung-Choon, 2013). This was the overview of Samsung HRM strategies. You can click the below button to buy the PDF of this report
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