The doctors in the television drama "Hospital Playlist" are all different. Their specialties, personalities and values diverge, yet the moment they play together in their band, they become one team.
These days it is hard to find that kind of unity at Samsung Electronics (005930), South Korea's largest company, when it comes to the core business. Performance bonuses have set the semiconductor division (DS) against the consumer products division (DX), while employees in the memory and non-memory businesses run their own separate calculations. Conflict among union members also persists.
Samsung's management and unions agreed on a special management bonus just before a general strike in May, but disputes over bonus gaps between business units have not stopped. Employees in the non-memory unit, who contributed to strengthening memory competitiveness, complain of being shortchanged after their bonuses came to only a third of what the memory unit received. Resistance is also considerable among employees in DS common functions such as back-end processing and the semiconductor research institute. Some DS common organizations that had handled foundry work were moved to the foundry business unit last year in the name of a one-team structure. Their bonuses due early next year are said to have fallen by more than 300 million won ($220,000) per person.
The DX division has finished its wage negotiations, yet it is now pressing management with a belated demand for 1,000 treasury shares per employee. DX union members, whose division faces the risk of losses, are insisting on being paid now for their past contribution to the company's growth.
None of these claims is entirely without reason. Business units enjoying a boom want bigger bonuses, while employees in struggling units say they too are working to improve results and argue that they propped up the company when the semiconductor business — now approaching 100 trillion won in quarterly operating profit — was in trouble.
Next year's wage talks could grow more complicated. The Ministry of Employment and Labor recently issued a guideline stating that demands for bonuses set as a percentage of operating profit are not subject to mandatory bargaining. That means labor and management may negotiate voluntarily, but such demands cannot be grounds for industrial action such as a strike.
This is a moment that calls for more dialogue. Management must explain its bonus formula and the reasons for differences between business units in terms its employees can accept. The unions should demand their fair share, but not at the expense of the company's sustainability and shareholder value. What I would like to see is a "wise Samsung life" — a path in which both sides acknowledge their differing interests and each other's position, and grow together as one team.
