When prompted: “what is the biggest talent challenge facing HR leaders in Korea?”, ChatGPT replied:
Finding and retaining people with the right skills in a shrinking and rapidly changing workforce.
–ChatGPT
The entire purpose of 보상 경영 (compensation & benefits management) is to attract and retain talent. Right? Why is it that there seems to be very little variation in pay practices?
Strategic versus One-size-fits-all
One-size-fits-all job and pay structures are easy for HR, consistent and compliant. Managers don’t have to own any unpopular decisions on pay or job title. Good, good, good and good!
But one-size-fits-all practices limit attraction and retention.
제 한국 친구들은 한국 기업들이 이렇게 한다고 말합니다: 사원, 대리, 과장, … same salary, same annual increase, etc.
This is strictly a length-of-service-based pay and promotion system. No link to actual job differences, qualification or skill differences, track record, merit, market salary, market scarcity, potential, or other work-related differentiators. A low-performing 사원 in accounting will have the same salary as an entry-level high-performing software engineer who knows CODEX and Python. In this case, who is most likely to leave the company for better opportunities? The high-impact techie!
Is this true in Korea? Please tell me it is not!
And don’t blame the unions who are skeptical of management fairness. Maybe Korean managers cannot handle discretion on pay and promotion. Maybe managers like having HR make all the decisions, so they can blame HR when someone leaves. Maybe managers are afraid that making pay decisions will alienate workers who get a smaller pay increase than others. Maybe managers have the courage, but are not trained to make pay decisions. Maybe HR is not equipped to advise management on these matters, or train them to make and own pay decisions.
Or could it be that HR knows a better way, but higher management does not listen to HR?
Keep What’s Good, Make the Rest Better
My career has been devoted to better reward practices. I have lived in Asia almost 20 years and have trained over 3,000 Asia HR practitioners and 1,000 Asia business leaders on rewards. Better practices are possible, regardless of your current situation or barriers. The key is acquiring the right knowledge, skill and attitude around total rewards, and then working to influence decision makers to adopt better practices.
What is better practice?
Best practice is what works. Best practice is what helps you improve attraction and retention of the skills you need. Copying Samsung is not best practice, even if everyone does it. Every employer is different, and can offer a unique employment value proposition, or EVP.
I have learned to respect current practices and understand their advantages, before recommending change. I believe this strongly.
I also believe it is not just about pay. Benchmarking is useful, but it’s not a strategy. Better practice is about using an intentional mix of tangible and intangible rewards—what we call “total rewards” to attract and retain the right talent at the right time, at the right cost.
Respect
I was at 시청 in July 1987. My best friend ever was Korean, but he has disappeared and my heart still hurts. I speak intermediate Korean with near-perfect pronunciation. Believe me when I say I am not a judgmental 외국인. I know what 한 is, what 정 is.
As an American living and working in Korea by choice, when I could just retire. 저는 65세입니다. I am sincere. My assessment is this: it’s time for Korean HR practitioners to reach a new level in reward practices. I respect the benefits of consistency. I know black is the only acceptable color for clothing, otherwise you are drawing too much attention.. But is HR about fashion? Or is about effectively bringing the best talent in and keeping them? My intentions are pure, not insulting or judgmental. Just the opposite. Please help me learn. Comment on this article.
Total Rewards
Total Rewards looks at everything as a whole system, a collection of structures, policies, practices and the culture itself. Mandatory benefits, employment laws and regulations are also included in total rewards. If it helps to attract or retain talent, it is part of total rewards.
Some companies simply copy a leading company. But when that company abandons its traditional practices, it’s time to understand that one-size-fits-all practices or blindly following what’s most prevalent will get you B performance at best. A-level talent attraction and retention in rewards requires intentional design.
The most effective people practices go far beyond compliance, follow-the-leader and doing what’s always been done. Better to understand human behavior, consider each person’s life and career stage, range of needs and preferences, and then design career and reward structures that cater to key workforce segments and build in choice and flexibility where possible.
How to Start
Learn what total rewards is all about. Talk with your boss, talk with managers, talk with your HR friends at other companies. Hear from experts in total rewards. Then develop a total rewards strategy that makes sense for your company.
More to come. I will announce Seoul Total Rewards gatherings soon. Are you a total rewards practitioner? Let me know and please help me in this effort.
Follow me on LinkedIn: https://www.linkedin.com/in/tomfarmerlinkedin/ Contact Tom Farmer at Freelance Total Rewards, Korea Branch Office. +82 010 7304 2844. tfarmer@freelancetotalrewards.com. Kakao: TomFarmer. Or Contact Us.