Feb 13, 2014

Seniority-based Promotions being Replaced by Merit-based Promotions in Korea

Slowly, but surely, South Korean organizations are moving away from seniority to merit-based promotions.  Standard Chartered Bank weathered a long employee strike as it pushed its Korean personnel policies into closer compliance with its international, merit-centric standards.
 
While the article below mentions a promotion by Korean Air of a female may not have been given to a owner family member (as is most often the case for Korean female executives), it may be helpful to keep in mind that Korean Air has a long tradition of sending its rising stars abroad for foreign MBAs, such as at the University of Southern California.  In fact, a daughter of the chairman got her MBA just like dear old Dad from USC and today she is a vice president of Korean Air.  When something like that happens, change is likely to occur.

So for whatever may have been the original motivations, Korean companies are recognizing the value of earlier promotion of younger and female employees.

This trend will continue, but it will not be without its downsides.  Already Korean middle-aged men live in career mortal fear come each December when many are forced into premature retirement while facing the expenses of putting their children through college – not to mention that many middle-aged men are not financially prepared for retirement nor capable of building a second career.

A merit-based human resources scheme is likely to only add to these middle managers’ insecurity and increase their political gamesmanship that often results in doing business with Korean corporations being particularly galling.

A good article on this issue may be found at:  New Age Thinking Rattles South Korea by In Soo NAM, Wall Street Journal (October 15, 2012)

by Tom Coyner, Senior Advisor to IPG.
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Sean Hayes may be contacted at: SeanHayes@ipglegal.com. Sean Hayes is co-chair of the Korea Practice Team for an international law firm. He is the only non-Korean to have worked as an attorney for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty.