[E-Daily Reporter Shin Yeong-bin ] A proposal to overhaul the performance compensation and evaluation system being pushed by Samsung SDS (SAMSUNG SDS CO., LTD.(018260)) was rejected in a vote by employees. As a result, the current personnel system will remain in place.

According to industry sources on the 8th, Samsung SDS recently announced the results of an employee vote on the proposed HR system reform. A total of 55.6% of all employees participated in the vote, and 71.9% of those who voted approved the reform plan. However, the final approval rate based on the total workforce was only 40%.

Since Samsung SDS failed to meet the requirement of a majority approval from all employees necessary to implement the changes, the company has decided not to proceed with this personnel system reform plan.

The reform plan involved revisions to the performance compensation and evaluation systems. The incentive system was designed to replace the existing cash-based performance bonus system with a system based on the issuance of company stock, allowing for higher payout rates linked to the company’s profits and increased corporate value.

The core of the reform plan was to switch from the existing cash-based performance bonus system to a system based on the issuance of company stock, and to adjust the evaluation system from the current twice-a-year schedule to an annual performance and competency evaluation system.

While the company’s intention was to use publicly disclosed metrics to increase the transparency of compensation standards and expand performance-based rewards, the plan ultimately failed to gain the approval of a majority of employees and was scrapped.

Samsung SDS had previously extended the voting period until the day before, reflecting employee feedback that this personnel system reform—as a significant change affecting employee compensation and evaluations—required sufficient time for review.

Meanwhile, on the 6th, the Samsung SDS branch of the Inter-Company Labor Union was launched amid concerns that there had been insufficient communication with employees during the process of reforming the personnel and compensation systems. The union declared that it had secured majority union status, stating that approximately 5,800 employees had applied for membership within just one day of its launch.

The union stated, “The fact that thousands of colleagues have united as one demonstrates just how deep the lack of communication and the desire for change have been in the workplace,” and demanded that the company suspend the announcement of the vote results on the personnel system overhaul and any follow-up procedures, and instead engage in formal dialogue with the majority union.