Pay dispute that began in the semiconductor industry spreads to Gyeongnam's key manufacturing sectors

The debate over how performance-based pay (additional wages tied to company earnings and individual performance) is calculated, which began in the semiconductor industry, is spreading to the power equipment and shipbuilding sectors, transforming the wage culture of Gyeongnam's key manufacturing industries.

The office and technical workers' union at Hyosung Heavy Industries went on strike, demanding disclosure of the criteria, saying that despite operating profit more than doubling last year, there is no way to know how bonuses were calculated. A union official said, "We have no idea why the bonus came out to 200 percent," adding, "All we're asking for is to be told the criteria for the bonuses."

In the shipbuilding industry as well, performance-based pay has emerged as a central issue in negotiations. HD Hyundai Heavy Industries—no, Hanwha Ocean—wrapped up its annual wage talks last month, but failed to narrow differences over bonus criteria, so labor and management have formed a dedicated task force to continue discussions. A Hanwha Ocean union official explained, "Performance indicators such as delivery deadlines and cost reductions are included, but because there are no precisely objective metrics, union members cannot accept them."

Samsung Heavy Industries, which settled its wage negotiations in September, overhauled its calculation method. It shifted from an economic value-added basis to allocating 10 percent of operating profit as bonus funds starting next year. The semiconductor industry's practice of paying bonuses as a fixed percentage of operating profit appears to be spreading across the manufacturing sector as a whole.

Kim Sung-hee, director of the Institute for Industrial and Labor Policy, said, "The trend has shifted toward a fixed rule of 10 percent of operating profit," adding, "Negotiations will be based on that benchmark, and it will not be easy to settle below it."