Chapter 22 "Knowledge first" salary system

In the era of knowledge economy, talents are the core competitiveness, and having excellent talents is a huge wealth of an enterprise.Establishing a reasonable salary system can not only retain the existing outstanding talents, but also attract new talents, which has become a prudent decision for enterprise managers. Ren Zhengfei advocates the power of knowledge, "insists that the value-added of human capital is greater than the value-added of financial capital", and implements "knowledge-based doctrine" - capitalizing knowledge, believing that knowledge creates technology, technology creates products, admits that knowledge creates wealth, and gives wealth to those who create wealth Knowledge is rewarded reasonably.This "knowledge first" salary system not only attracts and retains talents, but also stimulates their enthusiasm for work, driving Huawei's continuous progress.

Goss, vice president of personnel at Siemens Global Headquarters, once said frankly: "Our company as large as Siemens can be united. There are two main reasons for the cohesion. One is money, and the other is human management." In Huawei, the basic salary components of compensation are: basic salary, stock, benefits, overtime pay, subsidies and bonuses.Roughly speaking, basic salary and stocks account for half of the salary, and bonuses account for nearly 1/4 of the total salary. Huawei does not hesitate to increase the salary of its employees by tens of dollars. Compared with its peers, its high salary is very "generous", and it "hoards" talents with a salary that is several times that of ordinary companies.

At the end of 1992, Li Yinan had just arrived at Huawei, and the manager told him that the income of Huawei's key engineers was expected to reach the level of ordinary people in the West in two years. Li Yinan was very excited when he heard that.However, the speed was faster than expected, and after a year his income reached the level of the average person in the West. In 2001, when he left Huawei, he already had tens of millions.In fact, many executives or technical backbones who have worked in Huawei for ten years have a net worth of tens of millions when they leave.At present, in Huawei, there may be more than a hundred employees worth tens of millions of yuan, and no less than a thousand employees worth one million yuan.

In 2000, when Huawei recruited at Nankai University, it promised "a monthly salary of not less than 4,500 yuan."According to a person from Huawei, the salary in 2002 was: 5,000 yuan/month for undergraduates and 6,000 yuan/month for postgraduates.Another document states that as early as 2000, the monthly salary of employees with a bachelor’s degree was 7,150 yuan, and there was a bonus of 100,000 to 160,000 yuan at the end of the year; 7,700 yuan/month for double bachelors, 8,800 yuan/month for master’s degrees, and 10,000 yuan for doctors. Yuan/month.This level is about 15% to 20% higher than the average company in Shenzhen.

A Huawei person who resigned said: "Huawei is really very interesting to technology developers. For example, when I first joined the company in 1995, they offered a monthly salary of 6,500 yuan, which gradually increased to 12,000 yuan. The subsidy, the number in hand is even higher.” After completing all the resignation procedures, he unexpectedly found that he had also received a large year-end bonus, and he was surprised that he “almost regretted leaving Huawei.” In 1996, Huawei hired a group of "returnees" with an annual salary of US$100,000 to engage in technology research and development.An engineer engaged in chip research and development, Huawei offered an annual salary of 400,000 US dollars. After he was in place, Huawei found that he had greater value and immediately raised it to 500,000 US dollars.

In October 1998, ZTE and Huawei conducted a recruitment "battle" in Tsinghua Park. In mid-October, ZTE was supposed to come first, but the leaders of the institute disagreed, so they had to hold a "meeting meeting" first. When ZTE came back in November, Huawei had already gained the upper hand.It turned out that Huawei "killed" it on October 27, using high salaries as a bait, "the latecomers prevail", and seven out of ten of the original ZTE contracted fell to Huawei. Huawei is so generous that many big companies are intimidated. On May 22, 2004, Huawei held an on-site job fair in Huizhou, Guangdong, the headquarters of TCL. Perhaps out of helplessness, Li Dongsheng had no choice but to organize the main technology, management backbone and all R&D personnel of the headquarters to travel to Nankun Mountain.

A Motorola executive said: "It is very difficult for Motorola to recruit people from Huawei, but it is much easier for Huawei to recruit people from Motorola." In order to stimulate the enthusiasm of employees, contemporary western large enterprises will distribute part of the company's shares to employees.Huawei pursues the "knowledge-based principle". As long as it can generate huge value-added value, employees can get high dividends.Therefore, Huawei also implements an employee stock ownership system. Back in 1987, when Ren Zhengfei and five other people jointly invested 21,000 yuan to register Huawei at the Industrial and Commercial Office of Nanshan District, Shenzhen, each of them accounted for 1/6 of the shares. In November 1991, an application was made to change the nature of the company, which was approved in June of the following year. Huawei became a collective company and began to implement universal employee stock ownership. This was the beginning of the mysterious internal stock system.

Employees who have joined the company for one year can own internal shares in Huawei, and the company allocates a certain amount of shares based on their position, performance, and work performance.Before 2001, Huawei people generally used their annual bonuses to buy internal shares, one yuan per share.During Huawei's rapid development period, internal dividends were as high as 70%, and dividends were converted into equity.Shares can be cashed in upon leaving the company. In 2001, Huawei hired TOWERSPERRIN, a well-known international human resource consulting company, to carry out shareholding reforms. Employees bought and sold company stocks based on net assets per share, and transformed the original internal shares into "virtual restricted shares", which began to approach the West. Option incentive system before the company goes public.Beginning in 2002, ordinary Huawei employees can exercise 1/4 of the option every year for four years, and the price is based on the company's most recent net assets per share in that year.

Stock dividends account for a considerable proportion of employee income, and the amount of dividends depends on various factors such as the employee's position, quarterly performance, and qualifications. The stock held by employees is far greater than the salary, and the performance is linked to the stock. The greater the contribution, the more shares are allocated.This is greatly motivating? ? ?They make them work hard and become the unremitting driving force for Huawei's development. In 1994, Huawei encountered a problem.Two salesmen were sent to Shanghai and Urumqi to sell a kind of telecommunication equipment respectively.The one in Urumqi sold very well, while the one in Shanghai sold only a few units.If the old distribution policy of more sales means more bonuses, the salesmen who were sent to Urumqi could get more than 200,000 yuan in bonuses, while the salesmen who went to Shanghai could only get a few thousand yuan in bonuses.But this would be very unfair, because the market is different.

As Huawei's market team grew larger and larger, Ren Zhengfei sent Vice President Zhang Jianguo to set up a reasonable salary evaluation system. The Huawei salary standards discussed by Zhang Jianguo and others are: knowledge ability (input), problem solving (doing things), responsibility (output), and advocates the principles of internal fairness and external competition.The fairness of internal compensation means that people who make the same contribution within the company are required to be paid equally.The external competitiveness is mainly analyzed through salary adjustment and payment. The specific evaluation criteria are: first, whether it can help realize the corporate strategy; second, whether it can help improve the corporate strategy; and finally, whether it can promote Organizational growth.In short, Huawei's standards are performance-oriented.

In 2002, Huawei implemented "virtual restricted shares" for its equity. Employees of the company should not only rely on their own money, but rely on their own efforts.Huawei determines job qualifications based on responsibilities and contributions, and then determines employee functional salaries based on job qualifications.The distribution of bonuses is linked to the performance of the department and individual performance, and the distribution of other benefits also widens the gap based on work performance. In the salary appraisal department, performance appraisal and salary management are combined into one. One of their beliefs is: "Never let Lei Feng suffer."Performance appraisal and remuneration distribution should ensure that this kind of dedication gets a reasonable return.Another belief is: "Promote all employees to work hard to advance through 5% of backward elements". In Huawei, different contributions have different rewards.The same is the vice president, the contribution is different, the income is different. In 1996, as the vice president of the marketing department, the monthly salary in charge of marketing was 20,000-22,000 yuan, while that of the functional department was about 10,000-15,000 yuan.The same is an account manager, the outstanding performance may be 150,000 shares, and the average performance is less than 100,000 shares. A good salary structure system can effectively ensure the rationality of the dynamics in the development of the enterprise, and at the same time promote the competitiveness of the enterprise, enhance the sense of accomplishment of the employees, and create value in the morale and sense of belonging of the employees.