The Compensation System of Huawei

With the development of various social undertakings and the advancement of different modern technology, people are now in an era of information and many kinds of techniques are now more and more available in everyday life. The improvement and progress of this age requires high-speed update of diverse science and technology, which evokes the emergence and evolution of lots of enterprises. Huawei is one of them. As one of the Fortune Global 500, Huawei Technology Limited Corporation is a private company focusing on communication. To be specific, the products in this firm are mainly related to exchange networks, transfer networks, wireless and wired networks, data terminal and so on. Founded in the year of 1987, Huawei is now a firm with around 150.000 employees and the annual sales amount exceeded $350 million in 2013 (David 2015). Headquartered in Shenzhen, China, the enterprise has currently spread its influence to more and more countries and areas in this globe. It should be admitted that the success of Huawei can never be separated from the common efforts of all the employees. As a matter of fact, Huawei has a relatively improved compensation system, which helps it motivate and retain talents. Over all, the compensation system of Huawei is thorough with space for improvement, because it ensures the equality between employees and with the marketplace.

Taking the differences of different staff into consideration, the rate of pay for new hires in Huawei guarantees the long-term equality with the internal staff. Generally speaking, the new hires will experience a period of probation. During this time, the new employees can just get 80 percent of their base pay and allowance (2004). Compared with the senior workers, the new employed do not have enough experience, so it is not fair if the new ones get the same basic wages as the elder ones. When passing the probation period, there exists broad equality between all the staff. The system of the rate of pay in Huawei sounds reasonable and feasible, for it ensure the equality and fairness among different employees.

In fact, Huawei is also successful in that it keeps equality with the marketplace via its rational salary system. Basically, the wage system of Huawei technology is similar to the general condition in the marketplace, which attracts new hires and at the same time avoid the outflow of the old staff. In detail, the salary of the employees in Huawei contains seven main parts: basic pay, post subsidies, performance bonus, overtime wages, allowance, business commission and bonus or rewards (Albertalli 2012). All the contents of the salary system in Huawei Technology is in accordance with the average level of the market. What’s more, it is quite apparent that the compensation system is more improved and enriched than many of the companies in the marketplace currently. In other words, the relatively improved system helps Huawei remain its talents, and at the same time attracts more employees with pursuit and ambition. Besides, Huawei advocates the transparent wage salary system. It is not a secret of different employees in Huawei. On the one hand, it motivates the active competitions in the company. On the other hand, it helps avoid the problems or paradox caused by the hidden inequality.

In addition, there are also some policies in the compensation system of Huawei Technology that provide other benefits to its employees. One of the biggest and rather beneficial policies is that the employees can get the bonus in stock. To put it into detail, the employees in Huawei who have been served for one or two years can be provided a chance to be allocated with a certain amount shares (David 2015). In general, employees will buy the shares using their annual bonus. After that, they have shares of Huawei in stock. Honestly speaking, this is really a wise way to maximize the activeness of the workers for the actual income of the company is closely connected with the income of the shares that the employees hold. In that case, the workers not only work for the company because of the wages, but also work for themselves because of the stock bonus. There is no doubt that not so many companies have the courage to try this policy for it in fact gives much more benefits to the employees. Therefore, Huawei is a rare firm where the employees can get the benefits of holding shares of its company in stock.

Undoubtedly, Huawei manages a relatively rare and efficient way of maintaining its compensation system, and it deserves 5 in its internal equality, external equality and also its benefits. To begin with, Huawei offers a different salary composition between the new hires and the old staff, which ensures the location of the regular staff. Meanwhile, it provides the new employees with enough to make progress. As a result, it makes sure the equality and fairness inside the company. In regard to the external, Huawei keeps pace with the general market dynamics and its compensation is full of competitiveness in the marketplace. What’s more important is that the firm gives its employees the chance to hold shares of the company in stock, which is really rare benefits in the current business area. Above all, Huawei deserves this 5.

Although with highly-improved and enriched compensation system, there are still some points for Huawei to take in order to keep its system better and even perfect. In the first place, it is important for Huawei to adopt the floating compensation system. It should be admitted that the relatively higher and fixed salary in the wage system of Huawei helps it attract a lot of talents with high quality. However, it add the load of the finance. At present, the wages of Huawei and long-term compensation is attractive enough, so it may be more suitable to apply the floating salary system to reduce the financial pressure. Furthermore, it is also necessary for Huawei to develop its enterprise culture. In modern enterprise management, the company culture is one of the most important aspect. Excellent firm culture can helps strengthen the cohesive force of all the staff, influence their sense of honor, motivate them to function well in team works and so on. In Huawei, the enriched compensation in fact somehow replace some of the powerful function of the enterprise culture. That is to say, it is necessary to develop the enterprise culture in Huawei Technology Limited Corporation.

Based on the above illustrations, it is quite obvious that Huawei’s compensation system works well in that it is effective in its internal equality, external equality and also its benefits for the employees. However, there are still some recommendations for Huawei to function better. For one thing, it is necessary for the company to apply to the floating salary system to replace the fixed one. The reason why this system is more feasible is that the floating salary will help reduce the financial stress to a large extent. For another thing, it comes to have a great significant to build and develop its enterprise culture. Compared with the compensation, a improved and cohesive firm culture will help more in uniting the workers and maximize the activeness of the employees. In all, Rome is not built in one day. There is still a not short way for Huawei as well as other big and influential companies to move forward and perform better.