Unpacking the ‘black box’ of a Korean big fast follower: Hyundai Motor Company’s engineer-led production system

Figures & data

Figure 1: Hyundai production system and the role of engineers.

Figure 2: Research framework: Hyundai production system and skill formation of engineers.

Table 1: Hyundai engineers interviewed in this study.

	Job title
Dept. of personnel management	Executive (1), Head of Dept. (2), Deputy Head of Dept.(1)
Dept. of production management	Executive (1), Deputy Head of Dept.(1)
Production technology centre	Executive (1), Head of Dept. (2), Labour Union Representative (1)
Factory (shop floor)	Executive (1), Head of Dept. (1), Deputy Head of Dept.(2)
Quality management team	Head of Dept. (1)

Table 2: Distribution of samples according to job title for a survey questionnaire.

Job title	Population	Per cent (%)	Sample	Per cent (%)
Clerk	816	21.4	45	23.8
Deputy Section Chief	878	23.1	48	25.4
Section Chief	1055	27.7	44	23.3
Deputy Head of Dept. or higher	1059	27.8	52	27.5
Total	3808	100.0	189	100.0

Sources: Internal documents obtained from Hyundai and the survey questionnaire administered to Hyundai engineers in 2013.

Table 3: A change in the trend of employees by job category and production volume in Hyundai.

	1996	2000	2004	2008	2012
White-collar office	13,565	10,325	10,705	11,158	11,606
R&D	–	2909	4322	6065	8240
Production worker	28,324	26,141	28,990	28,751	29,490
Total employees	47,174	48,874	53,335	55,976	58,271
Production volume	1,282,000	1,525,000	1,674,000	1,674,000	1,905,000

Source: Internal documents obtained from Hyundai in 2013.

Table 4: Composition of white-collar office job at the Ulsan plant as of 2013 (person, %).

		Clerk (5th grade)	Clerk (4th grade)	Deputy Section Chief	Section Chief	Deputy Head of Department	Head of Department	Total
Production engineers	Production technology	5	288	272	222	199	73	1049 (27.8)
	Production	11	133	164	296	218	81	885 (23.5)
	Maintenance	2	25	31	35	21	8	120 (3.2)
	Quality management	0	78	151	118	55	13	404 (10.7)
	Subtotal	18	524	618	671	493	175	2458 (65.3)
Indirect personnel		16	258	260	384	281	110	1309 (34.7)
Total		34	782	878	1055	774	285	3767 (100.0)

Source: Internal documents obtained from Hyundai.

Table 5: Education and training of newly recruited engineers in Hyundai.

Types	Contents
Off-the-job training education for the Hyundai Motor Group (two weeks)	History, current status and core values
Off-the-job training education for Hyundai (three weeks)	History, current status, business and brand strategies, automotive basic knowledge, value chains, and so on

Source: Interview (2013).

Table 6: Education and training of incumbent engineers in Hyundai.

Types		Contents
Promotion candidates	Clerk (4th-year)	Automotive structural engineering – 11 h (online)
	Deputy Section Chief (4th-year)	Labour laws – 10 h (online)
Engineers on the promotion list (Section Chief; Deputy Head of Department; and Head of Department)		Consecutive job training in three modules (work, people and business) provided by Hyundai Motor Group – 3 days
Section Chief; Deputy Head of Department; and Head of Department (2nd–5th-year)		Supplementary course for upgrading personal capacity	Vision presentation and signposting, performance management, leadership training and decision-making – three days

Source: Interview (2013).

Table 7: Striking characteristics in the organisational culture of Hyundai.

	Frequency	Per cent (%)
Achievement of project goals	104	55.9
Work autonomy	20	10.8
Solidarity among colleagues	35	18.8
Rational decision making	9	4.8
Efficient management	17	9.1
Others	1	0.5
Total	186	100.0

Source: Survey results from Hyundai engineers (2013).

Table 8: Organisational units in which Hyundai engineers feel a sense of belonging.

	Frequency	Per cent (%)
Team	104	54.5
Working group	50	26.2
Job category	13	6.8
Company	24	12.6
Total	191	100.0

Source: Survey results from Hyundai engineers (2013).

Table 9: The most appreciated core values of Hyundai.

	Frequency	Per cent (%)
Customer	29	15.2
Challenge	26	13.6
Collaboration	107	56.0
People	25	13.1
Globality	4	2.1

Source: Survey results from Hyundai engineers (2013).

Table 10: Application range of knowledge or technology acquired from Hyundai.

Application range	Frequency	Per cent (%)
Useful only in the current company	12	6.3
Useful in affiliate companies of the same conglomerate	20	10.5
Useful for all automakers	98	51.3
Useful in the same job that is unrelated to the auto industry	34	17.8
Useful in any industry or in any job	24	12.6
No specific knowledge or technology	3	1.6
Total	191	100.0

Source: Survey results obtained from Hyundai engineers (2013).

Table 11: Personnel appointment to other departments (including overseas plants).

	Frequency	Per cent (%)
None	101	58.7
Dispatch	20	11.6
Transference	51	29.7
Total	172	100.0

Source: Survey results from Hyundai engineers (2013).

Table 12: Terms of personnel appointment to other departments (including overseas plants).

	Frequency	Per cent (%)
1 year less or below	15	22.1
Over 1 year–5 years or below	22	32.3
Over 5 years	31	45.6
Total	68	100.0

Source: Survey results from Hyundai engineers (2013).

Table 13: General versus specific skills: Transferability versus substantive contents.

		Economic definition
		General = portable	Specific = not portable
Substantive definition	General = broad		Hyundai engineers
	Specific = narrow

Source: Adapted from Streeck (2012, p. 334).

Table 14: Management performance of major carmakers (as of March 2013, billion $).

Company	Sales	Profits	Market value
VW Group	254.0	28.6	94.4
Toyota	224.5	3.4	167.2
Renault/Nissan	168.1	6.4	63.7
GM	152.3	6.2	38.5
Daimler	150.8	8.0	64.1
Ford	134.3	5.7	51.8
Hyundai Group	117.0	11.0	61.3
BMW	98.8	6.6	60.0
Honda	96.0	2.6	72.4
Peugeot	73.1	-6.6	3.0

Source: Adapted from http://www.forbes.com/global2000/list/.

Table 15: Promotion requirements for white-collar workers in Hyundai.

Job title	Requirement for promotion
Head of Dept.	–
Deputy Head of Dept.	Evaluation of capacity and performance: 250 points for 5 years (Grade 5)
Section Chief	Evaluation of capacity and performance: 250 points for 5 years (Grade 5)
Deputy Section Chief	Personnel evaluation: Four years (Grade 5)
Clerk	Personnel evaluation: Four years (Grade 5)

Source: Internal documents obtained from Hyundai.

Table 16: A separation between job position and title.

Position (team)	Head of Dept.	Head of Large Dept.	Head of division	Head of HQ
Title	Head of Dept.	Executive	Director of Executive	Vice president, President

Source: Internal documents obtained from Hyundai.

Table 17: Prospects for the promotion of Hyundai engineers (%).

	Deputy section chief or below	Section chief or above	Total
Very low	5 (5.4)	6 (6.3)	11 (5.8)
Low	16 (17.2)	37 (38.5)	53 (28.0)
Moderate	38 (40.9)	28 (29.2)	66 (34.9)
High	31 (33.3)	25 (26.0)	56 (29.6)
Very high	3 (3.2)	0 (0.0)	3 (1.6)
Total	93 (100.0)	96 (100.0)	189 (100.0)

Source: Survey results from Hyundai engineers (2013).

Table 18: Annual salary system of Hyundai (1000 won).

		Results of performance evaluation					Note
		S	A	B	C	D
Base-up pay	Basic pay	4500^a	3600	3000	2100	0	Living guaranteed
	Capacity pay	675 (15% of this year’s basic pay)	432 (12% of this year’s basic pay)	300 (10% of this year’s basic pay)	147 (7% of this year’s basic pay)	0	Based on capacity
Performance pay^b		15% of the last year’s basic pay	12% of the last year’s basic pay	10% of the last year’s basic pay	7% of the last year’s basic pay	0	Based on performance

^aThe result corresponds to the weighted value of the base-up pay (3 million won).

^bThe ratio of basic, capacity, and performance pay to the total of individual pay is 60%, 12%, and 28% respectively.

Source: Internal documents obtained from Hyundai.

Table 19: Extent to which Hyundai compensates the performance of an individual in wages.

	Frequency	Per cent (%)
Very low	6	3.2
Low	23	12.1
Moderate	84	44.2
High	70	36.8
Very high	7	3.7
Total	190	100.0

Source: Survey results from Hyundai engineers (2013).

Table 20: Extent to which Hyundai compensates the performance of a team in wages.

	Frequency	Per cent (%)
Very low	9	4.7
Low	38	19.9
Moderate	90	47.1
High	49	25.7
Very high	5	2.6
Total	191	100.0

Source: Survey results of Hyundai engineers, 2013.

Table 21: Extent to which wages and company welfare packages of Hyundai exceed those of its competitors.

	Frequency	Portion (%)
Very low	1	0.5
Low	2	1.0
Moderate	32	16.8
High	119	62.3
Very high	37	19.4
Total	191	100.0

Source: Survey results of Hyundai engineers (2013).

Table 22: Service years of white-collar personnel at the Ulsan plant of Hyundai.

Years of service	Frequency	Per cent (%)
1–10	567	56.1
11–20	190	18.8
21 or above	253	25.0
Total	1010	100.0

Source: Internal documents obtained from Hyundai.

Streeck, W. (2012), ‘Skills and politics: general and specific’, in The Political Economy of Collective Skill Formation, eds. M. Busemeyer and C. Trampusch, Oxford: Oxford University Press, pp. 317–352.

 Google Scholar