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monitor country regulations. South Korea ranks 121stout of 140 countries when it comes to labor-market flexibility and 86thfor market efficiency (S. Nathan Park, 2015). Unions are well known in South Korea as it only takes two employees to form a union. This makes it increasingly difficult for employers to recognize a union until issues arise. When issues arise, management will need to be able to address with employees in a certain way based on procedures set by the government.Employees that are not part of a union are typically paid based on merit. Large benefit packages for employees are also customary. These packages include: bonuses, education reimbursement for the employee and all children of the employee’s family and bereavement pay (Hyun, 2014). South Korean companies must also provide a retirement plan or statutory separation pay. Based on the wage and benefit requirements set forth by the government, 2
8-1 Case Study: Acquiring a Company in South KoreaChapman Auto Parts will need to continually review standard wages to determine the company’s cost of offered benefit packages.South Korea’s main wage payment system is known as the Hobong system (Hyun, 2014).With this system wages are calculated on the employee’s job description and years of service.