BOSS Zhipin to Implement New Merit Pay System
Chinese online recruitment platform BOSS Zhipin will implement an internal “361” merit pay appraisal system, and the bottom 10% of employees may be fired, Sina Tech reported on August 4. BOSS Zhipin has not commented on the report.
Zhao Peng, the CEO of BOSS Zhipin, announced this system in an internal email. Specifically, the merit pay measurement is carried out twice a year, and employees will be divided into three groups: top 30%, the middle 60% and the bottom 10%. This generally means that the bottom 10% of employees may be fired.
A BOSS Zhipin employee said that the company has started cutting unqualified staff and some departments are conducting new recruitment.
However, it remains to be confirmed whether the 10% ratio will be expanded. A user who was certified as a former BOSS Zhipin employee said on job information sharing platform Maimai that he or she was responsible for operations, with merit pay level of B+, which means that staff who don’t belong to the bottom 10% may also be laid off.
The “361” merit pay appraisal system has been faced with great controversy. On the one hand, the system can stimulate the enthusiasm of employees and improve the personnel efficiency of enterprises. On the other hand, this system deviates from the relevant provisions of China’s Labor Contract Law.
A document published by the Supreme People’s Court in November 2016 clearly states that if an employer unilaterally terminates the labor contract by means of “elimination” or “competition for posts” within the terms of the labor contract, the employee can request the employer to continue to perform the labor contract or pay compensation on the grounds of illegal action.
BOSS Zhipin has experienced a dilemma for nearly one year. Since July 2021, due to China’s network security review, it has stopped registering new users, which has greatly reduced the number of monthly active users.
The number of monthly active users stayed around 25 million after the second quarter of 2021. At the financial report meeting in the first quarter of this year, BOSS Zhipin revealed that as of May 31, the number of new users who failed to register had reached 45 million, an increase of 15 million compared with the number announced in the previous quarter.
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BOSS Zhipin’s financial report for the first quarter of this year is also mixed. It achieved revenue of 1.138 billion yuan ($168 million) in the first quarter of this year, a year-on-year increase of 44.3%, mainly due to the increase in the number of paying enterprises. However, its net loss was 12 million yuan, compared with the net profit of 233 million yuan in the previous quarter.
Although BOSS Zhipin announced the resumption of new user registration at the end of June this year, it will still take time to fully recover.