Company: Haier Group, Qingdao, Shandong, China
Nomination Category: Achievement in Human Resources Administration
Achievement Essay: Text Redacted for Publication
Haier’s cooperate strategy, over the last few years, is to transform from a traditional home appliances manufacturer to an open entrepreneurship platform. The Group has become a platform with thousands of innovative, independent business units, both inside and outside the enterprise.
Haier’s Management model for the Internet Age is the Rendanheyi Model. It is recognized by world-renowned business school, scholars and enterprises.
To break down RenDanHeYi,
Ren refers to employees,
Dan refers to user value, and
Heyi refers to the integration of employees’ value realization and user value creation, and it is a win-win situation.
To create the entrepreneurship platform, based on the Rendanheyi Model, Haier HR Platform disrupted the traditionally bureaucracy and transformed ‘Paid-by-Enterprises’ into ‘Paid-by-Users’.
1. Organization: From Bureaucracy to Open Entrepreneurial Platform
Haier has disrupted the traditional pyramid structure of bureaucracy, and created an open entrepreneurial platform.
① From closed to open. The Platform-based organization is open and borderless. Haier HRs build the ‘Open Human Resource Platform’ to attract world first-rate resources extensively, that is, ‘the world is our HR department’.
② From large-scale controlling organization to independent microenterprises. On the platform built by Haier HR, the leader-member relation has been erased, every single internal employees and social people like the external entrepreneurs, external scientific institutions, resource partners, professors& college students, product users and fans, etc, could come to Haier’s platforms to start a business. Based on the user demands, they can start microenterprises freely under the regulations of Human Resource Platform and become entrepreneurs on Haier’s platform.
③ Haier’s platform offers varying resources to entrepreneurs, like HR entrepreneurship mechanism, HR entrepreneurship training, and shared services (about HR, Finance and Law), VC and all the resources to support the overall operations of microenterprises.
To now, more than 200 customer-facing microenterprises, 3800 service and support micro-enterprises, are starting businesses on the ‘Open Human Resource platform’. Haier hatched successful microenterprises like ‘ThundeRobot’ (case 1) and ‘Trunk Based Logistics Microenterprise’ (case 2) and created more than 1.6 million job opportunities.
2. Remunerations: From ‘Paid-by-Enterprise’ to ’Paid-by-Users’
‘Paid-by-Users’ focuses on user value, as everyone’s payment is correlated with value created for users. Higher value means higher compensation. With the ‘leading target’ as its core and the open platform-based organization, Haier HR utilized mechanisms like Co-investment, Extra Profit Sharing, Microenterprises Share Incentives, Bet options and etc. All of them are represented in ‘ThundeRobot’ (case 3).
① From employees to partners. With microenterprises as the incentive subject, the traditional employment relationship is transformed into partnership among members and microenterprises.
② The microenterprises have the autonomy of remuneration distribution, deciding and operating. The remuneration is determined by their contribution; it varies with the value created by the individuals instead of being fixed. The intention of bidding for higher goals to get higher salary is motivated greatly.
The change of mechanism also stimulates the potential of employees to create more value for users and themselves. ‘Paid-by-Users’ of Human Resources Platform supports the organizational transformation.
3. Shared HR Services: HR Shard Services Platform
To enhance the employees’ experience, HR Platform built the shared services platform. It improves the standardization of service processes, employees’ satisfaction and working efficiency, and cuts down costs for enterprises. It is well received among employees.
With the above actions, Haier HR Platform improved the satisfactions and happiness of employees in working, thus promoted the Group’s progress performance significantly in all aspects：
In 2016, Haier recorded a global turnover of RMB 201.6 billion yuan and a total profit of RMB 20.3 billion yuan. The profit growth rate is 1.8 times that of revenue. Haier Group’s platform has developed 15 innovation and entrepreneurship sites supporting 108 incubators, VC investment totaling 12 billion RMB .That is the new achievement of Haier model.
1. Haier’s RenDanHeYi Model has been recognized by world renowned business schools, scholars and enterprises;
2. Haier’s entrepreneurial platform disrupted the traditional bureaucracy and created more than 200 customer-facing microenterprises;
3. On the platform built by Haier HR, every single internal employees and social people like the external entrepreneurs could come and start a business;
4. The ‘Paid-by-users’ mechanism is able to stimulate employee’s potential that more value;
5. The construction of HR sharing service platform improves the standardization level of service processes, the satisfaction of employees and the work efficiency;
6. In 2016, Haier achieved a global turnover of RMB 201.6 billion and a total profit of RMB 20.3 billion. The profit growth rate is 1.8 times that of revenue;
7. Haier Group’s platform has developed 15 innovation and entrepreneurship sites supporting 108 incubators, VC investment totaling 12 billion RMB .