Chairman Shin Dong-bin

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Lotte Group has decided to revamp its human resources (HR) strategy to emphasize expertise and drive business innovation.

According to Lotte Corp. on Tuesday, the conglomerate will sequentially introduce a task-based HR system across select affiliates, including Lotte Shopping Co.’s department store unit and Lotte Wellfood Co., to foster innovation and secure new growth engines.

The company explained that the new HR framework aims to boost productivity through differentiated compensation based on job value and specialization.

The move reflects the conglomerate’s sense of urgency amid worsening business conditions.

With key sectors such as retail and chemicals struggling, Lotte sees an urgent need to move away from a risk-averse and complacent corporate culture.

Since last year, the group has rolled out a series of restructuring measures, including asset sales and voluntary retirement programs.

Lotte Chemical Corp. and Lotte Duty Free are already operating under emergency management systems, while some affiliates have begun accepting applications for voluntary retirement.

Lotte Engineering & Construction Co. and Lotte Rental Co. are also pursuing asset and business unit sales.

Lotte is reportedly planning to gradually expand the task-based pay system groupwide. It believes that long-term transformation requires more than temporary fixes and must be underpinned by a work culture that rewards performance.

Under the new system, each role will be classified on a five-level scale, with Level 5 indicating core positions and Level 1 denoting non-core roles.

A major hurdle for implementation will be obtaining labor union approval.

Samsung Group, for instance, laid the groundwork for a job-based pay structure by streamlining its rank system in 2016 and announcing plans to phase out seniority-based pay in 2021, but failed to launch the system due to internal backlash.

Lotte is reportedly encountering similar resistance from its unions regarding the full-scale adoption of the task-based model.