As Gree pays 5.5 billion in dividends, it turns out shareholders are doing much better than employees. Average salaries are half as much as those of its competitors. Everyone has a sales quota.
Photo from CFP
By XU Shiqi
When CHEN Lin went to work for the home appliance giant Gree after college, it wasn’t for the money. Other employers paid better, but Gree was well-known and not far from home. When she got her first paycheck, however, she was surprised. It was only 2,000 yuan (US$315) a month. Granted, she was in training, but even an assembly line worker made more.
In fact, each new hire has to spend at least a month in the factory, to learn “how great products are made,” so Chen actually was on the assembly line.
The company's chairwoman DONG Mingzhu, one of China’s best-known female entrepreneurs, takes every opportunity to shout about the great deal Gree’s employees get. There is a homeownership program and cheap cafeteria food, but the wage is not that great.
The average annual salary at Gree is only about 110,000 yuan, compared to 230,000 yuan at Haier. A former technician made 150,000 yuan a year after six years on the job. He now makes twice as much doing exactly the same thing at a different company. Two years into her job, Chen makes 70,000 yuan a year. “In the beginning, I didn’t make much less than my college friends. But the longer I work here, the bigger the gap gets,” she said.
Those who make significant contributions to key projects are rewarded with bonuses of as much as 100,000 yuan, but the money doesn’t hit the account until three years later, by which time the receivers often have already left. “Top performers can easily double their salaries at similar companies,” a senior manager said.
In 2019, Gree started to assign sales quotas to all employees. Everyone, regardless of the actual job, had to sell at least 10,000 yuan of Gree products that year. Dong Mingzhu herself shifted 200 million yuan of appliances in one month. Her more mortal workforce was advised to start peddling dishwashers and air conditioners to their friends.
Many found the practice deeply embarrassing – an air conditioner sold is a friend lost, the saying goes – but sales targets have only gone up, to at least 20,000 yuan per employee per year. During this year’s Spring Festival, employees were ordered to sell at least two space heaters.
In 2018, Dong Mingzhu bet 1 billion yuan with Xiaomi CEO LEI Jun that Gree would reach 200 billion yuan in sales that year. Gree sold just over 200 billion and Dong won the bet. The year-end bonus to employees was paid in Gree gift cards, which expired on December 31 that year. Everyone had to buy a Gree phone before choosing anything else. It was estimated that Gree sold about 100,000 phones in three years by 2019, many customers were employees and distributors. Dong’s gambling buddy Lei Jun sold about 120 million Xiaomi phones in 2015.
During a shareholder meeting in 2020, Dong had nothing much to say when she was asked why Gree was having trouble retaining talent. "Perhaps they don’t like living in Zhuhai? Maybe she expects people to work too hard?" Dong shrugged. But, she said, Gree would offer stock to everyone, as Midea and Haier had long been doing. The first such program was announced in June last, which allowed employees to buy Gree shares at about 50 percent of market value. It was later replaced by a more scaled-back plan, which was met with little enthusiasm. Dong said it was because Gree workers weren’t rich enough to buy stocks.
Employees may be strapped for cash. Shareholders, on the other hand, could hardly be happier. Since it went public in 1996, the company has paid 83.3 billion yuan in dividends, 44 percent of profits. Just this week, it announced another 5.5 billion yuan in dividends, about 70 percent of its H1 2021 profits.
Being a Gree employee pays off in other ways. They pay little for room and board, and Gree has an attractive homeownership program, which sells houses at much lower than market prices to qualified workers. The average housing price of Zhuhai in January was about 25,500 yuan per square meter.
"Let's look at the bright side," Chen Lin said. “The hours are humane. It’s not a stressful job. I have plenty of time to prepare for my postgraduate school application.”
(Chen Lin is a pseudonym.)
