Chinese e-commerce giant JD's recent move to adjust its attendance management system and shorten the lunch break timings of its employees has sparked an online debate, at a time when the company faces mounting challenges from rivals including Alibaba Group and PDD Holdings amid sluggish growth in the domestic e-commerce sector.
Industry experts said Chinese internet companies are stepping up efforts to strengthen internal management to improve operational efficiency, reduce costs and seek new business growth points, to gain an edge amid increasingly fierce competition.
They pointed out, however, that while pursuing commercial interests, these companies should respect and better protect the legitimate rights and interests of employees to achieve sustainable development.
Liu Qiangdong, founder and chairman of JD, said in a video circulating on social media platforms that the company will not tolerate poor performers and will weed them out through various means.
He, however, added that those who perform well would not have to work overtime, while average performers would be spared from being fired if they started working hard.
Liu's words came after JD made a series of adjustments to its employee attendance policy, including shortening the lunch break from two hours to one hour, and banning workers from clocking in for colleagues who are late or absent.
The company also said on Monday that it will gradually raise the salaries of its procurement and sales staff, who will be able to earn a fixed annual salary of 20 months' pay instead of the earlier 16 months' pay from July 1, with no cap on additional bonuses.
This is JD's second salary hike in the past six months as the company said late last year that it will double the pay for procurement and sales staff.
Jiang Han, a senior analyst at market consultancy Pangoal, said JD hopes to enhance operating efficiency and improve business performance by adjusting timekeeping policies for employees, which is a common phenomenon in corporate management.
Liu's remarks highlighted that JD pays attention to staff members' attitudes at work, aiming to stimulate employees' enthusiasm and hardworking spirit, and improve their overall work performance, especially in an increasingly competitive e-commerce landscape, Jiang said.
"Enterprises need to adopt appropriate management strategies in accordance with their own conditions to enhance competitiveness. They should respect the rights and interests of employees, and balance their work and life through reasonable mechanisms and incentives."
He added Chinese e-commerce and internet companies should leverage cutting-edge digital technologies, including big data and artificial intelligence to optimize supply chain management and improve user experience, tap into the immense potential of lower-tier markets, and innovate in business models like social e-commerce and livestreaming e-commerce to seek new growth drivers.
JD reported its revenue reached 260 billion yuan ($35.9 billion) in the first quarter, an increase of 7 percent year-on-year, while non-GAAP (Generally Accepted Accounting Principles) net profit stood at 8.9 billion yuan, up 17.2 percent on a yearly basis.
Guo Tao, deputy head of the China Electronic Commerce Expert Service Center, said, with Chinese internet companies expanding in recent years, some internal management problems have emerged, as some staff members might become less motivated and productive, while the adjustment to the attendance system will help better regulate employee behavior.
Guo said that enterprises need to adjust their strategies to adapt to market changes, adding that large-scale layoffs and excessive extension of work hours may reduce employee satisfaction and impact their work efficiency.
The growth of PDD in the domestic market has outstripped that of competitors including Alibaba and JD. The Chinese online discounter reported that its revenue rose a whopping 131 percent year-on-year to 86.81 billion yuan in the first quarter.
Jack Ma, co-founder of Alibaba, said in April that the company has hacked away at the big company's faults, and returned from an organization that makes decisions slowly to one that is simple and agile, where efficiency and the market come first. He said the innovation is not to pursue higher profits, but to try to survive in an era full of rapid changes.
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