Naver is pushing to introduce a level-based employee evaluation system as company founder Lee Hae-jin prepares for his return. The move aims to foster internal competition amid the rapidly evolving artificial intelligence (AI) landscape. However, concerns are growing that the new system, which ranks employees based on skills rather than tenure, could accelerate the departure of technical talent and hinder efforts to recruit AI experts from outside.
According to industry sources, Naver recently announced an internal briefing on March 5 to explain the new system, known as the “level system.” Under this framework, employees will be assigned levels based on their skills and expertise, regardless of tenure. Over time, the system is expected to be integrated with performance-based compensation. This means a 20-year veteran could be placed at a lower level than a second-year employee.
Naver first attempted to introduce the system in 2020 but abandoned the plan due to internal resistance. The company stated that the level system is designed to align organizational capabilities with business needs while providing employees with clear growth milestones.
More than a decade ago, Lee voiced frustration over what he saw as a complacent workplace culture at Naver. During an internal lecture, he recalled reading a company forum post in which an employee said they had left Samsung to join Naver for an easier job. “I was completely dumbfounded. I felt devastated,” he said, criticizing employees who treated the company like a casual soccer club.
Lee’s past frustrations over complacency at Naver may help explain the company’s renewed push for the level system, particularly as AI competition intensifies globally. With Naver facing mounting pressure to stay ahead, the decision to push forward with the system underscores the company’s sense of urgency.
Currently, Naver’s internal hierarchy consists of only two categories: general employees and executive-level leaders. The lack of clear promotion tracks has led to criticism that the company lacks internal competition. Some employees hope the level system will serve as an alternative pathway for career progression.
However, HR experts warn that while the system could have benefits, it also poses risks. Increased internal competition might make it harder for Naver to attract external talent. Additionally, with more than 60% of Naver’s workforce engaged in technical roles, there are growing concerns that the system could drive skilled employees to leave.
“Technical staff can quickly move to another company if they feel undervalued or demotivated,” one HR expert said. “Naver engineers are highly regarded in the industry, so competing firms would readily hire them.”
A similar approach at Microsoft under former CEO Steve Ballmer led to widespread dissatisfaction and workforce attrition. From 2000 to 2014, Microsoft adopted a five-tier employee ranking system with quotas for each level. The system fueled intense internal competition, and in a 2011 Glassdoor survey, 60% of Microsoft employees expressed dissatisfaction with Ballmer’s leadership. After Ballmer stepped down in 2014, his successor, Satya Nadella, eliminated the ranking system.
Some industry watchers also worry that Naver’s new system could be used to justify workforce reductions. As major tech firms ramp up AI investments, many have been cutting staff to optimize efficiency. In January, Meta laid off 5% of its workforce to focus on AI, with CEO Mark Zuckerberg emphasizing stricter performance management and quicker terminations for underperforming employees.
