What: Lotte Department Store will introduce a new HR system that evaluates and promotes employees based on expertise and job responsibilities rather than years of service, marking a major shift in talent management strategy.

Why it is important: By aligning promotions and compensation with job complexity and skill, Lotte is building a more dynamic, future-ready workforce and raising the bar for employee engagement and operational excellence.

Lotte Department Store is set to implement a professional growth-centered HR system, moving away from its traditional seniority-based pay and promotion model. With 95.3% of employees consenting to the change, the new system will reward and promote staff based on job expertise, difficulty, and responsibility, rather than tenure or rank. Promotions will be determined through separate level-up assessments, independent of years of service. This reform is part of a broader group-wide initiative at Lotte to modernize personnel and wage systems, with job analysis processes classifying roles into five grades according to complexity and importance. The shift aims to foster a culture of meritocracy, upskilling, and agility, positioning Lotte as a leader in HR innovation among Asian retailers. By prioritizing expertise and operational excellence, Lotte is building a more dynamic, engaged, and future-ready workforce to meet the demands of a rapidly evolving retail landscape.

IADS Notes:

Lotte Department Store’s shift to a professional growth-centered HR system is part of a broader transformation strategy that emphasizes innovation, agility, and workforce development. As reported by Inside Retail (June 2025), Lotte’s leadership has prioritized structural reorganization and technological advancement to stay competitive in an increasingly digital market, with a focus on customer value and operational excellence. Korea JoongAng Daily (October 2024) highlights Lotte’s significant investment in modernization and technology integration, reflecting the company’s commitment to adapting its business and talent strategies to changing consumer preferences and market dynamics. The Korea Times (October 2024) further underscores Lotte’s ambitious growth targets and international expansion plans, noting the importance of workforce transformation and upskilling in achieving these goals. Collectively, these developments show that Lotte is positioning itself as a leader in HR innovation among Asian retailers, aligning its talent management practices with the demands of a rapidly evolving retail landscape and setting new standards for meritocracy, expertise, and employee engagement.

Lotte Department Store launches expertise-based HR system to boost employee growth