September 14, 2018 / 11:41 AM / 9 months ago

China Evergrande referral scheme pushes sales, pressures staff

* Employees asked to refer at least 50 potential buyers

* Second scheme in five months draws workers’ complaints

* May be ineffective if buyers not serious candidates - analyst

* Firm’s official says no targets, no punishments in scheme

By Clare Jim

HONG KONG, Sept 14 (Reuters) - China Evergrande, a major property developer, has drawn criticism in social media for pressuring employees to provide names of potential buyers, its second such referral scheme in five months.

Workers targeted by the scheme have been told it is compulsory to refer at least 50 names before the Golden Week holiday in early October, employees told Reuters.

“All Evergranders have exhausted their relationship with their relatives and friends,” said one staff member who declined to be identified because they were not authorised to speak to the media.

The employee told Reuters this campaign came with more pressure because it was launched only a few months after the last one.

Reuters spoke to one person who currently works at Evergrande and two former employees for this article. The latter two quit in the past year, saying the referral programmes were a factor in their decision to leave.

It was not clear how many of its 80,000-plus employees were part of the referral programme.

An Evergrande official told Reuters the company had recently launched an “all-staff sales event, to give incentives to staff to boost sales”.

The official did not give details of the incentives, and said there were no enforced targets for employees.

Analysts said they did not think the scheme pointed to business problems at Evergrande, which they said has a conservative sales target.

But it risks alienating employees and could be ineffective, they said.

“The efficiency of the referral programme may not be very high because the people being referred may not be quality, potential buyers,” said Toni Ho, RHB Securities’ Head of Hong Kong and China Research.

He said the scheme may be part of an effort to trim inventory in lower-tier cities where a potential slowdown in those markets is expected.

Evergrande is not the first Chinese developer to tap into employees’ personal networks to find new buyers.

Country Garden, another big developer, introduced a mandatory referral programme a few years ago but has now made it voluntary, said a company official who declined to be named.

The practice is not prohibited under Chinese law, said Dong Zhengwei, a lawyer at Beijing Liang Gao law firm, which specializes in anti-trust and real estate law.


Nevertheless, there have been a stream of complaints from “Evergranders” on social media sites such as Zhihu.

Buliaochen, a Zhihu user identified as an Evergrande employee, said they “paid in sweat, money and time” for the first campaign and “now another one after a few months is testing our limits once again”.

Buliaochen did not respond to a Reuters’ request for comment.

Aside from the sales event, Evergrande is offering discounts to buyers of up to 11 percent and other incentives to meet its 2018 sales target of 550 billion yuan ($80.5 billion). The target is a 10 percent increase over the completed sales of the previous year.

Sales this year have reached 385 billion yuan by the end of August.

Evergrande’s latest campaign began on Aug. 30 and runs to Oct. 8, the day after the Golden Week holiday ends, according to a company memo posted by an employee on the Zhihu site.

“Each person should refer at least 50 visitors,” the memo said.

Employees were asked to provide the full name, mobile phone number and ID card details of each potential buyer, the current employee and former workers said.

The Evergrande official said the employee sales event did not include enforced targets.

“There are no targets to meet and there’s no punishment on employees,” the official said.

However, the current employee said she was told her referrals would be a factor in her performance appraisal. She said some managers demanded up to 200 names to justify a top performance rating.

Some managers also circulated staff rankings according to their referrals to push workers to perform better, she said.

“If you don’t achieve the target then you don’t expect a pay rise,” the employee said, adding it was “painful to live under such immense pressure”. (Reporting by Clare Jim Additional reporting by Yawen Chen in BEIJING Editing by Darren Schuettler)

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