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An Exploratory Study on the Compensation Systems of Korea's PR Industry Using Agency Theory
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PR회사 보상제도에 대한 탐색적 연구(대리이론 접근을 중심으로)

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Type
Academic journal
Author
SUNOUK YOU (한라대학교) 김장열 (Colorado State Univ.)
Journal
Korean Academic Society For Public Relations PR연구 PR연구 제19권 제1호 KCI Accredited Journals
Published
2015.2
Pages
122 - 161 (40page)
DOI
10.15814/jpr.2015.19.1.122

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An Exploratory Study on the Compensation Systems of Korea's PR Industry Using Agency Theory
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This study reviews the status quo of the commonly practiced compensation systems in Korea’s PR industry. It discusses factors affecting the current systems, and proposes future directions aimed at further developing the industry. Twenty-three PR professionals were interviewed. Payment for PR services is normally assessed by time fees, but the payment methods vary in three types, such as monthly retainer fees, fixed project fees, and ad hoc time fees based on the hours committed per staff level. Fixed minimum fee plus additional fees, and value fees were occasionally practiced. In addition, reflecting the changes in media environment, a commission system for media buying service is practiced by some agencies. Common phenomena which occur include the increasing PR service scopes and volumeswithin the retainer fees, conflicts centered on the time fees between the PR firms and theclients, and the excessive requests of fee discounts and rejection of agency mark-ups. Thisstudy argues that these conflicts are related to the cut-throat competition among PR firms,trend of selecting PR firms by the purchasing department, the unfair culture (‘Gab-Eul’culture) between firms and its clients, as well as changes in the media environment. There isa lack of understanding of the PR industry, which provides sophisticated knowledge-basedservices that clients often fail to acknowledge. In addition, it criticizes the short-term and sporadic relationships between the PR firms andthe clients and the lack of professionalism among the PR firms and practitioners. Howpayment for PR services is made is not only a crucial thesis for the growth and status of the

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