Toyota Motor Corp. plans to drastically review the way it calculates annual pay raises in spring, by linking them with personnel evaluations instead of the current across-the-board wage increase, sources said Thursday.
The planned method would eliminate regular pay hikes, and the automaker has already begun negotiations with the labor union, hoping to introduce the method in 2021.
There are roughly two types of regular pay raises: an across-the-board hike based on position and age and a raise based on evaluation, meaning that all employees have benefited. The new calculation method will use performance-based criteria only, reflecting factors such as employees' ability to get things done. This may mean employees with the lowest evaluations do not receive a pay raise.
The labor union will officially decide whether to accept management's proposal at a regular meeting scheduled for Sept. 30.
Toyota hopes its employees will maintain high motivation levels while retaining good people by offering performance-based pay hikes, rather than across-the-board ones.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
