In this year's shunto spring wage negotiations, moves to break up the system of lock-step wage increases based on seniority are spreading. Will this be a major turning point?
Labor-management negotiations among large companies are getting into full swing.
Many labor unions have insisted on pay-scale increases, which raise the level of base pay for all employees. In recent years, however, there have been calls even from the union side for a system in which those who achieve good results, regardless of age or other such factors, receive more pay.
The competition for human resources is intensifying due to a shortage of labor. If companies don't change their lock-step mentality, they won't be able to retain excellent employees. It is understandable that both labor and management are emphasizing this sense of crisis.
Corporate earnings in the short term are expected to be severe due to the new coronavirus outbreak. Amid this situation, will companies be able to come up with wage hike measures that will motivate employees? The management side should devise measures that are not bound by precedents in preparation for the centralized response date of March 11.
The Toyota Motor Corp. union has demanded a total monthly pay increase of 10,100 yen on average, including pay-scale hikes and regular pay raises. What is noteworthy is that the union has called for a policy in which pay-scale hikes are further differentiated depending on performance.
Automakers are facing a once-in-a-century period of reform in the development of automatic driving and responses to environmental regulations. Toyota's move is apparently aimed at invigorating the organization by rewarding hard-working employees, even those who are young, through their salary.
The outcome of labor-management negotiations at Toyota, which has long taken the lead in setting the rate of the shunto hikes, will affect negotiations at other companies. The union of Honda Motor Co. also changed its policy to reflect evaluations in its wage increase demand.
Transparency required
In order for the merit system to take root, it is a prerequisite that personnel evaluations must be conducted fairly. It would be a problem if performance evaluations were influenced by compatibility with superiors. It is essential to devise ways to ensure the appropriateness and transparency of judgments.
Understandably, there is a trend toward reducing the seniority system, in which wage increases are based on age and length of service, as a factor. However, if companies were to hold down the wages of middle-age and older workers unduly, these workers' frustration would grow. Companies should thoughtfully explain to their employees.
The move toward a break from the lock-step mentality will eventually apply to industry practices.
Major electric machinery companies have hitherto maintained the same level of wage increases. Each company's union uniformly demanded a pay-scale hike of 3,000 yen to the monthly salary this time. However, differences in the companies' business content and financial results have widened. It is unclear how long this lock-step mentality will last.
Create an environment where employees can easily have and raise children or care for parents. In labor-management negotiations, efforts should also be made on these points. It is also hoped that disparities between regular workers and non-regular workers, who account for about 40% of the workforce, will be corrected.
-- This article appeared in the print version of The Yomiuri Shimbun on March 2, 2020.
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