A 25 year old Sony employee, with a postgraduate degree in mechanical engineering and skilled in multiple programming languages was promoted to job grade I3 within three months of starting at the company. This meant his salary was increased by Y50,000 (US$460) a month and he can also qualify for higher bonuses. This would not have been possible until at least two years had been completed at the company previously.
This new system was introduced by Sony this year, whereby ability and work effectiveness are assessed and a grade from I1 to I9 is assigned. Sony had already restructured its management level from 2015. 40% of all employees were in management grades, due to the egalitarian, seniority based promotion system, but many were “name only” managers. The “name only” managers were all demoted to non-management grades.
The mura mentality
Sony has to compete with GAFA (Google, Apple, Facebook and Amazon) for top talent, so the old Japanese mura (village) mentality where everyone is a member of the village, and treated equally regardless of their work content and where they work, with lifetime employment and seniority based promotion was not sufficiently attractive.
Now those who wish to join Sony can choose from 70 possible entry routes – those joining from university can choose 3 from the 70. It is not all controlled by HR as in the past – individual business executives are also involved in the recruitment process. They proceed straight to the job they have applied for, rather than go through a general training period.
But not firing
The Nikkei wonders how this will impact firing, not just hiring. With the Japanese mura system, the ability to dismiss employees is severely restricted. Sony has said it can demote or refuse to promote people, but it will not fire them. Keidanren, the Japanese employers’ association, says that while it is generally in favour of HR systems becoming more focused on role content and performance, it thinks the Japanese approach of reassigning people to other jobs if they are not performing in their current role is still preferable.
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