Canon to introduce wage system based on duties for all employees


By Staff Writers
Knight Ridder Business News

Published 1/19/2005

Kyodo News International via NewsEdge Corporation : Jan. 18--TOKYO -- Canon Inc. will adopt a wage system determined by what duties employees perform for all of its rank-and-file employees, starting in April, company officials said Tuesday.

The company has already introduced the system for managerial-level employees, whose wages are decided based on their performance, ability and the duties they perform.

Canon will also promote an in-house staff recruitment system under which an employee can apply for a transfer to a section that he or she is eager to work in, they said.

The move is aimed at putting more emphasis on evaluating employees by the level of their duties and their competence, while strengthening the merit-based pay system, the officials said.

Under the wage system that has been applied to managerial-level employees, Canon has five levels of wages for those between section chief-level and division director-level managers.

The company evaluates those in managerial-level jobs after conducting a detailed analysis and assessment of their performance and taking into account other factors such as the number of subordinates they manage.

The company will introduce a similar system for rank-and-file employees. It is currently negotiating details of the system with its labor union, the officials said.

Under the system, however, Canon is unlikely to cut wages even if an employee is demoted, the officials added.

The company replaced a seniority-based regular wage increase system for rank-and-file employees with a merit-oriented system in April 2002. But it has refrained from introducing a duties-based wage system because it can be complicated, the officials said.

Among Japanese companies, Takeda Pharmaceutical Co. introduced such a wage system in June 2003. Department store chain operator Daimaru Inc. also aims to adopt the system in spring 2006.