There are three basic policies for personnel evaluation and compensation at Hitachi Construction Machinery: 1) performance-based personnel compensation, 2) a highly fair, transparent and credible personnel evaluation and compensation system, and 3) personnel compensation based on field-oriented policy. In addition, we comply with labor laws and ordinances, including those wage-related laws and ordinances stipulating provisions on matters such as minimum wage, legal benefits, and overtime. Our basic premise for labor management is the payment of a reasonable salary, bonuses, allowances, other wages, and retirement benefits in accordance with employee wage regulations.
In accordance with these basic policies, we have established a ranking system for management level personnel based on work standards that focuses on responsibilities and the worth and merit of their professional duties. In addition, we have established a grade system that focuses heavily on the exhibition of skills for rank-and-file employees. We conduct evaluations and set compensations based on systems that completely eliminate any suggestion of seniority as a factor in evaluation or compensation.
In addition, heavy focus is placed on achieving mutual understanding through dialogue between superiors and underlings. We are implementing 3C interviews (Career-up, Challenge, and Communication). We believe this is a contributing factor to sparking communication, the training of employees, and the credibility of evaluations.
From FY 2018, we introduced regular one-on-one monthly meetings between supervisors and their subordinates. During the one-on-one meetings, supervisors give subordinates their attention and support to help them solve problems on their own. This increases work performance and supports professional development. Through the meetings, supervisors and subordinates build greater mutual understanding and trust, and grow together. This serves to improve our human resources and strengthen our organization.
Moreover, in determining compensation we comply with the laws of each region. The initial salary for new graduate recruits in Japan (where roughly half of our employees are located) is about 120% of the national weighted average of minimum wages in each region.