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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.
In order to nurture corporate culture where each individual define what he or she should do by setting goals for each half year and voluntarily taking actions to achieve them, We have introduced an objectives management system.
In implementing the system, the “3C interview”, where a senior manager performs for supervisors or lower subordinates that he or she manages, plays the key role. The meaning of “3C” is “Challenge Program” for objectives management, “Career Development Report” to analyze functional accomplishment capabilities of employees and to clarify capability development targets, and “Communication Sheet” in which subordinates ask for advice and pose questions. At the 3C interview, these three tools are used for promoting communication between the senior manager and his or her subordinate and for setting up the yearly targets and career development plan tailored for the subordinate.
In September 2018, the Hitachi Construction Machinery Group implemented the sixth employee awareness survey. This was also the first time our overseas group companies participated in this survey. Owing to this, we received responses from 9,440 people. This survey is an awareness survey conducted via our website for the entire Hitachi Group. The goal is to assess employee awareness to grasp the strengths, weaknesses, and issues at group companies and workplaces, and to implement necessary solutions.
The results of the survey were posted on the group intranet for disclosure to all employees. In addition, issues are shared with related departments and measures are currently under development to make improvements. Specifically, we work to make career paths clear and improve diversity so that every single employee can reach their maximum potential and find satisfaction in their work. At the same time, we use 3C interviews and one-on-one interviews to make evaluations more fair, transparent and understandable, as well as to help recognize and reduce gaps in communication.
Going forward, we plan to continue to implement the survey to grasp the degree of improvement, and to promote further use of these surveys.