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Human Resources Management

Compensation & Benefit

We believe that treating employees based on proper evaluation is an important system that motivates employees, helping to acquire, develop, and retain talents, and significantly impacting the development of the Mitsui Chemicals Group.

Basic Approach to Performance Evaluation and Compensation

At Mitsui Chemicals, performance is evaluated based on the achievement of predetermined job targets and actions, and the results are reflected in the compensation.

We systematically ensure that in setting job goals, individual employees can recognize that achieving their goals will help achieve company-wide goals by rolling out business plans aligned with the Corporate Vision at each workplace, incorporating them into workplace policies, and ensuring that important challenges are reflected in job goals for individual employees. At all employee levels, the Company has systemized annual interviews and meetings to set goals with supervisors.

In the goal-setting meetings, job goals for each fiscal year and behaviors to be strengthened or developed are shared. If the individual makes a request, a “career dialogue” is held with the supervisor during the term to confirm the work they would like to experience in the short term (within three years) and long term, as well as the skills they would like to acquire. This allows employees to proactively think about their own careers, and supervisors to deepen their understanding of their subordinates' career perspectives, strengths, weaknesses, and future goals.

Regarding performance evaluations, feedback interviews on the assessment results are also conducted once a year. During these interviews, supervisors share the results of job goal achievement evaluations and behavioral evaluations, as well as reasons for evaluations, and strengths and areas for improvement based on each individual's characteristics, in order to provide appropriate support for the employee's development. For behavior evaluation, we have introduced the Global Core Competency Assessment, in which supervisors evaluate the behavior of their subordinates and provide feedback after the employees themselves review their own behavior based on specific facts to see if they are taking the actions stipulated in the Action Guidelines and core values. Through these efforts, we aim to instill and establish our Action Guidelines and core values.

 

Mitsui Chemicals has been using its Talent Management System (Workday) to manage activities from setting goals to performance evaluation, and this has improved the accuracy and efficiency of HR management. Using the system, we constantly update goals and achievement status, and refer to past information to ensure effective goal management and consistent skill development for each individual.

Moreover, the Mitsui Chemicals Labor Union conducts a survey on the rate of these feedback meetings among its members and the degree of satisfaction with the feedback. The results of the survey are shared by labor and management, and we are striving to manage the evaluation system appropriately.

Revising the Personnel System in Line with VISION 2030

To realize VISON 2030, we revised our human resource system in April 2022 to improve employee engagement and further encourage growth and proactive challenges. When making the revisions, we used the results of the engagement survey to revise the individual performance management system, including goal setting and evaluation, and to improve the transparency and specificity of evaluations.

Specifically, when setting goals, we stipulated that directors and corporate auditors and general managers should take the initiative in setting transformation goals that were back-cast from VISION 2030 and disclose them to their subordinates for the purpose of collaboration. In order to encourage employees to persevere in pursuit of higher goals without fear of failure, points were awarded for achievements. The transformation goals will be introduced in stages, starting with those in higher positions, with plans to expand them to section managers and lower positions in the future.

In addition, the bonus allocation, which used to be uniform for each evaluation category, has been changed to a system that allows detailed adjustments according to each employee's performance, directly rewarding the contributions of each individual. The bonus calculation method is based on the amount of consolidated operating income before special items in addition to individual performance. However, in order to further motivate employees to achieve the performance goals of VISION 2030, we are revising the system to provide additional payments for high operating income.

We also reviewed the global competencies that have been used as the basis for behavioral assessment. It reflects the “promoting challenges,” “strengthening of execution,” “strengthening of commitment,” and “promoting internal and external collaboration,” which have been discussed as necessary elements for the realization of VISION 2030. In addition, one of the existing core items for the behavioral evaluation of understanding diversity has been updated to incorporate the perspectives of equity and inclusion. As we aim to create innovation and realize VISION 2030, our goal is not only to understand diversity, but also to provide opportunities for people to speak and act fairly, and to encourage people to make use of others with rich individuality, which will lead to new ideas and results. In addition, specific behaviors and levels required for each job grade are newly defined as “Leadership Competencies” and evaluated to promote actions for the realization of VISION 2030.

Complying with the Legal Wage and Establishing Compensation Levels that are Both Attractive and Competitive

As its businesses become more globalized, the Mitsui Chemicals Group ensures compliance with the laws of each country and region as a matter of course with regard to employee compensation, including paying the legally required minimum wages and granting compensatory time off or extra wages for work hours that exceed the prescribed or legal working hours. We then ensure attractive and competitive compensation levels and schemes for the labor market of each country and region. Our basic approach is to set compensation levels in accordance with the positioning of the Company's performance in the market where it competes for human resources. We review and update our compensation levels regularly based on a variety of wage statistics provided by government agencies, compensation databases of external survey institutions, etc.

In fiscal 2022, based on the above approach, we reviewed the compensation levels of Mitsui Chemicals' non-management employees and increased their base salary in April and July. In addition, in fiscal 2023, the compensation system for directors was revised in June, and base increases for non-management and managerial employees were implemented in July.

Furthermore, we operate a fair and equitable system that reflects performance results by eliminating age and seniority factors as much as possible, and disclose the salary, bonus, evaluation, and pay raise systems to employees in our company rules and handbooks.

In fiscal 2023, one of the key themes for the Human Rights Working Group to consider is living wages (i.e., whether employees are paid enough to maintain an adequate standard of living for themselves and their families), which is important in realizing decent work (work that is fulfilling and satisfying to human beings).

Clarification of evaluation and compensation in the group and globally

When acquiring, developing, and retaining excellent human resources across the Group beyond national borders, the Mitsui Chemicals Group has developed the “Group Global Evaluation Guidelines” and “Global Policy on Position Management” to promote the broad and fair application of evaluation indicators standardized within the Group, visualization of positions, and clarification of the compensation process.

Global Evaluation Guidelines

In 2016, we formulated and distributed the Global Evaluation Guidelines, which outline the evaluation schemes, approaches, design, etc., across the group companies. These guidelines consist of two concepts: (1) management by objectives (MBO) and (2) global core competencies. These guidelines enable the HR sections of four regional headquarters (the Americas, Europe, Asia-Pacific and China) to support the development, revision, and operation of evaluation systems for companies in their respective regions.
Specifically, global core competences are used as a shared index within the Mitsui Chemicals Group’s HR management, and they are used as the basis for the 360-Degree feedback and assessments provided in the leadership development program.

Global Position Management

Since 2004, the Mitsui Chemicals has established job descriptions for management employees and introduced a job evaluation system in which employees are treated according to the size of the duties of each position. However, as we expand globally, it is necessary to appropriately design an organization and job descriptions for the entire group that are consistent with our long-term business plan. For this reason, “the Global Policy on Position Management” was rolled out to the Group in fiscal 2020. At present, there are approximately 18,000 job positions in the Group, of which roughly 40% are overseas-based positions. The policy clarifies the basic philosophy, structure, decision-making authority, and processes to create and abolish these positions within the group. Along with this development, we have introduced global job grades. We are currently working to ensure visibility and transparency for job positions within the Group based on standardized job evaluation criteria.

Policy on Executive Appointments, Dismissal and Compensation at Subsidiaries and Affiliates

In fiscal 2021, we rolled out a Global Policy on executive personnel governance for the Mitsui Chemicals Group. This Policy defines (1) the appointment and dismissal of directors and corporate auditors, (2) the criteria for compensation levels and composition, and (3) the process for determining the compensation for over 120 domestic and international consolidated companies. Based on this Group-wide policy, the Mitsui Chemicals Group will implement integrated executive compensation management throughout the Group, ensuring transparency in the appointment and dismissal process and the determination of appropriate compensation linked to the Group's overall performance.