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 Goal Setting and Performance Evaluation
At all employee levels, Mitsui Chemicals has systemized annual interviews and meetings to set goals with superiors. 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.
In addition to job goals, we have also introduced a behavior evaluation scheme (global core competency evaluation scheme), whereby employees reflect on their own behaviors based on specific facts to see if their behaviors are aligned with the behavioral guidelines and core values to promote and consolidate them across the organization.
In goal-setting interviews, we set not only performance targets for a single fiscal year but at the same time conduct a "capability/career development interview" to confirm the business tasks the employee would like to experience as well the skills they would like to acquire in the short term (within three years) and long term. Employees are thus able to use their own initiative in setting their own career paths. In addition, the superior reviews the career perspectives, strengths and weaknesses as well as the future goals of their workers and obtain their support.
Mitsui Chemicals has been using its Talent Management System (Success Factors) to manage activities from setting goals to evaluating performance, and this has improved the accuracy and efficiency of HR management. Employee’s performance achievements are updated on the system either by the employees themselves or by the superiors to enable effective management of the employee’s goals. In addition, the employee and their superior are able to use the system to review the employee’s performance history, which enables consistent development of the employee’s talents.
Revising the Personnel System in Line with VISION 2030
As we launched the new long-term business plan of VISION 2030, we partially updated the personnel system for management employees in April 2022. This is one of several items that were extracted in the course of examining the results of the engagement survey and various HR issues to date, as well as other necessary HR measures, in order to realize our ideal state for 2030 as set forth in VISION 2030.
As we move forward with our initiatives to enter new growth areas and transform our business portfolio, it is essential to improve the engagement of our employees and take on ever more challenging tasks. In order to deliver more convincing evaluation results, promote growth, and encourage our employees to actively take on challenges, we have updated our system for managing the performance of each individual.
Specifically, in addition to the management taking the initiative in setting challenging goals and encouraging their direct reports to do the same, we have updated our bonus allocation method for management employees so the allocation amount can be fine-tuned according to the performance of each employee even for the same evaluation category. Unlike the previous method of uniformly allocating bonus compensation to management employees for each evaluation category, the updated method allows each contribution to be rewarded more directly. The bonus calculation method is based on the amount of consolidated core operating profit in addition to individual performance. However, in our efforts to further motivate employees on our journey to achieve the VISION 2030, we are currently working to update the system to reward employees with higher bonus pay when we achieve a higher operating income.
We have also updated the global competencies, which have been used as the criteria for behavioral evaluation. The updated criteria, the leadership competencies, are designed to reflect the key elements that have been discussed as necessary for internal transformation, which are "encouraging employees to take on challenges," "strengthening the ability to execute," "strengthening commitment," and "promoting internal collaboration," thereby promoting behaviors that will drive us to achieve 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, we consider diversity to be an important element, and we will not only understand it, but also provide equal opportunities to speak out and take actions. We have also incorporated the perspective that acknowledging and making the most of diversity will lead to new ideas and results.
Mitsui Chemicals has introduced an annual interview with their superior for employees at all levels to give feedback on their performance assessment. In the interviews, we share not only the results, but also each person's strengths and areas for improvement to promote effective training.
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.
The conducting rate of feedback meetings and Degree of Satisfaction (Mitsui Chemicals Labor Union Registered Members)
|The conducting rate of feedback meetings in the Previous Fiscal Year||97%||94%||93%||95%|
|Degree of Satisfaction over Evaluation Feedback||86%||91%||90%||90%|
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 legally required minimum wages and granting compensatory time off or extra wages for work hours that exceed the prescribed or legal working hours.
We also 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, we disclose the schemes for salary, bonus, evaluation, and pay raise to employees in company rules, handbooks, etc. We ensure a fair and just system that reflects work and performance results, while eliminating seniority-based factors as much as possible.
Global Evaluation Guidelines
In May 2016, we formulated and distributed the Global Evaluation Guidelines, which outline the evaluation schemes, approaches, design, etc., of the Mitsui Chemicals Group, across the group companies. These guidelines consist of two concepts: (1) management by objectives (MBO), (2) global core competencies. These guidelines are enabling 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 Key Talent Management system, and they are used as the basis for the 360-Degree feedback and assessments provided in tandem with the leadership development program.
Improving assessment and training has become an urgent issue in finding and utilizing talented group-wide human resources in the years ahead. We are strengthening our cooperation with Group companies in applying shared Group evaluation indices broadly and fairly.
A global policy on "position management" was implemented in fiscal 2020 to build the foundations for appropriate job placements across the entire Mitsui Chemicals Group.
In 2004, we introduced a job evaluation system to create job descriptions for management employees and provide compensation in accordance with the significance of each job position. At present, there are approximately 18,000 job positions in the Group, of which roughly 40% are overseas-based positions. In order to properly design organizations and duties across the Group that are consistent with the long-term business plan as the Group continues to expand globally, we have defined the basic principles, mechanism, decision-making authority, and processes for the creation and abolition of positions within the Group in the global policy on position management. This policy has allowed us to introduce global job grades. We are currently working to ensure visibility and transparency for job positions within the Group based on standardized job evaluation criteria. By accelerating the appropriate placement of human resources throughout the Group and creating a transnational job relocation mechanism, we are encouraging growth in employee opportunities for self-reliant career development and improvements in employee engagement.
Example of Activity: Global position management in action
Since I had joined Mitsui Chemicals Europe in Germany in 2006, I had the opportunity to see many different countries and cultures. Initially in our original sales territory (Europe, Middle East, Africa), later also in Asia and the Americas. It is always rewarding and inspiring to get to know people with different cultural backgrounds. There is the saying that “travel broadens the mind”, and I can definitely relate to that. I cannot stress enough how much I value the experiences and acquaintances made during all these years.
In February 2022, I joined our office in the US to take on a new challenge in our Compounds Business. The relocation process was fairly easy, thanks to the great support given by the Management and HR teams from America and Europe. Moreover, I am supported by an experienced and ambitious team here in the US and am glad to be part of making Mitsui Chemicals a truly global company.
It is great to see that Mitsui Chemicals is offering such an opportunity to its employees and is providing extensive support during the entire relocation process. I am looking forward to promoting cross-regional activities and projects by bringing in my global experience gained throughout the years.
*Each affiliation is from the time when the article was created.
Policy on Executive Appointments, Dismissal and Compensation at Subsidiaries and Affiliates
In fiscal 2021, we rolled out a new global policy on executive personnel governance for the Mitsui Chemicals Group. This 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. In the face of changes in the Group's business portfolio and our rapidly growing overseas business activities, recruiting, developing, and retaining talents in business management and in specialized fields showing great potential for leadership in our various business operations and regions have become one of its top priority issues. With the application of a group-wide policy, we aim to introduce greater transparency in the appointment and dismissal procedures for executives and to determine compensation levels that are appropriate and synchronized with the business performance of the entire Group. From now on, we will implement consolidated executive compensation management across the entire Group based on this policy.