Sanyo Electric Co. will introduce a merit pay system in April that will apply to roughly 5,000 of its managerial-level employees, company sources said Wednesday.
The move is an effort to reduce overall personnel costs and raise morale among the company’s managers, they said. Those to whom the new system applies will be required to set particular goals, and their salaries for the next fiscal year will be determined according to the degree to which they meet their targets.
Specifics as to how these goals will be set and how the accomplishments will be reflected in pay are to be hammered out by the end of March, according to the sources. Sanyo introduced a merit pay system for roughly 50 managerial workers beginning in January 1993. Company officials said the system is quickly taking root in Japan, which led them to expand the number of workers participating in it.