Nippon Telegraph and Telephone Corp. plans to link bonus and retirement payments more closely with employee performance, company officials said Wednesday.
To smooth the shift from its seniority-based salary system, the telecommunications giant will negotiate with its labor union. It hopes to implement the system in time for this year’s winter bonuses, the officials said.
NTT hopes the system will improve employee morale and improve efficiency, they said.
In April, NTT introduced a system in which roughly 10 percent of an employee’s salary reflects his or her performance.
NTT is planning to establish a system in which 75 percent of retirement payments are performance-related and 25 percent reflect seniority factors.
Around 20 percent to 30 percent of bonus payments will be related to performance under the scheme.
The new system would affect employees at NTT and seven major group companies, including NTT East Corp., NTT West Corp., and NTT DoCoMo Inc.
The system is likely to be adopted at their subsidiaries in the future, the officials said.
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