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The average monthly wage, including overtime pay, stood at 277,003 yen in January, up 0.2 percent from a year earlier, marking the first rise in 25 months, the Health, Labor and Welfare Ministry said Monday in a preliminary report.

The rise reflects the continued increase in overtime, up 5.6 percent to an average of 9.4 hours per month per worker, for the seventh consecutive month of growth, signifying that companies tend to ask some employees to work longer while cutting other jobs, according to ministry officials.

“The increase in overtime hours in itself does not mean that production activity is getting stronger,” a ministry official said.

According to the report based on a survey of companies with at least five workers, overtime hours at manufacturers, the benchmark for business activity, rose a record 19.8 percent to an average 13.3 hours per month in January.

The average nonregular wage, including overtime pay, rose 5.1 percent to 18,195 yen, while the average regular wage fell 0.1 percent to 258,808 yen, down for the 19th straight month.

MHI eyes merit pay

Mitsubishi Heavy Industries Ltd. plans to introduce a new pay system in spring 2004 under which the company will reduce seniority-based wages and instead increase performance-based pay, company officials said Monday.

Mitsubishi Heavy officials said the company will propose the introduction of the new system to the labor union after this spring’s wage negotiations.

Under the current pay system, about half of a worker’s wages are raised every year on the basis of seniority, with the other half depending on worker performance, according to the officials.

By introducing the new system, the company will greatly expand the portion to be decided by performance, the officials said.

Management aims to introduce the new system in April next year after agreeing with the union around October, they said.

The company, however, is not expected to propose fully abolishing the seniority-based pay scale, with one senior official saying, “It is difficult (to scrap the age-indexed scale) because (employees) need some 10 years after entering the company to learn (their work).”

For this spring, the union gave up a demand for a basic pay hike on the premise that seniority-based wages will be raised as usual, since neither management nor the union has put the seniority-based pay scale on the table for negotiation.

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