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Matsushita Electric Industrial Co. plans to introduce a merit-based pay system for plant workers and sales staff at its Chinese subsidiaries beginning in fiscal 2004.

The move is designed to attract skilled workers by utilizing a merit-based pay system that is stricter than commonly used in Japan. The company said Monday it hopes the move will help it survive in the highly competitive Chinese market.

A company spokeswoman said the merit-based pay system will be applied to about 90 percent of the 45,000 employees at Matsushita’s 53 subsidiaries in China.

The new system is expected to triple the maximum gap between the highest- and lowest-paid workers at the consumer electronics giant.

Employees whose job performances fall within the bottom 5 percent will be asked to leave the company.

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