NTT to pay bonuses, retirement money based on performance.
Nippon Telegraph and Telephone Corp. (NTT) plans to start linking bonus and retirement money payments more closely to employee performance in a shift from its seniority-based salary system, company officials said Wednesday.
The telecommunications giant will negotiate with its labor union with an eye to applying the new system from this year's winter bonuses, the officials said.
It is hoped the system will improve employee morale and lead to more efficient operations, they said.
The company in April introduced a system in which roughly a tenth of an employee's salary reflects performance.
NTT is planning to have 75% of retirement money reflect performance and 25% reflect seniority factors such as the number of years an employee has spent at the company. Around 20-30% of bonus salary will reflect performance.
The new salary system is planned for NTT and seven major group companies including NTT East Corp., NTT West Corp., and NTT DoCoMo Inc., and is likely to be adopted at their subsidiaries in the future, the officials said.