OSAKA -- Sharp will focus on rewarding high-achieving employees and reprimanding non-performers in an operational overhaul under new parent Hon Hai Precision Industry, the Japanese electronics maker's president said Monday.
Tai Jeng-wu, who took over the top spot at Sharp on Aug. 13, outlined his vision of a profitable and efficient company in an address here. The Taiwanese contract manufacturer better known as Foxconn will make sure hardworking staff is compensated and promoted as it reshapes the ailing electronics company in its image, the president said in a message to workers.
Performance-based compensation is common "not just at Hon Hai, but all over the world," Tai said. "Yet it's not particularly widespread in Japan."
Rumors that Sharp could cut around 7,000 jobs have been circulating since before the company officially joined the Foxconn group Aug. 12. Tai was careful Monday to say the company is undergoing an optimization in staffing, rather than a workforce reduction. But the president also said employees who simply sit around collecting a paycheck will be dealt with appropriately. "If possible, I would like to keep current employees in place, but we'll be forced to make cuts if there is no improvement," he said. Although there is no specific target for the trimming, restructuring moves and the emphasis on results are expected to thin the herd on their own.
A new office under the president will oversee the creation of a system granting employees compensation and promotions purely on merit, disregarding such factors as age, sex and nationality. Ordinary employees will see their positions clearly ranked within the company. Underperforming managers and other supervisors will be demoted. The president's office will have veto power over nearly all promotions and personnel changes, according to Tai.
This arrangement is seen paving the way for a broader structural overhaul. Sharp will be incorporated into Foxconn as a business unit, with the parent supporting processes such as parts procurement and production. Greater attention will also be given to costs, spurring efforts to put resources to more efficient use and let go of unnecessary facilities. Such reforms aim to bring the company into the black as soon as possible.
Sources within Sharp report the company's acquisition by Foxconn has accelerated the pace of business. But others say things are moving too quickly, making it difficult to keep up with reforms and respond appropriately. When asked whether Japanese employees might be feeling uneasy, Tai called concerns "normal," adding that "without pressure, Sharp's restructuring will never succeed."
"I'm uneasy, too -- but if we don't feel that unease, we cannot grow," he said.
Tai will retain his role as Foxconn's second-in-command while at Sharp's helm, splitting his time between Japan and Taiwan. The success of his bold reform plan rests largely on whether the new president can get employees and executives to follow along.