ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Companies

MUFG Bank to end uniform wage increases

Traditional seniority-based pay to shift further to merit-based

The labor union for Japan's MUFG Bank wants to break with tradition and start awarding pay raises based on individual performance. (Nikkei montage)

TOKYO -- MUFG Bank's labor and management are expected to agree this spring on a pay system in which raises are based on employees' individual performance evaluations.

The move would mean the union ending the traditional practice of demanding a uniform uplift of the bank's seniority-based pay scale.

In the upcoming shunto "spring offensive" wage negotiation season, Toyota Motor's union is also weighing demanding a pay hike based on the evaluation of individual employees.

The moves at the two leading companies in Japan's financial and auto industries to shift to performance-based pay hikes could impact on the rest of those industries as companies seek to secure tech-savvy talents.

Labor and management at Japanese companies have traditionally negotiated pay raises mainly by shifting seniority-based corporate pay scales up across the board. Banks, in particular, still typically have seniority-based systems in their employment policies, meaning salary increases are linked to workers' ages. But banks now face the need to secure talents in fintech by amply rewarding them, as the technology is increasingly being used in financial services.

For it to be able to reward talented individuals, MUFG aims to introduce a system in which their performance will be reflected in their pay. Starting with this spring's negotiations, the bank's labor union plans to no longer demand an annual upward shift of the pay scale by a percentage point, which it traditionally demanded. It now plans to start demanding raises in total payment amounts combining salary and bonuses. The salary portion would be decided based on the employee's performance under the system.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more