Last month the Asahi News on-line reported the following:
Sony with continuing poor business performance would change its salary system within next year. The structure which salary went up according to age would be abolished, and the contents of the work that was taken charge of would be considered as important. As it aimed at enhancing employee's motivation and to cut down personnel expenses, it might be rejected by the labor union.
The target was the some 14,000 core people in Sony. If it was proposed to the labor union next month and agreed upon, changes would take place in the 2015 fiscal year. It was a radical salary system change since 2004.
The rate of basic wage increase so far was reflected in the capability and the special nature of the business. However, part of the rate had been left to the consideration based on years of service and experience etc.
Under the new system, the portion like "the long working experience principle" would be given up, and changes in structure would be made according to the role and responsibility.
Simultaneously, those employees who were in his twenties would be appointed into the management etc; also the introduction of a personal rating system to encourage motivation from the young would be considered. In Sony the majority employees’ average age went up every year, and now over 40 percent was in the management position. Under the new system, the salary of people at the middle or senior management level was expected to decrease greatly.
Sony had a 128,300 million yen net loss in the 2013 fiscal year, and also expected a 50 billion yen deficit in the current fiscal year. Restructuring through accepting voluntary resignation in the current fiscal year from the non-major sections inside the head office, and reducing overseas sales sub-office was in progress.
Sony’s average annual salary for its core employees had decreased to 8,850,000 yen in 2013 fiscal year from 9,210,000 yen in 2003 fiscal year. Because of the severe financial condition, not only reduction in bonus but also in salary would be in place, the aim was to help getting profits.
The changes effected by Sony are understandable given its huge deficits.