How do Japanese companies divide their money?

At the end of the year again, office workers may start to calculate this year’s year-end bonus. In Japan, there is no such thing as a year-end bonus. Most Japanese companies give bonuses twice a year, which are summer bonuses and winter bonuses. The amount of bonus each time is equivalent to 2 to 3 months of salary.

“Nihon Keizai Shimbun” conducted an industry-wide bonus survey in 2019. The per capita payment for summer bonuses that year was about 839,800 yen, and the per capita payment for winter bonuses was 840,300 yen, a drop of less than one percentage point from 2018. According to the exchange rate at the time, the annual bonus of a Japanese employee is equivalent to RMB 108,000 on average.

This year encountered the new crown pneumonia epidemic, Japan’s economy is growing negatively, and most companies are not having a good life. Therefore, this year’s winter bonus is also unhappy.

The Japan Labor Administration Research Institute conducted a survey of 205 companies listed on the First Section of the Tokyo Stock Exchange. The estimated winter bonus this year is 744,000 yen, which is more than 4,400 yen less than the summer bonus. Many companies that have been severely affected by the epidemic have even discounted their winter awards by 50 to 70%. Air travel companies with the worst performance decline, such as All Nippon Airways and JTB Travel Agency, have simply cancelled their winter awards.

“Generation” and Hidden Class
In Japan, there is no suspense as to how many bonuses an employee can get. Japanese companies will not “open the bonus gap” to stimulate employees to catch up and fight for performance.

This sounds a bit “big pot of rice”, but in the eyes of the Japanese, it is also a kind of “team spirit”; Japan is influenced by Chinese Confucian culture and likes the golden mean, and is unwilling to excel, but it cannot be left behind.

However, in such a team, they are very particular about “ranking seniority”. Japanese people talk about “generation” on many occasions. For example, those who enter a company or school early are “seniors” and those who enter late are “juniors”, so in the workplace , It is often seen that older people call young people “seniors.”

In addition to “generation”, there are many hidden classes in Japanese companies. For example, employees are divided into regular members, contract members, and part-time workers. The regular members and the company sign a contract with no working period, and they default to life-long employment; the contract member’s labor contract period is generally 1 to 3 years, while part-time workers are the kind of work that counts for a day’s wages.

The wage curve is slowly changing

The average amount of retirement pay after university graduates have worked in companies of different sizes for 35 years

Employees who entered the company as fresh graduates and employees who hopped from other companies also have some subtle differences in perception. The latter is called “midway adoption”, which not only suffers from “generational status”, but also has “impure ancestry”. “the meaning of. One of the problems with this culture is that Japanese people don’t like to change jobs casually.

The wages of employees in Japanese companies are generally proportional to the number of years they have served in the company. This system is called the “sequence of merit”, which means that the wages of employees increase every year with the growth of age and working experience in the company.

In most cases, the income of Japanese company employees is directly proportional to their age. For example, a 20-year-old new employee has a monthly salary of 200,000 yen. When he reaches 30, his monthly salary is almost 300,000 yen; a 12-month monthly salary , Plus summer and winter bonuses, the annual salary of a person is about his age multiplied by 16-18, for example, if a person reaches 50 years old, his annual income is about 8-10 million yen. Therefore, Japanese people usually reach the peak of their lifetime income and seniority when they are 50 to 60 years old. This is also the stage when they have the strongest sense of life.

“Retirement Payment” and Wealthy Old Age
Of course, different industries and companies also have income gaps. A recent “Survey of Popular Companies for Employment” in Japan shows that major trading companies such as ITOCHU, Mitsubishi, Sumitomo, and Marubeni are still the first choices of college students for job hunting. In Japanese traditional trading companies, banking and finance, construction and real estate, and other industries, the average income of members of large companies usually exceeds 10 million yen, while the average annual income of employees in all industries in Japan is about 4 million to 5 million yen.

However, high income will also have high pressure and high taxes. The personal income tax of high-income groups in Japan has increased year by year. Taking an annual income of 10 million yen as an example, the personal income tax has increased from 2 million yen in 2002 to 2.74 million yen in 2020; in addition, the higher the income, the longer the overtime work will be. The longer, many companies with annual revenues of more than 10 million yen, employees work more than 60 hours of overtime each month; therefore, on a balanced basis, the income gap in Japanese society is not too large.

In addition to salary, when employees retire or leave, most companies will pay a lump-sum “retirement payment” based on the employees’ years of service for the company. Generally speaking, if they leave midway, the amount of money will be pitiful. ; But if you are employed for life and work until retirement at the age of 60, the retirement pay of most companies will generally be around 20 million yen, which is equivalent to 1.3 million yuan.

Moreover, many employees will be re-employed by companies after retirement, and continue to do their original jobs with half of their salary (4 million to 6 million yen). Coupled with the government’s social security pension, they can still live in money in their later years. Stay slack.

Some time ago, Japanese TV broadcasted a program to survey households in various regions of Japan. In many places, household deposits were more than 10 million yen, and Tokyo ranked first in Japan with more than 20 million yen; see In the past, the Japanese people are still quite rich, but this is also related to the aging of Japanese society, because many people’s savings come from generous retirement pay.

All “operators”
I once asked Professor Sasaki of Tokyo University of Science about the employment of Japanese companies. His point of view is: The labor market in the United States is developed, and companies can easily obtain them from the market whether they are excellent talents or manual workers; If you do this, you will not be able to win in international competition, because even if Japanese companies give the same salary as American companies, world-class talents have no intention of coming to Japan to work; therefore, Japanese companies must start with cheap fresh graduates and cultivate talents for themselves .

The curve of salary and value creativity with age

Therefore, Japanese companies pay attention to OJT (Onthe-job training, on-the-job training), to make employees proficient in the professional skills related to the company’s business, and they must rotate frequently to learn the work skills of the company’s various positions in an all-round way. At the same time, the company will also encourage employees to participate in various nationally recognized skills qualification examinations. The more skills qualification certificates they obtain, the higher their salary will be.

On the contrary, studying MBA in Japan is not very marketable, because few companies need to hire an “airborne soldier” to manage, so it is better to get a skill qualification certificate to get an MBA diploma. This is also the reason why Japan’s MBA education has been underdeveloped. .

Professor Sasaki also showed me a chart with two lines in it, one is the straight line that the annual income increases with age, and the other is the curve that the employees create value for the company. At the stage when fresh graduates are just entering the job, the salary paid by the company is higher than the value created by the employees; when an employee has a certain ability to work, the value he creates for the company is higher than the salary the company pays him; but when he is older After that, the value created began to decline, but the salary became very high.

This kind of annual merit-based wage system is also an implicit investment in the future. Employees work hard when they are young and vigorous, and when they can’t do anything, the company gives back-feeding with generous returns. This system binds the interests of the company and employees together, so that both business owners and employees must consider issues in the long-term. When there is a conflict between short-term interests and continuing operations, they will choose to continue operations without hesitation. Otherwise, the company will become stale and everyone’s pension will be in vain.

Few people in Japan say that the term “entrepreneur” is that the Japanese system of dividing money makes the boundaries between business owners and managers not very clear. Both employers and laborers regard the business as a place to settle down. I think I am responsible for running the business well. Therefore, Japan usually uses the term “operator” instead of “entrepreneur”, and emphasizes that “all employees participate in business, and everyone is an operator.” This is also a saying that Kazuo Inamori often talks about.

Of course, this kind of corporate system also has many obvious drawbacks, such as keeping the organization conservative and rigid, suppressing innovation, etc. Therefore, since the 1990s, Japanese society has been calling for the elimination of lifetime employment and annual merit orders. In the transition to a more international management model, it advocates the free flow and diversity of talents, and pays according to ability, so that value creation and value distribution can be more matched.