Q64 The Japanese system of seniority-based wages is under threat, isn't it?

A64    Since the mid 1990s, there has been an increase in the number of companies that raise staff wages based on results, and have introduced performance- and results-based pay for certain positions. Currently, it is said that more than 80% of companies have
introduced merit-based systems. However, these are not always successful. The new approaches have been like a bolt from the blue for middle-aged and older staff, who are used to seniority-based wages. Employees are bewildered when they are suddenly

told that they have to deliver results. As standards for evaluating staff individually, based on their results, have not been well established, there is much dissatisfaction among employees. There is the added danger that, if individuals' results become overly important, priorities will shift away from team performance. This can sometimes damage the overall results of an organization. Under merit-based systems, young employees have older employees on their teams bur this can create problems for both team leaders and subordinates. There are also companies that cut salaries during corporate restructuring, after the collapse of the economic bubble, using the introduction of merit-based systems as an excuse.

This has led to many companies reevaluating and modifying their merit-based systems. Companies are now carefully considering the type of work conducted, staff structures, and their corporate cultures-and revising their approaches accordingly.