Jinji hyoka 人事評価

The personnel evaluation system that drives pay rises, bonuses and promotion at Japanese companies. Also written jinji kōka, jinji koka, performance appraisal, personnel evaluation.

A typical system has three strands. Performance evaluation measures what the employee achieved, often against targets set under management by objectives. Competency or behaviour evaluation measures how they work, against descriptions for their grade. Attitude evaluation, still found at many traditional employers, looks at qualities such as cooperation, responsibility and diligence. The results are combined into a grade, often on a five-point scale from S to D, and the grade then drives the annual salary increase, the size of the twice-yearly bonus and eligibility for promotion.

Evaluations usually pass through more than one level. The direct manager makes a first assessment, a more senior manager adjusts it, and HR calibrates across departments. Many companies require a set distribution of grades, so that only a fixed share of employees can receive the top rating. The effect is that most people land in the middle grade, and differences in pay between strong and average performers in the same grade stay small.

The 1990s push towards pay for performance, known as seikashugi, exposed the limits of this model. Fujitsu, which introduced a results-based system for managers in 1993, revised it several times after complaints that targets were being set low and teamwork was suffering. Many companies have since moved to blended systems, and more recently to job-based grading with clearer links between role and pay.

What it means for a foreign employer

Sources

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General information for employers, not legal advice. Thresholds and dates are checked against the sources listed and dated above; confirm anything you act on with a Japanese employment lawyer or a licensed labour and social security attorney.