TOKYO - Mitsubishi Motors Corp. is abandoning the seniority system that long has prevailed in Japan in favor of a performance-based one requiring managers to grade one-fifth of their employees less than satisfactory each year.
Part of the system is similar to a controversial performance-evaluation system put in place at Ford Motor Co. under then-President Jacques Nasser. But Mitsubishi officials say they do not expect to see the complaints of age discrimination the Ford system produced.
Mitsubishi will extend its performance-based wage system, already in place for managers, to include all salaried workers effective April 1.
Under the new system, wages of clerical and professional employees no longer will rise steadily with seniority. Instead, wages will be set within certain bands depending on which of four ranks they hold, with the exact amount determined by their performance evaluations.
A roughly similar system will apply to manufacturing employees.
The performance evaluations are weighted half on achievement and half on work behavior and competency. At the same time, the evaluations will produce what Mitsubishi calls "mileage points," which will be used to determine promotions.
Under the rating system, an "S" carries four points, an "A" three points, a "B+" two points, a "B" one point, a "C" zero points, and a "D-" two points.
The points are tallied on a running three-year basis, and a cumulative score of seven points puts an employee in line for a promotion, while a cumulative score of minus four could make an employee subject to demotion.
Mitsubishi officials say supervisors would be expected to give roughly 20 percent of the employees under them an "S" or "A," and another 20 percent either a "C" or "D."
A similar attempt to force supervisors to grade their employees on a curve at Ford led to complaints that the supervisors were giving lower grades to their older employees, especially because those who repeatedly scored poorly would be subject to dismissal, not just demotion.
Critics of the system say supervisors were using the system to eliminate older, higher-paid staff to lower their work unit's wage costs.
But Atsushi Ueba, senior executive officer and corporate general manager of the human resources office, contended that was unlikely to happen at Mitsubishi, in part because of the cultural bias in Japan in favor of older workers.
The new system may trickle over to Mitsubishi's overseas operations. Ueba says Mitsubishi cannot force its subsidiaries and affiliates worldwide to adopt the system but will encourage them to do so.