CHAPTER 4 | Systems28

Conveying Messages from Management through Our Personnel Systems
Our style of management, which emphasizes motivation-Management speed is also important. We manage ourdriven employee engagement, recognizes humans as

business based on our unique perspective on time, in which

emotional beings with limits to their rationality. People dothree months everywhere else is one year at the Link andnot work 24/7/365, absorbed in thoughts only of financial

Motivation Group. We therefore set targets and conduct

reward. There are times when people derive greaterevaluations once every three months.

satisfaction from their own growth or from the feeling ofFurthermore, the Group considers compliance to be closely

contributing to customers and others, rather than fromlinked to employee engagement, which is the degree ofmonetary benefit. Therefore, we invest in providing emotional

mutual understanding and affinity between a company and its

as well as financial rewards to our capable employees to raise

employees. If there is a decline in employee engagement—

their motivation to strive for greater achievements.

that is, if a company is facing organizational issues—compliance will also be affected. We have set “management

Emotional Rewards

with integrity” as one of the three goals of our management
policy, and senior management and all employees work

Desire for Contribution

Desire for Recognition

E.g., words of thanks

E.g., awards for performance

Desire for FellowshipE.g., good teamwork

Desire for GrowthE.g., improvement in know-howand techniquecontinually to ensure we live up to this goal.
In these and other ways, our management system reflects
what we think is most important. It is ever-visible in ourpersonnel systems and management policy, and also serves
to raise employee motivation. This is management thatleverages our core technology of Motivation Engineering.
29

CHAPTER 4 | Systems
01 Evaluation and Compensation That
Connect Motivation to Results

Increasing Individual Motivation
by Providing Emotional Rewards

List of Awards

We view humans not as completely driven by economic rationality,
Work

Best Motivation Project
Project that produced outstanding results

but as emotional beings with limits to their rationality. In otherMotivation CreatorTeam member who produced outstanding results

they ultimately make decisions based on feelings and emotions. That iswords, although people think and behave rationally to a certain extent,

Motivation Manager
Manager who produced outstanding results

Individuals

Organizations

why we place importance on providing emotional rewards as well asmonetary rewards in order to enhance the motivation and engagement

Rookie of the YearFirst to third year employees hired as new graduates who
produced outstanding resultsof individuals.

Entry Manager of the Year
Entry manager (recruiter) who had a major influence on
applicants and achieved results

emotional reward. This system recognizes outstanding employees andAdministrator of the Year
Administrator who achieved outstanding results in the role ofimproving employee engagement in his/her organization

We judge and select award winners based on a comprehensive range ofCompany of the Year
Company that produced outstanding results over the courseof a year

We have set up an awards system as an important form ofprojects at the Group General Meeting held once every three months.
factors, including level of performance, degree of growth and change,and influence on others. A certificate with the reasons for the evaluation
and relevant anecdotes is read in front of all employees, and the winnerhas the opportunity to make a speech. This not only helps to spur thefurther growth of the award recipient, but also has a substantial

Number of Awards

positive effect on other employees.
2019

Number of awards

34

2020
40

2021
37

Going forward, we will further enhance employee motivation andengagement by providing appropriate emotional rewards.

30

CHAPTER 4 | Systems
01 Evaluation and Compensation That Connect Motivation to Results
Metrics for Compensation

Three-Month Evaluation CycleThree months for the rest of the world is one year at LMG.
We aim for not merely an accurate evaluation, but a satisfying one.
First month

Middle month

Last month

Goal setting interview

Interim interview

Evaluation interview

Coordination of goals
asked of employee

Progress check andclarification ofcorrective action

Review of employee’sperformance andgrowth

2019

2020

2021

Average monthly salary (thousand yen)

361

366

401

Average yearly salary1 (thousand yen)

4,895

4,871

5,505

Ratio of officers’ compensation to theaverage salary and remuneration2 (%)

4.34.1

4.7

1. Calculated as monthly salary plus bonus paid four times a year.
2. Calculated as total officers’ compensation as ratio of the average total compensation of all
employees.

Metrics for Evaluation
Evaluation Items
Performance
Stretch2019

Degree of contribution to company
results and the organization
Individual growth and change

Average individual
evaluation score32020

2021

Performance

4.7

4.7

4.8

Stretch

4.9

5.0

5.0

Total

9.6

9.7

9.8

3. Performance and stretch are evaluated on a scale of 1 to 9, with 5 being “met expectations.”

Speeding Up the Evaluation and Compensation Cycle
Increases Individual Motivation
The Link and Motivation Group is particular about the speed of management,
and therefore operates an evaluation and compensation cycle that repeats
every three months. Specifically, setting of goals for individuals, decisions onclass promotion, and payment of premium compensation (bonus) all take place
once every three months. This accelerates the growth of individuals andenables satisfying evaluation and compensation. As a result, we believe it
leads to the improved motivation of individuals.
In individual evaluations, we evaluate two axes with equal weightings:
performance, which evaluates contribution to results, and stretch, whichevaluates the individual’s growth. This system plays an important role inaccelerating the growth of individuals.

31CHAPTER 4 | Systems
02 Management with Integrity

Improving Employee Engagement Is Key toPromoting Understanding of Compliance

Compliance Metrics1
2019
Number of grievances filed2

2020

The Link and Motivation Group strives to practice Management with2021

1083Harassment

230

Workplace environment

721

Other132

Number of concluded disciplinary actions

21551655(Type)(Type)

Reprimands/pay cuts

Integrity – i.e., management with no illegality or dishonesty toward
any of its stakeholders, including customers, business partners,employees and shareholders. We are proactively strengthening
compliance and ethics, which are prerequisites for achieving this. As acompany, we abide by laws, regulations, corporate ethics and social
norms, and understand that individual employees must also make efforts
to avoid transgressions.

Suspensions/demotions

Requests for resignation/
disciplinary dismissal200

Our performance is shown on the left. At the Link and Motivation
Group, we believe that our emphasis on employee engagement

300000

100.0

100.0

100.0

helps to strengthen compliance, and see our high performance inthese metrics to be a result of our high level of employee engagement.

Number of unresolved external audit findings3
Percentage of employees who havecompleted training on compliance (%)

1. The number of grievances filed and concluded disciplinary actions covers officers,
employees, part-time staff and ALTs. The training participation rate covers officers,
employees and part-time staff, but excludes ALTs.
2. The number of consultations with the hotline that is open to all employees.
3. The number of findings in external audits by the Labor Standards Inspection Office, etc.
that are still unresolved.

In the future, we will further deepen understanding of compliancethrough our commitment to employee engagement. We are also
focusing on raising employee awareness in various ways, such as
through compliance training in which management conveys its point ofview, as well as through the Six Codes of LM, which summarize ourvarious rules, and regular communication from the Legal Department
on matters relating to compliance.

32Reference
Resignation System

A Company That’s Easy to Leave because Both Parties
Select Each Other, Not a Company That’s Hard to Leave
because of a Mutually Binding Relationship

2019

2020

2021

Turnover rate1 (%)

12.8

9.8

10.0

The relationship between companies and individuals is shifting from a mutually

Voluntary turnover rate (%)

12.6

9.6

9.8

binding relationship to a mutually selective relationship. For that reason,

Voluntary turnover rate(management)2 (%)

0.8

0.60.3instead of a system that makes it hard for individuals to leave because of

Voluntary turnover rate(IT engineers)2 (%)

0.0

seniority-based pay and retirement benefits based on the premise of lifetime
0.3

0.3

1. The annual (12-month period) sum total of the monthly turnover rate(monthly number of leavers ÷ monthly average number of employees)
2. The annual (12-month period) sum total of the monthly turnover rate ofdefined category of employees (monthly number of leavers ÷ monthly
average number of employees)

Main Reasons for Leaving in 2021
Rank

Reason(n=125)

1Work

43.2％

2

Family18.4％

3Treatment/Pay

16.0％

4

Health8.8％5Philosophy

8.8％

6

Company culture

2.4％

7

Retirement age

2.4％

employment, the Link and Motivation Group has built a system in which
individuals can easily leave so that the company and the individual have arelationship of their own choices, and is focusing on coordinating the diverse
work motivation styles of diverse people.
Therefore, we focus not on the overall turnover rate, but on critical turnover(i.e., regrettable turnover). Specifically, we monitor the turnover rates ofWant to grow in a new job,want to start own business,etc.

management and IT engineers, which are especially critical for the company’sbusiness strategy.
We also keep a close watch on reasons for leaving. As shown on the left, themain reasons for leaving in 2021 were work-related, while the percentage ofpeople leaving because of the company culture—which we are particular
Human relations in theworkplace, etc.

about—is small. Many people left for reasons of self-actualization, such as adesire to change jobs to achieve growth on a new stage. We therefore thinkmutual selection has been achieved.

33