“The Essence of Personnel Evaluation — Facing Each Person One-on-One”

This time, Inamori* spoke about the above motto in Kyocera philosophy.

What Inamori said is quoted with “”.

 

“In a company, the question of how to inspire people and how to evaluate them fairly is an eternal challenge.

The most difficult task of all is to evaluate one’s subordinates. Promoting someone—or, conversely, demoting someone because their performance is poor—is extraordinarily hard. It is difficult not only because of your direct relationship with that individual, but because such decisions have a profound impact on everyone around them.

If you say, ‘You are excellent, so I am promoting you,’ that person may be pleased. But those who watch from the sidelines may think, ‘Why is that guy getting promoted when I’m not?’—and their motivation may drop instead. In other words, it does not necessarily encourage everyone.

On the other hand, if you demote someone, then others begin to fear, ‘Maybe I’ll be next,’ and that fear also fails to motivate them. There are many such dynamics in play.

Right now, you want to create a universal rule for handling these situations. That is why you are asking me—hoping that if such a rule exists, you can rely on it and free yourself from responsibility. It would make things easier for you.

However, management is not that simple.

In the end, the president must devote their heart and soul to understanding each of the several hundred employees. To do so, the president must step into the organization, attend every meeting, and observe everything firsthand.”

(Quoted from the Inamori Digital Library.)

 

Here, Inamori explains the essence of personnel evaluation.

I believe the key points are as follows:

 

 

 

I will now explain each point in greater depth.

 

１Establish clear rules

Inamori’s Words

“I, too, once thought that if only we could establish some rules, personnel evaluation would become easier. So I tried various approaches over the years, but none of them worked well. In the end, there is nothing more difficult than evaluating people.

Even in a company with only twenty or thirty employees, assessing individuals—deciding whether to raise someone’s salary, or in rare cases to lower it—is an extremely challenging task. It is so difficult and uncomfortable that I kept wondering whether there might be a way to create rules that would allow us to evaluate people objectively.”

(Quoted from the Inamori Digital Library.)

My Comment

As Inamori points out, evaluation may indeed be inherently difficult.

Even so, our company is working to establish certain rules.

We will formally review each person’s evaluation after a set period.

We will list the skills we want each employee to achieve in accordance with their role.

We will set a minimum evaluation line that no one will fall below.

At the same time, the rules must not become overly complicated.

What we need are two or three solid, foundational principles.

For now, we will focus on establishing—and adhering to—those essentials.

 

２ Read human psychology and discern his/her essential characteristics

Inamori’s Words

“Ultimately, even in good times, you must maintain a reasonable level of restraint, and in bad times, you must endure the hardship while continuing to care for your employees. When business is good, you can pay more, but when business is bad, that does not mean you can simply stop paying. Human beings—including employees—are creatures of emotion. A leader must be able to understand how those emotions shift and fluctuate.

This ability to read people is essential.

A business leader must be an excellent psychologist. If you cannot foresee how people’s minds will move, you are not truly qualified to be a manager.”

(Quoted from the Inamori Digital Library.)

My Comment

As Inamori emphasizes, reading the psychology of each person is absolutely vital.

At our company, we invest a great deal of energy in understanding our staff—what they care about, what anxieties they carry, and what mindset they need in order to grow.

It is crucial to discern the essence of the person in front of you, and to grow together with them.

 

３ Understand the “market value” within the area

Inamori’s Words

“With respect to the question of what level of salaries and bonuses should be provided, we gather a variety of data from companies in the same industry and examine the general market level. For example: ‘For a university graduate with a certain number of years of experience, the industry average is roughly this much,’ or ‘For a high-school graduate of this age with this many years of service, the average wage is around this level.’

You can have your labor-management staff collect such information. Go to different places, gather the materials, and review all of them carefully. The same applies to bonuses—investigate how much other companies offer.

The idea is that our company should not fall behind competitors; rather, we should offer treatment that is slightly better. In other words, compensation should not be arbitrarily raised or lowered simply based on short-term business performance. Instead, we should base our decisions on the prevailing market standards.”

(Quoted from the Inamori Digital Library.)

My Comment

Understanding market standards is essential.

At our company, we first want our staff to become conscious of this concept—

to learn to grasp the market level themselves.

I believe that such an effort helps both staff and management grow together.

Pricing is a core element of management, and I hope our staff will take an active role in this aspect of our operations.

 

As I write this, I find myself reflecting on my own past.

When I was a salaried employee, I was not always as conscientious as I should have been.

There were times when dissatisfaction with systems and structures made my attitude careless and improper.

Even so, the company, my supervisors, and the people around me did not lower their evaluation of me.

For that, I feel deep regret—and deep gratitude.

 

Perhaps Inamori was teaching us something like this:

“You can create systems and rules.

But once those rules are in place, managers have a tendency to rely on them,

and stop looking seriously at each individual employee.

Such an attitude can be fatal in management.”

I intend to take this lesson to heart.

 

 

 

 

* Mr. Kazuo Inamori, the founder of Kyocera, KDDI (one of the top tele communication companies in Japan) and the top of revitalization project of JAL. As a well-known Japanese entrepreneur, he has been sharing his experiences and management know-how with managements of small to middle companies in Japan.

 

Further queries or doubts, please email to ytomizuka@abrilsjp.com

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