We will talk about the procedure of rebirth of a hierarchical and stalemate organization in an open and flat manner through ISAO's actual examples! I will mainly talk about the reforms carried out by ISAO in the three years from 2010 to 2012.

I hope that this will be a reference for management who are currently in a hierarchical organization and want to create a more flat organization in the future.

Reform of the salary system that was disjointed

Situation in 2010

ISAO, which has more than 95% of mid-career hires and almost no new graduates joining the company, had an individual salary determined by extending the conditions at the company before they joined. In the organization at the time, salary increases were also decided by the boss's decision. The challenge was to make this a "salary system that the entire company can accept."

Create a Grading System

First, we created a "grading system" that covers everyone from new employees to high-level seniors. We defined the level required for each grade. As a result, we were able to express annual income from 3 million yen to about 13 million yen in 12 grades.

*Currently, it has been changed to 4.1 million yen to 15 million yen for grade 11.

At that time, about 70 employees gathered at a meeting to fit all of them into grades, and about 7 people at the general manager level and above gathered to discuss each of them and decide on the grade over three days.

The new grading system was launched in April 2011.

Tell each person a grade

In the process up to this point, the grading system and the grades of all employees have been decided.

What happened here was that most people's salaries went up and down.

Overall, the salary level has increased slightly, but as an individual, some people have increased their annual income by more than 2 million yen, while others have dropped by more than 2 million yen.

It was easy to tell the person who went up, but the hardest thing was to explain it to the person who went down.

Based on the grade definition decided above, the supervisors carefully explained it to each person.

Some of them were quite upset when they were not convinced, and some of them said they would quit. ISAO was in the midst of a 62-month losing streak at the time, so I think some people gave up on the company at this time.

Smooth out changes with adjusted pay

The explanation is over, but if the annual income suddenly changes by millions of yen, it will greatly affect the lives of each employee, so we applied an adjusted salary to those who go down. This is a method of gradually adjusting the salary to the determined grade over two years.

*Those whose salaries increased due to the new grade immediately adapted.

How did you disclose information?

The grading system (salary system) was born after a lot of pain, but in a situation where it is not "fully open" like the current ISAO, it was not possible to immediately take the step of disclosing the grade (= salary). It also took time to determine whether the grade I decided at the beginning was really correct.

It took three years to discuss with each individual and finally come up with a grade structure that seemed appropriate, and finally five years to publish everyone's grades. (2016)

After that, not only did we disclose all grades, but we also began to publish information on promotions and demotions in a timely manner using the internal communication service "Goalous".

Next time, it's "The great thing that happened by publishing my salary".