Developing and Promoting Human Resources from a Global Perspective The Ajinomoto Group Human Resources Principles Developing and Promoting Human Resou

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1 Developing and Promoting Human Resources from a Global Perspective The Ajinomoto Group Human Resources Principles Developing and Promoting Human Resources from a Global Perspective The Ajinomoto Group is working toward building a framework for developing and promoting diverse employees regardless of nationality or career level. In fiscal 2010, the Ajinomoto Group introduced a leadership training program for each region where it operates outside of Japan for potential front-line The leadership training program Participants in a cross-cultural managers, with the initial goal of identifying and is conducted in regions outside training program nurturing candidates for next-generation executives. Japan Participants in the program were able to develop their expertise by recognizing the core competencies and skills required of leaders, and putting them into practice during work duties. The Ajinomoto Group also broadened the scope of its cross-cultural training with the objective of promoting the understanding of different cultures to leverage employee diversity across the entire group. The training was previously intended for international employees from overseas group companies and their coworkers in Japan, but now also targets Japanese employees engaged in overseas operations and participants in the regional leadership training program. Human Resources Training System Human resources training in the Ajinomoto Group is designed to enable employees to successfully carry out their respective duties and meet the expectations defined in the Ajinomoto Group Way, a set of values, fundamental thinking and attitudes shared throughout the group: Create New Value; Pioneer Spirit; Social Contribution; and Value People. A number of in-house systems, such as career support systems, are integrally linked Leadership training with various training programs on the basis of on-the-job training in the workplace, thereby providing individual employees with training tailored to his or her level of skills development. In fiscal 2010, the group continued to implement various training programs for upper management, and newly introduced a leadership training program in cooperation with regional headquarters outside of Japan and training programs established by group companies in Japan. In addition, the Ajinomoto Group began training programs both in and outside Japan intended to promote shared values as expressed in the Ajinomoto Group Way. From the standpoint of leading a global group of companies, the Ajinomoto Group will continue to develop human resources that can succeed in achieving further business growth going forward. 68

2 Compensation for Inventions Ajinomoto Co., Inc. and its group companies strive to contribute to human health globally by continually creating unique value that benefits customers. The company is working to protect and effectively utilize intellectual property rights, including original technologies, content, and brands, in order to strengthen its technological expertise. The company pays compensation for patent applications when employee inventions are transferred to the company, and for patent registrations when inventions are registered. It also pays performance-based compensation when inventions are implemented by the company. Awards System for Recognizing Achievements With the aim to provide a comprehensive framework for raising employee motivation and morale, the Ajinomoto Group awards employees who have made noteworthy achievements as well as employees who have demonstrated exemplary behavior. In fiscal 2010, the group formally recognized 13 groups of employees with company-wide achievement awards. The recipients were selected based on achievements in a broad range of areas such as cost reduction, product quality, sales results and outstanding research. Recipients of the group-wide achievement awards The group also recognized long-service employees with awards for 25 years and 15 years of continuous employment to show its gratitude, and took the opportunity to call on all employees to work together and implement the Ajinomoto Group Way in order to advance over the next 100 years. 69

3 Improving Work-Life Balance Implementing the Ajinomoto Group Work-Life Balance Vision Ajinomoto Co., Inc. is carrying out various initiatives aimed at realizing the goals of its Work-Life Balance Vision. The company has been focusing on systematically improving its programs related to work-life balance, and introduced a re-employment system for retired and former employees in fiscal In fiscal 2010, the company began offering partial salary payment for the first 15 days for employees taking parenting leave. Male employees have taken advantage of the change since its implementation, with 11 taking leave during the fiscal year. The Work-Life Balance Kick-off seminar With the goal to raise employee awareness of its programs related to work-life balance, Ajinomoto Co., Inc. invited external experts and held Work-Life Balance Kick-off seminars in fiscal 2010 at the company's head office, research divisions, and offices around Japan including branch offices and factories. The seminars were followed by workplace workshops designed to deepen employees' understanding of work-life balance and strengthen related programs at work sites. Employees attending the seminars expressed that they had gained a full appreciation of the true meaning of work-life balance and sought to explore the subject in more detail with coworkers. Looking forward, Ajinomoto Co., Inc. intends to steadily expand measures to promote work-life balance. The company conducts a corporate culture survey every two years in order to accurately assess employee awareness of related programs and gain a perspective of the workplace climate. Based on this information, management is enhancing and expanding initiatives that can lead to the mutual growth and development of both employees and the company. The Ajinomoto Group Work-Life Balance Vision 70

4 Building Supportive Workplaces The Ajinomoto Group is promoting various initiatives to create supportive workplaces that foster job satisfaction based on findings from the Work-Life Balance Improvement Project, a joint labor and management initiative. The project contributes to the realization of productive lives for all employees, the prosperity of society through personal growth, and the long-term development of the company. The Kurumin Mark certification for companies complying with childcare support standards was acquired for a second term on October 27, It acknowledges the target achievements of the company's 'action plan based on the Act on Advancement of Measures to Support Raising Next-Generation Children, and actions taken along other guidelines. Ajinomoto Co., Inc. is undertaking preparations to acquire Kurumin Mark certification for the new action plan starting in fiscal National policies and Ajinomoto Co., Inc. initiatives related to work-life balance Japanese Government Policies Ajinomoto Co., Inc. Initiatives 1990 and earlier Introduced financial assistance to cover babysitter costs Implementation of the Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave 1991 Introduced the Family Care Leave System 1992 Implemented the Parenting Leave System and the Part-Time Parenting and Work System Introduced the Leave System for Volunteer Activities 2000 Introduced the Ajinomoto Certified Professional System for managers Revision of the Labor Standards Act Eased requirements for work projects using discretionary labor Extended fixed-term employment contract period 2003 Implemented major revisions to childcare programs 2004 Introduced morning sickness Established a parental leave leave for up to 10 days support program Extended the Part-Time Issued a handbook on Parenting and Work System childcare period to 4 years, until one's Established a career path child reaches the 4th grade of support program for elementary school employees Eased conditions for obtaining accumulated paid leave Established the Childcare Leave System to care for sick children Revised the Rejuvenation Leave System 71

5 Japanese Government Policies Revision of the Act on the Welfare of Workers Who Take Care of Children or Other Family Members Including Child Care and Family Care Leave Enforcement of the Act on Advancement of Measures to Support Raising Next-Generation Children Revision of the Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment Ajinomoto Co., Inc. Initiatives Established an action plan June 2005 to May 2007 to acquire the Kurumin Mark certification, which promotes the fostering of the next-generation of children Introduced the Part-Time Expanded the Ajinomoto Family Care and Work Certified Professional System System to include general Acquired the Kurumin Mark positions 2007 certification Established an action plan Implemented measures to shorten work hours for for June 2007 to May 2009 shift workers and field for new Kurumin Mark sales representatives certification Revised rules for childcare Increased the number of and family care to broaden paternity leave days for eligibility newborn care from 2 to 5 Revised rules for company Launched the Work-Life housing subsidies for the Balance Improvement families of employees Project and formulated the 2008 posted away from home Ajinomoto Group Work-Life Set annual average Balance Vision employee working hours to 2,000 hours as a guideline Established an action plan Introduced the for June 2009 to May 2011 Re-employment System for new Kurumin Mark 2009 certification Acquired Kurumin Mark certification for the second period Revision of the Labor Began providing partial Increased the maximum Standards Act salary payment under the number of days of Extra wage rate of 50% or Parenting Leave System accumulated paid leave more for overtime beyond a Further extended the Broadened permissible 60 hour work week Part-Time Parenting and reasons for taking Revision of the Act on the 2010 Work System period until childcare leave or using Welfare of Workers Who one's child reaches the 4th accumulated paid holidays Take Care of Children or grade of elementary school Other Family Members Increased the number of Including Child Care and days of half-day paid leave Family Care Leave 72

6 Employee usage of the Ajinomoto Group programs related to work-life balance in fiscal 2010 Program or initiative Parenting Leave Part-Time Parenting and Work Childcare Leave Family Care Leave Part-Time Family Care and Work Accumulated Paid Leave Rejuvenation Leave Volunteer Leave Re-employment system Details Leave can be taken until the last day of April following the child's 1st birthday (can legally be extended for 6 months). A total of 15 days paid leave from the first day of leave is provided. Part-time work is allowed until the child enters the 4th grade of elementary school. Leave can be taken up to 2 hours and 30 minutes per day. Employees with children who have not yet entered junior high school can take up to 10 days of childcare leave per fiscal year per child. Leave can be taken in half-day units. Absences or suspension of work can be taken to care for a spouse, parents, or family within the second degree of kinship whom the employee supports. Leave can be taken up to 1 year. Part-time work is allowed when certain family members are in need of nursing care. Leave can be taken up to 2 hours and 30 minutes per day until the family member no longer needs care. Accumulated paid leave can be taken under the following circumstances: caring for a spouse, parents, or family within the second degree of kinship whom the employee supports due to a non-occupational illness or injury; regular hospital visits of family members mentioned above due to a non-occupational illness or injury; and during a temporary closing of school. Leave can be taken in half-day units, and a maximum of 40 days can be accumulated. Rejuvenation leave can be taken once during each age category below for the following number of days, for a combined total of 27 days: Age 25-32: 5 days (can extend to a total of 9 days with paid leave and weekends) Age 33-40: 5 days (can extend to a total of 16 days with paid leave and weekends) Age 41-48: 15 days (can extend to a total of 30 days with paid leave and weekends) Age 49-56: 7 days (can extend to a total of 16 days with paid leave and weekends) Rejuvenation leave can be taken from the first April 1 after 5 years have passed since the last day of the previous rejuvenation leave. Volunteer leave can be taken for up to 8 days per fiscal year by employees who are qualified to engage in volunteer activities at NPOs or social welfare organizations, such as welfare services for people with disabilities, welfare services for and nursing care of seniors, welfare services for children, and activities for protecting the environment, providing disaster relief, donating bone-marrow, or other activities for which the company gives permission. In the event that retirement was unavoidable due to any of the following reasons, the employee may register for re-employment. Childbirth and newborn care Family and child care Relocation due to marriage or spouse's job transfer Employees who have used the program 97 (including 11 male employees) Number of employees registered as of April 1, 2011: 11 73

7 Program or initiative Initiative to reduce working hours Details Holding no-overtime days at business sites Employees who have used the program - Initiative to improve rate of taking paid leave Implementation of paid leave usage campaign at business sites - Financial assistance for babysitter hire Provided employees with 1,500 yen each occasion a babysitter is hired 5 Healthcare Initiatives At Ajinomoto Co., Inc., the Wellness Promotion Center provides a health system that emphasizes the concept of self-care. It is comprised of eight industrial physicians, 11 medical staff members (nurses and hygienists), a general manager, and 9 staff members. Since health management issues differ among new hires, middle-ranking employees, and managers, industrial physicians offer guidance specific to the kind of employee at the company. New managers and middle-ranking employees not only learn about their health management, but also about specific ways to identify signs of health problems among colleagues. All employees of the company undergo annual checkups at the center, which was established solely for company personnel. The results are reviewed by industrial physicians, nurses and hygienists in order to offer guidance and information on health maintenance. Employees working and living outside Japan also take an annual health checkup in the country where they work. The results are reviewed by the company's medical staff members in Japan, who follow up on the employees' health management. Furthermore, the company's health care system allows employees outside Japan to discuss the health problems of their immediate family members and obtain advice. Going forward, Ajinomoto Co., Inc. continues to assist employees maintain their health with the support of the center's staff. 74

8 Fair Employment for All The Group's Employment Initiatives The Ajinomoto Group Standards of Business Conduct stipulate that the Ajinomoto Group shall comply with the laws and regulations of each country and region where it conducts business, remain committed to understanding and respecting the cultures and customs of the places where it operates, and expressly prohibit discrimination based on race, ethnicity, nationality, religion, belief, national origin, sex, age, physical disability, or any other basis. Furthermore, these standards provide the basis for the group's employment practices. The Ajinomoto Group respects the values and abilities of all individuals, and accordingly, it actively seeks out and employs people from around the world who share its HR Values people who explore individual creativity, understand the global impact of local values, and thrive through team collaboration. Reemployment System for Retiring Human Resources Ajinomoto Co., Inc. has been providing a reemployment system for retiring human resources since April The system is open to all staff and management, including seconded employees, who desire to be reemployed after reaching the mandatory retirement age of 60. The only condition is that the employee be healthy in both mind and body and fit for duty. Among employees who have met this condition, 88% applied for reemployment at the company and continued to work enthusiastically under the system in fiscal Group companies in Japan have also started to use the system. Click here for more details: Number of retirees and re-employed personnel Expanded Employment for Persons with Disabilities At 15 consolidated group companies in Japan, the average workforce rate for persons with disabilities was 1.7% as of March 1, Five of the companies achieved a workforce rate that met or exceeded the Japanese government's mandated rate of 1.8%. The Ajinomoto Group intends to further strengthen initiatives to promote the hiring of people with disabilities in new graduates and mid-career recruitment to attain its ideal of fully integrating diverse employees in the workplace. Click here for more details: Number of personnel with disabilities 75

9 Initiatives for Labor-Management and Human Rights Labor-Management Relations The Ajinomoto Group endeavors to create a stimulating and rewarding work environment for its employees. The group regularly holds labor-management conferences to share management policies, as well as labor-management council meetings to assess labor conditions. In fiscal 2010, Ajinomoto Co., Inc. held Work-Life Balance Kick-off seminars at all of its business sites in Japan as a concrete measure of the Work-Life Balance Improvement Project, a labor-management initiative. The seminars were intended to promote awareness of the topic and encourage employees to consider how to carry out personal plans for balancing work and home life. It enabled employees to lead more fulfilling lives both at and away from work, and take on work responsibilities with enthusiasm. The Work-Life Balance Kick-off seminar In addition, members of upper management visited each of the Ajinomoto Group company and held productive discussions with labor union representatives to provide opportunities to directly explain the Medium-Term Management Plan for fiscal 2011 to Such initiatives will be continued to realize the Ajinomoto Group Work-Life Balance Vision, and ensure the development and wellness of employees. Increasing Employee Awareness on Human Rights As one of its most important priorities for becoming a genuine global company, the Ajinomoto Group carries out initiatives aimed at realizing workplaces and a society where human rights are fully respected. Toward this end, in fiscal 2010 Ajinomoto Co., Inc. carried out activities to educate employees about human rights. Training was provided to promote the Ajinomoto Group Standards of Business Conduct, which prohibits any form of discrimination or harassment, and examine some of the most recent human rights issues. The ultimate goal of the training is to develop employees that conduct themselves with a deep understanding of human rights and a heightened sensitivity to the related issues surrounding them. Also in fiscal 2010, the company again carried out its annual survey on workplace harassment for all employees. The results of the survey were compiled with opinions and cases reported in previous surveys, enabling the company to gain a clearer understanding of harassment issues at its workplaces through this feedback from employees. As an initiative aimed at preventing and eliminating harassment in the workplace, Ajinomoto Co., Inc. set up a reporting hotline for use within and outside the company to allow employees to readily report cases of harassment without fear of retaliation. The company also collaborated with group companies in Japan on an annual event that encouraged employees and their families to submit slogans to increase human-rights awareness. The event collected more candidate slogans in fiscal 2010 than the previous year, and helped improve human rights awareness throughout the Ajinomoto Group. Ajinomoto Co., Inc. carried forward these initiatives into fiscal 2011, during which it is continuing training programs designed to deepen employees' awareness of human rights issues. The company will also proceed with initiatives that promote even greater respect for human rights. 76

10 Main human rights training programs conducted in fiscal 2010 Training program Training for newly hired graduates Training for newly recruited employees Training for newly appointed managers Training support at group companies Training objectives Increase trainees' understanding of human rights-related problems that they may experience and enable them to act independently in the workplace with an awareness of human rights issues Examine various human rights-related problems and establish an understanding of standards of conduct as citizens and company employees who have a heightened awareness and sensitivity to human rights issues Raise awareness of corporate social responsibility and examine an array of human rights issues in and outside Japan to establish an understanding of evaluation criteria and standards of conduct from a global perspective Study various cases of harassment and provide specific strategies for preventing harassment in the workplace An excellent slogan chosen by the Industrial Federation for Human Rights, Tokyo Mitsuko Kanzaki Quality Control Group, Main Plant, FREC DESSERT CO., LTD.1 1. Company name and job title are correct at the time of receiving the award 77

11 Occupational Health and Safety "Disaster Prevention" and "Occupational Health and Safety" Philosophy and Policies The Ajinomoto Group Health and Safety Slogan "Be brave enough to 'Stop.' 'Check' first whenever you are not sure." The Ajinomoto Group "Disaster Prevention" and "Occupational Health and Safety" Philosophy We, the Ajinomoto Group, respect each person and act on our recognition that "disaster prevention and occupational health and safety" are one of the most important components of corporate activities. The Ajinomoto Group "Disaster Prevention" and "Occupational Health and Safety" Policies The Ajinomoto Group: persistently identifies and evaluates potential risks, and acts to diminish and/or eliminates risks in order to prevent disasters and accidents. takes initiatives continually to improve occupational health and safety activities by thoroughly complying with public regulations and in-house rules encouraging mutual efforts to do so. strengthens the corporate system and facilitates quick response to minimize damage in the event of an emergency and/or disaster. proactively provides support for each employee so that they can work in good health, and pay careful attention for the safety of work environment. April 1, 2011 Progress in Fiscal 2010 and Targets in Fiscal 2011 The Ajinomoto Group worked steadily toward achieving targets in 2010, the final year of its Medium-Term plan that commenced in fiscal As a result, group companies outside of Japan succeeded in meeting their targets. Regrettably, however, group companies in Japan fell short of reaching set targets. Safety management system in fiscal 2011 Group companies outside of Japan are striving to attain targets by building on results from initiatives on preventing caught-in accidents, which commonly occur in food production processes. In fiscal 2011, the Ajinomoto Group will implement a package of basic safety activities comprising education on common safety measures for equipment, and hands-on training. The Group intends to regularly conduct these activities at each of its workplaces in cooperation with relevant organizations. Group companies in Japan have finished introducing a risk assessment system at production sites generally according to plans. As risk assessment procedures still have room for improvement, a new Zero Accident Committee has been established to lead efforts aimed at addressing issues related to food packaging operations. 78

12 Hands-on safety training at Ajinomoto (Malaysia) Berhad Using a model hand to teach safe operations at Ajinomoto Vietnam Co., Ltd. Hands-on safety training at Ajinomoto Poland Sp. z o.o. A safety training session at Ajinomoto Poland Sp. z o.o. Hazard prediction training provided to the Ajinomoto Group employees Results related to workplace safety The following data on work-related accidents covers all employees of the Ajinomoto Group working in Japan and outside Japan. Frequency of accidents resulting in time off work in Japan Frequency of accidents resulting in time off work outside Japan Frequency = Number of deaths and injuries / Total actual working hours x 1,000,000 79

13 Severity rate of accidents resulting in time off work in Japan Severity rate of accidents resulting in time off work outside Japan Severity rate = Number of lost work days / Total actual working hours x 1,000 Safety slogan The Ajinomoto Group has established a group-wide safety slogan every three years since A new slogan was chosen in 2010 from among 66 submissions sent from group companies both in and outside Japan. It will be issued at the start of the new Medium-Term plan from fiscal 2011 to fiscal The winning slogan was created by Jun Kosaka from the Research and Development Division of AJINOMOTO PHARMACEUTICALS CO., LTD. The winning slogan creator, Jun Kosaka Third Disaster Prevention Lecture held Ajinomoto Co., Inc. has adopted a flexible approach to the disaster training it conducts every year, and has held an accident prevention lecture annually since fiscal 2008 to raise disaster prevention awareness among employees before training sessions commence. Divided into two parts, the event opened with a talk on the probability of a major earthquake by a manager from the Environment & Safety Department. It was followed with a guest lecture by Masao Tokura, a manager from Asahi Breweries, Ltd., who was in charge of reconstruction and business resumption of the company's Nishinomiya Factory following the Great Hanshin Earthquake in He discussed the damage Employees pay close attention during the Disaster Prevention Lecture status and reconstruction projects at the time, as well as effective measures for continuing business operations. A questionnaire was distributed after the lecture. Eighty-four attendees responded; many expressed their desire for the event to be held every year and to hear personal stories from victims of disasters. The company plans to continue holding the lecture event from fiscal 2011 onward. 80

14 Follow-up information reporting after administrative penalty at the Tokai Plant As previously announced by the company, the Tokai Plant of Ajinomoto Co., Inc. breached reporting and notification duties to local authorities in Since then, the plant has been receiving instructions from authorities, including the Yokkaichi City Fire Department, while steadily implementing corrective measures aimed at preventing similar cases from occurring. In relation to these activities, the Tokai Plant held an information meeting for community leaders to present an overview of the administrative penalty it has received, along with explanations of the incident's causes and the company's countermeasures. Representatives from the plant openly disclosed facts of the incident and made an apology. In an effort to reassure the community, the plant provided information on initiatives related to safety and environmental preservation, which it is carrying out in earnest. The information meeting with local community association leaders In the future, the Tokai Plant intends to manage the plant in a manner that enables it to develop together with the local community. It will work toward regaining the trust of local residents and society by opening the plant to the public every year and continuing to pursue opportunities to interact directly with local residents. A tour of the plant was given during the information meeting Safety Training Safety confirmation drills In the past, Ajinomoto Co., Inc. practiced safety drills that involved sending s to confirm employee safety. At the time of the Great East Japan Earthquake that occurred on March 11, 2011, however, messages from the company to employees were not delivered quickly due to a temporary disruption in telecommunication services. As a result, considerable time was required to confirm the safety of employees. In response, the company introduced the Safety Confirmation System 1 in April to provide an improved method for contacting employees during times of emergency. Through the new system, safety confirmation messages are sent to all employees at the same time an earthquake occurs to speed up the verification process. With the aim to ensure reliable safety confirmation of employees, Ajinomoto Co., Inc. plans to conduct drills for managers designed to verify the status of personnel. Meticulous checks will also be conducted to ensure that all of the company's workers are properly registered in the system. 1. The Safety Confirmation System contacts registered employees at the time of an emergency via received by cellular phones and home computers. Employees can then select responses to the messages to verify their safety with the company and whether they are able or unable to arrive at their worksites. Evacuation drills On September 2, 2010, Ajinomoto Co., Inc. carried out an evacuation drill at its Head Office in Tokyo's Kyobashi district. Based on the scenario of a major earthquake followed by the breakout of fires, the drills comprised procedures for escaping from company buildings and verifying the number of personnel outside. Employees were able to leave the buildings without any problems under the guidance of designated safety leaders on each floor. Employees also practiced using outdoor fire hydrants and hoses during the drill, having Employees practice using a fire previously mastered the use of fire extinguishers in several evacuation drills. This hose outsidethe building was a new experience for most of the participants, and some were surprised at the force of the water pressure. Since this training had not been conducted in previous evacuation drills, the company intends to provide opportunities for more employees to gain the experience of operating hydrants and hoses in the future. Furthermore, the company plans to place more emphasis on confirming the safety of employees in the next evacuation drill. 81

15 Employee Data Employee Data (As of March 31, 2011) Number of employees Full-time employees Male Female Total Temporary staff Ajinomoto Co., Inc. 2, , Group companies in Japan 6,593 1,621 8,214 5,366 Group companies outside Japan 11,882 4,678 16,560 8,509 Total 20,854 7,230 28,084 14,170 Number of managers 1 Male Female Total Japan Ajinomoto Co., Inc Group companies 1, ,722 Asia ,287 Europe and Africa The Americas Total 3, , Managers: Employees in the position of manager, a position equivalent to manager, or a position higher than manager (excluding executives) Full-time employees Average age Average work years Average annual working hours Paid leave utilization rate 1 Employment turnover rate Ajinomoto Co., Inc , % 1.1% 1. Including managers' utilization rates. Number of personnel with disabilities Total Workforce rate Ajinomoto Co., Inc % Group companies in Japan % Number of new hires (school graduates and employees hired during the fiscal year) Total Ajinomoto Co., Inc. 92 Group companies in Japan

16 Group employees by region Number of retirees and re-employed personnel in fiscal 2010 Number of retirees Re-employed after retirement 2 Retired Resigned for personal reasons 1 After retirement After resigning for personal reasons Ajinomoto Co., Inc Group companies in Japan Contract staff are not included in this category. 2. Re-employed from retirees and personnel resigned for personal reasons such as job transfer of spouse 83