Human Resource Management System Reforms at Matsushita

Matsushita was founded by Konosuke Matsushita (Konosuke) in 1918, as Matsushita Electric Housewares Manufacturing Works in Japan. From the beginning, Konosuke's belief about employees was different from other employers. Generally, employers considered it risky to share technical know-how with their employees as there was a possibility of them passing on the information to their competitors. However, Konosuke trusted his employees a lot. He believed that knowledgeable employees would perform better and therefore believed in sharing all information with them. After the Second World War, Matsushita expanded rapidly into different product segments, namely, consumer electronics products, industrial electronics products and components...

In 1998, the company introduced the Retirement Allowance Advanced Payment System under which the new recruits were given pay packages based on their preference. The new system was introduced because the attitude of young workers in Japan was changing and they preferred to change jobs for better opportunities.

The new system offered two options – Plan A and Plan B. Under Plan A, recruits received significantly higher salaries (more than ¥100,000 per annum than Plan B). However, these recruits had to forgo other benefits like stock sharing, housing loans, company accommodation etc. and did not get any amount on retirement or resignation.