Nippon Telegraph and Telephone Corp.'s 210,000-strong labor union decided Wednesday to push for the adoption of a new wage system that gives priority to results rather than seniority.
The union, Japan's biggest, was unanimously supported at a meeting of its central committee and will soon discuss the proposal with managers of NTT group companies.
It is rare for labor to nudge management into rethinking wage systems.
The proposal calls for reducing the amount of salary being paid to employees on the basis of skills acquired and length of employment. This "extra money" would then serve as a pool from which salary based on results can be paid.
The move comes amid concern within the union itself that clinging to a traditional seniority-based pay system may degrade the NTT group's competitiveness and lead to job cuts.
Among major group firms under the NTT holding company are NTT East Corp., NTT West Corp., NTT Communications Corp. and mobile communications firm NTT DoCoMo Inc.
The NTT group is facing an increasingly severe business environment as it is called on to further relinquish its grip on the industry and as telecommunications firms wage a seemingly endless price-slashing war.
Junjiro Tsuda, head of the NTT labor union, told the central committee the proposed wage system is aimed at rewarding competent workers "in a fair and timely manner." The new wage system is expected to take effect in April, the first month of fiscal 2001.