Fair Evaluation and Treatment

Performance assessments and career development are conducted under a common global system. Goals are set at the beginning of the fiscal year, communication with superiors is conducted as necessary during the year, and an evaluation interview is conducted at the end of the fiscal year. This interview is conducted not only for full-time employees but also for some contract and temporary employees.

In terms of compensation, we are not only committed to fairness, but also to the retention of the best talent who will ensure our future growth.

Advantest Resource Management System (ARMS)

With overseas sales ratio of over 90%, and more than 60% of our employees located in overseas affiliated companies, this allows Advantest to grow as a global company. Given this structure, we introduced the Advantest Resource Management System (ARMS), a unified human resources system, in April 2012. ARMS promotes cooperation among multiple bases around the world, as well as smooth personnel exchanges and transfers.

Global human resource system

Under ARMS, the unique job classification systems decided on by Group companies in each country have been replaced by a new 10-level job system that is common to all. In this system, job levels 1 to 6 are for general employees, while levels 7 to 10 are for management positions. There are two management paths in this system: one for "people managers," who manage budgets and deal with staff merit and labor issues, and one for "functional managers," who tend to business and ensure that operations are carried out properly. Line managers with subordinates are assigned to the first path, and all other specialists are assigned to the second. With these two lines for advancement, we ensure that our diverse personnel have opportunities to develop as managers.

We also apply common global rules to our pay scale, including basic pay and bonuses. Previously, for example, bonus payments in each country mainly reflected the performance of Advantest's subsidiary or affiliate in that country, but under the new system, bonus payments reflect the Company's consolidated earnings. Starting in fiscal 2012, we have applied a new system of evaluating employee performance. No matter where Advantest employees work, they can now be evaluated and rewarded according to the new common global system, with every employee receiving an evaluation/cultivation interview at least once a year.

Since the introduction of our global human resources system, during which efforts have been made to increase the number of employees seconded from Japan to overseas postings and the number of personnel exchanges with overseas affiliates; this system has contributed to invigorating the organization and improving corporate performance.

Global job level and title

Meanwhile, the new human resources framework offers labor management flexibility in setting up working hours, telecommuting arrangements and other job specifics, so that managers can more aptly address such matters directly in accordance with the laws and regulations of their respective nations and in line with local employment practices.

Starting from fiscal 2014, we have established a global personnel database, which is effectively utilized for project team composition and smooth personnel changes on a global scale. Beginning in fiscal 2015, we began using a new global personnel evaluation system to replace the existing personnel evaluations. In the future, we will be setting up human resource development schemes with a worldwide reach, promoting employee diversity through active efforts to hire and promote employees with different backgrounds, and taking decisive steps toward forging an employee recruitment strategy that is in accordance with the business strategies of our operations in diverse countries.

In the spirit of establishing ourselves as a truly global company going forward, Advantest will continue to work hard to create a professional business environment where every member of a diverse Advantest Group workforce can make the most of his or her individual capabilities.

Reflection of the core values in the evaluation system

Since the launch of the INTEGRITY Core Values in 2019, we dedicated a section of the evaluation sheet in the personnel evaluation system to the core values, providing an opportunity to reflect on our actions during the term.

Specifically, the nine values of INTEGRITY (Innovation, Number One, Trust, Empowerment, Global, Respect, Inclusion & Diversity, Teamwork, and Yes) are used as the behavioral evaluation items on the evaluation sheet, where employees describe their own actions for each of the items on the sheet. Employees are encouraged to discuss with their supervisors during the evaluation interview, and their supervisors provide feedback with comments after the interview.

It is crucial for us to not only understand our core values in words through trainings or other means, but also act for it by linking these values to our own actions. Reflecting on them during the evaluation process will ultimately encourage changes in each employee, which help realize an organization that can flexibly address various issues.

Incentives and Retention

Since 2002, Advantest has introduced stock options as stock compensation for directors and executive officers, as well as domestic and international executives and employees. While ensuring the functionality of the stock compensation system as an incentive and/or as a retention measure, we established a framework that allows employees to own shares in the Company globally in conjunction with the formulation of the 2nd Mid-Term Management Plan for FY2021, having undergone several transitions.

Competition for talent is intensifying in many countries than ever before. In order to secure world-class engineers, we have expanded the scope of compensation grants and introduced Retention RSUs as stock compensation with a five-year transfer restriction period. We are continuing to review the scope and scale of our retention compensation.

In addition to appropriate guidelines for payroll and creating a comfortable and rewarding workplace in the spirit of our INTEGRITY core values, we believe that such incentive and/or retention measures will also help improve employee turnover.

Evolution of our Stock Compensation Program

Pension system

Domestically, Advantest has introduced a point system to determine retirement benefits. In addition, Advantest has introduced a fund-type defined benefit corporate pension system as part of the retirement benefit system, where the retirement benefit can be received as pension under certain conditions.
In fiscal 2018, Advantest incorporated a defined contribution corporate pension system as part of its defined benefit corporate pension system and started the defined contribution corporate pension system in addition to the point-based retirement benefit system.
As a result, retirement benefits will be divided into a retirement lump sum paid by the Company, the benefit from the fund which can be paid out as pension according to the years of service and the defined contribution.