Maximize employee engagement

Idemitsu Kosan is working to stimulate internal communication with the aim of creating a better company where all employees can work with engagement and motivation. We believe that in order for each employee to grow and be more motivated, it is necessary to create a safe and secure place where employees can freely and openly talk to each other, promote good internal communication, and ensure that the company-wide and organizational goals are fully understood and understood.

The Idemitsu Engagement Index (Idemitsu EI) is an index developed independently by our company to measure employee commitment to the organization. It consists of six elements: "high sense of ownership," "pride in belonging to the company," "realization of personal growth," "willingness to contribute to the organization," "embodiment of Management Philosophy," and "challenge for change beyond organizational boundaries." In order to clarify the elements that have a strong influence on Idemitsu EI, we conducted a multiple regression analysis using the questions from engagement Survey as independent variables and Idemitsu EI as the dependent variable, and extracted six key drivers that showed particularly high contribution rates.

●Idemitsu EI and key drivers

Idemitsu EI

As an approach to each key driver, in FY2024 we implemented measures to support the autonomous career development of individuals and promote the creation of a proactive workplace culture, such as establishing Career Design Department and Idemitsu Employee Association, and Idemitsu EI in FY2024 was 70% (FY2022: 67%, FY2023: 69%).

sex

The gender gap, which was 5 points in fiscal 2022, has narrowed to 3 points by fiscal 2024. We believe this is the result of various measures, including mentoring, which have produced certain results. However, it has become clear that women's scores are significantly lower than men's, especially in the question, "Action Mindset serves as the standard for judgment and behavior in the workplace." We will more carefully explain the newly established Action Mindset to ensure its understanding and penetration.

By years of service

By length of service, those with less than 10 years of service were more than 10 points lower as of fiscal 2022 than those with 20 or more years of service. In particular, the score for the question "Our company's Management Philosophy serves as a guide for me in my daily work" was found to be significantly lower than those with 20 or more years of service. Those with less than 10 years of service include both employees who joined the company as new graduates and those hired as mid-career recruits, and we will take measures to instill understanding of Management Philosophy, especially among mid-career recruits.

Idemitsu Growth Score

To achieve sustainable growth through structural reform of existing businesses, we place the utmost importance on Idemitsu EI as our goal indicator. While Idemitsu EI has gradually improved, reaching 67% in fiscal 2022, 69% in fiscal 2023, and 70% in fiscal 2024, we need to take even more drastic measures to achieve our fiscal 2025 target of 75%.
Reflecting on the fact that the previous Idemitsu EI analysis was limited to examining countermeasures based on average values, we decided to select over 30 leaders from each workplace and conduct an anonymous, written survey to identify the issues that employees in the field are experiencing.

These three points emerged as challenges. These three points coincide with three of the six key drivers that contribute particularly highly to Idemitsu EI: "I have opportunities to develop my skills and grow at the company (a sense of growth)," "I am satisfied with my efforts and results in my current job (a sense of contribution)," and "I can envision my future career at the company (a sense of career development)." Therefore, we decided to establish these three points as a new intermediate indicator, the "Idemitsu Growth Score." The correlation coefficient between the Idemitsu Growth Score and Idemitsu EI is high, at 0.8. Idemitsu EI, which currently discloses its current status, will continue to disclose the Idemitsu Growth Score as a goal indicator. It is a precursor to improving Idemitsu EI, and we will track the Idemitsu Growth Score, an intermediate indicator for achieving urgent organizational challenges, as a key management indicator and initiate a movement for improvement among all employees. We believe this will ultimately lead to growth in existing businesses.
The Idemitsu Growth Score for fiscal year 2024 was 64% (60% for fiscal year 2022, 62% for fiscal year 2023), but the average score for the top third was 70%, while the average score for the bottom third was 58%, a difference of 12 points. The Idemitsu Growth Score varied by department depending on business content, the characteristics of the members, etc., and we were reminded that a detailed and careful approach is necessary for each department.

●Setting the Idemitsu Growth Score

●Relationship between Idemitsu Growth Score and Idemitsu EI

Implementing measures that contribute to Idemitsu's growth score

Our KPIs and intermediate indicators for human capital management are shown in the figure below. Based on these, we will focus on the following points this fiscal year in order to improve our Idemitsu Growth Score.

Expanding opportunities to proactively consider one's career

The issue is that the score for "I can envision my future career at the company," which is part of the Idemitsu Growth Score, is only 51%. We have prepared various career support measures and offer options to employees, but the current situation is that the percentage of employees who take these measures personally and are able to proactively map out their own careers is still insufficient.
To overcome this, we have set KPIs such as the "Job festival," which brings together all departments to understand the work of other departments and provide an opportunity to consider their own careers; the "a secondary job in-house System," which allows employees to devote 20% of their time to work in other departments while continuing their current job; and the "Participation Rate in Activities Outside of Their Department," which measures the percentage of employees who have participated in cross-boundary learning departmental projects and cross-border learning outside the company. We will also set and follow up on the "Autonomous Career Intention Rate," which encourages employees to make their own independent career decisions after experiencing these experiences. We believe these will also contribute to Idemitsu EI's "challenge for change beyond organizational boundaries."

Improving career support and expanding the pool of next-generation leaders

We will measure how employees perceive various career support measures and support from their superiors and others around them, so that we can make course corrections as necessary. To that end, we will set the "career support ratio" as a new KPI. Furthermore, in the process of clarifying one's own career plan, we would like to broaden the pool of employees who aspire to play a leadership role, not just the current female ratio in managerial positions. To that end, we will measure the "percentage of employees who aspire to be leaders" as an intermediate indicator. This will create a pipeline of future leaders and managers without gender differences.

Improving career support capabilities by improving the interview skills of managers

The role of the direct supervisor is extremely important in supporting the careers of subordinates. In the first half of fiscal 2025, we will conduct training for evaluators on the personnel system based on the new Action Mindset, and from the second half of the year, we will conduct training for all managers over the next two years that will focus on improving interview skills (listening and feedback). First, we will set the "effective interview implementation rate" as a KPI for managers, which will check whether they are able to conduct interviews that help their subordinates feel a sense of growth and contribution.

Visualize and maximize human capital

We are building a platform that utilizes generative AI technology to visualize and maximize human capital. This will enable us to visualize employee skills and career potential, helping us to optimize placement and development plans. This fiscal year, we will organically combine the KPI information set out above and utilize it as management information.

As a company that values maximizing employee growth and engagement, we conduct an employee engagement survey  once a year to quantitatively and continuously analyze employees' engagement, mutual trust, and unity, and to understand the culture and state of the organization. The survey results are fed back to management and all employees who participated in the survey, and the results are analyzed in detail and specific action plans are formulated and implemented. The results of these efforts are then checked in the survey the following year, in a PDCA cycle.

Overview of FY2024 employee engagement survey

Idemitsu Employee Association Initiatives

Townhall meeting

Exchange of opinions with employees regarding personnel measures

The Group strives to comply with labor-related laws in each region, both in Japan and overseas, and promotes the creation of a working environment where all employees can focus on their work with peace of mind. Based on the Labor Standards Act, employee representatives prepare opinions on the establishment and revision of labor-management agreements and work regulations. Changes to personnel policies are communicated to employees at information sessions and other opportunities.
We collect opinions about our existing systems through voluntary employee surveys and share the results via the in-house portal and email. We also create opportunities for dialogue between the company and employees, such as by raising the same topic at town hall meetings.
We regularly hold labor-management consultations with our labor union, FTOE (Forward Together with Our Energy). Through these efforts, we aim to develop policies that are easy to understand and empathize with regarding the content of personnel policies, wage levels, working conditions, and employee benefits.
We are also soliciting public comments from employees and considering them when designing our future personnel system.

Promotion of Activity Based Working (ABW)