Co-Owned Management and Engagement

Introduction

Based on its core value of “contributing to society and people,” Ryohin Keikaku’s employees act as leaders with a sense of ownership, taking the initiative to practice “public interest and people-centered management” in order to realize “a truthful and sustainable life for all.”
We believe that in practicing “public interest and people-centered management,” it is important to foster a sense of ownership and management awareness among employees. It is also important to create an environment that empowers employees to confidently take on challenges over the medium to long term with a sense of security. To this end, we are promoting co-owned management.

Employee Shareholding Association Program

The Ryohin Keikaku Group has introduced an Employee Shareholding Association program. By enabling employees themselves to become shareholders (owners) of Ryohin Keikaku, our goal is to create a virtuous cycle in which increases in corporate value resulting from business activities are returned to each employee. We provide two incentive plans: the employee stock ownership plan (ESOP), a long-term plan in which shares are paid out upon retirement, and the trust-type employee stock incentive plan (E-Ship), a medium-term-plan in which dividends are paid every three years based on the Company’s stock price. Both plans are offered to employees, including partner employees. Under the ESOP plan, an amount equivalent to 50% of the employee contribution is paid to employees as shareholding association incentive points. In addition, we have established a “challenge expectation point” system, in which ESOP points that can be converted to shares of the Company’s stock upon retirement are awarded to employees who take on challenges at a high level, regardless of their membership in the shareholding association. We aim to create an organization where anyone can enjoy taking on challenges and be rewarded for being proactive. In addition, we want employees themselves to build strong relationships of trust with even more people. Based on nominations and supervisor recommendations, individuals or teams announce the challenges they are taking on a six-month basis, and are awarded with points when progress is confirmed. From June 2024, we also started awarding ESOP points to regular employees who receive a performance evaluation above a certain level, with points linked to the evaluation results. We have introduced systems that support the medium- to long-term growth of employees such as a grade system that ensures employees’ growth and achievements are reflected in their compensation earlier than in the previous system as well as fixed annual salaries. We are building a compensation system that empowers employees to confidently take on challenges and realize co-owned management where they can share in the Company’s growth.

Strengthening Internal Communications

In order to promote co-owned management, it is necessary for employees to participate in management, and make suggestions to the Company while working in cooperation with managers. We therefore actively share management information, and we are increasing opportunities for communication between management and employees, and among employees themselves.
Starting in FY2024/8, we have been increasing staff meetings as a forum for dialogue between store staff throughout Japan and executive officers. Staff Meeting events are a forum where the approximately 20 executive officers working in Japan go to MUJI stores and engage in dialogue with store staff. Any staff member who would like to convey the wishes of customers or feedback about the store and help drive positive change is welcome to participate. At these events, the management team shares Ryohin Keikaku’s philosophy and policies, while also receiving feedback on the current state of stores. With this understanding, discussions are held to work toward the realization of our vision. This also enables us to stay informed of customer needs and the problems of stores in a timely and detailed manner.

Increasing Employee Engagement

We conduct a Culture and Engagement Survey of all Ryohin Keikaku Group employees, including those overseas. Our goal is to become a company with a high level of engagement where all employees are aligned with our corporate purpose and use it as the basis for their actions. The survey is designed to ascertain the current state of awareness among employees regarding topics such as our corporate purpose, approach to work, organizational culture, human relationships, and job satisfaction, so that we can establish a virtuous cycle for creating a better work environment. This proprietary engagement survey includes questions categorized under indices such as “resolving social issues and creating an impact,” “proactiveness and independence,” and “a culture that embraces challenges,” to measure engagement in the organization and culture of Ryohin Keikaku.

Survey Summary

Target:

Ryohin Keikaku Group employees, including those overseas¹

Content:

Based on 27 indices, the survey contents were designed specifically for the Ryohin Keikaku Group, and consist of 52 questions in total, including 46 original questions and 6 general engagement questions.²

Survey period:

July to August 2024 (previous survey: Jan. 2022 to Dec. 2022)

Response rate:

96% (previous survey: 82%)

1. Conducted in 12 countries and regions around the world (excluding dispatch employees)

2. The survey is implemented and its responses are aggregated by a third-party organization.

Changes from the Previous Survey

In working to realize “a truthful and sustainable life for all,” we focus on three indices as the Company’s driving force: “I resonate with the corporate purpose,” “My work is useful to society” and “I feel attached to the company.” Each of the indices is calculated based on the responses to preset questions. Compared with the 2022 survey, we have observed an improvement in results for these indices, and for the response rate.

Improvements Based on the Survey Results

Based on the survey results, we work to analyze, identify and improve issues through repeated discussions across the organization and with people in different roles. The 2022 survey results brought to light issues related to sharing of the Company’s direction with employees, creating teams with strong relationships of trust, the burden on stores due to staff shortages and excessive work, and the establishment of environments and systems to enable working with a sense of security. To address the issues identified in the survey, we have made a range of improvements, such as increasing opportunities for communication between management and employees and among employees themselves, enhancing store operations and IT infrastructure, and completing a sweeping review of the compensation system. In addition, at the individual store level, store managers addressed issues and worked directly with team members, which led to improvement in results in the 2024 survey. We will continue to constantly make improvements and effectively utilize surveys, with the aim of creating better working environments for every employee.