Social

Labor Practices (Personnel System and Labor-Management Initiatives)

Approach and Policy

Under the NGK Group Human Capital Management Policy, the NGK Group has established its Workplace Development Policy. We are committed to creating a rich and vibrant workplace and a challenging and open workplace where diversity is respected and a wide range of employees can thrive. We also operate our personnel system based on fair treatment so that each employee can maximize their abilities.

Promotion

For our overall Human Capital Management Promotion Framework, please see below.

Initiatives

Fair Treatment and Evaluation

Clarifying Job Expectations Through Qualification Definitions

NGK operates a qualification system that allows employees to pursue promotion and transfers between employee categories based on their efforts, regardless of educational background or age. By clearly defining the roles associated with each qualification level, we help employees understand the capabilities required for higher qualifications and create an environment where they can take on more advanced responsibilities.
At NGK, employees are classified into two categories based on their roles and responsibilities: Key Personnel and Group S/M/J Employees. Key Personnel generally correspond to management positions and are responsible for managing organizations and people while leading the sustainable growth of the business and organization. Group S/M/J Employees perform a wide range of roles, including driving operations as core members of teams and workplaces and demonstrating advanced expertise.

NGK’s Employee Categories and Expected Roles (Qualification Definitions)
Qualification Level Definition
Key Personnel
（Management Positions）
  • Key personnel are expected to demonstrate performance in the achievement of organizational results based on upper-level policies and the promotion of reforms for the sustainable growth of businesses and organizations by leading individuals and groups.
Group
S/M/J
Employees		 Group S
  • Group S employees are human resources who manage at the level of sections/teams or advanced specialist human resources.
  • They are expected to improve the productivity of their section/team and to produce results by connecting and leading their section/team with their supervisors and related departments. Alternatively, they are expected to bear responsibility for important issues and operations as specialists in specific fields.
Group M
  • Group M employees are human resources at the center of practical operations and on-site leaders.
  • They are expected to assist in the smooth promotion of overall team operations and to serve as on-site role models by supporting their supervisors and members with their techniques, skills, knowledge and experience as experts in specialist fields.
Group J
  • Group J employees are human resources who can think and work by themselves as those in charge of practical operations.
  • They can understand the purposes and flow of overall operations and promote and accomplish the daily operations in general they have been assigned with the cooperation of those around them. They are expected to autonomously improve their techniques, skills, knowledge and abilities to play an active role in the workplace.

Human Resource System for Group S/M/J Employees

NGK has established the Human Resource System for Group S/M/J Employees to ensure that all employees, from early-career to experienced employees, can work with motivation. As we expand our business globally and create new products and businesses, we place a strong emphasis on creating an environment where early-career and mid-level employees, who play key roles in these efforts, can maximize their abilities.

Key Points of the System
  • Qualification System: Provides opportunities for all employees to advance to higher employee categories and clearly defines the roles required at each qualification level
  • Evaluation System: Appropriately reflects employees’ efforts and achievements in treatment and compensation
  • Mandatory Retirement Age of 65: Maintains employees’ salary levels at age 60 and provides an environment where they can continue working with confidence

Key Personnel System

Evaluation System

NGK operates multiple evaluation systems to ensure fair treatment and appropriately assess individual efforts and achievements. These systems enable each employee to recognize their own growth and development.

Evaluation System Content
Performance evaluations
(group S/M/J Employees)
Results evaluations
(Key personnel)		 Evaluates achievements based on both the level of goal attainment and the efforts made toward goals set at the beginning of the fiscal year.
Also evaluates work not included in the established goals, taking into account individual efforts and contributions.
Evaluations are conducted twice a year.
Conduct evaluations
(Key personnel only)		 Evaluates how consistently employees demonstrate the behaviors expected of Key Personnel throughout the year.
Evaluations are conducted once a year.
Role evaluations
(group S/M/J employees only)		 Evaluates the extent to which employees fulfill the roles expected at their qualification level, based on the evaluation criteria established for each qualification level.
Evaluation interviews Through goal setting at the beginning of the fiscal year and feedback at year-end, managers and employees hold evaluation interviews to enhance understanding of evaluation results and discuss achievements for the current fiscal year, challenges for the next fiscal year, and mid- to long-term career development.

Fair and Equitable Compensation

NGK has concluded an agreement with its labor union and has established a company minimum wage that exceeds regional and industry-specific minimum wage levels. Through this approach, we comply with applicable laws and regulations while supporting stable improvements in employee compensation. We also apply the same pay structure to employees at the same qualification level regardless of gender, ensuring fair and equitable treatment.

Difference in Wages Between Male and Female Workers

Labor-Management Initiatives

Freedom of Association

NGK respects workers’ rights, including the right to collective bargaining, and strives to build healthy labor-management relations. As of March 31, 2026, 4,308 employees belonged to the Labor Union.

Labor Union Membership Rate

Protecting the Right to Collective Bargaining

NGK has concluded a collective labor agreement with its labor union on an equal footing, clearly defining the rights of both parties and the appropriate exercise of those rights. We also hold regular labor-management meetings to promote information sharing and mutual understanding. Through these meetings, we exchange views on management policies, business performance, and union activities, helping to maintain sound labor-management relations. In addition, we approach collective bargaining in good faith and strive to achieve peaceful and prompt resolutions.

Communication Between Labor and Management

NGK strives to build trusting labor-management relations through various consultation forums, including labor-management meetings, workplace meetings, and regular labor-management council meetings. At labor-management meetings, we share business performance and management conditions with employee representatives. At workplace meetings, we exchange views on issues specific to each workplace, such as production systems and the work environment. In addition, through regular labor-management council meetings, both labor and management engage in active dialogue to promote mutual understanding and maintain sound labor-management relations.

Labor-Management Consultations in FY2025
  • Regular Labor-Management Council meeting
  • Labor-Management Advisory Board meeting
  • Other bargaining and consultations
    • Consultation on overtime work and work on days off
    • Discussions about labor-management in the workplace

Notification of Transfers due to Business Necessity

In accordance with the collective labor agreement with the labor union, NGK determines work-related transfers after taking into account each employee’s abilities, health condition, and family circumstances. As a general rule, employees are notified of transfers at least three weeks in advance. In addition, when a transfer may involve a large number of employees or have a significant impact on union activities, we consult with the labor union in advance. Through these practices, we strive to ensure fair and transparent personnel administration.