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Environmental Management
Sustainability Report 2006

Creating a Better Working Environment
Kobe Steel's personnel policies respect the personality and individuality of company employees and are designed to create a pleasant, comfortable and fulfilling working environment. We are also working with Group companies in various ways to achieve one of the principles of the Kobe Steel Group Corporate Philosophy: We support each employee in developing his or her abilities, while respecting mutual cooperation.


Human Resource Development
The objective of human resource development in Kobe Steel is for each employee to approach his or her job with enthusiasm and a sense of pride. To this end, we believe it is important that each of our employees has specific targets for personal development and works actively day by day to achieve those targets. We hope that employees will pursue their own personal development through hard work, and the company provides all-round support for this.

For career development, a self-assessment system provides opportunities for management and employees to discuss business targets and future career planning. On this basis, we implement periodic job rotation to foster job skills, taking into account the individual's wishes and business needs. To encourage self-directed career building we operate a human resources recruiting system, and in FY2005 we started career development training.

Skills development is centered on on-the-job training in the workplace. To supplement this, we run off-line training designed to improve specialized business or technical skills. In a measure to improve management skills for managers, coaching was greatly expanded in FY2005.



Personnel Benefits System
The system of personnel benefits in Kobe Steel is performance based, and we have introduced a benefits system that reflects employees' roles and responsibilities, as well as a formula for calculating bonuses related to business performance.

In an effort to achieve the most credible and fair evaluation of employee performance, besides a direct "line" evaluation between supervisor and subordinate, we use a "competence observation" system that provides a multi-faceted evaluation from a wide range of related people.



Eliminating Gender Bias
Kobe Steel recognizes the importance of promoting an employment environment in which diverse employees can fully exploit their individual abilities regardless of gender.

Besides working to increase the number of female staff and broaden the range of their job opportunities, we are making extra efforts to set up systems to foster skills and support women balancing home and job responsibilities, to make the workplace friendlier for women.



Support For Balancing Work and Child-rearing
In line with the coming into effect of the Law for Measures to Support the Development of the Next Generation, in Kobe Steel a Private-Sector Employer Action Plan was formulated in April 2005. We are striving to create a workplace where work and child-rearing can be successfully balanced.

In this action plan, the following three points are seen as the main issues in building the foundation for this sort of working environment:

- Implementing measures to change such attitudes as giving the workplace priority and holding rigid views on gender roles.
  - Creating a system to provide information and back-up on giving birth and raising children.
  - Implementing measures to encourage the taking of annual paid leave.



Employment of Older People
Kobe Steel has introduced a Mature Employee Reemployment System as a way to reemploy workers after formal retirement. By continuing to make use of the skills and abilities of veteran employees, we hope that skills can be more easily passed to younger staff, and that the individual's keenness to work will boost workplace vitality.

In line with the revision of the Law Concerning Stabilization of Employment of Older Persons in April 2006, we have revised our practices by widening the range of employees who may take advantage of the system, lengthening periods of employment and shortening working hours.



Employment of Disabled People
The Kobe Steel Group actively promotes the employment of disabled people by such measures as holding periodic joint seminars on employment and is striving to make the workplace one where individuals can make full use of their abilities and work comfortably.

In FY2005, disabled people accounted for 1.91% of the work force in Kobe Steel, superceding the ratio of 1.8% required by law. The company will continue with measures designed to increase this ratio further.
Employment Ratio of Disabled People (Kobe Steel)

Employment Ratio of Disabled People



Respect for human Rights
To maintain a working environment where human rights are respected, and that is free of any sort of discrimination, the Kobe Steel Group runs educational programs on human rights, such as human rights awareness training for different management levels. We are also giving training to recruitment staff on unprejudiced recruiting.



Preventing Sexual Harassment
Kobe Steel's Guidelines for Business Conduct in our Corporate Code of Ethics clearly state that sexual harassment is unacceptable, and our labor contracts and rules of employment stipulate that sexual harassment will be met with disciplinary action.

A system has been set up whereby a counselor is available in every working location for consultation on sexual harassment and swift action is taken. In addition, a Manual on Preventing Sexual Harassment has been produced and training is also given as part of our training on human rights. These measures are intended to create a working environment that allows all personnel to work comfortably and with peace of mind.
Manual on Preventing Sexual Harassment



Health and Safety Management Policy
On the principle of "health and safety are fundamental to business management and take priority over all business activities", we run a range of different health and safety activities in order to ensure that the our employees are healthy and energetic, and can work safely and with peace of mind.
Principles for health and safety

- Employees arrive for work each day full of vitality and go home each evening with a smile.
  - Employees are always vigilant of the safety of co-workers and help create a culture of caring about health.
  - Product quality is boosted through safety activities.



Safety
In 1979 Kobe Steel started a drive toward a medium to long term reduction in accidents at work, and since then has pursued safety activities, formulating a medium-term health and safety management plan every three years or so. This resulted in a big drop in the number of accidents and the frequency rate has stayed at a low level. Unfortunately, the last few years have seen no further improvement and even a slight deterioration. A particularly large number of accidents occurred in 2005.

Therefore, from this year activities will be targeted on the following three points in an effort to eradicate occupational accidents:


1. Proper understanding and strict observance of relevant laws, such as the Occupational Health and Safety Law, as well as in-house rules.
  2. Operating arrangements that will prevent major disasters involving high-temperature molten materials, toxic gas, or falls and collapses.
  3. New risks created by changes to the working environment or new processes or types of work should not be ignored. An on-site approach to identifying these risks and ameliorating conditions should be restored. (More complete risk assessment through frank discussions)
Frequency Rate of Accidents that Halted Operations

Frequency Rate of Accidents that Halted Operations



Health
To create a working environment that gives full consideration to human health, we are improving our management system in both the physical and mental health areas.

In the area of mental health, we are expanding a consultation system of consultation rooms where occupational counselors and specialist doctors can be consulted on any type of issue, as well as promoting mental health education at all levels.

In the area of physical health, we are working to prevent the onset of lifestyle illnesses by ensuring that all staff have regular health check-ups and follow-ups. We are also striving to prevent work-related illnesses by dealing with changes in the working environment.

A number of health-related issues have led to widespread public concern in wider society, such as the problem of asbestos contamination. It is our policy to deal with such matters in a thorough and sincere manner.