McDONALD'S JAPAN NO LONGER SERVING UP FORCED RETIREMENT

By Smerd, Jeremy | Workforce Management, August 28, 2006 | Go to article overview

McDONALD'S JAPAN NO LONGER SERVING UP FORCED RETIREMENT


Smerd, Jeremy, Workforce Management


AGING WORKFORCE

Senior citizens may soon be serving Teriyaki McBurgers, Chicken Tatsutas and Big Macs alongside the 20-somethings behind the counter at McDonald's restaurants in Japan.

McDonald's Japan announced recently that it would abolish its policy of forced retirement at 60 for its company-owned restaurants. That change complies with Japanese legislation that took clfcct in April, hut the company says that's not why it is instituting it.

"Basically this decision comes From the understanding that work opportunities should he provided to employees who have ability, physical energy and drive, regardless of age," spokesman Ryosuke Tsuji says. "We should forget about age."

The policy change allows qualified employees to go on working for the corporate office or in one of its 2,800 restaurants. The change will have little immediate impact on company culture. The average age of workers at McDonaid's Japan is 33, and only five employees are older than 55. Further, the company's 1,000 Japanese franchisees have not abolished the mandatory retirement age.

Japan's recent law calls for companies to let people work longer because the age at which retirees become eligible for pension benefits is being raised. The legislation is intended to add tax revenue to save the country's pension system and, perhaps more importantly, fill a labor shortage created by a zero growth rate in the population.

Companies can comply with the retirement law in three ways. They can raise the retirement age to a minimum of 62, or, like McDonald's Japan, can abolish the Forced retirement age in effect at most employers. Companies that pay employees based on performance, not seniority, are more likely to abolish mandatory retirement ages, according to Nhattan Nguyen, a senior consultant for Mercer Human Resource Consulting in Tokyo.

Most Japanese companies, however, do base pay on seniority, as well as team performance. …

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