Communication Based on Mutual Trust and Responsibility

DENSO believes that worksites where associates continue to work proactively with a sense of pride and a high level of motivation will lead to sustainable growth of the DENSO Group. Guided by this belief, we build good relationships with our employees through sincere Company-employee dialogue. We also hold discussions with our employees regarding improvements to working conditions, including not only working hours, holidays, and salaries, which are compliant with laws and regulations, but also maintaining a living wage and promoting efforts to reduce overtime hours.
We are also taking steps to deepen the bonds of mutual trust and responsibility by creating a sense of organizational unity, enhancing each associate’s morale, and improving the workplace environment to make it a better place to work. In these ways, we strive to ensure long-term, stable employment.
Furthermore, our approach and initiatives toward long-term, stable employment are shared globally, with information exchanged between our headquarters and each Group company. In these ways, such initiatives are being carried out in accordance with the laws and regulations of each country and region.

*1 Turnover rate: Resignation due to personal reasons
(For reference) Fiscal 2024 turnover rate (general workers, manufacturing industry): 8.7% (Ministry of Health, Labour and Welfare, Survey on Employment Trends, 2023)
*2 Retention rate: Figures taken from turnover rate of associates in their third year since joining the Company

DENSO encourages active communication between managers and associates to ensure the mutual sharing and understanding of management policies, issues related to management, and issues related to the workplace environment, in addition to solving these issues. To realize this basic policy, we hold regular meetings and round-table conferences both Company-wide and at each individual workplace. We also work to promptly share information through the various channels for communication, such as messages from the CEO and in-house bulletin boards.

To achieve DENSO’s continuous growth, we must ensure that all employees gain job satisfaction and actively take on challenges and grow on a steady basis. Accordingly, achieving high levels of employee engagement, toward both their work and the organization, is extremely important. As a global management issue, DENSO is working to enhance engagement across the entire Group, including in its overseas operations.

Every year, we implement an employee survey, titled the Workplace Capability Survey, targeting our entire employee base of roughly 50,000 employees. The Workplace Capability Survey seeks to visualize our organizational capabilities and facilitate activities aimed at building a better organization. To that end, the survey comprises questions based on organizational development theories, focusing on the three perspectives of soundness, effectiveness, and self-reform capabilities. In addition, at DENSO, we define engagement as a sense of fulfillment and connections with the Company and the workplace. We measure positive responses*¹ for four specific questions: “Do you have a sense of fulfillment with your work?”; “Do you approach your work with a positive attitude?”; “Do you feel a connection to the Company?”; and “Do you believe there is an overall positive work environment?” We are steadily moving forward with activities focused on improving responses from young employees, technicians, and women, all of whom currently provide responses falling below the Companywide average. We share the results of the survey with all employees and, at the workplace level, engage in dialogue and operate a rigorous PDCA cycle to create better working environments. We utilize the survey results to review and enhance HR policies.
We also conduct employee engagement surveys at DENSO Group companies.
In addition, we hold labor–management negotiations and dialogue sessions throughout the year to promote ongoing discussion and action toward creating attractive work environments and improving workplace communication.

*¹ We measure positive responses as the rate of employees who answered, “somewhat agree,” “agree,” or “strongly agree” among the seven choices given.

We are stepping up efforts to strengthen employee engagement not only in Japan but also on a global basis. In fiscal 2025, human resource managers from each region met to assess engagement levels in their respective regions and discuss the importance of promoting improvement efforts. Also, after establishing a shared global standard that enables us to compare engagement levels across regions, we set specific targets for each region and are implementing initiatives to improve engagement while monitoring progress over time.

Positive Response Rate for Work Engagement (%) [DENSO CORPORATION]

DENSO strives to realize the happiness of people and society as a whole through the provision of new social value. We believe the starting point of this endeavor is our employees and their ability to execute as a team. Based on this belief, in 2021 we formulated PROGRESS, a vision and action plan for our people and organization that aims for us to become a group of professionals with the ability to turn ideas into reality.
As part of our efforts under PROGRESS, we revamped the wage system.
For all employees, we introduced a compensation system in which wages fluctuate according to individual efforts and results (business performance) and the performance of the roles assigned to each employee.
For management positions, we introduced a compensation system based on rank, which focuses on the significance of the roles and duties for which each individual is responsible, providing compensation that varies according to results. For union members, we greatly reduced components of the wage system that involved seniority-based salary increases and introduced a performance-based system where wages fluctuate significantly in accordance with performance and role.
We also have in place a framework that fairly evaluates personnel on their pursuit of achieving personal goals, which are linked to our organizational targets and policies, and can provide wages that exceed the limits of an employee’s position or rank if certain conditions are met. Through this framework, we are enhancing employee engagement and pursuing new value creation.
In addition, we have introduced other systems that lead to better employee engagement on a Groupwide basis, including the President’s Award, which is given to business divisions and Group companies that have contributed to corporate value enhancement.

We established the DENSO Employees’ Shareholding Association with the aim of improving employee benefits and enhancing employee awareness of participation in management. This association targets all employees, such as full-time employees, employees rehired after retirement, and full-time contract employees. * In addition, to encourage employees to build assets, we provide them with subsidies for holding company shares.
Through this system, we will strive to further improve corporate value in unity with our employees by encouraging them to have a high level of interest in the status of the Company’s management.
* Excluding term employees, part-timers, and part-time employees.

At DENSO, policies pertaining to working conditions are established under the DENSO Group Sustainability Policy and the DENSO Human Resources Philosophy and are implemented across the entire Group. In addition, along with promoting labor management in accordance with the laws and regulations of various countries and regions in relation to labor, such as working hours and pay, DENSO strives to improve working conditions and create employee-friendly work environments while maintaining dialogue with employees so that they can work with satisfaction and enthusiasm.
For example, DENSO CORPORATION and domestic Group companies implement initiatives designed to curb long working hours in order to promote workstyle reform and maintain the physical and mental health of its employees. In addition to abiding by the Article 36 Agreement on which labor and management have reached an accord, DENSO CORPORATION has established indicators for overtime work and implements monitoring and management on a year-round basis to curtail overworking by employees.
We will continue to promote workstyle reforms while placing due importance on dialogue with employees. In addition, we will endeavor to increase job satisfaction among employees by taking appropriate measures, such as revising fixed-term employment regulations, to curb long working hours and comply with developments including changes in laws and regulations and minimum wage revisions in conjunction with the establishment of equal pay for equal work.

Based on associates’ needs and the laws and customary practices of each country, DENSO is working to expand welfare programs for all employees such as company dormitories, cafeterias, and other facilities, as well as insurance, pension and retirement benefits, and a childcare leave system, to foster a comfortable workplace as well as improve the motivation of associates and support their lifestyles including after retirement.
For example, since 2001 DENSO CORPORATION has been introducing a selection-based welfare program called the DENSO Cafeteria Plan that applies to all employees to meet diverse welfare needs. In addition, the Company has established company dormitories, cafeterias, recreational facilities, and other facilities, as well as an asset building assistance program and a Group insurance system.

Note: Applicable persons differ by facility and program.
• DENSO Cafeteria Plan, asset building assistance program, and housing allowance: Employees
• Cafeterias: Employees and workers within facilities on the Company’s grounds (Group employees, contract employees, and temporary employees, etc.)
• Recreational facilities: Employees and their families
  (Certain recreational facilities can be used by Group employees and retired employees.)
• Group insurance system: Employees and retired employees
• Pension and retirement benefits: Employees

Sustainable growth of the DENSO Group is essential in continuing to secure long-term stable employment. By placing even more importance on communication with our associates and further reinforcing the bond of mutual trust and responsibility, both associates and we will make efforts together to realize growth and development of the DENSO Group.