Hidden Impact Makers vol.2: PayPay’s Unique HR System that Rewards High Performers

Focusing on the back office that supports PayPay’s growth, the series “Hidden Impact Makers” offers a glimpse into the behind-the-scenes workings of PayPay that are usually out of sight. Following the previous issue, “HR Policies for Continuous Innovation and Growth,” we spoke with Kaori Sugiyama-san from the HR Planning Department about the HR policies of the PayPay group.

A Simple HR System that Quickly Adapts to Change

PayPay’s “HR system” is uniquely designed from scratch to align with the company’s growth strategy. Based on the HR policies introduced in the previous issue, it is an extremely simple system.

Here are its key features:

Let me introduce each feature.
First, PayPay does not have a grading system commonly used in many companies. Based on the concept of “positions are cast,” compensation is determined by expected roles and market value, regardless of whether one holds a managerial position.

Compensation is primarily based on an annual salary, with no personal allowances or no bonuses in the common sense. Instead, there is a special lump-sum payment tied to the achievement of business goals. This special payment is not guaranteed and can be zero.

The evaluation system is a four-level relative evaluation (1:4:4:1) designed to avoid evaluations from clustering in the middle categories. Performance evaluations are conducted once a year and reflected in salary increases, status quo, or decreases. High performers who drive innovation and lead business growth are rewarded handsomely.

In terms of benefits, we keep them to a minimum from the perspectives of “Pay for Performance” and “Diversity,” as they are often tied to individual attributes.

Additionally, our hybrid work style, combined with a super flextime system, allows for collaboration that transcends time and space.

Furthermore, at PayPay, we believe that “everyone is a professional.” Instead of company-imposed “talent development,” we adopt a “talent growth” approach based on self-directed careers.

Innovation Doesn’t Come from Mediocre Companies

During the six-month review process of our HR system that began at the end of last year, an executive remarked, “PayPay is a company that creates things no one has ever seen, so our HR system should be something no one has ever seen either.” True to these words, our system is not a copy of any other company’s; it is uniquely PayPay’s.

Our system is streamlined to the extreme and may not be universally accepted. However, we have chosen a policy that “rewards employees who lead business and service innovation” over a “system that is kind to everyone.” This approach ultimately contributes to our users and the market.

Regarding organization and personnel placement, we adhere to the principle that “positions are cast,” ensuring a “flat and optimal organization” and “right person for the right job” to respond to different phases of the business. In a rapidly growing and changing organizational environment, individual roles should also be flexible. As the key challenges of each company or department change, the most suitable leader should take charge accordingly.

The Role of HR in the AI Era

I believe that PayPay’s HR system is in a perpetual beta state. We continuously question what kind of system best enables employees to drive innovation and contribute to business growth, evolving our HR system to match the environment.
At the same time, it is crucial to be future-oriented. We shape our system by vividly imagining the kind of talent that will thrive at PayPay in the future and how they can contribute to users and society.

We stand at a historical turning point, possibly facing a “singularity” that surpasses the Industrial Revolution or the Renaissance. Never before has the question “What will humans do?” been so pertinent. We aim to innovate HR from scratch, unbound by the conventional concept of Human Resources.

*Job openings and employee affiliations are current as of the time of the interview.