Assessment Methodology | 2026 Edition
Assessment Methodology
Understanding Investment in People Through Corporate Disclosures.
What capabilities do companies need? How do they develop those capabilities, support motivation, and connect investment in people to business outcomes?
NINGEN INDEX assesses human capital information disclosed in Annual Securities Reports across three assessment areas and 16 items, with a total of 100 points.
This assessment examines the initiatives companies disclose and how they explain them. It does not directly measure actual human capital capabilities or the abilities and motivation of individual employees.
1. Source Information
This assessment covers Japanese-language Annual Securities Reports filed through EDINET.
The fiscal year and filing are identified before information in the text, tables, figures and notes is examined. Information from integrated reports, recruitment websites, news or other sources outside the Annual Securities Report is not used to fill gaps for scoring.
The assessment considers both the size of a reported figure and whom it covers, which period it relates to, and what it measures.
2. Three Assessment Areas
01 Disclosure Governance | 20 points
Does the filing clearly explain the company’s human capital initiatives?
The assessment examines basic workforce, diversity and workplace indicators, together with human capital strategy, responsibilities, targets and actual results.
Beyond the presence of policies and figures, the assessment examines whether the filing explains their connection to business strategy. The scope and definitions of its indicators are also examined.
| Assessment Item | Maximum Points |
|---|---|
| G1Disclosure of Basic Quantitative Information | 5 points |
| G2Governance and Risk Management | 5 points |
| G3Human Capital Strategy and Basic Policy | 5 points |
| G4Clarity of Indicators, Targets, and Explanations | 5 points |
The Disclosure Governance score does not certify legal compliance.
02 Human Intangible Assets | 40 points
How does the filing describe the development and support of capabilities and motivation to deliver outcomes?
Disclosures about the accumulation and use of human capabilities are examined through Technical Knowledge, Skills and Motivation.
This assessment area is structured around the Can × Will concept explained below. Can is examined through Technical Knowledge and Skills, and Will through Motivation.
Technical Knowledge | 10 points
These are capabilities people possess: knowledge, qualifications, expertise and know-how relevant to the business. The assessment examines disclosures about specialist personnel and how their capabilities are acquired and accumulated.
| Assessment Item | Maximum Points |
|---|---|
| T1Technical Knowledge Base | 5 points |
| T2Acquisition and Accumulation of Technical Knowledge | 5 points |
Skills | 15 points
Skills are the ability to put technical knowledge to work in practice. The assessment examines where it is used, the extent of practical experience and application, and whether its use is sustained.
| Assessment Item | Maximum Points |
|---|---|
| S1Alignment between Technical Knowledge and Practical Work | 5 points |
| S2Volume of Use and Application | 5 points |
| S3Continued Use and Expansion | 5 points |
Motivation | 15 points
Motivation is the willingness to apply one’s capabilities at work and contribute to outcomes. The assessment examines disclosures about supporting mechanisms, their operation, and employee states and changes.
| Assessment Item | Maximum Points |
|---|---|
| M1Mechanisms Supporting Motivation | 5 points |
| M2Track Record of Operation | 5 points |
| M3Employee State and Change | 5 points |
The number of people attending training is not treated as the number who acquired a capability. Likewise, the existence of a mechanism or a survey response rate alone does not demonstrate high employee motivation.
03 Human Capital Investment Flow | 40 points
Does the filing explain how investment in people connects to outcomes?
The assessment examines the explanation of how investment in people connects to work or business outcomes. It also examines the magnitude of outcomes, the calculation basis, their use in planning, and verification of the relationship.
| Assessment Item | Maximum Points |
|---|---|
| F1Logic from Investment to Outcomes | 10 points |
| F2Magnitude of Outcomes | 10 points |
| F3Calculation Basis and Use in Planning | 10 points |
| F4Verification of the Relationship | 10 points |
Outcomes are not limited to profit. Measures such as productivity and reductions in working time are also considered where their relationship to human capital initiatives is explained.
Favorable business performance alone is not treated as evidence of the effects of investment in people.
3. Can × Will: The Foundation of Human Intangible Assets Assessment
Human Productivity ≈ Can × Will
The ability to deliver outcomes × The motivation to deliver outcomes.
NINGEN INDEX uses this concept to design the assessment items for the second area, Human Intangible Assets.
| Concept | Corresponding Assessment Item | Maximum Points |
|---|---|---|
| Can: The Ability to Deliver Outcomes | Technical Knowledge: Capabilities People Possess | 10 points |
| Skills: The Ability to Put Knowledge to Work | 15 points | |
| Will: The Motivation to Deliver Outcomes | Motivation | 15 points |
Can is assessed through Technical Knowledge and Skills, and Will through Motivation, with a total of 40 points.
Can | The Ability to Deliver Outcomes
Can ≈ Technical Knowledge × Skills
The ability to deliver outcomes is considered from two perspectives: possessing knowledge, expertise and know-how, and being able to apply them in practice.
NINGEN INDEX examines disclosures about possessing and acquiring technical knowledge separately from disclosures about its practical application and continued use.
Will | The Motivation to Deliver Outcomes
Will is a state shaped by countless factors, including work, evaluation, compensation, opportunities, relationships, health, family and emotions.
These factors cannot all be quantified. For Motivation, NINGEN INDEX examines companies’ disclosures about mechanisms supporting motivation, their track record of operation, and employee states and changes.
The Conceptual Model and Score Calculation
People cannot be fully reduced to a set of factors. The multiplication sign in C × W represents a conceptual model in which both capability and motivation influence human productivity.
The actual score is calculated by addition, not multiplication: Technical Knowledge (10 points) + Skills (15 points) + Motivation (15 points).
Scores reflect what the Annual Securities Report explains about these areas. They do not directly measure the Can or Will of individual employees.
4. Research Foundations, Expressed Through Two Questions
This approach draws on insights from several academic fields, including economics, industrial and organizational psychology, motivation research, and human resource management.
Human Capital Theory | Gary BeckerThis theory examines investment in people, including education and training, as human capital.
Job Performance Model | John P. CampbellThis model examines job performance through knowledge, skills and motivation.
Expectancy Theory | Victor VroomThis theory explains why people make an effort and seek to deliver outcomes through their expectations about effort, performance and rewards.
Self-Determination Theory | Edward L. Deci / Richard M. RyanThis theory examines the quality of motivation and its supporting conditions through autonomy, competence and relatedness.
AMO Framework | Ability, Motivation and OpportunityThis framework considers employee performance through ability, motivation and opportunities to contribute.
Rather than adopting any single theory, NINGEN INDEX brings together shared themes from these different perspectives into two employee-centered questions.
Can they do it? × Will they do it?
Can × Will expresses NINGEN INDEX’s synthesis of a common denominator across these academic perspectives.
It brings their complementary insights into a simple lens for thinking about human productivity: the ability to deliver outcomes and the motivation to do so.
This is NINGEN INDEX’s conceptual synthesis. It does not replace the theories or claim that their full explanations reduce to two factors. Nor do these theories directly validate NINGEN INDEX’s point allocations or individual scores.
5. Reading the Scores
Start with the Overall Score.
The Overall Score is the sum of the three assessment areas, with a maximum of 100 points. It provides a starting point for understanding human capital disclosures in an Annual Securities Report against the assessment items.
Explore Disclosure Characteristics Through Three Areas and 16 Items.
Companies with the same Overall Score may explain different areas in detail. The breakdown shows where supporting information is provided and where there is room for further explanation.
Read the Overall Disclosure Profile for Context.
The profile describes each company’s initiatives and the limitations of its disclosures. Read it alongside the scores to understand the company’s explanations more specifically.
A Score of Zero Does Not Mean Nothing Is Being Done.
A score of zero may indicate that supporting information for an assessment item could not be identified in the Annual Securities Report. It does not mean that an initiative is not implemented or that employees lack capability or motivation.
Extraction or reading failures, and items requiring review, are not treated as nondisclosure and assigned zero points.
When comparing companies, also consider differences in fiscal years and the scope of their disclosures.
6. Assessment Scope and Disclaimer
This assessment is based solely on information disclosed in the company's Japanese-language Annual Securities Report filed through EDINET.
It does not assess the human capital initiatives a company actually implements or the company's human capital capabilities themselves.
Items for which no disclosure was identified in the Annual Securities Report receive no points, regardless of whether the company actually implements the relevant initiatives.
This assessment does not certify investment value or legal compliance.
This English-language assessment is a translation of the original Japanese assessment and is provided for convenience. In the event of any discrepancy, the Japanese assessment prevails.