Introduction

Due to continuous globalisation, there is clear evidence that of an increasing

desire to learn management practices which have been regarded as successful,
regardless from which part of the world they originate. This essays aims to
promote a better understanding of how human resource management methods
and practises of two major economies differ from each other and explores the
possibility whether either country is keen to learn from one another. This essay
examines the HR methods of USA and Japan for their economic integrity and
position. Furthermore, these countries have been chosen due to their different
variants of capitalism, Free Market USA and a government guided economy,
Japan.

Culture orientation
"Land of the Free" - USA

Applying Hofsteads cultural dimensions theory which sets a framework for cross-
cultural communication, noticeable cultural predispositions appear in the USA ,
its strong orientation towards an individualistic culture and society which also
reflects self-reliance and a competitive and achievement based drive.
Individualism is manifested in the widely accepted idea of the "American
Dream", which glamorises an individual's opportunity to rise from a "log cabin to
the Whitehouse" on the basis of personal merit, endeavour and hard work.
Hofstead (1994), USA scores highly on masculinity and low in uncertainly
avoidance, placing the culture into a "Free Village" cluster which displays
agitation towards rules and a bureaucratic structure in the workplace and society.
The American Culture is based around the notion of "land of the free" which is
demonstrated by its preference towards democratic organisations, equality rights
amongst society members and a low power distance.

However, Jackson(2002) suggests that individualistic societies "group up" for

projects which benefit each member mutually. Furthermore, collectivism can be
observed in American culture after times of national crisis such as the
devastating terrorist acts of September 2001 and Hurricane Katrina 2007.

Confucian Philosophy - Japan

Using Hofsteads dimensions theory, Japan falls under a "Pyramid People" cluster.
With a highly uncertainty avoiding culture and high power distance, Japanese
people prefer routine work, stick to tight schedules, slow to accept change and
accept, furthermore, Japanese employees are aware of their position in a working
environment and stick to a hierarchical structure. Japan is a very masculine
culture, just like the use, However in combination with a focus on collectivism,
individual competiveness is not usually present. Competition occurs between
groups rather than individuals and in corporate Japan, employees function better
when they are competing against rival firms. Japan is notorious for workaholics,
employees strive for Monodukuri, excellence and virtue in the workplace.

Maintaining Confucian philosophy, a strong emphasis is placed on the five

virtues of mutual love, virtuousness, consciousness, honestly and reciprocation
and group belonging being a primary focus of Japanese society (Hollinshed
2009). Furthermore , critical differences were discovered in Japanese firms
compared to their American counterparts. The emphasis placed on group
belonging is also reflected in a more incessant use of group decision-making,
higher frequency of communication and lifetime employment, generating strong
employee cohesiveness and company commitment. Vogel (1975) and Ouchi
(1981) place a crucial important on similar aspects within the Japanese
management, Ringi, consensus decision making, nemawashi, intensive "clan-
like" communication and control system and Enryoi, refraining from expressing
opinions which contradict the majority. Other aspects such as High level of
communication and a Seniority-based pay system have been noted by Pascale
and Athos (1981).

Human Resource Management

USA

An argument is made that the core elements of HRM in the USA are its
suppositions of business autonomy and managerial freedom, however these
factors are not easily transferable to other global markets.

Recruitment and staffing in the US is conditioned by the "At-Will" labour law 1908
which implies that HRM managers have a heavy dependency on external labour
markets to fulfil roles (Book). A huge priority on tradition methods of recruitment
have been proposed, assessment centres, interviews and psychometric tests.
However, with rapid global technological advancements, a higher emphasis has
been placed on Internet-based recruitment as it enables two-way communication
between potential new employees and the firm.

While the US government retains its non-involvement state in employment

matters for firms, it purposes heavy anti-discriminatory legislations such as the
Civil Rights act of 1964 which forbids discrimination against employees based
on; sex, race , religion, national origin, age , pregnancy, affiliation and
disability(Civil Rights act of 1964). Individuals rights receive heavy protection
from the US government as seen in protection against sexual harassment, which
leads to formal and professional work relations between employees and drives
employers to follow an ethical and professional approach in terms of hiring,
firing, promotion and training of employees.

Close to 90% of the US workforce belongs to a non-union enterprise, giving

employers elbow room to develop strategies relating to payment, factors which
employers take into consideration are; labour rates and variable payment
depending on employees performance. Variable payment depending on
performance is common in the US and non-wage benefits are also included,
employers contribute towards pensions and social security, and also to
healthcare plans as healthcare is private and the government plays little role in
subsidising the industry. Non-union sectors exhibit partnership-based approaches
to collective bargaining, forbidding sticking(Book).

US companies place a heavy emphasis on training, it heavily relies on a

technologically savvy workforce and orientates around the need for customer-
focus behaviour. There has been a huge emphasis placed on a highly mobile
workforce to meet the challenges and responsiveness of a globalising world.

Japanese Pillars of Employment

Steep labour mobility in Japan was first recognised by Hollinshead and Leat
(1995). A dual structure for HRM managers was then proposed which oriented
around the concept of Keiretsu, where core employees are assumed to have
lifetime employment in firms while being ringed by expendable employees or
subcontractors.

Many companies employ a "seniority-based wage system" where earnings are

increased proportionally to age and time served. While salary is based on
seniority, it does not necessarily mean that and increment based on age and
time served occurs regardless of the job title and skill. There are two wage
systems: Seniority-based wages and skill-based wages which is determined by
the level of performance and responsibilities carried by the employee (Yuping
2004). The skill-based wage system is divided into a grade system where each
employee is assigned a grade depending on his level of education, performance
and skill. Employees are able to move up on the grade system through fulfilment
of set requirements by employers, developing necessary skills to progress and
through job-performance evaluations. Employees who perform outstandingly are
able to skip grade systems and move onto a higher grade (Yuping 2004) .

With "time-served" being one of the most crucial elements which affects the
wage system in Japan, many Japanese firms have adopted the method to
encourage employees to remain with the company and to coordinate lifetime
employment practises. Core employees are also exposed to a range of benefits
such as, holiday comes, company schools, assistance in case of accidents and
death to further promote the idea of lifetime employment (Hollinshed 2009).

The concept of Keiretsu carries over into training and developing, with core
employees being treated as assets which benefit the company rather than costs,
employers are more than willing to devote time and resources for further training
and developing of employees. Kaizen , the concept of continuous improvement
is emphasised by firms, where staff are encouraged to constantly improve quality
and service. Multi-skilling is another fundamental part for core employees, job
rotation is a mandatory for promotion.

Japan has a unique recruitment system, large firms are subject to recruit on a
specific year schedule, the process is referred to as Aotagai, with students being
recruited prior to graduation (Jackson & Tomioka, 2004). Graduates from
prestigious universities are given preference, however all university graduates
hired are considered as core employees. Employers place emphasis on
communication skills, motivation and temperament (Sasaki, 1990). Recruitment
usually begins in April where students begin their final year of education,
applicants are required to pass several tests and interviews before being offered
a position. However, during the interview and application process, applicants
have little to no knowledge in regards to their future role or job location.
Successful applicants would all begin work the following year in April .
Organisations establish connections within educational facilities to assist in
finding talented recruits.

http://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/47730/1/EJHU_40_59.pdf

Issues and Implications for HRM.

US

While the US has a world-leader status in terms of economy, the neo-liberal

economic and employment policies have lead to a perverse affect on the market,
provoking a detrimental effect on society. The income inequality is clearly visible
in both social and corporate structures in the US, the United Nations
Development Programme (2006) placed the US as 73rd out of 126 countries on
income equality. It is estimated that company chairmen and top level executives
earn on average 300 times more than the person in the states(Berliner, 2008).
Furthermore rapid globalisation has had a detrimental impact on the unskilled
workforce of the US due to outsourcing to cheaper production intensive nations.

There has also been a surge in the number of flexible employment positions
being offered in comparison to full time and part time employment. Flexible
forms of employment can range from short-term contract work to agency work,
telemarketing and telecommunications. It is clear that the US firms are shifting
labour intensive work to lower-cost global regions due to lower barriers of entry
from globalisation.
Japan

Ouchi's widely noted book and theory in which he describes a "Z-culture"

apparent in Japan suggests that the Japanese management differs from
American and is found to be more effective. Theory Z How American
Business Can Meet the Japanese Challenge (1981) discusses cooperation,
group activities, openness's to criticism, concern for quality of life and stability in
the job position. Furthermore, Ouchi argues that unlike American firms which
place a high emphasis on technological integration, Japanese success is purely
driven from its management style. "This is a managing style that focuses on a
strong company philosophy, a distinct corporate culture, long-range staff
development, and consensus decision-making"(Ouchi, 1981). During the
"heyday" of Japanese economic supremacy, these HR practises were trumpet as
the key to organisations success (Bird & Beechler, 1994). However a decade
later, the Japanese economy entered a recession and a growing international
influence in Japanese economy has lead to many firms questioning whether
these practises are subject to modernization.

There has been heavy criticism of for treatment of core employees, furthermore,
Japan has been affected by declining birth rates and a demographic "time
bomb". 13% of Japans population ages 15 and under, 65% of the population is
ages 15 to 64 and 21% of the population is ages 65 and over (Japan in figures
2007). A declining population creates labour shortages which has explicit
implications for human recourse management in terms of staffing and
recruitment.

Senior-wage payment and core employee concept have come under fret for
"binding employees hearts and minds to the organisation"(Book). It has been
critiqued as an excessive technique to maintain employee loyalty. Furthermore,
constant job rotation and Tanshin-Funnin, short notice relocation for employees
from one branch or part of the country to another, where employees spend
extensive time away from their family, has also been linked to high levels of
suicide and alcoholism.

Conclusion
The Japanese HRM model has substantially lost its appeal, while it maintained its
strength during the height of Japanese economy, it has now been widely
critiqued. It has also been established that the Japanese need to adapt and
modernize their model to meet needs of a rapidly globalising world. An
institutional reform must take place which would move towards a more
individualistic and low power distance culture which is more relatable to America.
However, the US gains to learn a thing or two from the payment method
implemented in corporate Japan. While skill-based wage system is found in the
US, it is exclusively available only to the white-collar workers, which further
promoted the unequal distribution of wealth. The Skill-based wage system is
applied to white and blue collar workers in Japan.

Refrence

United Nations Development Programme (2006) Human Development Report, : Palgrave Macmillian.

Hofstede, G. (1994) Culture and Organisations: Software of the Mind, London : Harper Collins .

Jackson, T (2002) International Human Resource Management: A cross-cultural approach, London: Sage Publications .

Civil Rights Act 1964 () Civil Rights Act 1964, Available at:http://www.ourdocuments.gov/doc.php?
flash=true&doc=97 (Accessed: 26/04/2016).

Hollinshed, G (2009.) International and comparative human resource management,

Ouchi, W (1981) Theory Z How American Business Can Meet the Japanese Challenge ,

Vogel, E. 1975. Modern Japanese organization and decision-making. Berkeley, CA:

University of California Press.

Pascale, R. & Athos, A. 1981. The art of Japanese management: Applications for
American executives. New York: Warner Books.

Hollinshead, G. and Leat, M. (1995) Human Resource Management, An international and comparative
perspective, : .

Yuping, Chen (2004) Compensation System in Japan, United States and European Countries, Institute for International Labor Studies
Ministry of Labor and Social Security: P.R.China.