JAPAN

THE LAND OF RISING SUN

 HRM in Japan:
Practices, Issues & Challenges
 Quick Facts
 Area: about 378,000 sq. Km.
 Population: over 127 million
people.
 Language: Japanese spoken
by 99% of population.
 Religion: Buddhism and
Shinto.
 Longest overall life
expectancy rate in the world.
National Culture

 collectivism
 masculine
 endurance
 indebtedness
 absence of horizontal
social groupings
 observance of social
status
 harmony
 high uncertainty
avoidance
HRM and other employee related values and practices

• Enterprise-based trade unions, cooperative relationship between

employees and company, avoidance of open conflict

• Emotional and dependent relation between company and employees

• The Japanese are experts at the "soft S's" of management: staff, skills,
and style.

• Ringi method: collective decision making

• Implicit discrete performance appraisal

• Teamwork: multi-skill work teams, team appraisal and reward

 nenko: life-time (or long-term) employment for regular core employees

 seniority-based pay and promotion

 process-oriented

 discrimination against women

 employee-oriented leadership style

 job-rotation

 job-flexibility

 Kaizen- continuous improvement

 Kanban or just-in-time production

 Population,Labor force, andnumberof unemployed(2010)

Population Labor force Labor force No. of Unemployme

2008 participation unemployed nt rate
rate
Japan 126,536 62,210 81.6 3,320 5.0
USA 310,384 153,886 77.3 14,822 9.6
France 62,787 28,379 71.0 2,643 9.3
Germany 82,302 41,783 77.9 2,949 7.1
Italy 60,551 24,972 63.2 2,103 8.4
UK 62,036 31,365 78.4 2,432 7.8
Korea 48,184 24,749 70.3 921 3.7
(1,000 persons,%)

Source:
United nations, world population prospects: the 2010 revision, OECD, labor force statistics,
statistics bureau, ministry of internal affairs and communication, Japan, current population
estimates 2009, labor force survey.
Four pillars of Japanese HRM
 Long term employment
 Seniority based promotion and compensation
 Company-driven employee training programs
 Trade/labor unionism
 Japanese vs. western HRM
HR practices Japan West

Nature of employment •Long-term (if not lifetime) •Employment- at-will

employment
•Paternal approach •Individual responsibility

•Strong long term talent •Short to mid term talent

pipeline pipeline
Compensation Pay for age or experience Pay-for-performance
(seniority based pay) (value based)

Training •Company responsibility •Personal responsibility

•generalist focus •Specialist focus

Union relations •Cooperative •Confrontational

•Passive •Aggressive
 Recruitment and Selection
 Recruitment at entry level (Hiring from universities)
 Lateral hires, independent contractors for special
tasks, recruiting agencies, and temporary employees
(currently)
 Hiring time
 Mid-career hiring
• Advertisements in
newspapers, through web
sites, employment agencies
and through special seminars
and meetings
• Hiring on the basis of
reference
• Internship system
• Selection criteria
 Training and development

 Traditional Japanese training styles

 On-the-job training
 Off-the-job training
 Job rotation/multitasking
Training and development (cont’d)

 Occupational skills are valued over firm-

specific skills

 Support employees to improve technical

skills and to acquire qualifications.

 Creates generalists than specialists

 Compensation and benefits
• Wage system based on seniority
• Automatic Pay rises and promotions
• Monthly salary comprises of only base pay and allowance.
• Frequency of Pay reviews
• Annual salary for the lateral hires
 Compensation and benefits (cont’d)
 Retirement benefit
 Bonuses are tied to the broader performance of
the organization.
 Bonuses frequently comprise a significant portion
of take home pay.
 Many companies are now reviewing this system to
prepare one based on performance.
 Growing numbers of companies are explicitly
weighting ability and performance over tenure and
age in salary decision.
 Performance management:
 Appraisal and evaluation policies
 Based on an employee's performance
 Interviews with superiors once or twice a year
 Management By Objectives (MBO)
 Companies make a team assessment by project.
Career management
• Promotion system distinct
from that of the West.
• No clear demarcation
between the white collar and
the blue collar.
• The rise to the senior level
managerial post.
• Japanese follow the late
selection criterion mixed
with simultaneous and
divergent promotion.
 Reasons for Staffing
o factor for international
staffing
o more PCNs than HCNs and
TCNs

 Selection methods

 Selections criteria

 Training

 Pre-mature return and failure

 Ethics:
• Japanese business ethics are a direct product of Japanese culture
and religion.

• The Keidanren Charter-Charter for Good Corporate Behavior

clarifies ten principles

• Punctuality and work ethics

 Corporate Social Responsibility
May 2009, the CSR ranking in Japan
• SHARP-ranked at the first place-supports more than 500 environmental
education classes with nongovernmental organizations for elementary
school students.

• TOYOTA, the second highest ranking company is famous about hybrid

car PRIUS.

• “Ecology” is the most important key word for the CSR activities in
Japan.

• Panasonic follow it in a respective order

• Other highly ranked companies are renowned manufactures, except

NTT DOCOMO, the largest mobile phone carrier in Japan.

• Kyoto Protocol and low emission vehicles such as hybrid cars and
low-fuel consumption cars are the subjects of lowering tax rates which
offers the 50-100% of car purchasing related taxes
ISSUES & CHALLENGES
 Workplace Diversity
• Gender Diversity
• Example of IBM Japan
– ratio of female employees
improved from 13 percent in
1998 to 20 percent in 2010
– the number of women in
management increased from 1.8
percent to 11.6 percent by 2010
• Diversity in employment
structures
 Equality
• Equal Employment Opportunity Law (EEOL)
• Women occupied no more than 10 percent of
management positions in 2005
• A 2000 Labor Ministry survey showed women held
only 1.6 percent of positions equal to director
• Japan ranks as the most unequal of the world’s rich
countries, according to the United Nations
Development Program’s “gender empowerment
measure”.
 Convergence towards Western HRM practices
• Convergence debate at the
centre of Japanese
management research.

• Convergence toward Western

HRM practices.

• Convergence to the extreme i.e.

end of Japanese-style HRM.
 Other Issues and Challenges
• The aging population has clear implications
for corporate HR practice.
• For many employees in Japan, the move
away from traditional employment practices
constitute a violation of the psychological
contract.
• Increasing ‘Suicides’ due to overwork. In the
fiscal year ending in March 2010, the
Japanese government found about 100
‘karoshi’ deaths. It also ruled that 63
suicides were caused by overwork.
• Reducing overwork and long working hours
 Rate of the employees who work more than 50 hours per week in 2000

Japan
New Zealand
USA
Australia
UK
France
Germany
Denmark
Italy
Belgium
Sweden
Netherlands

0 5 10 15 20 25 30
Reforming Japanese HRM:

 Turning away from lifelong employment, flexibility of

recruitment, release of personnel and change of employer

 Managers-externally recruited and can be laid off again more

easily

 Increased formation of specialists and turning away from the

formation of generalists.

 Japanese managers - more concerned with the decline of the

seniority principle: “performance orientation”, “result and
objective orientation”, “performance and result oriented
remuneration” and “turning away from the seniority principle”.
 New Japanese Model
New Values Reasons

1) introducing flexible HR systems 1) economic recession & changing State

policy since 1992

2) more merit-based approach 2) mismatching HRM & business needs

3) emphasizing new HRD strategies 3) changing attitudes of young employees

Conclusion