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ethics and effectiveness of which have been widely debated both inside and

outside Japan. However, there have been substantial changes in trends

concerning business organization and individuals in Japan and we can safely

say that in the recent aftermath of the breakdown of the bubble economy,

conventional debates on the features of Japanese-style management also need

to be fundamentally re-examined.

For instance, recent characteristics of environmental changes relevant to

Japanese business organization are as follows: large-scale fluidity in the labour

market through the processes of information technology and internationaliza-

tion; collapse of long-term stock-type employment systems, other than some

core employees; diversification and formation of multi-track and flexible

employment management; diffusion of information systems and flat organiza-

tion based upon information networking; higher educational qualifications

among women and their advance in occupations; decline of young workforces

and increase of older workers; further reduction of working hours and policy

formation for quality of life; and enactment of a series of laws related to

working life, such as the Equal Opportunities Law and Childcare Leave Law,

which form part of labour and living-related legislation and improvement of

social environment.

Furthermore, as far as the individual is concerned, there has been increased

diversity in values, attitudes to employment and lifestyle and individualindependence (autonomy). This has particularly shown up in orientation

towards will and skill, freedom and self-responsibility and self-enlight-

enment, and also in the formation of strong desires for balance in the so-called

four areas of life professional, family, social and private.

This more individual-oriented style of business organization is displacing the

above-mentioned collectivist approach, which required an individuals total

sacrifice to the interests of the goals of the business organization. Although

employment management by career choice selection including the system

whereby the choice of career path is based on an individuals sense of values,attitude to employment and intended career had already been introduced in

such institutions as major banks and large trading companies in the mid-1980s,

in the changing climate of recent years it is now being introduced as a new

medium-term flow-type management system, which is even more individual-

oriented.

In other words, while corporate division and the system of holding

companies were introduced in the unprecedented industrial restructuring

following the collapse of the bubble economy, with further labour transfer both

within and outside companies and their groups, and large-scale mobilization ofthe labour market, it is the independent and autonomous career development

of the individual which lies at the heart of the personnel system being

introduced and diffused. In this respect, the choice of career path mediated by

Takashi WatanabeRecent Trends in Japanese H.R. Management

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the will and skill, freedom and self-responsibility and self-enlightenment of

the individual becomes a premise it is a system that offers fulfilment of the

desire for self-actualization and development, gauging the increase in

motivation and seeking to preserve integration and contribution to the

organization. In other words, it is a shift towards a flexible system giving equal

weight to the four areas of life of the individuals while simultaneously

satisfying the interests of business organizations. With the exception of

enterprise unions, in business organizations which have introduced this type of

system the traditional fixed viewpoints and ways of thinking concerning

Japanese-style management have already been fundamentally called into

question.

We cannot yet say how far or how fast this new management system will

spread, but it should at least be recognized as a new trend hitherto unseen in

conventional Japanese management.

In this paper, taking the contemporary Japanese major banks as my core

example, I seek to present the associated trends and features of this individual-

oriented medium-term flow-type flexible management system, introduced in

recent years under the stylization of career personnel system, and to examine

its significance.1 In so doing, I hope to promote a fundamental re-examination

of fixed viewpoints and ways of thinking concerning Japanese-style manage-

ment still entertained by some abroad.2

Background to the Introduction of the Career Personnel System

I would like to begin by examining factors leading to the introduction of this

new system, with particular reference to trends in Japans city banks.

Restructuring of the banking industry and the fluidity of the labour market

Todays banking industry in Japan is developing a financial big bang, withlarge-scale restructuring and unprecedented mega-mergers exceeding the

framework of conventional company groups. Added to this is the introduction

of corporate divisions, intra-company systems and a system of holding

companies, with the state of the finance industry and that of the working

environment of individual companies undergoing a high degree of restructur-

ing via electronic banking (EB) and IT. Furthermore, both the relation

between the division and cooperation of labour in the finance industry and the

allocation of jobs and functions within the company group have undergone a

high level of reorganization, including the restructuring of the qualitative andquantitative relationship between supply and demand of the workforce. In

addition, while pursuing human resource restructuring on the one hand, it is

common practice to see head-hunting and year-round recruitment, both inside


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and outside company groups, of personnel who can be immediately effective.

As a result of the simultaneous development of these various trends, the

fluidity of the labour market has experienced considerable rapid promotion in

all areas of society. In such a climate, even if a small number of core staff are

generally recruited into the business organization in line with the long-term

philosophy of human resources management, a new form of personnel system

is being sought for the large peripheral labour force (and its sub-strata) one

that values short-term flow-type flexibility, whereby manpower of the required

quality is employed only in the required quantity and for the required period of

time, in order to avoid mismatches in supply and demand.

The introduction of the career personnel system at DK Bank may also be

considered as being in line with such trends. DK Bank explains this as follows:

The finance industry is going through a turbulent period as never before

experienced, as shown by the Japanese big bang, with intense and rapid

pressures for restructuring under circumstances of being in a real do-or-die

situation. (Interview, 1999)

From April 1999 DK Bank put into action its first corporate plan. It states that

as a financial group of high corporate value living up to the trust of the

customers, the market, the shareholders and society itself, it aims to operate

successfully through the financial big bang, and remain a company where bankclerks can enjoy attractive working conditions, while reaffirming its position as

a leading company. This is the future image that DK Bank will progress

towards, by means of the radical reform of its management system. This has

started with the introduction of an intra-company system, supporting the

professional career development of the personnel and preparing the

infrastructure for employees to continue to aim for professional development.

The introduction of such a career personnel system was born from the

necessity to adapt the personnel system to the acute changes in its environment,

particularly in the mobilization of human resources that accompanied thefinancial big bang, and to create an environment offering maximum scope for

independence, autonomy and creativity so that bank employees can become

true professionals.

The intra-company system and internal manpower market

DK Bank introduced an intra-company system, establishing a Corporate

Centre functioning as head office and four companies a Customer and

Consumer Banking Company, centred around domestic branches; a Corpo-rate Banking Company responsible mainly for large businesses; an Interna-

tional Banking Company, with an overseas focus; and a Market and Trading

Company, with a marketing department at its heart (see Figure 1).


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General meeting of

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AsseBoard of Directors

In-house operating

audit committee

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LegalAffairsDept

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sakaOfficeDept

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entPlanning

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dministration

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CreditSupervision

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lanningDept.

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FundManagementDept.

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ccountingDept.

BusinessA

dministration

ResearchDept.

P

ublicRelations

TrustP

lanningDept.

Group

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Dept

PlanningDept.

CorporatePlanningDept.

Secretariat

Fund

Securities

Investme

ntBanking

M

arketBanking

M

arketPlanning

AsianDept.

InternationalInstitutions

InternationalFinance

InternationalP

lanning

InternationalCreditSupervis

ion

EuropeanDept.

AmericanDept.

InternationalBankingBranch

ExpatriateStaffOffice

Corporate Banking

Company

Industrial

Research

FinancialInstitutions

CorporateBusiness

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OsakaF

oreignBusiness

TokyoF

oreignBusiness

OsakaBusiness

ChibaBusiness

C

TokyoBusiness

Centre

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Dept.

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D

LondonFunds

D

SingaporeFunds

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New

YorkFunds

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ocialResponsibility

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Di

i

i

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ankingDivision1

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inessHQD

ivision

PublicService

Division

B

ankingDivision6

BankingDivision5

BankingDivision3

B

ankingDivision2

B

ankingDivision7

B

ankingDivision4

Figure 1 Example of company system organization. Source: Nikkin, edition 19 March 1999.

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Management20032


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The main objectives of the intra-company system may be summed up as

follows (Interview, 1999):

(1) the formation of a system able to reflect customer needs strategically and

with speed and precision,

(2) the formation of a system allowing individual companies to exhibit

independence, autonomy and creativity, by delegating to each individual

company fixed functions relating to management of finance income,

resource distribution, credit supervision, etc., centralized at head office,

and the authority concerning their execution.

(3) the clarification of the stances taken in the complete corporate strategy of

each individual company.

This implies the dismemberment of the business organization for each

respective customer market, while respecting the autonomous activities of the

business establishment, and opting for a small head office.

The intra-company system is based around basic personnel rights being

delegated to each individual company with the transfer of personnel

fundamentally operating on the principle of a career path aimed at nurturing

professionals in each respective company. However, if more notice is taken of

an individuals requests and areas of specialization regarding his career when

seeking how best to fill a position, personnel transfer may go beyond thecompany framework (Interview, 1999). As the internal labour market was

formed under the intra-company system, the introduction of a new personnel

system based on the premise of labour/personnel transfer was inevitable.

At the same time, there were plans to expand the career challenge system in

order that individuals may be granted an independent choice of careers beyond

the company framework, with the practical application of the functions of the

internal and external manpower markets via the structure of personnel

interchange from both inside and outside the company. In other words, banks

support the active practical application of marketability in the evaluation andtreatment of personnel or career choice, in order that ultimately bank

employees may be able to acquire the abilities and skills to allow them to

compete successfully in the external market as well (Interview, 1999).

Moreover, with the availability of various alternatives in the treatment of

personnel, the way is clear for each individual employee to determine for

themselves the type of career and reward, thereby, it is hoped, creating an

environment in which individuals take responsibility for results. In other

words, according to the principle of freedom and self-responsibility, each

person makes an independent career choice based on self-responsibility, andtrue professionals are nurtured because the working environment is one in

which the treatment earned corresponds to the results achieved (Interview,

1999).


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and finance than in the past individuals who are able to understand the

values and behavioural differences of other cultures and who are good

communicators. In general, the model bank employees that DK Bank hopes

to find are working members of society, whose role is not confined to a

company but covers the whole world people with self-responsibility and

autonomy, who are No.1 in their own fields and able to participate in

healthy debate and discussion (Interview, 1999).

In this way, the large-scale restructuring and changes in the business content

of the finance world in recent years and the inter-corporate competition

accompanying the development of internationalization and IT have led to

greater business opportunities, particularly in an international context. This

means there is an urgent need for a new breed of employees best suited to the

job in hand and for a review of conventional employment management by

career course selection, combined with the flip side of transfer to related firms

and the reduction of redundant workers. Furthermore, various systems with

the flexibility to allow an adjustable supply and demand of human resources

have been examined in terms of their adaptability to globalization, and a

personnel system introduced based on independent career choice by

individuals.

Long-term fixed employment for women and the revision of the Equal

Opportunities Law

With womens higher educational advancement and the enforcement of Equal

Opportunities Laws, against a backdrop of womens movements and increased

international awareness, recent years have seen a rapid rise in the number of

women in employment. According to the White Paper on Female Labour,

21,270,000 women were engaged in employment in 1997, a rise of 430,000 on

the previous year, and women accounted for 39.5 per cent of the total number

of employees; this increase in both number and rate surpassed that of maleworkers. However, a relatively high proportion (35.9 per cent) of these are

part-time workers (Rodosho, 1999).

Moreover, compared to a decade ago, M-type employment whereby

work is interrupted for marriage, childbirth and childcare and then resumed

once the children have been raised shows a shift in the full M-curve towards

the top, as well as an ongoing bottoming-up of the M-curve (Rodosho, 1999).

There has thus been an overall increase in the number of female workers and in

the number of women who continue working through marriage, childbirth and

childcare, balancing both professional and family life.Although women thus active in the workplace and engaged in long-term

fixed employment may be a recent phenomenon, despite some attempts at

empowerment, management has traditionally sought, in general, to raise the


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ratios of female short-term employment in order to maintain and retain low-

pay structures. In other words, the provision of a general staff course for

routine peripheral work to which an inordinately large number of women are

assigned, thereby pre-emptively controlling promotion in position, rank and

salary, lies at the heart of conventional employment management by career

course selection. As long as this course exists, women will be subject to a tacit

condition to take early retirement, thus providing a lawful means of

increasing the rate of female short-term employment and maintaining the

low-pay structure.

However, with the revision of the Equal Opportunities Law in 1999,

advertising specifically for female-only labour was prohibited, so that the

conventional advertising and recruitment of a general women-only staff

course was no longer possible. Moreover, with modern womens place and

activity in the workplace coming under the spotlight, the introduction of a

system based on individual will and skill, freedom and self-responsibility and

classified by job specialization, rather than separate major and general staff

courses for men and women respectively, was called for.

In this respect, the state of conventional employment management by career

course selection also needs to be redesigned and reintroduced as a career

personnel system. As will be considered later, even if all work is termed non-

routine work and a minority of women continue to seek empowerment, aninordinately large number of women will still find themselves on a path that

utilizes dispatched employees or part-timers.

The post-bubble rationalization of management and reduction of total labour

costs

A further basic factor that required the restructure of conventional systems and

the introduction of the career personnel system was the pursuit of

rationalization of management after the bubble economy burst. The periodof prolonged recession and financial big bang witnessed considerable

insolvency and the development of acquisitions and mergers among the big

banks, while restructuring and the streamlining of management operations

harshly affected those banks that managed to survive. The impact of this was

manifested in a demand for reduced business expenses, particularly as regards

labour costs or, more specifically, in demands for wage restraints, staff

cutbacks or employment adjustment.

For an illustration, the business expenses of DK Bank, which amounted to

f40.28 billion for March 1997, were cut to f39.41 billion for March 1998, withfurther cuts to f36.32 billion forecast for March 2003. At the same time, this

brought drastic cuts in personnel, with the 17,425 staff on register as of the end

of March 1997 being reduced to 16,969 at the end of March 1998, and plans in


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hand to leave only 13,200 by the end of March 2003. Moreover, labour costs

amounting to f17.41 billion for March 1997 were cut to f16.99 billion for

March 1998 and are projected to drop to f13.83 billion by March 2003. Within

these labour costs, salary and reward accounted for f14.56 billion for March

1997, cut to f14.20 billion for March 1998 and expected to be reduced to

f11.23 billion by March 2003 (DK Bank, 1999).

For cuts to be made in salary and reward, the introduction of a new

personnel system able to carry out tighter wage restraints than ever before was

deemed inevitable. In addition, the plan is that with the introduction of the new

personnel system, measures such as reviewing the bonus and monthly salary

system and the effective use of personnel anticipate a reduction of around 16.5

per cent, some f2.73 billion, in total labour costs in the 2002 fiscal year, as

compared with those for the 1998 fiscal year (DK Bank, 1999). Thus, a revision

of the job-qualification system (Shokuno Shikaku Seido) in the conventional

career course selection system was essential to enable tighter wage restraints

than those introduced previously. In particular, stages of promotion in

position, rank and salary underwent a much stricter sub-division, and

reduction of total labour costs for the majority of employees in order to

facilitate the empowerment of a minority was carried out. DK Bank explains

this in terms of looking for a means of daringly making our own job a business

challenge and bearing responsibility for its consequences, giving rise to aclimate in which good work is rewarded and failure penalized which is

reflected in more meticulous treatment of processes and results (Interview,

1999).

The Structure of DK Banks Career Personnel System

Staff classification

In DK Banks career personnel system, staff can be basically classified into

three groups: career staff, clerical staff and expert staff (Interview, 1999).

The designation career staff denotes personnel engaged in business, office

management, planning and research, general administration and other office

work. However, rather than adopting the conventional attitude that generalist

or specialist staff=non-routine work and clerical staff=routine work, this

system seeks to operate according to the idea that career staff=non-routine

work. Clerical staff, as in the past, are engaged in peripheral work other than

administrative work. Expert staff are personnel with an extremely high level

of specialist knowledge and skill, engaged in specialist areas, whose

remuneration and associated contractual conditions are determined separately

and individually.


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(c) However, if more notice is taken of an individuals requests and fields of

specialization regarding his career when seeking how best to fill a position,personnel transfer may go beyond the company framework.

(d) The career challenge system allows independent choice of ones career by

creating a good labour market within the Bank.

Models of employee recruitment and personnel transfer are shown in

Figure 3.

The career challenge system

As regards intra-company personnel transfer, the career challenge system

allows individual employees an independent career choice. As we saw earlier,

the shift to an intra-company system in 1999 brought with it an expansion of

the conventional career challenge system already in effect since 1991, ranking it

as a system that would allow independent career choice for individual

employees in terms of inter-corporate personnel transfer. Each company

undertakes functions from the planning and development of a product to its

promotion and sale, and is thus an integrated organization with head office as

well as business function, and in principle it provides a career path fornurturing professionals in their market. But in a climate of integration of

businesses, applications can be made to other companies under the DK bank

umbrella in order to practice employees initiatives in the most suitable

Recruitment Posting Transfer

Career Staff A

Career Staff B

(business)

(office work)

(internationally-related work)

(system engineer)

(otherspecialized work)

Expert Staff

Posting at time of recruitment

Corporate Division

In-house Office

Monitoring Division

Customer &

Consumer Banking

Company

Corporate Banking

Company

International

Banking Company

Market & Training

Company

Career categorization clear from the

recruitment stage

Internal

Market

(Career

Challenge

System)

Inter-corporate

Personnel

Adjustment

T

r

a

n

s

fe

r

(Companydecision

after 3-5years)

Customer &

Consumer

Banking

Company

Figure 3 Conceptual diagram of recruitment, posting and transfer of personnel at DK Bank.

Source: Interview at DK Bank (April 1999).


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company. Each company with the right of personnel management can thus

deal effectively with the enthusiasm of employees who are eager to develop

their expertise. From the perspective of aptitude development, it is hoped thatthe introduction of an intra-company system will act as a tool for determining

an employees future career direction in a sense, his permanent residence

(Nikkin, 1999) (see Figure 4).

In addition, apart from this, there is a career support system. Generally, it

is for Career staff A employees aged 25 or over and it is a system that provides

career development support to the above employees to acquire highly

marketable skills and know-how not found in the bank. It provides an

opportunity for self-realisation as finance professionals, while retaining an

employment relationship, by attending business schools abroad or graduateschool in Japan (Interview, 1999).

The job-posting system

As regards personnel transfer within the company, it is the job-posting system

that allows individual employees an independent choice of work. Each

company, as we have seen, is an integrated organization. Job-posting extends

a wide spectrum of work opportunities and the interchange of personnel within

a company is considered a career path means to nurture professionals in eachmarket. Employees will apply for a job under their own initiative and selection

will be made by the bank (Interview, 1999). A summary of job-posting is shown

in Figure 5.

Figure 4 Summary of the career challenge system at DK Bank. Source: Interview at DK Bank

(April 1999).


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Change of course

Although career staff may be divided into Career staff A and Career staff B,

changes of course between the two are possible at the request of the individual

and by bank authorization in line with the following criteria:

K The person in question is a career staff member who has been with the bank

for three years (excluding those who have applied for a change of course

within the 3-year period).

K The employee selection method consists of a personnel appraisal of the

person wishing to change course, judging such qualities as ability, aptitude

and degree of contribution, via set procedures including a personnel

interview. The overall result is assessed and the bank decides on the

advisability of the change.

K In principle, change of course takes effect from 1 July each year; followingthe change, the new qualification, grade and rank are determined by the

bank, based on a comprehensive assessment of the ability, aptitude and

degree of contribution of the person concerned (Interview, 1999).

Qualification classification

For career staff, qualification classification is divided into nine stages from

Grade A1 to A9 for Career staff A, and from Grade B1 to B9 for Career staff B

(Interview, 1999). The minimum number of years experience required for eachof these is shown in Figure 6. The minimum experience for Career staff B1 is

given here as 5 years, except for university graduates. This is because an

appropriate number of years are prescribed for the initial learning period which

1. Execution ProcessApplications can be made at any time however, the process from application to appointment followsthat of the Career Challenge System.

2. Work targeted for applicationTaking the business needs of each company into consideration, applications appropriate to the workor post in question.

3. Applicationa. Conditions for application

Career staff with three years or more of professional experience and who are able to fulfilthe extra application conditions required for each particular type of work.

Re-application is possible.

c. Application procedureApplication form (standard) + report (supplemented with reason for application, desire forcareer development)

Application via head of divisional branch (no direct applications)

Figure 5 Summary of the job-posting system at DK Bank.Source: Interview at DK Bank (April

1999).


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occurs in the early stages of career formation, taking into consideration the

sophistication and diversification of the work.

The qualification rank of new employees in the case of Career staff A (Grade

A1) requires university graduates or those with a similar or higher level

of knowledge and competence. For Career staff B, the Grade B1 quali-

fication targets university, junior college, vocational training school and

high school graduates or those with a similar or higher level of knowledge

and competence (see Figure 7). There is no change in the treatment of clerical

staff, and as regards expert staff there is no qualification, as their conditions

will be determined based upon assessment of individual performance intheir job.

The required conditions for qualification at all grades for Career staff A and

Career staff B are illustrated in Figures 8 and 9.

Classification of hierarchical ranking system

Five hierarchical rankings have been established for career staff and expert

staff according to the type of work in question, as follows (Interview, 1999).

K Business associate (job groupings in the early stages of career formation).

K Business staff (job groupings as core professionals who, highly motivated by

job development, are able to use their own judgement and initiative to

identify and solve problems).

K Business leader (job groupings at the leadership level of those responsible for

core work, having specialist knowledge and skills).

K Senior officer (job groupings at high professional knowledge and skills level,

serving as managers or future executives and contribute to organizational

objectives).K Executive officer (job grouping at executive level, responsible for a company,

a department of the bank, and/or jobs responsible for the overall business of

the bank).

Career Staff A Career Staff BQualification

Classification

Years

Classification

Years

Grade A 1 3 Grade B1 5*Grade A2 2 Grade B2 2Grade A3 2 Grade B3 2Grade A4 3 Grade B4 2Grade A5 3 Grade B5 3Grade A6 2 Grade B6 3

*One year for university graduates.

Qualification

Figure 6 Qualification classifications at DK Bank, with required number of years experience.

Source: Interview at DK Bank (April 1999).


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Classification of positions

In order to achieve as simple and flexible a structure as possible, companies

have adopted via a flat organization a small hierarchical system with a

minimum number of positions (Interview, 1999). The theoretical equivalencesbetween qualification and position are shown in Figure 10. The measures

involved in the shift to a new system namely the corresponding relation

between qualification, position and hierarchical ranking are shown in

Figure 11.

Composition of regular salary

With the introduction of the career personnel system, basic pay and job-basedallowance as well as skill allowance were phased out, to form instead a single

unit entitled to payment based on job and performance. Moreover, family

allowance was replaced by child allowance and the whole package referred to

Evaluation of New Qualification Present EvaluationCourse Target Qualifi-

cationCourse Target Qualification

CareerStaff A

Universitygraduates orthose with asimilar or superiordegree of skill andknowledge

GradeA1

Major Staff University graduates orthose with a similar orsuperior degree of skilland knowledge

Grade 1(Major)

University, juniorcollege, vocationaltraining school and highschool graduates orthose with a similar orsuperior degree of skilland knowledge

Grade 1(General)

GeneralStaff

University graduates orthose with a similar orsuperior degree of skilland knowledge

Grade 2(General)

CareerStaff B

University, juniorcollege,vocational trainingschool and highschool graduatesor those with asimilar or superiordegree of skill andknowledge

GradeB1

SpecialistStaff

University graduates orthose with a similar or

superior degree of skilland knowledge

Grade 1

(Specialist)

Figure 7 Evaluation of the qualifications of personnel systems (old and new) at DK Bank.Source:

Interview at DK Bank (April 1999).


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as payment based on job and performance, plus child allowance (Interview,

1999).

If we consider first child allowance: by abolishing family allowance, and

introducing child allowance in the light of the financial burden of those

upbringing children, this meant that those with a spouse only would receive no

child allowance. This led to a marked drop in salary for almost 80 per cent ofmale bank clerks (Ginko Man, 1996), with banks also forced to re-examine the

rapid changes in mitigation procedures in view of considerations of stability

and livelihood of employees (Interview, 1999).

Next, let us consider the content of payment based on job and performance.

While there is a set amount based on job and performance for first-year

employees, the initial payment based on job and performance for those not

subject to a set amount is determined according to ability, experience,

educational level, nature of work, etc., of the person in question. Although

career staff are assigned a class or rank determined by the bank according tothe work in Grade 1 of each course, the allowance provided is set according to

the table for payment based on job and performance corresponding to the

work of the person in question. However, from the month following the

employees 55th birthday, payment based on job and performance becomes

thereafter fixed according to the rank for that age, level and work, etc., as set

out in the table for payment based on job and performance. For example, the

case of Career staff A (under 55 years of age) of rank No. 70 and class 55

would be evaluated at 3,360 or that of Career staff B (under 55 years of age) of

rank No. 70 and class 59 would be evaluated at 3,640. Each upgrade in rankcorresponds to a f500 increment; with the detailed sub-divisions in the table,

the general payment based on job and performance is thus able to correspond

to individualized management (Interview, 1999).

Qualification

Career

Staff A(Grade)

Career

Staff B(Grade)

Position

A7 B9 Research Officer, General ManagerAged

under 55A6 B8 Section Chief, Financial Affairs Manager, Deputy Chief

years A5 B7 Section Chief, Financial Affairs Manager, Deputy ChiefA4 B6 Section Chief, Vice-Section Chief, Deputy ChiefA7 B9 Research Officer (Specialist Business)

Aged 55years or

A6 B8 Section Chief (Specialist Business), Financial AffairsManager

above A5 B7 Section Chief (Specialist Business), Vice-Section Chief(Specialist Business), Financial Affairs Manager

A4 B6 Section Chief (Specialist Business), Vice-Section Chief

(Specialist Business)

Figure 10 Theoretical equivalences between qualification and position at DK Bank. Source:

Interview at DK Bank (April 1999).


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1. Shift from Major Staff to Career Staff A

Currently At Time of Shift

Current

Qualification

Type Position New

Qual.

New Position Other

Conditions

Councillor Section Chief Grade Deputy Manager (Branch)

Deputy Chief A7 General Manager

Exclusive Duty Research

Officer

Research Officer

Research Officer Research Officer

No designated position No designated position

Vice- Section Chief Grade Deputy Manager (Branch)

councillor ranking Section Chief A6 Section Chief

Financial Affairs Manager Financial Affairs Manager

Deputy Chief Deputy Chief

Deputy Section Chief Deputy Section-Chief Specialist Deputy

Research Officer

No designated position

Deputy Research Officer No designated position


Junior Section Chief Grade Section Chief

Ranking Financial Affairs Manager A5 Financial Affairs Manager

Deputy Chief Deputy Chief

Deputy Section Chief Deputy Section-Chief

Specialist Deputy

Research Officer


Deputy Research Officer No designated position


Senior

Figure 11 Shifts in grade and hierarchical ranking according to qualification and position at DK Bank.

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Director Senior Section Chief Grade Section Chief

Ranking Deputy Chief A4 Deputy Chief

Deputy Section Chief Deputy Section-Chief

Chief Examiner No designated position


Junior

Ranking

Deputy Chief Examiner Grade

A3

No designated position Qualification

experience=

1 year or +

Qualification

experience

= 0 year

No designated position No designated position qualificationexperience=

1 year or +

qualification

experience

= 0 year

Managerial

Grade 2

No designated position Grade

A2

No designated position qualification

experience=

1 year or +

qualification

experience

= 0 year

ManagerialGrade 1

No designated position GradeA1


Currently At Time of ShiftCurrent

QualificationType Position New

Qual.

New Position OtherConditions

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2. Shift from General Staff to Career Staff B


Current Qualification New Qualification Other Conditions C

General Grade 5 Grade B5 18General Grade 4 Grade B4 12

Qualification experience = 1 year or + 8General Grade 3 Grade B3

Qualification experience = 0 year

Qualification experience = 2 years or + (business)

Qualification experience = 2 years or + (office work)

Qualification experience = 1 year Shift G

General Grade 2 Grade B2

Qualification experience = 0 year Shift G

General Grade 1 Grade B1 Qualification experience = 1 year or + 1

3. Shift from Specialist Staff to Career Staff B


CurrentQualification

Current Position NewQualification

New Position Other Conditions

Superintendent Section Chief Grade B7 Section Chief Deputy Section Chief Deputy Section Chief Grade 2

Deputy ResearchOfficer


Superintendent Section Chief Grade B6 Section Chief

Grade 1 Deputy Section Chief Deputy Section Chief No designated position No designated position

Specialist Grade 4 No designated position Grade B5 No designated position Specialist Grade 3 No designated position Grade B4 No designated position

Qualification experience =or +Specialist Grade 2 No designated position Grade B3 No designated position

Qualification experience=0

Specialist Grade 1 No designated position Grade B2 No designated position Qualification experience =or +

Figure 11 Continued.

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Re-examination of the class evaluation is made based as required on the value

of the work in question (the degree of responsibility, workload, specialization,

market value, etc.) and the degree of strategic expectation substantiated by

performance to date. Moreover, it is stated that according to the annual

performance of an individual for the work in question namely the

contribution made and capacity for accomplishment displayed upgrading is

made, generally taking effect on 1 July each year with a maximum set at the

highest rank in each class in the table of payment based on job and

performance. However, no upgrading occurs from the first of the month

following an employees 55th birthday. In this way, payment based on the job

and performance component of the career personnel system comes to attach

importance to the value of the work of each individual employee, indicated by

the degree of responsibility and workload involved, the specialization and

marketability and the degree of strategic expectation, as well as the

performance ability displayed, the degree of contribution and the results

achieved.

Career-up programme

In January 1999 a career-up programme (CUP) was introduced in DK

Bank and officially launched in March of the same year. This consisted of

active supportive measures for the independent career development and

self-actualization of administrative employees aged 40 or over (approx-

imately 5,000 people), with such initiatives as personnel transfer to related

firms branching out into new fields of business. As opposed to the

aforementioned career challenge system or job-posting system for intra-

corporate transfer, as well as the career support system aimed at Career staff

A aged 25 or over, this system is concerned with the dispatch and transfer of

middle-aged employees.

The CUP is aimed at older ambitious administrative employees; theyundergo examination for grade certification or qualification incentive in a field

of their own choice, and with an overall appraisal of their effort and career

development results management will consider transfers and dispatch of such

employees to related companies within the bank (Interview, 1999). As the usual

age for this type of transfer in the major city banks is around 50, this

programme is designed to facilitate dispatch and transfer to related firms,

thereby providing a means of active self-investment in a new business field. In

specific terms, this entails:

(a) an independent report on performance development in eight designated

fields,

(b) an officially recognized qualification linked to each field,


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(c) a career-up challenge test,

(d) guidance on career enhancement during a personnel interview.

The officially recognized qualification may be any one of around 60 vital to

new business fields, ranging from qualifications directly related to bank work,

such as financial planner or chartered accountant, to sign language interpreter,

care worker, boiler welder, electrician, etc. (see Figure 12).

Features of the DK Bank Career Personnel System

Expansion of career paths beyond the company framework

Conventional employment management by career course selection was

basically concerned with the treatment of specific career courses within

business organizations. However, the career personnel system, based on the

premise of transfers both within and across a corporate group, with the

introduction of an intra-company system, represents the introduction of a

philosophy for using the active application of the functions of the internal

corporate market for the evaluation and treatment of personnel. In other

words, the introduction of the intra-company system has meant that, as the

heads of each company have authority over their personnel, each company can

adopt a flexible approach to the way those personnel are utilized. Therefore,

even though personnel reshuffling operates on the basic principle of providing

a career path to nurture professionals in each company, if more notice is taken

of an individuals requests and areas of specialization regarding his career when

assessing how best to fill a position, personnel transfer may go beyond the

company framework. Thus, the new system differs from the old in that it takes

advantage of the function of internal personnel market/labour market for the

purpose of assessment and treatment of personnel.

Independent career choice based on freedom and self-responsibility

Although for forms sake conventional employment management by career

course selection professed personal respect of the independent will of each

individual, in content it was a system that allowed the pursuit of two or three

top-down fixed career courses as laid down by the bank. However, the career

personnel system, corresponding to the labour transfer in and out of the

corporate group which accompanied the introduction of an intra-company

system, persistently upholds the importance of independent career choicebased on freedom and self-responsibility. Consequently, in order that each

individual bank employee may be able to make an independent career choice

not limited by the company framework, the conventional career challenge


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Field Content Recognised Qualification Grade

DepositsForeign

Exchange

None (Test Administered)Office Work

BusinessFinancing

Business andknowledge of business

work based on thisbanks businessprocedures

None (Test Administered)

Credit ManagementCollection

Knowledge of the laws and businessfor credit collection None (Test Administered)

IndividualTax relating toindividuals, knowledgeof asset management

FP Grade 1, FP Grade 2 (individual),Licensed Tax Accountant, SocialInsurance Consultant, CharteredAccountant

Total Finance

CorporationAsset acquisitionknow-how relating to

core/ small & medium-sized corporations.Knowledge of taxationbusiness legal affairs.

FP Grade 1, FP Grade 2(Corporation), Licensed Tax

Accountant, SME Consultant,Chartered Accountant, SecuritiesAnalyst, Management Consultant ofSocio-Economic Productivity Centre

Real Estate

(Business Division)Dealer in Housing Land, Real Estate Investigator, Real Estate Appraiser(Assistant)(Surveying Division)Real Estate Appraiser(Development/Design Division)Real Estate Investigator, Registered Architect, ArchitecturalMaintenance Worker(Building Management Division)Electrician, Electrical Construction Manager, Construction Manager,Chief Electrical Engineer, Chief Gas Engineer, Equipment Manager,

Building Mechanical & Electrical Engineer, Boiler Engineer, BoilerMaintenance Worker, Boiler Welder, Boiler Installation Operations Chief,Boiler/Turbine Chief Engineer, Boiler Service Agent, BuildingManagement Supervisor, Instrumentation Engineer

Taxation Business/Legal Affairs

Taxation Business/ LegalAffairs Specialist Staff

Chartered Accountant, Licensed TaxAccountant, successful candidates in theBar Examination (2nd Round), PatentAttorney, Judicial Scrivener, BookkeepingCertification Grades 1 & 2 (JapanChamber of Commerce & IndustryBookkeeping)

Insurance Knowledge of InsuranceProducts and of TaxationBusiness/ Legal Affairs for

Sales

Actuary, FP Grade 1, FP Grade 2 (LifeInsurance), FP Grade 2 (IndemnityInsurance) (Test Administered)

System Specialist knowledge forSystems Development

Type 2 Information Processing Engineer,Type 1 Information Processing Engineer,Junior System Administrator, SeniorAdministrator, System OperationsManagement Engineer, DatabaseSpecialist, Network Specialist, ApplicationEngineer, EDP Auditing Engineer, ProjectManager, System Analyst, DatabaseRetrieval Engineer

Other Useful and requiredqualifications for the wholeof this banking group

Office Work Specialist, Advisory Specialistfor Consumer Affairs, Travel BusinessSupervisor, Leisure DevelopmentProvider, Social Worker, Care Worker,

Care Attendant Service, Sign LanguageInterpreter

Figure 12 Official qualification and fields of capacity development in the career-up programme

at DK Bank. Source: Interview at DK Bank (April 1999).


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system is expanded to accommodate the complete spectrum of work in the

personnel needs of each company. Moreover, the job-posting system was

introduced to allow each individual an independent choice of work in terms of

transfers within each company. In this way, while there is clearly a far greater

degree of freedom of individual independent career choice in the career

personnel system than in employment management by career course selection,

it also entails increased self-responsibility. In short, every individual makes an

independent career choice based on self-responsibility, with self-enlight-

enment calling for the acquisition of highly marketable expertise and a strong

sense of professional consciousness.

All staff as true professionals in non-routine work

Although conventional employment management by career course selection

was designed according to the philosophy that major and specialist

staff=non-routine work, while general staff=routine work, this has been

subject to much re-examination and restructuring. Career staff=non-routine

work has become the underlying assumption of the career personnel system,

with the aim that all staff should be true professionals. In other words, all

administrative staff members are called upon to exhibit professionalism

treating business, office management, planning and research, general manage-ment, internationally related work, system engineering, etc., as non-routine

work. The major difference presented by the career personnel system is

essentially characterized by the fact that the concept of general staff=routine

peripheral work found in conventional employment management by career

course selection has disappeared and by the fact that all office employees

perform non-routine work, aspiring to be highly marketable true professionals.

Routine work basically dependent on part-time workers and employees of related

firms

In conventional employment management by career course selection, general

staff were not subject, as a rule, to a change of workplace which would entail a

change of residence and, with promotion being limited to general Grade V,

received no designation of official position. Moreover specialist staff were as

a rule not required to relocate from an assigned district, with promotion

limited to Grade II Superintendent and the highest possible official position

being that of Section Chief & Deputy Research Officer. In either case, there

was the systematic assumption of the impossibility of promotion to thehierarchical ranking of senior management.

However, in the newly introduced career personnel system, while conven-

tional general staff and specialist staff have shifted to Career staff B, it is


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possible to be appointed to the hierarchical ranking of senior management in

the capacity of Executive Officer. However, with the introduction of this new

system it also became possible to transfer staff in the major category to general

staff or employees of related firms, or from general staff to part-time workers,

thus achieving returns commensurate with personnel costs and developing the

level of work specialization (Interview, 1999). Consequently, while the

potential now exists for any career staff member (administrative employees)

to be appointed in the light of his/her performance to the echelons of senior

management, there is conversely the suggestion that those penalized will be

replaced by employees of related firms or part-time workers. In general terms,

the routine work of the conventional general staff can be seen basically to be

shifting to employees of related firms or part-time workers (Interview, 1999).

Eliminating the concept of basic salary and expanding the weighting of job-based

salary

In conventional employment management by career course selection, monthly

salary was made up of basic pay, job-based allowance, family allowance and

technical allowance. In other words, this comprised the basic pay awarded

following a comprehensive and rational appraisal of job performance ability,

substantiated by results achieved (ability-oriented pay), as well as a job-basedallowance awarded for a ranking of specialist staff Grade I or above and

managerial level or above, commensurate with the current degree of

responsibility and workload, the expected contribution and nature of

specialization, a family allowance and technical allowance.

In the new career personnel system, these components have been grouped

together and classified as job-based pay and child allowance. In short, from a

wage system based on the qualification of job performance ability, a further

level of importance is attached to the degree of responsibility and workload

involving by various factors current work, the specialization and market-ability which form the work value and degree of strategic expectation, the job

performance ability displayed towards the work and the degree of contribu-

tion, with increased weighting being given to the job-based pay component of

the conventional basic pay and job-based allowance, brought together under

the new title of job-oriented pay. The concept of basic pay has thereby been

completely abolished and refined to form a job-oriented pay based on

performance-oriented principles, allowing a more precise reflection of the

treatment of process and achievements. Furthermore, the job-oriented salary

table gives a very thorough breakdown, with individualized managementclassifications, emphasizing the fact that the work assigned represents a bold

business challenge, with each person taking responsibility for the results.

Generally speaking, whereas in conventional employment management by


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career course selection, job performance ability was unconditionally assessed in

a comprehensive and rational manner and a pay system based on this

performance ability (ability-oriented pay) was awarded commensurate with

qualification promotion, the career personnel system is based on increasing the

job-oriented pay weighting, which assesses performance in the job in question

(lateral job-based pay), and translating this into a performance-oriented

reward system. Furthermore, the abolition of the family allowance and

subsequent replacement by the child allowance points to large reductions in

personnel expenses.

Conclusion

To what extent can the career personnel system (performance-oriented

management with its basic criterion of independent career development for a

wide range of individuals and mediated by the freedom and self-responsibility

of those individuals) be adapted? It may be influenced by the state of business

organization and industrial structure; the increased fluidity of the labour and

internal personnel markets that have accompanied corporate disintegration

(divisions) and the arrival of the intra-company system; and the individuals

approach to working life, professional consciousness, aspirations will andskill etc.

With regard to these points, while note should be taken of the three

groupings listed by the Japan Federation of Employers Association

(Nikkeiren, 1995) the Long-term Accumulated Ability Group, Specialised

Ability Group and Flexible Employment Group as well as the three

formats envisaged by the Japan Trade Union Confederation (Rengo, 1995)

Low Risk Low Returns, Medium Risk Medium Returns and High Risk

High Returns, regardless of their intentions or aims, they are a reflection

of the spread of the individualized multi-tracked personnel system diffusedover recent years.

Even if the diffusion of the individualized personnel system with a shift

towards this type of diverse individual career aspirations accompanies on the

one hand performance-oriented management reinforcement led by the cost

principle, on the other hand, it also provides a rational progressive format

which corresponds to the new human model (that of the independent

individual or the socially self-actualized person) born out of the socialization

of the labour process.

In other words, if we consider managerial success brought about byperformance-oriented management, whereby necessary personnel are recruited

and utilized only for the required period of time and in the required quantity,

this may lead to a sophisticated differential structure of promotion in position,


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rank and salary within the corporate group, and to a heightened sense of

competition between individuals. This may cause increased unemployment

coupled with employment mismatch. In particular, if the power of trade unions

to resist the cost principle is weak, if there are problems with the independence

and will and skill of individuals hired, coupled with a lack of sufficient legal

protection for the various rights, and insufficient social and political

infrastructure for working life, then the career personnel system will cause a

majority of employees unacceptable levels of anxiety and distress. In this

respect, direct or indirect opposition, dissatisfaction or resistance in the

reaction of the workers is virtually unavoidable, making the partial occurrence

of social friction and tension a historical inevitability. In this respect, we should

be prepared to listen to the alarm bells sounded by these people.

However, at another level, there is also a need to remain objective. In other

words, in terms of rational restructuring of the general form of the labour

process, the career personnel system attaches importance to the professional

consciousness, initiative and independence of various individuals responding to

their diverse wills and skills and desires for self-actualization, thus adopting

(or having no choice but to adopt) a rational progressive format which

corresponds to a model of independent individual or socially self-actualized

person. This means that a system which mediates between a workers freedom

and self-responsibility and independent intention when choosing a careercourse may be seen as a step forward when compared to a unilateral autocratic

system designed to allow posting, transfer and promotion (Shimoyama, 1987).

Even if such mediation through individual intention and will may be

unlimitedly external/formal, the fact that more business organizations are

forced to adopt these systems implies the existence of the material basis which

produced the socialization of the labour process. At the very least, we should

take note of the historical step that has been achieved here. Of course, while a

unilateral exaggerated evaluation is not right, it is necessary to keep an

objective observation of such reality. For this reason, it is accepted andtolerated to a certain degree by employees, thus demonstrating the

effectiveness of this system.

A contradictory relationship exists as the reinforcement of management is

achieved by performance-oriented management via a form of rational

progress in the labour process; or conversely as it accompanies a form of

rational progress reinforcement of management achieved. It may be that

while anxiety caused by stress and problems are unavoidable at each stage of

development, awareness of human rights develops when employees resist and

challenge each stage (Shimoyama, 1987). Even if the diffusion of anindividualistic system such as the career personnel system does indeed lead

to a choice involving intolerable anxiety and distress on the one hand, it is also

true that at the same time it continues to create and cultivate, in an objective


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manner, individuals who are awakened to democracy, with a political

awareness of human rights the independent individual overcoming

collectively oriented company-ism and pursuing self-actualization and skill

development in an environment fraught with inconsistencies.

In Japanese corporate society today at least as regards the white-collar

workers in big companies a new medium-term flow-type management

system is being introduced that is individual-oriented and centred around

individual career development, with the premise of freedom and self-

responsibility for the independent individual. This type of new trend can

be seen as one element leading to a major shift in the depths of Japanese

corporate society. International watchers of Japanese management will also need

to keep an eye on this aspect of new trends in Japan (Watanabe, 2000a, b, 2001).

Acknowledgements

We thank Ms. Sue Schneider for her translocation of this paper from Japanese to English.

Notes

1 The banking industry was chosen for the case study as it represents a typical illustration of a

rapidly spreading individual-oriented medium-term flow-type personnel management system

based upon the desire to pursue individual career development. Similar personnel systems have

been introduced in general trading companies or manufacturing businesses (indirect sectors),

generally aimed at white-collar workers in large corporations; thus, the introduction and

diffusion of such personnel management has become a common phenomenon in Japan.

2 Abegglen may be seen as the first foreigner to point out the collective characteristics inherent in

Japanese management systems (Abegglen, 1958). Identifying the three areas of lifetime

employment, seniority-based system and enterprise labour unions, this work pointed out how

the characteristics of Japanese management differed from Western European models; it was to

have a marked influence on research into Japanese management both inside and outside Japan

thereafter. Later came Dore, with the observation that, as opposed to the market-oriented

system and company according to company law of British big businesses, Japan was

characterized by an organization-oriented system and community-style companies (Dore,1988). Each of these studies focused on and analysed the Japanese factory during the period of

high economic growth, providing excellent and accurate research into one aspect of the historical

features of the time.

We may say that most researchers in Japan and elsewhere agree with the collective/community-

style features (although this term cannot cover all aspects) inherent in Japanese management.

However there have been various opinions, too numerous to summarize here, on the reasons for

this, with possible explanations being the backwardness of Japans capitalist development and

also the shame culture explanation based upon behavioural characteristics of the Japanese

people (the culture theory approach). Therefore there seems some reason for the argument that,

even with the collapse of Japans high economic growth and the ensuing economic recession after

the bubble economy, the collective/community-style features inherent in Japanese managementare unlikely to disappear overnight.

However, in recent years, with the fluidity of the labour market following the breakdown of the

bubble economy, a new medium-term flow-type management system, more individual-oriented


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and based on the premise of freedom and self-responsibility for the independent individual, has

become popular. This management method is particularly aimed at white-collar workers in large

corporations such as major banks and trading companies, and it is strikingly different fromconventional Japanese employment systems. A new trend such as this requires us to re-examine

or re-investigate Dores view that it is something of an overstatement to say that the Japanese

employment system is dead and gone (Dore, 1990). However, I am not claiming here whether or

not the Japanese employment system is dead and gone. Neither is it my intention to claim that

the Japanese employment system should shift to a Western European-style individual-oriented

system (or what Dore calls a market-oriented system) nor to assert its superiority. The

objective of this paper is to stress the need for an analytical observation of trends in the new

personnel systems aimed at white-collar workers of large corporations, which continue to be

introduced and diffused in the process of flexibilisation of the labour market that emerged after

the collapse of the bubble economy, rather than to predict the future or surmise reality.

References

Abegglen, J.C., The Japanese Factory, The Free Press, 1958.

Dore, R., British Factory, Japanese Factory, George Allen & Unwin, 1988.

Daiichi Kangyo Bank (1999) Keiei no Kenzenka no tameno Keikaku (Plans for Sound Manage-

ment), Tokyo: Daiichi Kangyo Bank.

Ginko Man (Bank Man) (1996) Osaka: Kansai Ginkou Mondai Kenkyusho.

Nikkin (1999) Tokyo: Nihon Kinyuu Tsushinsha.

Nikkeiren (1995) Shinjidai no Nihonteki Keiei (A New Age of Japanese Management), Tokyo:

Japan Federation of Employers Association.

Rengo (1995)Atarashii Hatarakikata no Sozo o Mezashite(Towards the Creation of a New Way of

Working), Tokyo: Japan Trade Union Confederation.

Rodosho (Ministry of Labour) (1999) Heisei 10, Jyosei Rodo Hakusho (White Paper on Female

Labour, 1998), Tokyo: Ministry of Labour.

Shimoyama, F. (1987) Shimin Seikatsu to Ho (The Citizens Life and the Law) Tokyo: Sobunsha.

Watanabe, T. (2000a) Kyaria Jinji-seido no Donyu to Kanri(The Introduction and Management of

the Career Personnel System), Tokyo: Chuo Keizaisha.

Watanabe, T. (2000b) Jinteki Shigen no Soshiki to Kanri(The Organization and Management of

Human Resources), Tokyo: Chuo Keizaisha.

Watanabe, T. (2001)Kosubetsu Koyo Kanri to Jyosei Rodo; zoho ban Employment Management by

Career Course Selection and Female Labour; Enlarged and Revised Edition), Tokyo: Chuo

Keizaisha.


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