WHAT IS THE JAPANESE-STYLE HUMAN
RESOURCE MANAGEMENT?
JONGWON WOO
PART 1
TYPICAL PRACTICES OF JAPAN
A FACTORY IN CHINA:
ON THE WALL, THERE IS A SHEET TO
ANNOUNCE SOMETHING TO WORKERS.
A FACTORY IN JAPAN:
ON THE WALL, THERE IS A SHEET TO SHOW
SOMETHING TO WORKERS.
WHAT IS THE “SKILL MATRIX” SHOWING?
able to do the job
with support
able to do the job
without support
able to teach
the job
able to do
problem solving
TOYOTA PRODUCTION SYSTEM (TPS)
OR TOYOTA WAY (TW)
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LEAD TIME OF PRODUCT DEVELOPMENT
The read time of Japanese automakers is the shortest.
They cleverly make use of simultaneous engineering.
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“SIMULTANEOUS ENGINEERING”
For simultaneous engineering, it is critically needed that
the related departments like development and production
keep close communication and cooperation each other.
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ROLE OF SKILLED WORKERS IS CRITICAL
Foremen at every
workplaces shorten the
operation time and
rewrite the operation
standard sheets.
Not only foremen but
also seniors at every
workplaces tackle the
operational problems
and accomplish the
Kaizen.
THE ECONOMIC EFFECT OF KAIZEN IN
TOYOTA:
TOTAL EFFECT IS 1,670 BILLION YEN
DURING 12 YEARS FROM 1992 TO 2003
WAGE SYSTEM AT TOYOTA
The total amount of compensation depends on the “ability”.
White collar workers are granted from 7 to 1 ability grade,
and blue collar workers are granted from 9 to 1 ability
grade, respectively.
White collor workers Blue collar workers
Individual wage
based on ability (50%)
Basic wage based on
ability (50%)
Individual wage
based on ability (30%)
Basic wage based on
ability (30%)
Wage based on
productivity (20%) Wage based on
seniority (20%)
SU
GIY
AM
A, N
aosh
i [20
14
]
JIT (JUST IN TIME) NOT ONLY IN THE
PRODUCTION BUT ALSO IN THE SUPPLY CHAIN
Provided by “lot”:
A few parts are in stock.
Provided in the “order”:
Suppliers deliver parts
in sequence.
THE STRONG POINTS OF TOYOTA [PRODUCT]
Speedy and flexible development of new product
“Lean Production”: continuous Kaizen of QCD (Quality, Cost,
and Delivery)
[ORGANIZATION]
Flexible work organization
Close cooperation between sections
Smooth communication between engineers and operators
[HUMAN RESOURCES]
Flexible placement of employees
All round skilled workers
Strong commitment to the growth of company
PART 2
WHAT KIND OF HRM SUPPORTS THE
COMPETITIVENESS OF JAPANESE
FIRMS?
LONG-TERM EMPLOYMENT SUPPORTS THE
EMPLOYEES’ COMMITMENT TO THE COMPANY
AND THEIR ‘FIRM-SPECIFIC’ SKILLS
As of the length of service year, the average of Japan is
about 12 years, longer than that of USA or that of Great
Britain.
However, no longer than those of some European countries
like Germany, France, and Italy.
JIL
PT
(20
14
) "Da
tabook
of In
tern
atio
nal
La
bou
r Sta
tistics"
THE PRACTICE OF HIRING NEW GRADUATES AND
TRAINING THEM SUPPORTS EMPLOYEES’ STRONG
COMMITMENT TO THE COMPANY AND THEIR FLEXIBLE
PLACEMENT
As of unemployment rate of 15-24 years old,
Japan is one of the countries where it is the least.
This is related with the hiring practice of
Japanese firms.
JIL
PT
(20
14
) "Da
tabook
of In
tern
atio
nal
La
bou
r Sta
tistics"
THE SENIORITY BASED WAGE SUPPORTS THE
INCENTIVE OF EMPLOYEES TO DEVELOP THEIR
‘FIRM-SPECIFIC’ SKILLS AND/OR KEEP THEIR
ROYALTY TO COMPANY
JAPAN’S SENIORITY-BASED WAGES
STRENGTHEN EMPLOYEES’ INCENTIVE TO
DEVELOP THEIR CAREER IN THE COMPANY
As of the service year and wage profile, the wage of Japan,
especially that of male is sharply increasing in proportion
to the service years.
This is called the seniority-based wage.
JIL
PT
(20
14
) "Da
tabook
of In
tern
atio
nal
La
bou
r Sta
tistics"
INTERNAL TRAINING, ESPECIALLY “OJT” IS
SUPPORTING JAPANESE WORKERS INTERNAL
CAREER
Q) (Asking firms) What type of training do you
think important?
A) 73.5% of firms answer OJT is important.
ML
HW
(20
14
) "Su
rvey o
n A
bility
Develo
pm
en
t"
TO MAINTAIN THE INCENTIVE OF EMPLOYEES,
JAPANESE FIRMS RESTRAIN THE
IMPLEMENTATION OF “FAST TRACK”
There is not so many “fast tracks” in Japan as in the US or
in Germany.
The chances of promotion are granted to the majority of
employees.
Pro
vid
es b
y P
rof. T
eiich
Sek
igu
chi
Existence of Fast Track
5.4
38.4 28.2
89.9
49.5 51.9
0%
10%20%
30%
40%50%
60%
70%
80%90%
100%
Japan US Germany
N. A.
No Fast Track
After Several YearsExperience
From the Entry Level
THE “SLOW PROMOTION” SUPPORTS
EMPLOYEES’ MOTIVATION ON ONE HAND, THEIR
COOPERATION ON THE OTHER HAND
Timing of Promotion(Average Length of Service at the Promotion to the Current Positions
Ocuurered)
0
5
10
15
20
25
30
HRM - Dept.
Head
(BUCHYOU)
HRM - Section
Chief
(KACHOU)
Sales - Dept.
Head
(BUCHYOU)
Sales -
Section Chief
(KACHOU)
Accoounting -
Dept. Head
(BUCHYOU)
Accounting -
Sectrion Chief
(KACHOU)
US
JAPAN
The length of service necessary for the promotion
to the department/section chief in Japan is
almost double of that in the US.
Pro
vid
es b
y P
rof. T
eiich
Sek
igu
chi
CAREER CONTINUATION IN JAPAN HELPS
WORKERS MORE INCORPORATED TO THEIR
COMPANY
Pro
vid
es b
y P
rof. T
eiich
Sek
igu
chi
NO COLLAR LINES BETWEEN REGULAR
MEMBERS IN A FIRM
There is no formal collar line within regular employees. The same compensation and appraisal system and rules have been applied to both white collar and blue collar employees, regardless of their current job assignment or specialty.
The difference of annual earning levels of top level white collar workers and lowest level blue collar workers is far smaller in Japan than firms in the Western countries.
RANKING SYSTEM BASED ON “ABILITY” SUPPORTS ALL
OF THE JAPANESE HRM: AN EMPLOYEE CAN BE
PROMOTED EVEN IF THERE IS NOT A JOB VACANCY
In this case of Nippon steel corporation, employees are
graded according to the “job” on one hand (left side), and to
the “ability” on the other hand (right side).
TA
GU
CH
I, Ka
zu
o [2
00
4]
THE COMPREHENSIVE ASSESSMENT OF
EMPLOYEES HELPS ALL OF JAPANESE HRM
WORK SMOOTHLY
Workers are evaluated according to “performance”,
“ability”, and “morale and attitude,” respectively.
The results are reflected in wages, bonuses, and promotion.
Ability
Morale and
Attitude
Performance
NOT INDUSTRIAL UNION BUT ENTERPRISE
UNION MORE HELPS EMPLOYEES COMMIT TO
HIS/HER COMPANY
Pro
vid
es b
y P
rof. T
eiich
Sek
igu
chi
THE UNION PUT TOGETHER BY WHITE AND
BLUE COLLAR WORKERS MAKES THEIR
COOPERATION EASIER
Pro
vid
es b
y P
rof. T
eiich
Sek
igu
chi
ENTERPRISE UNIONS SUPPORT THE
COOPERATIVE RELATIONS BETWEEN LABOR
AND MANAGEMENT
As for the number of days not worked because of labor dispute,
they are very small in Japan.
It shows that the relationship between labor and management in
Japan is very peaceful.
This is related with the characteristics of enterprise unions.
JIL
PT
(20
14
) "Da
tabook
of In
tern
atio
nal
La
bou
r Sta
tistics"
“WHITE-COLLARIZATION” OF BLUE
COLLAR WORKERS IN JAPAN
In Japan, there is no clear distinction between salaried employees and wage earners.
Everyone is a “Salary Man” and earns his compensation in a single category “Kyuro”.
The level of consciousness and behaviors of blue collar employees are very close to those of white collar employees.
Generally, Japanese blue collar employees are earnest to acquire skills and knowledge.
Also, they show strong commitment and loyalty to their firm.
“Kaizen movement” and “QC circle” are typical examples of their commitment.
PART 3
“JAPANESE-STYLE MANAGEMENT” IN
THE VARIETIES OF HRM/IR
OUTLINE OF JAPANESE-STYLE
MANAGEMENT (1)
Smooth School-to-Work Transition: Young people almost could have had their jobs immediately after graduation.
Intensive OJT: After entering a company, they have been trained by intensive, long-term OJT.
Cooperative Relationship: Workers are trained by their higher-ups and/or their seniors in the atmosphere of cooperation.
Problem Solving: The goal of internal training is that not only the core workers but also the majority of workers have the capability of problem solving.
OUTLINE OF JAPANESE-STYLE
MANAGEMENT (2)
The HR Development is supported by related HR practices/institutions as below:
Seniority Based Wage/Promotion: Their wages and positions have been raised step by step with their seniority.
Job Security: Their jobs have been guaranteed until the mandatory retirement.
Enterprise Union: They have been the members of enterprise unions which bargain/consult with the management about the conditions of “life-time commitment.”
Government’s HRD Policies Valuing ILMs: Japanese Government traditionally has not supported workers who hopping for jobs, but supported management who bring their employees up.
“JAPANESE-STYLE MANAGEMENT” AND VARIETIES OF HRM/IR
Job based HRM
vs. HRM based on Personal Factors
Market-oriented Unions and Industrial
Relations
vs. Organization-oriented Unions and IR
Market-mediated Employment Relations
vs. Internalized Employment Relations
Scio-economic IR System
vs. Voluntary IR System
REFERENCES
Freeman,R.B. and J.L.Medoff [1984]. What Do Unions Do?, New York: Basic
books.
Fujimoto, Takahiro [2003] Noryoku Kokiku Kyosoj: Nippon No Jidosya
Sangyo Wa Naze Chuyoinoka, Chuo-Koron-Shinsya.
Huselid, Mark A. [1995]. “The Impact of Human Resource Management
Practices on Turnover, Productivity, and Corporate Financial Performance”,
Academy of Management Journal 38(3) 635-672).
Kato,T. and M.Morishima [2002]. “The Productivity Effects of Participatory
Employment Practices: Evidence from New Japanese Panel Data”,
Industrial Relations, Vol. 41(4).
Koike, Kazuo [1999] Shigoto No Keizaigaku, Tokyo: Toyo-keizai-shimpo-sya.
Sugiyama, Naoshi [2014] “Toyota Ni Okeru Chingin Seido No Tenkai”,
Chukyo-Keiei-Kenkyu, Vol. 23, No. 1-2.
Taguchi, Kazuo [2004] “Shin-Nippon-Seitetu Ni Miru Chingin Seido No
Sengo Shi”, Kikai-Keizai-Kenkyu, No.35.
Tsuru, Tsuyoshi, and Kentaro Nakajima [2012] (Discussion Paper Series A
No.559) “Seihin Achitecture To Jinzai Management: Kigyo Enquête Chosa
Ni Motozuku Nicchukan Hikaku”, Institute of Economic Research,
Hitotsubashi University.
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