HRM in Japanese Management

Definition
Japanese management is strongly related to the country’s unique culture,
which was formed and strengthened by a century-long seclusion of the
country. Confucianism is the base of Japanese culture and society, and its
influences can also be observed in Japan’s business practices today.
Japanese corporations have developed very unique human resource
management practices, such as lifetime employment, job rotation, and a
strong focus on training within the firms. These practices are often called
the backbone of Japanese economic development, since they supported the
rapid economic development of the country after World War II. And even
if many Japanese human resource practices are challenged by economic
development, many of them are still practiced in the Japanese firm.

Human Resource Practices in Japan

1. Lifetime employment
Lifetime employment remains relatively common in Japan, with 35
percent of Japanese employees guaranteed employment for life in
2011. Although lifetime employment limits the flexibility and
opportunities of one’s career, the security it provides, particularly for
families, remains very highly valued in Japanese culture. This is
evident from the fact that lifetime employment is an entrenched
custom rather than an explicit requirement in an employment
contract – it is culturally ingrained and is therefore followed without
need for legal enforcement. It is likely that lifetime employment will
gradually decline as younger generations are employed, without the
promise of lifetime employment. Indeed, younger employees have
expressed a preference for a more flexible career path, rather than
being confined to one company. Overall, the practice of lifetime
employment in Japan is supported by cultural traditions but is not
supported by economic factors.

2. Seniority-based wage and promotion

 Currently, 60–70 per cent of Japanese companies use a performance-
based wage and promotion system. However, human resource
decisions based upon seniority remain prevalent, and many
companies have encountered problems with the transition to a
performance-based system, such as lack of acceptance by senior
employees. Furthermore, younger employees are resisting a system
that does not reward ability and skill, but rather champions
experience, which cannot be attained fast enough. Due to
globalisation, opportunities to work for foreign companies with
performance-based wage and promotion systems have become far
more common in Japan. In summary, the seniority-based wage and
promotion system is supported by Japanese culture and tradition, but
it does not make economic sense.

3. Enterprise Unionism
Enterprise unionism in Japanese companies is declining. The number
of enterprise unions in Japan declined by 21 per cent between 1984–
2006. Reasons for this may include the growing importance of the
service sector in Japan, which traditionally has lower union
representation.

4. Quality management systems

Quality control circles were championed as key to the success of
Japanese companies in the 1980s. This quality management system
attracted attention from Western countries that attempted to
implement the system. However, in the West, 80 percent of the
sample companies that introduced quality circles abandoned them. It
became clear that the Japanese quality management system was
suited only to the collectivistic nature of Japanese workers.58 In a
more individualistic society such as the USA, this quality
management system seemed to identify people to blame for
problems rather than identifying solutions to problems. It follows
that quality management systems are not suited to individualistic
cultures
5. Consensus decision-making
There is an emphasis in Japanese culture and business on consensus
decision-making; everyone in the company should collectively agree
on the objectives and decisions of the company, and all conflict
should be avoided. This consensus system is known in Japan as the
‘ringi system’ and is one of the most important human resource
management practices in Japan. Decisions are made with regard to
the long-term impacts of such a decision, rather than just the
immediate short-term impacts. Japanese business decisions are made
in a structured, logical and thoughtful process.

6. Employee loyalty to his/her company

Loyalty continues to be valued extremely highly by managers in
Japan and is fundamental in Japanese culture due to the prevailing
influence of Confucian philosophy. However, it is likely that
employee loyalty will decline in alignment with lifetime
employment. It is arguable that the younger generations in Japan
value flexibility and diverse career experiences over loyalty to one
company. Furthermore, globalisation has meant that Japanese
companies have internationalised and global firms have entered
Japan, bringing alternative human resource management practices.

7. Lack of gender equality in the workplace

Gender equality in the workplace in Japan is far behind the Western
world. Female participation in the labour force is 63 per cent and 70
percent of women stop working after they have children, compared
with 30 per cent in the USA. This is set to change, as promised by
the Japanese Prime Minister Shinzō Abe; due to Japan’s shrinking
workforce, female participation in the labour force is critical for the
improvement of Japan’s economic performance. This change is
likely to be slow due to ingrained culture, family traditions and
expectations of women.

Basic Principles of Japanese Management

There are four basic theories underlying the main difference between
Japanese and western managerial style. Western companies operate almost
the direct opposite way of the following Japanese managerial styles.
1) The employee who is able to perform any work responsibility is
intelligent enough to develop the productivity and quality of that
work.
The first theory boldly states, “The employee is not unintelligent”. This
suggests that if the typical company employee knows enough to work on a
specific job, then they also know enough to develop the work being done.
The Japanese developed two organizational practices, which will
encourage employees to share their ideas. The first is the Quality Control
procedure in which employees make their own productivity suggestions.
The second practice is a procedure used to encourage all employees to
develop their new skills over the years during their work practices. So
most new employees in Japan learn new skills by observing someone in
the company.
2) Given the opportunity to the employee who wants to develop the
quality of their work.
The second theory states “employees want to do better work”. The
Japanese companies are avoiding this by rewarding employees when they
do extra than normal. As a result, any employee who has more skills and is
capable of doing more jobs is also given more responsibility or else is
relocated to the next level of division. So often, Japanese companies are
encouraged to continue promoting of their employees. Once employees are
capable of working more than one main job, they are able to communicate
their work to other subdivisions; they can also evaluate their own
responsibilities and become productivity specialists. Japanese employees
are rewarded when the company has increased in profits; bonuses are
based on how good the company performs.
3) Members of a company form a “family.”
The third basic theory of Japanese management states, “employees form a
family”. Japanese companies are accepting the idea that employees and
employers form a strong social unit. All employees of a company create
systems of mutual responsibility further than what they are actually being
paid to do. Being part of the company or ‘family’ creates liability on both
the employers and employees part. One outcome of this theory is the
practice of lifetime employment.
4) Work in a group is more important than working individually.
The last common theory of Japanese management style states “the group is
more important than the individual.” No one should be so selfish and think
that only they are working for themselves. This reflects the idea that a
person owes a gratitude to their parents or leaders, which realistically and
ultimately can never be paid off. Since the group is more important than
the individual, the Japanese companies have developed a few methods to
ensure harmony within the group.

Japanese management style VS. Western management

style
The key difference between Japanese and Western management style
is not one of method but of attitude and philosophy. The Japanese have
studied the Western style of management, concentrating mainly on
American management styles for the past 30 years and have adapted what
they believed to be useful methods to their own work environment. It now
appears that Western companies are studying some of the Japanese
management styles, attitudes, and philosophy and have adopted areas of
work ethic, which they believe to be valuable to their companies. It is
necessary that Western companies study and deploy various Japanese
management styles because the most important reason behind successful
Japanese outcome in productivity and quality is the quality of their work
force.
The basic difference between Japanese and Western employees is the
connecting relationship between the employee and the employer. In
Japan there exists a reasonably strong bond, especially in those
circumstances where employees are hired for the stability of their work
life. The relationship between company and the employer, under these
circumstances become a key aspect of the individual and his or her
identity. This employee/employer bond often turns out to be a strong
relationship that may grow even stronger than the parent/family or
husband/wife. On the other hand, the bond between employee and
employer in the West is relatively weak, as it is generally based on a
relationship, which can be separated independently by either employee or
employer with short notice.
There are those who argue that when the Japanese approach work, their
attitudes about their jobs and their strong connection with their
employer are all the outcome of the Japanese “family” style company.
In the other words, it is argued that a necessary condition to achieve the
Japanese employee/employer connection is the basic cultural environment.
On the other hand, the Western approach to the relationship between
employee and employer does not satisfy the value of the employee,
collectively or individually. In various western companies, the
employee usually is considered merely just a part of production.

CONCLUSION
As we have seen, the Japanese-style HRM model was formed gradually
through half a century of interactions between management and workers,
at times confrontational and at other times cooperative. While the process
was guided by economic rationality in principle, it was also affected by
unique historical events, such as the great labor shortages during WWI, the
heavy military interventions during WWII, and the far-reaching
democratic reforms under the Allied occupation.
This led Japan to develop a complex and interdependent set of HRM
policies that are unmatched in Western countries. It is a model that
promises to invest in human resources and employment security for all
permanent employees to gain bottom-up innovation and high productivity,
and become an engine of economic growth. In contrast to Asian people in
general, Japanese tend to be monochronic and really value time. Japan also
prioritizes work ethic, productivity and quality of workforce. In addition,
the relationship between superiors and subordinates is very close and is
even said to be like family. This basic cultural environment is unique or
even key, considering that the relationship between employees is very
important to improve quality performance which can have a positive
impact on the success of a company.