Kaizen: Productivity Enhancement

from workplace
-The strengths and challenging issues of
Japanese Human Resource Management-
February 16, 2022

Dr. Naoki KURIYAMA (Professor of Soka University)

From 1992 to now, Soka University

From 1988 to 1991, ILO Geneva
Ezura Vogel (1930- ),
Professor of the Social
Sciences Emeritus at
Harvard University

He published Japan as
No.1 in 1979.
 Japan’s ranking in world competitiveness
Ranking The lost 3 decades

Japan as No.1
until 1992

Source: IMD（International Institute for Management Development）World

Competitiveness Yearbook, edited by Mitsubishi Research Institute,
https://www.mri.co.jp/knowledge/insight/20211007.html
NUMMI (New United Motor Manufacturing Inc.)
A factory run by both General Motors and Toyota
• In the mid-1980s, Toyota took over the Fremont
plant, one of GM's worst, a factory known for sex,
drugs and defective vehicles. And as part of an
historic joint venture, Toyota turned the plant into
one of GM's best, practically overnight. A
Symbolic
A Toyota worker
can stop the
story
assembly line and
identify his place
for problem
solving by him
self.
 Relentless reflection: 5 WHYS
• Toyoda is responsible for developing the concept
of the 5 WHYS: “when a problem occurs, ask ‘why’
five times to try to find the source of the problem,
then put into place something to prevent the
problem from recurring…as part of applying lean
methodologies to solve problems, always improve
quality, and reduce costs.”
Skill Grading System for multifunctional and flexible job assignment
Job Skill Wage
Skill
Upgrading
effect
No wage ↑
down from motivation
Mistakes
Rotation in
related jobs Skill level
correspond
Ordinary to wage
job level Long-term
Commitment

Easier job but

broaden job

Periodical Rotation within

Related Jobs
 Ability Development through Skill
Grading System
Width of Jobs Depth of Jobs
horizontal job expansion vertical job expansion

Related but Related and Related and

low level middle level High level

Realize of job structures and enable to

deal and control with the problems
 Strengths from workplaces in Japan
• Small Group Activities for Kaizen and 5S
• Continuous improvement
• Multi-skilled and effective OJT training
• High commitment
• Collaborative attitudes among workers (Organizational
Citizenship Behavior)
• Harmonious Labour Relations: Labour consultation
body
• Frequent communication between workers and
managers, importance of meeting in person
• Social Standardization for employment stability
Kaizen: Enabling approach at
workplaces
• How do we foster Kaizen approach of the
workplaces.
• Top-down approach - one dimensional application
to the ideal situation
• Bottom-up approach – interactive to improve the
reality first, building trust and stimulating creativity
• investment in people’s capabilities
• Flexible, Long term, Voluntary action
 Productivity enhancement at
working place by Kaizen
Productivity
For Introduction of Kaizen
Long-term employment and Kaizen
high commitment is critical.

Kaizen
Innovation
Kaizen

innovation

Innovation

Time Sequence
Comparison of KAIZEN and Innovation
KAIZEN Innovation
Company’s future
Subject Existing operation
development
Effect Gradual progress Drastic progress

Accumulation of Technology-oriented
Features
small steps Big breakthroughs
Investment Small Large
Person in
All employees Top management
charge
Problem solving Specific engineering
Technology
such as 5S, IE, QC. technology
11

By courtesy of Mr. Yasuhiko INOUE

 Basis of Kaizen
• Small group activity （often after working
time）、５S
• ZD（Zero Defect） movement in the process
• QC circles increase productivity.
• The basis of Kaizen activities initiated by
workers themselves, and proposed voluntary
suggestions by workers.
• The Kaizen activities will lead to effective and
efficient training and development for workers
 5S
Definition Objective

S1 Seiri Sort To decrease waste and

loss
S2 Seiton Set in order To increase efficiency

S3 Seisou Shine To observe, inspect and

correct
S4 Seiketsu Standardize To reduce variables

S5 Shitsuke Sustain To maintain and train

From a field study of the outcomes
of 5S and Kaizen activities
A small scale of manufacturing
factory in the suburbs of Tokyo
Identify to discard unnecessary items
with fixed date
Indicate the next process
Visualization by indicating card
Place for waste and unnecessary items
Indication of risk factors
Sort of thousands of bolts
Sort by colored label with explanation
Scale on the pillar suggested by
employees
Materials sorted by the categorized
types
Put in order by the size of pipes
（Seiton)
Put in order（Seiton)
Place always at fixed location
Clear mapping indication
Colored Mapping
Place useful tools at fixed board
Indicate by clear posters
Place useful tools at fixed board
Pens at fixed place made by
employees
fixed places made by employees
Clear indication of running out of
materials
Clean and disciplined
Implementation
of ５S
Effective communication in the
workplace
Job and duty tables with employees’
pictures
List of qualified employee motivate
the skill upgrading
PDCA cycle
Enabling environment for 5s and
Kaizen
 Increase in the number of employees from 1955
Long-term economic growth up to the beginning of
1990s
Ten thousand persons

6000

5000

4000

3000

2000

1000

0
1 1 1 1 1 1 1 1 1 2 2 2 2
9 9 9 9 9 9 9 9 9 0 0 0 0
5 6 6 7 7 8 8 9 9 0 0 1 1
5 0 5 0 5 0 5 0 5 0 5 0 5

Source) Statistics Bureau, Ministry of Internal Affairs and

Communications, Labour Force Survey.
Agreement of three principle for
Japanese Productivity Movement:1955～
For Kaizen continual improvement
① Employment Security (Avoid dismissals)

② Fair distribution of increased productivity

③ Joint Consultation System=information

sharing
High commitment of workers
under long-term employment
• Basis of 5S and Kaizen activities

• The typical image of Psychological Contract of

Japanese workers
• Recruitment and job assignment
• Rationales of seniority wages
• Joint consultation system with enterprise union
• Japanese fairness
• Organizational Citizenship Behavior
 Membership employment
Workers have same experience, feeling and
value in their background for communication.
Workers are expected to guess the
environment of surroundings. Flexible assignment

.
High
context
 School to Work transition in Japan

University life Job guidance

Working life
Tentative employment agreement

Graduation on Job contract from

March 31 April 1st

Socially standardization of recruitment system led to

low transaction cost for fixing individual wages.
 An Unwritten agreement that sets out what
management expects from an employee and
vice versa.
 Violation of psychological contracts were
related to lower levels of productivity, higher
levels of theft, and greater work withdrawal.

(Source) S. Robbins et al. Essentials of Organizational Behavior,

14th edition, 2018, p.186.
 300.0
Starting salary for
Master degree students

250.0

200.0
000 yen

150.0

Difference is only yearly incremental

Starting salary for
of the seniority-based wage
undergraduate students
100.0

50.0

0.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

(Source) Ministry of Health, Labour and Welfare, ChinginKozo Kihon Toukei Chosa.
Performance
Wage
B≧A+C＋D Balance Sheet of
seniority wage and performance

D：Retirement allowance
B C
performance
Starting
Rewards Seniority
wages
salary
A Psychological
Contract
Wage and Productivity in long-term employment in a firm

Length of work
Late promotion Retirement age
Promotion ceiling

Initial ２～３years 1 Long term perspective and relationship

intensive training To be flexible and to save transaction cost
For Flexible and collaborative attitudes:
Organizational Citizenship Behavior
workers attitude to
undertake special
behaviors beneficial to
the organization that
extend beyond
contractual obligation.

OCB is originally introduced by Organ, D.,Podsakoff, P.

M. and MacKenzie, S. B. (2006),
Organizational Citizenship Behavior: its nature,
antecedents, and consequence.
 Promoting factors for OCB

Job satisfaction

Trust

Japan
Productivity
Movement
Fair distribution
Fair outcome Organizational
Employment
Fair treatment Citizenship Behavior
security
Fair process
Joint consultation
The effects on employment
stability
For keeping psychological
contract
 Prioritized government goal for
employment stability
• government subsidies for employment
adjustment—financed by the public unemployment
insurance scheme (Koyo-Chosei-Joseikin)
• These subsidies provide a leave allowance to firms
that suspend layoffs during the restructuring
period.
• Large companies are major contributors to the
scheme, and micro- and small-scale industries were
the major recipients.
 Unemployment rate during the
COVID-19 pandemic
2020Jan 2021Oct Highest rate (month)

Japan 2.4 2.7 3.1 (2020 Oct)

U.S. 3.5 4.2 14.8 (2020 Apr)
U.K. 4.0 4.3 5.2 (2020 Nov)
Germany 3.4 3.3 4.1 (2020 Aug to Nov)

France 8.1 7.6 9.0 (2020 Aug to Sep)

South 3.9 3.2 5.4 (2021 Jan)

Korea
(Source) OECD stat. and JILPT, (https://www.jil.go.jp/kokunai/statistics/covid-19/f/f01.html)
 D
B C
Contribution
Seniority
Wage wage
A

Working
If the workers are forced to retirement years
leave here, it would cause a
violation of psychological
contracts.
Voluntary early retirement incentive
• A major employment adjustment measure
without violation of psychological contract.
• In employers’ perspectives, Japanese employers
tend to have responsibility for employment and
sensitivity to their employees.
• One of the reasons of employment security for
competitive large company is that the violation of
employment security as ‘psychological contract’
leads to collapse of high commitment.
Shukkoh: Outplacement to supply chains
Implementation of employment security
Interfirm transfer:
Wage level should be secured
through the payment by the
original company
Shukkoh Practice: Company arrangement of
Outplacement for Employment Security
Interfirm transfer:
The wage of transferred workers
are subsidized by the by the
original company

JAL
ANA
500
400
employees
employees

The 2020 pandemic promoted this

arrangement beyond sector.
To retail sector and delivery services sector.

Report from Nikkei Shimbun, 2020, Oct. 30 .

 Unemployment rate of the youth 15 to 22

40.3
37.8
34.7
32.2
29.2 29.7 29.7
28.2
24.7 24.6
22.3 21.3
20.8 20.5
19.2 18.4 18.6

11.6 10.4 11.2

9.2 8.6 8.4 8.7
5.6 5.1 4.6 5.8
3.6 3.8 4.1 4.1

2015 2016 2017 2018 2019 2020 2021 Jan 2021Oct

Japan 5.6 5.1 4.6 3.6 3.8 4.1 5.8 4.1
France 24.7 24.6 22.3 20.8 19.2 21.3 18.4 18.6
U.S. 11.6 10.4 9.2 8.6 8.4 20.5 11.2 8.7
Italy 40.3 37.8 34.7 32.2 29.2 29.7 29.7 28.2
Japan France U.S. Italy OECD Stat.
 Standardized monthly salary in Japan
300.0

Master degree student

250.0

200.0
Undergraduate student
000 yen

150.0

100.0 Social
Standardization
50.0

0.0
Average Wages in US Dollars, 1991-2020 United
States
Source: OECD Data, https://data.oecd.org/earnwage/average-wages.htm

Germany

U.K.

France

Japan
 Teleworking during the
pandemic
TA Joint Research Project by JILPT (Japan Institute for Labour
Policy and Training) and JTUC (Japan Trade Union Confederation)
Research Institute for Advancement of Living Standardshe on
the effects of teleworking on Japanese workers and enterprises
in private sector from April 2020 (JILPT, 2020). These surveys
were targeted at individuals (JILPT a), enterprises (JILPT b) and
workers (JILPT c). These are nationwide surveys across the
industries and various type of workers to review a quick outlook
of the general effects of COVID-19 on employment and work.
The days of Teleworking and WFH
(Source) JILPT/JTUC a (May 2020)

80
70
60
50
40
30
20
10
0
no telework 1 to 2 days 3 days 4 days more 5days
pre-average Apr-20 May-20
Introduction of Teleworking by sample
individual workers
60 Fell down and stagnated of
Teleworking in Japan after
50 the peak of the pandemic.

40
30
20
10
0 Sep-20
Jun-20

Aug-20

Nov-20
Feb-20
Mar-20
Apr-20
May-20

Jul-20

Oct-20

Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
(Source), the 4th survey of JILPT a, September 2021.
 Telework % by industry
Joint Research Project by JILPT(Japan Institute for Labour Policy and Training)
/JTUC Research Institute
39.4

27.9 28.4
26.5 27 26.4

20.8 20.2
16.2 16.9
15 15.3
12.4 13.4
10.3

5 4.7 4.6 3.7

1.9

Manufacturing Services Retails Hotel, Restaurant

Teleworking in sample workers by status
Telework %

60.3

37.3 39.7 37.9

23 22.8
15.4
8.9 9.2

Atypical Regular Management

(Source) JILPT a.
 Productivity by Telework

Teleworking is
increase not so
13% successful in
prodctivity

no change
21%
decrease
66%

Joint Research Project by JILPT(Japan Institute for Labour Policy and Training) /JTUC
Research Institute Feb. 2021.
 Social well-being; human relations
and communication at workplace
Challenges and reactions to Teleworking

Difficulty of
monitoring and evaluation monitoring and
evaluation

Joint Research Project by JILPT(Japan Institute

for Labour Policy and Training) /JTUC Research
Institute. April 2021.
Communication

Communication
is the biggest 0% 10% 20% 30% 40% 50% 60% 70% 80%

challenge
no reaction challenges
 Physical stress of the workers

39
38
37
36
35
34
33
Joint Research Project by JILPT(Japan Institute for Labour Policy and Training)
32 /JTUC Research Institute, 2021.April.

2020/Jan 2020/May 2020/ Oct 2021/Jan

Mental stress of the workers
60

50

40

30

20

10 Joint Research Project by JILPT(Japan Institute for Labour Policy and Training)
/JTUC Research Institute, 2021.April.

0
2020/Jan 2020/May 2020/ Oct 2021/Jan
 Telework from Now
survey for 125 major companies in Japan,
2021 Nov.22. Yomiuri shimbun
12%

Increase
4%
Status quo
Decrease28
56%
%
Exploring ‘Best Mix’
for keeping the Strength and
Challenges for better
management
First Challenge; Communication
• Information sharing by personal contact is not
smoothly functioned.
• Enterprise unions as basic unit of trade unions in
Japan promote frequent interactions between a
union and employer under the joint consultation
system
• Small group activities for Kaizen (continuous
improvement) and 5S activities require close
working relations.
• lack of face to face would damage mental stress
leading to depression and isolation.
 Human moment at workplaces in person
• Face to face encounter that allows empathy,
emotional connection and non verbal are to
complement what is actually said.

Strengths of
labour
relations in
Japan

Anne-Laure Fayard, John Weeks, and Mahwesh Khan, ‘Designing the Hybrid office; From
workplace to “culture space”’, Harvard Business Review, (March–April 2021).
Steady transformation of employment system
• The job focused employment has been permeated in
Japanese labour market instead of membership
employment.
• Hitach, Ltd. decided that all the employment become
job focused employment with clarified job description
(Nihon Keizai Shimbun. January 10, 2022) .
• A culture of documentation should be established to
keep everyone informed about latest and most accurate
information about work and organization (ILO, 2020,
Teleworking during the COVID-19 pandemic and beyond; A
Practical Guide. p.11).
• The ILO also promotes smooth communication at the
best times and the best ways to get in touch with the
direct supervisors
Second challenges: evaluation and
interaction with supervisors
• The work evaluation in Japanese working
culture tends to focus on the process and
attitude. For example, ‘do your best’ attitude is
emphasized across the generations.
• This attitude is evaluated the visible attitude at
workplace. This evaluation is interrupted by
teleworking which prohibits spontaneous
monitoring visual working attitude and
immediate feedback and guidance.
Culture of attitude evaluation in Japan
Do your best attitude（high evaluation of attitude
in white collar workers in Japan）

A B A has 50 capability.
５０ １００
Capability Capability B has 100 capability

５０ They did the job which

Job needs 50 capability.

In terms of job or performance

Who is evaluated better A and B are evaluated equally.
A or B? In the case of “do your best attitude”,
Which one is evaluated better？
 ５０ ５０ ５０ ５０ ５０
Job Job Job Job Job

A
A
５０ B B
５０
capability １００ １００
capability
capability capability

Case ２ “Do your best attitude”

Case １ Job evaluation
A B do respective 50-job, 100-
job can be done as a whole.
evaluation
As A is evaluated better with the
same job, B will do the extra job up
to the level of his best capability.
150-job can be done by A and B as
a whole.
For evaluation at Telework
• A process called ‘Management by Results’ is the
best method (ILO, 2020 p.7). It includes ‘the
flexibility and autonomy to organize their work
without the manager having constantly check on
progress’ (ILO, 2020).
Third challenge: Training
• the workplace learning called as OJT
(On the Job Training) is the strength
of Japanese human resource
development.
• The cheap and effective teaching
and learning are taken place at on
the spot of workplaces.
 Three Principles of OJT
Effective and efficient
workplace learning
in Japan
• “set example”
Show models. Teleworking
• “job assignment” has to lose the
chances of this
Practice alone. OJT.
• “personal contact”
Support by request.
Importance of non-verbal signals in
communication and workplace
learning and teaching.
Workers Subject to Off-JT and Self development Low investment
Workers Subject to Off-JT in training other
than OJT in
Japan.
Prof. Miyagawa at
Gakusyuin university
Workers indicates that the amount
Subject to Self of training investment
development was decreased 80%
from the peak year of
1991 to 2015.
Non-regular workers Subject to Off-JT
The ratio of HRD/GDP
Non-regular was only 0.1% while that
Workers Subject to of other industrialized
Self development countries was 1-2%
during 2005 to 2012.

(Source) Abe, M. (2022) Article

at Keizaikyoshitu, Nihon Keizai
Shimbun, February 8, 2022
 More investment in people!
• Online training should be provided in much
larger scale.
• In particular, leadership skills, time
management skills, communication skills
‘focusing on learning about role-modeling
and proactive engagement and collaborative
approaches that should become central
features in strengthening the dynamics of
remote team’ (ILO, 2020, p.16).
 A Solution; Best-Mix of working
modality
• Apart from Dichotomy; telework or office work?
• Explore Best Mix of productivity and human factors
• Keeping strengths while adapting new environment
is the common agenda for Japanese workers and
employers.
Solution of human-
centered approach:
Investment in people’s
adaptability