Since the 1980s the Japanese model of Human resource management has been

dubbed the ‘superior’ model. In japan the workplace culture differs greatly from
what we are used to in the western world. Whilst many firms in the US and the UK
tend to focus on the individual, Japanese workers and companies tend to focus
heavily on the team, adopting a sort of Confucian hierarchy. This hierarchy means
that all new workers receive a basic starting wage and enter at the bottom of the
firms pecking order. Intrinsic promotion can only be gained through years of service
to the firm, with very little to no option of external promotion. This discourages
employees from finding new jobs in other firms, encouraging loyalty through
promotions and pay rises.

The HR practices in Japan can be split into, Work relations, Employment relations and
Industrial relations.

Firstly, I shall explore the work relations within Japanese firms. When it comes to job
titles and descriptions in Japan, these are kept extremely vague, However, whilst all
new employees will receive essentially the same job title, extensive cross training
through job rotation is a key factor in managerial strategy. As Japan’s state focuses
solely on academic education, it is up to the firms to provide intrafirm training.
workers in japan receive about 380 hours of training in their first year, compared
with 170 and 46 in Europe and the US respectively. This system ensures that workers
of differing abilities are familiar and competent in more than one section of the
business. After developing a personal portfolio of skills, workers then have the
chance at promotion. As this is commonly the only option for promotion, as
mentioned above, it promotes extreme company loyalty through internal career
paths. Furthermore, through job rotation within the business the workforce has no
functional specification, meaning every worker can carry out almost every task at the
base level.

Secondly, Employment relations. There are two concepts which are critical to the
industry culture of Japan, the ‘lifetime employment system’ and ‘seniority-based
wage’. The lifetime employment system is almost exactly what it says on the tin. A
worker will commit his life to one company and in return be rewarded with a
paycheck, opportunities for promotion and job security. The Seniority based wage
involves steep increases in pay, which come with length of service. Both of these
ideas reinforce the centerpiece of Japanese work culture, company loyalty.
Furthermore, Japan places little emphasis on a person’s ability to perform the
technical requirements of a job, instead, they focus on whether a person is able to
work within a team and become part of the firm’s workforce. This again links back to
the life employment system. Another example of this is the use of an annual hiring
system, whereby all new employees start on the same day, once a year in order to
promote a harmonious ethos throughout the workers. The new workforce is treated
as a giant reservoir of human resources.
Finally, Industrial relations. In the early post-war period, unions had to fight to
ensure wages were based on workers’ minimal living costs and provide them with
what we now know as, the living wage. The idea was to protect wages when inflation
was high, and times were tough. Workers were encouraged to stay with their
company and in turn offered the potential for wage increases through length of
service. This movement by the unions then became the basis for the lifetime
employment system, encouraging labour peace.

I shall conclude my presentation with two examples of HRM in the modern-day

Automobile industry in Japan.

The Japanese automotive manufacturer Toyota developed its own HRM of

production workers at the domestic plant in Japan under the lifetime employment
model and cooperative industrial relations. The centre of Toyota’s HRM is the
“seniority-based wage” system. As wage rises depending on seniority, the skill level
of the production workers is incrementally upgraded in the company. In the 1990s,
TMC adopted the “wage based on job evaluation” to add an element of competition
which compliments the limits of the seniority-based wage system. However, the
seniority-based wage system remains the key element of Toyota’s culture and
hierarchy. Some of Toyotas overseas factories tried to implement different variations
of the classic Japanese model, however the factories performances did not reach
those of domestic plants.

My final example is DENSO, a leading global automotive supplier based in Japan.

DENSO is an example of a firm which has altered its approach to HRM in order to
gain competitive advantage in an industry experiencing rapid development and
innovation in areas such as autonomous and electric cars. DENSO has outsourced to
a company named DOMO to optimise its HR department. The cloud software
company based in Utah allows DENSO to be more strategic and strengthen its ability
to compete in the globalized automotive industry. With Domo, they can find the right
employees with the right expertise, enabling them to hire, place and educate,
supporting the overall management strategy with great success. This example shows
a fusion of traditional Japanese industry culture and outsourcing, could this be the
future to hold greater market share in the modernising automobile industry?

(Je Jo, 2018) (DOMO Inc., 2018) (Sorge, et al., 2015)