The lecture of Professor Jongwon Woo - Doctor of Economics (The University of Tokyo) put an emphasis more on the aspect of Japanese - style human resources’ management. This undoubtedly would come in handy for lots of attendees in the seminar given the fact that a rising number of Japanese companies have invested in Vietnam in the recent year, which leads to higher demands for the recruitment of Vietnamese staffs working for them. Therefore a good grasp of typical Japanese human resources’ mechanism is likely to give an edge to the students who have it in mind to applying for these firms.

1. WHAT IS THE JAPANESE-STYLE HUMAN
RESOURCE MANAGEMENT?
JONGWON WOO

2. PART 1
TYPICAL PRACTICES OF JAPAN

3. A FACTORY IN CHINA:
ON THE WALL, THERE IS A SHEET TO
ANNOUNCE SOMETHING TO WORKERS.

4. A FACTORY IN JAPAN:
ON THE WALL, THERE IS A SHEET TO SHOW
SOMETHING TO WORKERS.

5. 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

6. TOYOTA PRODUCTION SYSTEM (TPS)
OR TOYOTA WAY (TW)
http://www.toyota-
global.com/investors/financial_data/high-
light.html

7. LEAD TIME OF PRODUCT DEVELOPMENT
 The read time of Japanese automakers is the shortest.
 They cleverly make use of simultaneous engineering.
http://ocw.u-
tokyo.ac.jp/lecture_files/eco_02/9/notes/ja/J
_ba2_9.pdf#search='%E9%96%8B%E7%99
%BA+%E3%83%AA%E3%83%BC%E3%83
%89%E3%82%BF%E3%82%A4%E3%83%
A0+%E6%AF%94%E8%BC%83'

8. “SIMULTANEOUS ENGINEERING”
 For simultaneous engineering, it is critically needed that
the related departments like development and production
keep close communication and cooperation each other.
http://webhotel2.tut.fi/projects/caeds/teksti
t/PDM/PDM_CE.pdf#search='Concurrent+
Engineering+Figure'

9. 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.

10. THE ECONOMIC EFFECT OF KAIZEN IN
TOYOTA:
TOTAL EFFECT IS 1,670 BILLION YEN
DURING 12 YEARS FROM 1992 TO 2003

11. 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%)
SUGIYAMA,Naoshi[2014]

12. 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.

13. 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

14. PART 2
WHAT KIND OF HRM SUPPORTS THE
COMPETITIVENESS OF JAPANESE
FIRMS?

15. 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.
JILPT(2014)"DatabookofInternational
LabourStatistics"

16. 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.
JILPT(2014)"DatabookofInternational
LabourStatistics"

17. THE SENIORITY BASED WAGE SUPPORTS THE
INCENTIVE OF EMPLOYEES TO DEVELOP THEIR
‘FIRM-SPECIFIC’ SKILLS AND/OR KEEP THEIR
ROYALTY TO COMPANY

18. 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.
JILPT(2014)"DatabookofInternational
LabourStatistics"

19. 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.
MLHW(2014)"SurveyonAbility
Development"

20. 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.
ProvidesbyProf.TeiichSekiguchi
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 Years
Experience
From the Entry Level

21. 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.
ProvidesbyProf.TeiichSekiguchi

22. CAREER CONTINUATION IN JAPAN HELPS
WORKERS MORE INCORPORATED TO THEIR
COMPANY
ProvidesbyProf.TeiichSekiguchi

23. 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.

24. 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).
TAGUCHI,Kazuo[2004]

25. 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

26. NOT INDUSTRIAL UNION BUT ENTERPRISE
UNION MORE HELPS EMPLOYEES COMMIT TO
HIS/HER COMPANY
ProvidesbyProf.TeiichSekiguchi

27. THE UNION PUT TOGETHER BY WHITE AND
BLUE COLLAR WORKERS MAKES THEIR
COOPERATION EASIER
ProvidesbyProf.TeiichSekiguchi

28. 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.
JILPT(2014)"DatabookofInternational
LabourStatistics"

29. “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.

30. PART 3
“JAPANESE-STYLE MANAGEMENT” IN
THE VARIETIES OF HRM/IR

31. 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.

32. 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.

33. “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

34. 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.

35. THANK YOU FOR LISTENING!