The cycle of Japan’s employment relations (ER) practices was the topic of a Centre for Work, Organisation and Wellbeing seminar on Tuesday, 11 August.
Commencing with what was once seen to underpin this greatly envied and competitively positioned labour market, Associate Professor Katsuki Aoki (Meiji University, Japan) spoke of the three sacred Japanese ER and management ‘treasures’ – lifetime employment, seniority payments and company unionism – and how their use in the country’s post-economic bubble burst has fared since 1991.
Since 1995, Japan’s key economic organisation has recognised the country’s ageing population and the impact of advancing internationalisation on its economy by calling for the deregulation and freeing up of markets, and the ‘diversification’ of employees’ consciousness. Employers responded, says Katsuki, by introducing new performance-related pay structures known as Seika-shugi, and began ‘diversifying’ their workforces by using workers other than the ‘regular’ [lifetime] employees, such as casual and supply/ agency/ dispatch workers.
With a marked rise in China’s economy around the year 2000, a ten year period between 1993 and 2003 saw further change as Japan’s Liberal Democratic government relaxed employment laws and began a program of deregulation. This included changes to the Labour standard Law, EOO Act, Employment Security Act, Worker Dispatch Law, and the privatisation of public services such as the post office and the Japan Highway Public Corporation.
So what of the current labour markets?
“While Japanese companies are still trying to maintain competitiveness…through the use of ‘regular’ employees, it has been difficult to maintain Japanese human resource management (HRM) practices that have supported corporate competiveness in [light of] the recent economic situation – in the automotive sector it is possible to maintain [traditional practices], but the electronics sector is very difficult,” adds Katsuki.
In this vein, asked whether the Japanese automotive industry – Associate Professor Aoki’s area of ER and management expertise – will face the same fate as its consumer electronics industry, Katsuki concluded:
“In the automotive sector they are trying to maintain the traditional employment practices but the [globalised nature of doing business] does not make it possible: for international [manufacturing] plants, for example, it’s not easy to have a standard, globalised employment practice.”