Table of Contents
TRADITIONAL JAPANESE MODEL OF EMPLOYMENT SYSTEM4
THE CHANGING NATURE OF JAPANESE EMPLOYMENT SYSTEM5
1.Sources of change5
3.Seniority-based Pay and Promotion System7
In the post-war period, Japanese manufacturing companies significantly increased their share of the global market of automobiles (Automotive News-Market Data Book, quoted in Womack, Jones, and Roos 1991, 69) as well as achieving more than 50 percent of the world markets in cameras, video recorders, watches, calculators, microwave ovens, motorcycles, and colour televisions (Oliver and Wilkinson 1992, 5). Much of this success was attributed to the forms of human-resource Management found in Japanese companies (Abegglen and Stalk 1987; Clark 1987; Dore 1990; Tachibanaki and Noda 2000).
However, during the period of Asian Financial crisis and economic recession for most of the 1990s, the typical Japanese features that supported comparatively high performance until the late 1980s came in for severe criticism.
Considering the high performance of the US economy in the 1990s, Neoliberals, based on the universal relevance of liberal markets, argue that the Japanese model is dead, and that Japan must (and will) adopt the US liberal market model (Lindsey and Lukas, 1998; Lin, 2001; Dornbusch, 1998; Krugman, 1996).
By contrast, many theorists of institutionalism, based on contextualized efficiency and path-dependent national patterns, claim that Japan continues its path-dependent national model due to its unique culture – taken for granted within the culture – the interconnectedness of institutions and agents’ efforts to utilize the comparative advantages of their institutions (Dore, 2000; Green, 2001; Isogai et. al., 2000; Chesbrough, 1998; DiMaggio and Powell, 1983; Hall and Soskice, 2001).
However, neither the neoliberals’ argument for simple convergence towards a liberal market economy nor the institutionalists’ claim for the continuation of the original Japanese model can explain the dynamic changes happening within the Japanese model at the turn of the century.
In this report, the recent trends of Japanese employment relations will be examined. Two questions have been addressed here. First, why the traditional Japanese employment system has been changed. Second, to what extent has ER system has been changed? To answer these questions we will first examine the traditional Japanese model and then after considering some issues relating to the reasons of this change, we will analysis the current trends to find out the extent of modification in a number of typical ER practices. A discussion of the implications of these changes is then be presented, followed by the conclusion.