Japanese Human Resource Manage

Employee Performance in Japan: Evaluation and Reward

Postwar economic development provided quite and immense amount of status and income to the Japanese. Since the 1960s, close to 90% of the Japanese people consider themselves to fall somewhere in the middle-class according to a survey conducted by the Prime Minister’s office. Today, status in society is determined mostly by one’s employment. Out of the labor force that consists of more than 60 million people, 45 million of those are regular employees. And for those who are working in a large firm, they are usually hired at the time of school graduation and retire at the compulsory age of 60. This kind of long-term employment system makes employers feel that labor is more of a fixed cost than a variable cost.

Regular employment is not determined by a legal contract, but more in the style of a social relationship, where performance in a by-product of the whole process and not a cause and effect of getting paid. In western societies, industrial identity is more focused on skill, or what one does, but in Japan it is where the employee belongs, or which company he works in is the main concern.

Performance is not the purpose or goal of the Japanese firm, instead it is a corporate reality in itself. The Japanese firm also exists in two levels, one which lies in the firm and one that lies outside the firm. Within the firm, the Japanese company tends to be a much more homogeneous group compared to its western counterpart. Large firms hire their workforce, mainly university graduates, from preferred schools to which they subtly assign quotas. These new recruits are hired for their potential. Training and development are essentially an internal affair which the firm is responsible for. This would lead to a system of job rotation and on the job training which is further nurtured by the classic Japanese system between junior and senior (sempai-kohai) found ubiquitously in Japanese society. The firm invests heavily on training generalists, or company specific skills in the sense that any employee should adept all the skills needed for the task assigned to the group, and that the overall work organization be as flexible to allow innovation, maintain internal competition and promote participation.

Outside of the firm, there is a vast network of banks and other companies that the Japanese firm is vigorously connected to. This is commonly known as ‘Keiretsu’ or a type of inter-personal relationship amongst various levels of the business.