HRM in Japan

By
M Saranya
 AGENDA

History of Japanese HRM

Business Culture
History of Japanese HRM
 HRM in the period of 1960s to 1980s
- ‘People oriented’ HRM systems
- Long term contracts
- High investment in education & training
- ‘Red carpet’ benefits to employees
- Ability based grade system
- Seniority based pay and promotions
 HRM from1990s
- ‘Performance oriented’ HRM systems
- Fujitsu Company Limited, Nikko Securities
Company
- Standard labor law, 2000
Business Culture

Product
Work
People
style
customers
quality
People
 Recruitment

 Selection of personnel is the most important phase for quality &

continuous improvement. Screening of people is done on 2 principle
criteria:
 1. Does the person really want to work for the organization.
 2. What is the applicants potential.
 Lifetime employment

 Once accepted for employment, the Japanese workers are

guaranteed employment for lifetime with the company. The
employees do not consider leaving an organization even if he could
get a substantially better position & salary. This gives the
organization the advantage of stable & experienced workforce.
Seniority (Wage) System

 Life time employment is strongly

tied to promotions and pay raises.
 Salaries in Japanese companies
are relatively low for younger
employees, but rise when the
employee reaches his/her mid-
thirties.
 Many companies do not recognize
previous work experience when
workers switch jobs (so far few
people change jobs).
 Financial incentive to be innovative

 The organizations in Japan give adequate financial incentive for employees

who come up with innovative ideas for improving quality & productivity.
 Importance of the individual

 Japanese organizations have true & genuine concern for people. This is
reflected in most of their organizations and is the first & foremost objective
for achieving continuous improvement. Besides healthy bonus, the perks
include housing for unmarried, home loans for newly weds, promise of
upward mobility within the company, access to employee cafeteria and
holiday trips.
 Company loyalty

 Many mistakenly believe that company loyalty is achieved by much

publicized Japanese exercises, motto repetition or vision statements. It
goes much deeper & broader. It consists of a working relationship in
which workers recognize that the company is concerned not only about
customers, products, bottom-line & share holders but also about them.
Work Style
 Involvement of Top management

 The top executives of all Japanese firms wear the same uniform as their
workers. The top management is personally involved in all the areas of quality
improvement. Many times the top management is on the shop floor, they
meet their workers, observe what they are doing & converse and resolve their
problems.
 Job rotation

 In Japan workers are rotated in different jobs irrespective of their qualifications. This
is beneficial both for the management & the employees. The employees tend to
view all the problems with a fresh perspective and do not have a biased attitude.
This also relieves monotony and instills fresh enthusiasm in the employees which is
regarded as an important motivating factor to obtain continuous good
performance.
 Very important to have an inquiring mind

 The Japanese organizations inculcate in their employees the quality of an

inquiring mind. They believe that unless you have an inquiring mind,
continuous improvement is not possible. Thinking about new ideas in most of
the organizations is thoroughly encouraged.
 Attitude to Excel under challenge

 Japan with its limited space & scarcity of resources has been able to make the most
of whatever it has. Space, people and other natural resources in Japan are so limited
that all Japanese workers have been taught to exploit them with great care &
diligence. This colors the Japanese workers efforts to excel with whatever little they
have - A classical example of the positive influence of adversity.
 Commitment to training

 The company believes that as you invest more & more in training, the
employees become more & more living assets who can be shifted to new
responsibilities & higher positions.
 Educators are the older employees and senior managers.
 Training happens via Japanese knowledge management styles creating highly
skilled generalists
– On-the-job training (OJT)
– Job rotation
Decision making - Consensus management

 RINGE system

Section X Section Y
 Long term management outlook

 Most of the decisions taken by the Japanese organizations are long term in
nature. Their investments aim for growth over a long period of time.
 Competitive spirit

 Competition in Japan is taken as an opportunity to improve. More and

more Japanese companies benchmark their products with the global
leaders in quality.
Product Quality
 Zero defect policy

 Zero defect is a well understood & practiced quality standard of Japanese

industry. At a Sony factory one could see a color T.V that had been operating 8
hrs a day for over 37,000 operating hrs with no adjustments or repairs, and the
T.V was still producing an acceptable picture. The Industry standard is 10,000
hrs.
 Quality supersedes production

 In almost all the Japanese organizations quality supersedes production.

In Toyota plants every workstation has a line stop button. Each worker
is empowered to stop the production line if something goes wrong and
they do not fear reprisal for interrupting the production line.
 Supplier quality

 Poor quality work is not accepted from any supplier and definitely means an
end of relationship with the organization. The organizations also conducts
training program for their suppliers and takes interest in continuously
improving their products & services as well. The supplier is considered to be an
integral part of the organization.
Effectives Techniques

 Just in Time inventory

 Kaizen
 Six Sigma
 Fool proofing
Customers
 Global reach

 Japanese had a very clear vision of developing products for the global market
from the very beginning. They were quick in identifying the disadvantages of
some of the important products manufactured globally. They made fast
improvements on those products and offered to customers at the most
affordable price. Electronics and Automobiles are live examples.
 Attention to detail

 From design & production to packaging & delivery the Japanese pay lot of
attention to details for customer satisfaction.
 Market research

 Most of the organizations in Japan have risen to eminence because of excellent market
research - determining what consumers want and giving it to them. The U.S auto
manufacturers failed to perceive that the 1972 fuel crisis would have a real impact on the
customers and they continued to manufacture large fuel inefficient cars. The Japanese saw
the need and came out with small fuel efficient cars which met with great success.
Examples:

Sony:
We will create products that become pervasive around the world…We will
be the first Japanese company to go into the U.S. market and distribute
directly…We will succeed with innovations that U.S. companies have failed
at - such as transistor radio…50 years from now our brand name will be as
well known as any in the world…and will signify innovation and quality that
rival most innovative companies anywhere…’Made in Japan’ will mean
something fine, not something shoddy. 

Within no time the country has transformed its “Made in Japan” label from
cheap to the one signifying quality, reliability and preference.
Thank you