HUMAN RESOURCES MANAGEMENT

Vol.34-No.06 June 1,1995

1995 Conference on Industrial Relations

The first session featured legislation and policies which played major roles in establishing and maintaining Japanese-style employment practices. Mr. Yasuo Suwa, professor of Hosei University, and Mr. Yoichi Shimada, professor of Otaru University of Commerce, reported on laws concerning employment policy and labor standards in related laws, respectively. Presenting a list of postwar labor-related laws, Mr. Suwa pointed out the remarkable increase in laws concerning employment policy since the 1960-1970 period. In recent years, the Japanese government has stressed positive employment policy with the objective of full employment. Further, the government has even formulated policies more directly involving the internal labor market within the firm, in the form of intra-firm training, maintenance of employment and employment administration, he noted. In step with growth and maturity of society and the economy, the image of workers who are the object of labor laws is now shifting away from that of "workers as a group" who are uniform and submissive to forced regulations toward that of "workers as individuals" who are more suited to voluntary regulations in an individualistic and complementary manner while their intentions are being respected, he added.

Mr. Shimada stated the fact that Japanese-style employment practices, which were suited to the era of high growth, are now pressed to respond to the needs of the times and that this poses a significant problem also for labor legislation. He thus stressed that "labor legislation is now entering an important phase of reorganization." Also, he provided examples of recent changes involving employment practices. First, the declining ratio of regular employees on a long-term basis. Second, flexible employment of professional workers. Third, changes in personnel management away from working hours management toward ability management. Fourth, individualized and liberated awareness of workers and setbacks from group-based industrial relations.

In the second session, Professor Hiroyuki Chuma of Hitotsubashi University, expounded on the merits of long-term employment practices from the standpoint of economics. On the other hand, Professor Naohiro Yashiro of Sophia University maintained that slower economic growth and future tighter labor demand - supply situation will make employment more flexible, while acknowledging the merits of long employment tenure. Noting that the allocation mechanism of the "internal labor market" complements the incom-pleteness of the external labor market, Mr. Chuma cited, as reasons for failure of the external labor market to function properly, difficulty in precisely measuring productivity and work performance of workers engaged in "non-uniform" upper-level duties and workers' not wanting major changes in wages. He thus questioned whether a full shift of the nation's employment practices away from the internal labor market toward the external labor market will take place. To this, Mr.Yashiro said he "quite agrees" with Mr.Chuma on the merits of Japanese long-term employment practices. Yet he pointed out the fact that with a declining labor force and slower economic growth in future years when the nation experiences a full-fledged graying of society, enterprises will find it difficult to maintain traditional long-term employment practices. Also, he added that enterprises will have a hard time paying wages for two adult persons of a single-income family and that the wage system, in step with women's advancement into the job market, will move away from a family-based structure toward an individual-based one.

The third session focused on intra-firm personnel and labor management policies. Assistant Professor Hiroyuki Fujimura of Shiga University proposed that a long-term policy of personnel management be adopted for blue-colar workers. Mr. Fujimura expressed the view that behind the need for review of Japanese-style employment practices lies the enterprise's self-centered "desire to shed this layer" of middle-aged and elderly workers which are deemed redundant. Also, he pointed out that the bloated layer of middle-aged and older workers is attributable to an imbalance between the fruits of labor and wage levels, lack of managerial posts and difficulty in responding to new technologies and outdated abilities. Further, he stated that the employer who has stuck to uniform personnel management is responsible for "making middle-aged and elderly persons useless." Mr. Naoyuki Kameyama, JIL research director, reported on the realities of introduction of the annual pay system which is drawing much attention as a new way of administering white-collar workers. "The annual pay system is one which is moving away from seniority-based toward merit-based pay, with the assumption that the traditional seniority-based wage scheme is not tied to ability and achievement," said Mr. Kameyama, thus pointing out that the seniority-based wage system "also involved evaluation and disparity." He added that the priority-based introduction of the annual wage system into those in management posts played the role of making managers recognize problems different from those involving rank-and-file employees and had a great impact in this sense.

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