Recent Trend

Recent Trends in Japanese Human Resource
Management: The Introduction of a System of

Individual and Independent Career Choice
Takashi Watanabe
Faculty of Business Administration, Ritsumeikan University, Japan; Higashi Noji, Kusatsu city,
Shiga Pref. 525-8577, Japan.
E-mail: arthur@msd.biglobe.ne.jp
Japanese-style management has long been characterized by its lifetime seniority-
based employment system, based on a collective and long-term philosophy of
human resource management, and its enterprise labour unions; its ethics and
efficacy have come under frequent discussion.
However, the end of the high-growth period and the resultant collapse of the
bubble economy have introduced new trends affecting business organization and
the individual in Japan. A flexible individualistic management system better suited
to short- and medium-term fluctuations is being sought. Major banks and trading
companies have particularly seen the need to adapt, with unprecedented
restructuring leading to corporate division and the introduction of holding
companies.
Against this background has developed a personnel system in which the
individuals independent and autonomous career development is put in the context
of watchwords such as will and capacity, freedom and self-responsibility and
self-development. This represents a significant challenge to the traditional views
and attitudes of Japanese-style management, and while we cannot estimate the final
impact of this new trend, we must at least acknowledge its contemporary
emergence.
Taking major banks as its core example, this paper seeks to introduce the
structure and features of this flexible individual-oriented management system, and
to update international perceptions concerning Japanese-style management.
Asian Business & Management (2003) 2, 111141. doi:10.1057/palgrave.abm.9200029
Keywords: flexible individualistic management system; career personnel system
Introduction
The so-called lifetime employment/seniority-based uniform management
system, based upon a collective and long-term philosophy of human resource
management, has, along with enterprise labour unions, long enjoyed
international recognition as characteristic of Japanese-style management, the
Asian Business & Management, 2003, 2, (111141)
r 2003 Palgrave Macmillan Ltd 1472-4782/03 $25.00
www.palgrave-journals.com/abm
ethics and effectiveness of which have been widely debated both inside and
outside Japan. However, there have been substantial changes in trends
concerning business organization and individuals in Japan and we can safely
say that in the recent aftermath of the breakdown of the bubble economy,
conventional debates on the features of Japanese-style management also need
to be fundamentally re-examined.
For instance, recent characteristics of environmental changes relevant to
Japanese business organization are as follows: large-scale fluidity in the labour
market through the processes of information technology and internationaliza-
tion; collapse of long-term stock-type employment systems, other than some
core employees; diversification and formation of multi-track and flexible
employment management; diffusion of information systems and flat organiza-
tion based upon information networking; higher educational qualifications
among women and their advance in occupations; decline of young workforces
and increase of older workers; further reduction of working hours and policy
formation for quality of life; and enactment of a series of laws related to
working life, such as the Equal Opportunities Law and Childcare Leave Law,
which form part of labour and living-related legislation and improvement of
social environment.
Furthermore, as far as the individual is concerned, there has been increased
diversity in values, attitudes to employment and lifestyle and individual
independence (autonomy). This has particularly shown up in orientation
towards will and skill, freedom and self-responsibility and self-enlight-
enment, and also in the formation of strong desires for balance in the so-called
four areas of life professional, family, social and private.
This more individual-oriented style of business organization is displacing the
above-mentioned collectivist approach, which required an individuals total
sacrifice to the interests of the goals of the business organization. Although
employment management by career choice selection including the system
whereby the choice of career path is based on an individuals sense of values,
attitude to employment and intended career had already been introduced in
such institutions as major banks and large trading companies in the mid-1980s,
in the changing climate of recent years it is now being introduced as a new
medium-term flow-type management system, which is even more individual-
oriented.
In other words, while corporate division and the system of holding
companies were introduced in the unprecedented industrial restructuring
following the collapse of the bubble economy, with further labour transfer both
within and outside companies and their groups, and large-scale mobilization of
the labour market, it is the independent and autonomous career development
of the individual which lies at the heart of the personnel system being
introduced and diffused. In this respect, the choice of career path mediated by
Takashi Watanabe
Recent Trends in Japanese H.R. Management
112
Asian Business & Management 2003 2
the will and skill, freedom and self-responsibility and self-enlightenment of
the individual becomes a premise it is a system that offers fulfilment of the
desire for self-actualization and development, gauging the increase in
motivation and seeking to preserve integration and contribution to the
organization. In other words, it is a shift towards a flexible system giving equal
weight to the four areas of life of the individuals while simultaneously
satisfying the interests of business organizations. With the exception of
enterprise unions, in business organizations which have introduced this type of
system the traditional fixed viewpoints and ways of thinking concerning
Japanese-style management have already been fundamentally called into
question.
We cannot yet say how far or how fast this new management system will
spread, but it should at least be recognized as a new trend hitherto unseen in
conventional Japanese management.
In this paper, taking the contemporary Japanese major banks as my core
example, I seek to present the associated trends and features of this individual-
oriented medium-term flow-type flexible management system, introduced in
recent years under the stylization of career personnel system, and to examine
its significance.
1
In so doing, I hope to promote a fundamental re-examination
of fixed viewpoints and ways of thinking concerning Japanese-style manage-
ment still entertained by some abroad.
2
Background to the Introduction of the Career Personnel System
I would like to begin by examining factors leading to the introduction of this
new system, with particular reference to trends in Japans city banks.
Restructuring of the banking industry and the fluidity of the labour market
Todays banking industry in Japan is developing a financial big bang, with
large-scale restructuring and unprecedented mega-mergers exceeding the
framework of conventional company groups. Added to this is the introduction
of corporate divisions, intra-company systems and a system of holding
companies, with the state of the finance industry and that of the working
environment of individual companies undergoing a high degree of restructur-
ing via electronic banking (EB) and IT. Furthermore, both the relation
between the division and cooperation of labour in the finance industry and the
allocation of jobs and functions within the company group have undergone a
high level of reorganization, including the restructuring of the qualitative and
quantitative relationship between supply and demand of the workforce. In
addition, while pursuing human resource restructuring on the one hand, it is
common practice to see head-hunting and year-round recruitment, both inside
Takashi Watanabe
113
and outside company groups, of personnel who can be immediately effective.
As a result of the simultaneous development of these various trends, the
fluidity of the labour market has experienced considerable rapid promotion in
all areas of society. In such a climate, even if a small number of core staff are
generally recruited into the business organization in line with the long-term
philosophy of human resources management, a new form of personnel system
is being sought for the large peripheral labour force (and its sub-strata) one
that values short-term flow-type flexibility, whereby manpower of the required
quality is employed only in the required quantity and for the required period of
time, in order to avoid mismatches in supply and demand.
The introduction of the career personnel system at DK Bank may also be
considered as being in line with such trends. DK Bank explains this as follows:
The finance industry is going through a turbulent period as never before
experienced, as shown by the Japanese big bang, with intense and rapid
pressures for restructuring under circumstances of being in a real do-or-die
situation. (Interview, 1999)
From April 1999 DK Bank put into action its first corporate plan. It states that
as a financial group of high corporate value living up to the trust of the
customers, the market, the shareholders and society itself, it aims to operate
successfully through the financial big bang, and remain a company where bank
clerks can enjoy attractive working conditions, while reaffirming its position as
a leading company. This is the future image that DK Bank will progress
towards, by means of the radical reform of its management system. This has
started with the introduction of an intra-company system, supporting the
professional career development of the personnel and preparing the
infrastructure for employees to continue to aim for professional development.
The introduction of such a career personnel system was born from the
necessity to adapt the personnel system to the acute changes in its environment,
particularly in the mobilization of human resources that accompanied the
financial big bang, and to create an environment offering maximum scope for
independence, autonomy and creativity so that bank employees can become
true professionals.
The intra-company system and internal manpower market
DK Bank introduced an intra-company system, establishing a Corporate
Centre functioning as head office and four companies a Customer and
Consumer Banking Company, centred around domestic branches; a Corpo-
rate Banking Company responsible mainly for large businesses; an Interna-
tional Banking Company, with an overseas focus; and a Market and Trading
Company, with a marketing department at its heart (see Figure 1).
Takashi Watanabe
114
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Figure 1 Example of company system organization. Source: Nikkin, edition 19 March 1999.
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The main objectives of the intra-company system may be summed up as
follows (Interview, 1999):
(1) the formation of a system able to reflect customer needs strategically and
with speed and precision,
(2) the formation of a system allowing individual companies to exhibit
independence, autonomy and creativity, by delegating to each individual
company fixed functions relating to management of finance income,
resource distribution, credit supervision, etc., centralized at head office,
and the authority concerning their execution.
(3) the clarification of the stances taken in the complete corporate strategy of
each individual company.
This implies the dismemberment of the business organization for each
respective customer market, while respecting the autonomous activities of the
business establishment, and opting for a small head office.
The intra-company system is based around basic personnel rights being
delegated to each individual company with the transfer of personnel
fundamentally operating on the principle of a career path aimed at nurturing
professionals in each respective company. However, if more notice is taken of
an individuals requests and areas of specialization regarding his career when
seeking how best to fill a position, personnel transfer may go beyond the
company framework (Interview, 1999). As the internal labour market was
formed under the intra-company system, the introduction of a new personnel
system based on the premise of labour/personnel transfer was inevitable.
At the same time, there were plans to expand the career challenge system in
order that individuals may be granted an independent choice of careers beyond
the company framework, with the practical application of the functions of the
internal and external manpower markets via the structure of personnel
interchange from both inside and outside the company. In other words, banks
support the active practical application of marketability in the evaluation and
treatment of personnel or career choice, in order that ultimately bank
employees may be able to acquire the abilities and skills to allow them to
compete successfully in the external market as well (Interview, 1999).
Moreover, with the availability of various alternatives in the treatment of
personnel, the way is clear for each individual employee to determine for
themselves the type of career and reward, thereby, it is hoped, creating an
environment in which individuals take responsibility for results. In other
words, according to the principle of freedom and self-responsibility, each
person makes an independent career choice based on self-responsibility, and
true professionals are nurtured because the working environment is one in
which the treatment earned corresponds to the results achieved (Interview,
1999).
Takashi Watanabe
116
In this way, DK Bank attaches importance to the desire of each individual
for an independent career choice based on the premise of the transfer of
manpower from both inside and outside the company, accompanying the
introduction of the intra-company system with a re-examination of the state of
employment management by career choice selection. Supporting the indivi-
duals ambitious new self-examination, commitment to challenge, indepen-
dent, autonomous action yielding positive results, it allows independent
selection of career course through freedom and self-responsibility, in
accordance with the personal career design of each individual. A system for
the treatment of personnel based on market evaluation and market
orientation both inside and outside the company was deemed inevitable.
Changes in business opportunity and the new manpower strategy
The development of large-scale restructuring and mega-mergers, going beyond
the confines of business contents and conventional company groups in the
financial world, has served to breakdown boundaries between the banking,
securities, life and accident insurance industries, implying intensified competi-
tion for survival between companies. While this trend has, on the one hand,
brought about cuts and reductions (insolvency and wind-ups) in unprofitable
ventures, it has also led to enhanced business opportunities for top-rated firms,
implying considerable changes in the focus of inter-company competition.
Moreover, with the development of the IT revolution and the application of
EB, the development and supply of new products and services related to the
liberalization of businesses and their contents has been made possible which
itself can create new business opportunities and become the focus of renewed
competition. The profit profile based on deposit and loan margins has already
undergone great change and, in order to overcome competition among
companies, there is an urgent need to secure a professional workforce able to
develop and deliver new products, services and systems for every area of
banking business. Securing such manpower and using it to advantage is
crucially important for competition. As DK puts it, in order to remain
competitive as a strong and reliable bank, there is a need to raise the quality of
products and services by leaps and bounds, realizing the necessity of each and
every individual in every field of activity, becoming a true professional, never
losing out to rival industries and competitors (Interview, 1999).
In practice, this means a demand for professionals in every area of marketing
to individuals and corporations, and for professionals in each different
business sector such as loans, settlements, asset management, trading and
system development. Furthermore, as befits the internationalization and
globalization of the finance world, there is an urgent need to secure and put in
place workers with a much more thorough knowledge of international business
Takashi Watanabe
117
and finance than in the past individuals who are able to understand the
values and behavioural differences of other cultures and who are good
communicators. In general, the model bank employees that DK Bank hopes
to find are working members of society, whose role is not confined to a
company but covers the whole world people with self-responsibility and
autonomy, who are No.1 in their own fields and able to participate in
healthy debate and discussion (Interview, 1999).
In this way, the large-scale restructuring and changes in the business content
of the finance world in recent years and the inter-corporate competition
accompanying the development of internationalization and IT have led to
greater business opportunities, particularly in an international context. This
means there is an urgent need for a new breed of employees best suited to the
job in hand and for a review of conventional employment management by
career course selection, combined with the flip side of transfer to related firms
and the reduction of redundant workers. Furthermore, various systems with
the flexibility to allow an adjustable supply and demand of human resources
have been examined in terms of their adaptability to globalization, and a
personnel system introduced based on independent career choice by
individuals.
Long-term fixed employment for women and the revision of the Equal
Opportunities Law
With womens higher educational advancement and the enforcement of Equal
Opportunities Laws, against a backdrop of womens movements and increased
international awareness, recent years have seen a rapid rise in the number of
women in employment. According to the White Paper on Female Labour,
21,270,000 women were engaged in employment in 1997, a rise of 430,000 on
the previous year, and women accounted for 39.5 per cent of the total number
of employees; this increase in both number and rate surpassed that of male
workers. However, a relatively high proportion (35.9 per cent) of these are
part-time workers (Rodosho, 1999).
Moreover, compared to a decade ago, M-type employment whereby
work is interrupted for marriage, childbirth and childcare and then resumed
once the children have been raised shows a shift in the full M-curve towards
the top, as well as an ongoing bottoming-up of the M-curve (Rodosho, 1999).
There has thus been an overall increase in the number of female workers and in
the number of women who continue working through marriage, childbirth and
childcare, balancing both professional and family life.
Although women thus active in the workplace and engaged in long-term
fixed employment may be a recent phenomenon, despite some attempts at
empowerment, management has traditionally sought, in general, to raise the
Takashi Watanabe
118
ratios of female short-term employment in order to maintain and retain low-
pay structures. In other words, the provision of a general staff course for
routine peripheral work to which an inordinately large number of women are
assigned, thereby pre-emptively controlling promotion in position, rank and
salary, lies at the heart of conventional employment management by career
course selection. As long as this course exists, women will be subject to a tacit
condition to take early retirement, thus providing a lawful means of
increasing the rate of female short-term employment and maintaining the
low-pay structure.
However, with the revision of the Equal Opportunities Law in 1999,
advertising specifically for female-only labour was prohibited, so that the
conventional advertising and recruitment of a general women-only staff
course was no longer possible. Moreover, with modern womens place and
activity in the workplace coming under the spotlight, the introduction of a
system based on individual will and skill, freedom and self-responsibility and
classified by job specialization, rather than separate major and general staff
courses for men and women respectively, was called for.
In this respect, the state of conventional employment management by career
course selection also needs to be redesigned and reintroduced as a career
personnel system. As will be considered later, even if all work is termed non-
routine work and a minority of women continue to seek empowerment, an
inordinately large number of women will still find themselves on a path that
utilizes dispatched employees or part-timers.
The post-bubble rationalization of management and reduction of total labour
costs
A further basic factor that required the restructure of conventional systems and
the introduction of the career personnel system was the pursuit of
rationalization of management after the bubble economy burst. The period
of prolonged recession and financial big bang witnessed considerable
insolvency and the development of acquisitions and mergers among the big
banks, while restructuring and the streamlining of management operations
harshly affected those banks that managed to survive. The impact of this was
manifested in a demand for reduced business expenses, particularly as regards
labour costs or, more specifically, in demands for wage restraints, staff
cutbacks or employment adjustment.
For an illustration, the business expenses of DK Bank, which amounted to
f40.28 billion for March 1997, were cut to f39.41 billion for March 1998, with
further cuts to f36.32 billion forecast for March 2003. At the same time, this
brought drastic cuts in personnel, with the 17,425 staff on register as of the end
of March 1997 being reduced to 16,969 at the end of March 1998, and plans in
Takashi Watanabe
119
hand to leave only 13,200 by the end of March 2003. Moreover, labour costs
amounting to f17.41 billion for March 1997 were cut to f16.99 billion for
March 1998 and are projected to drop to f13.83 billion by March 2003. Within
these labour costs, salary and reward accounted for f14.56 billion for March
1997, cut to f14.20 billion for March 1998 and expected to be reduced to
f11.23 billion by March 2003 (DK Bank, 1999).
For cuts to be made in salary and reward, the introduction of a new
personnel system able to carry out tighter wage restraints than ever before was
deemed inevitable. In addition, the plan is that with the introduction of the new
personnel system, measures such as reviewing the bonus and monthly salary
system and the effective use of personnel anticipate a reduction of around 16.5
per cent, some f2.73 billion, in total labour costs in the 2002 fiscal year, as
compared with those for the 1998 fiscal year (DK Bank, 1999). Thus, a revision
of the job-qualification system (Shokuno Shikaku Seido) in the conventional
career course selection system was essential to enable tighter wage restraints
than those introduced previously. In particular, stages of promotion in
position, rank and salary underwent a much stricter sub-division, and
reduction of total labour costs for the majority of employees in order to
facilitate the empowerment of a minority was carried out. DK Bank explains
this in terms of looking for a means of daringly making our own job a business
challenge and bearing responsibility for its consequences, giving rise to a
climate in which good work is rewarded and failure penalized which is
reflected in more meticulous treatment of processes and results (Interview,
1999).
The Structure of DK Banks Career Personnel System
Staff classification
In DK Banks career personnel system, staff can be basically classified into
three groups: career staff, clerical staff and expert staff (Interview, 1999).
The designation career staff denotes personnel engaged in business, office
management, planning and research, general administration and other office
work. However, rather than adopting the conventional attitude that generalist
or specialist staff=non-routine work and clerical staff=routine work, this
system seeks to operate according to the idea that career staff=non-routine
work. Clerical staff, as in the past, are engaged in peripheral work other than
administrative work. Expert staff are personnel with an extremely high level
of specialist knowledge and skill, engaged in specialist areas, whose
remuneration and associated contractual conditions are determined separately
and individually.
Takashi Watanabe
120
Within these three broad categories, the assumption that those classed as
career staff in particular all aspire to be true professionals gives rise to two sub-
divisions, Career staff A and Career staff B.
Career staff A comprises those who, following a period of education and
job training, are engaged in various types of bank work business,
administration, planning and research, general control, etc. with no
delimitation as to the actual content of the work, and a place of employment
that may be any domestic or international business district.
Career staff B comprises those who, following a period of education and
job training, are clearly assigned to one of five career categories business,
administration, international work, system engineer or other specialist
work engaged in work requiring special knowledge and skill in a fixed area
of activity and, as a rule, requiring no change in workplace that would entail a
change of residence (see Figure 2 for the corresponding relations between the
old career course selection system and the new career personnel system).
Employee recruitment and personnel transfer
Although recruitment is carried out based on personnel schemas that vary from
company to company, excepting direct recruitment by each respective
company, once career staff A have been assigned to a Customer and Consumer
Banking Company, they are expected to decide which company they will work
for within 35 years. Career staff B clearly specify their career category at the
time of recruitment and join an assigned company (Interview, 1999).
Personnel transfer operates in the following way:
(a) Personnel transfer works on the principle of a career path for nurturing
professionals in each respective company, with each company being
delegated a fixed authority over this.
(b) The establishment of a job-posting system also enables in-house personnel
transfer based on an individuals independent choice of work.
Career Course Selection
Major Staff Course 'Career Staff A' Course
Business
Office Work
General Staff Course
Internationally-related
Office Work
System Engineer
Specialist Staff Course
'Career Staff B'
Course
Other Specialised
Work
Conventional Personnel Management by New Career Personnel System
Figure 2 Equivalent courses (old and new) at DK Bank. Source: Interview at DK Bank (April
1999).
Takashi Watanabe
121
(c) However, if more notice is taken of an individuals requests and fields of
specialization regarding his career when seeking how best to fill a position,
personnel transfer may go beyond the company framework.
(d) The career challenge system allows independent choice of ones career by
creating a good labour market within the Bank.
Models of employee recruitment and personnel transfer are shown in
Figure 3.
The career challenge system
As regards intra-company personnel transfer, the career challenge system
allows individual employees an independent career choice. As we saw earlier,
the shift to an intra-company system in 1999 brought with it an expansion of
the conventional career challenge system already in effect since 1991, ranking it
as a system that would allow independent career choice for individual
employees in terms of inter-corporate personnel transfer. Each company
undertakes functions from the planning and development of a product to its
promotion and sale, and is thus an integrated organization with head office as
well as business function, and in principle it provides a career path for
nurturing professionals in their market. But in a climate of integration of
businesses, applications can be made to other companies under the DK bank
umbrella in order to practice employees initiatives in the most suitable
Recruitment
Posting
Transfer
Career Staff A
Career Staff B
(business)
(office work)
(internationally-
related work)
(system engineer)
(other
specialized work)
Expert Staff
Posting at time of recruitment
Corporate Division
In-house Office
Monitoring Division
Customer &
Consumer Banking
Company
Corporate Banking
Company
International
Banking Company
Market & Training
Company
Career categorization clear from the
recruitment stage
Internal
Market
(Career
Challenge
System)
Inter-
corporate
Personnel
Adjustment
T
r
a
n
s
f
e
r
(Company
decision
after 3-5
years)
Customer &
Consumer
Banking
Company
Figure 3 Conceptual diagram of recruitment, posting and transfer of personnel at DK Bank.
Source: Interview at DK Bank (April 1999).
Takashi Watanabe
122
company. Each company with the right of personnel management can thus
deal effectively with the enthusiasm of employees who are eager to develop
their expertise. From the perspective of aptitude development, it is hoped that
the introduction of an intra-company system will act as a tool for determining
an employees future career direction in a sense, his permanent residence
(Nikkin, 1999) (see Figure 4).
In addition, apart from this, there is a career support system. Generally, it
is for Career staff A employees aged 25 or over and it is a system that provides
career development support to the above employees to acquire highly
marketable skills and know-how not found in the bank. It provides an
opportunity for self-realisation as finance professionals, while retaining an
employment relationship, by attending business schools abroad or graduate
school in Japan (Interview, 1999).
The job-posting system
As regards personnel transfer within the company, it is the job-posting system
that allows individual employees an independent choice of work. Each
company, as we have seen, is an integrated organization. Job-posting extends
a wide spectrum of work opportunities and the interchange of personnel within
a company is considered a career path means to nurture professionals in each
market. Employees will apply for a job under their own initiative and selection
will be made by the bank (Interview, 1999). A summary of job-posting is shown
in Figure 5.
Figure 4 Summary of the career challenge system at DK Bank. Source: Interview at DK Bank
(April 1999).
Takashi Watanabe
123
Change of course
Although career staff may be divided into Career staff A and Career staff B,
changes of course between the two are possible at the request of the individual
and by bank authorization in line with the following criteria:
K The person in question is a career staff member who has been with the bank
for three years (excluding those who have applied for a change of course
within the 3-year period).
K The employee selection method consists of a personnel appraisal of the
person wishing to change course, judging such qualities as ability, aptitude
and degree of contribution, via set procedures including a personnel
interview. The overall result is assessed and the bank decides on the
advisability of the change.
K In principle, change of course takes effect from 1 July each year; following
the change, the new qualification, grade and rank are determined by the
bank, based on a comprehensive assessment of the ability, aptitude and
degree of contribution of the person concerned (Interview, 1999).
Qualification classification
For career staff, qualification classification is divided into nine stages from
Grade A1 to A9 for Career staff A, and from Grade B1 to B9 for Career staff B
(Interview, 1999). The minimum number of years experience required for each
of these is shown in Figure 6. The minimum experience for Career staff B1 is
given here as 5 years, except for university graduates. This is because an
appropriate number of years are prescribed for the initial learning period which
1. Execution Process
Applications can be made at any time however, the process from application to appointment follows
that of the Career Challenge System.
2. Work targeted for application
Taking the business needs of each company into consideration, applications appropriate to the work
or post in question.
3. Application
a. Conditions for application
Career staff with three years or more of professional experience and who are able to fulfil
the extra application conditions required for each particular type of work.
Re-application is possible.
c. Application procedure
Application form (standard) + report (supplemented with reason for application, desire for
career development)
Application via head of divisional branch (no direct applications)
Figure 5 Summary of the job-posting system at DK Bank. Source: Interview at DK Bank (April
1999).
Takashi Watanabe
124
occurs in the early stages of career formation, taking into consideration the
sophistication and diversification of the work.
The qualification rank of new employees in the case of Career staff A (Grade
A1) requires university graduates or those with a similar or higher level
of knowledge and competence. For Career staff B, the Grade B1 quali-
fication targets university, junior college, vocational training school and
high school graduates or those with a similar or higher level of knowledge
and competence (see Figure 7). There is no change in the treatment of clerical
staff, and as regards expert staff there is no qualification, as their conditions
will be determined based upon assessment of individual performance in
their job.
The required conditions for qualification at all grades for Career staff A and
Career staff B are illustrated in Figures 8 and 9.
Classification of hierarchical ranking system
Five hierarchical rankings have been established for career staff and expert
staff according to the type of work in question, as follows (Interview, 1999).
K Business associate (job groupings in the early stages of career formation).
K Business staff (job groupings as core professionals who, highly motivated by
job development, are able to use their own judgement and initiative to
identify and solve problems).
K Business leader (job groupings at the leadership level of those responsible for
core work, having specialist knowledge and skills).
K Senior officer (job groupings at high professional knowledge and skills level,
serving as managers or future executives and contribute to organizational
objectives).
K Executive officer (job grouping at executive level, responsible for a company,
a department of the bank, and/or jobs responsible for the overall business of
the bank).
Career Staff A Career Staff B
Qualification
Classification
Years
Classification
Years
Grade A 1 3 Grade B1 5*
Grade A2 2 Grade B2 2
*One year for university graduates.
Qualification
Figure 6 Qualification classifications at DK Bank, with required number of years experience.
Source: Interview at DK Bank (April 1999).
Takashi Watanabe
125
Classification of positions
In order to achieve as simple and flexible a structure as possible, companies
have adopted via a flat organization a small hierarchical system with a
minimum number of positions (Interview, 1999). The theoretical equivalences
between qualification and position are shown in Figure 10. The measures
involved in the shift to a new system namely the corresponding relation
between qualification, position and hierarchical ranking are shown in
Figure 11.
Composition of regular salary
With the introduction of the career personnel system, basic pay and job-based
allowance as well as skill allowance were phased out, to form instead a single
unit entitled to payment based on job and performance. Moreover, family
allowance was replaced by child allowance and the whole package referred to
Evaluation of New Qualification Present Evaluation
Course Target Qualifi-
cation
Course Target Qualification
Career
Staff A
University
graduates or
those with a
similar or superior
degree of skill and
knowledge
Grade
A1
Major Staff University graduates or
those with a similar or
superior degree of skill
and knowledge
Grade 1
(Major)
University, junior
college, vocational
training school and high
school graduates or
and knowledge
Grade 1
(General)
General
Staff
University graduates or
and knowledge
Grade 2
(General)
Career
Staff B
University, junior
college,
vocational training
school and high
school graduates
or those with a
similar or superior
degree of skill and
knowledge
Grade
B1
Specialist
Staff
University graduates or
and knowledge
Grade 1
(Specialist)
Figure 7 Evaluation of the qualifications of personnel systems (old and new) at DK Bank. Source:
Interview at DK Bank (April 1999).
Takashi Watanabe
126
Qualification Qualification Requirements
Grade A1
Under the general instructions of ones superior, able to use ones own judgement according to specialist skill and knowledge to deal
correctly with the work assigned, both for bank work in general and in striving to acquire related knowledge.
Grade A2
1. With an understanding of the dept., room, branch, able to use ones own judgement as someone with core responsibility, dealing
effectively with work using specialist skill and knowledge backed up with flair and initiative, both for bank work in general and the ambition
to assimilate related knowledge, and able to participate in dept. room and branch planning for business improvements.
2. With an excellent level of specialist skill and knowledge, able to bring a contribution equivalent to 1.
Grade A3
1. Able to accomplish dept., room and branch business smoothly as team leader, through appropriate planning/drafting and to contribute to
business improvement, in accordance with dept., room and branch business management plan, demonstrating an excellent degree of
specialist knowledge and an active capacity for career development.
2. With an even higher level of specialist skill, knowledge and experience, able to bring a contribution equivalent to 1.
Grade A4
1. In accordance with dept., room and branch management plan, able to contribute to business improvement as managers or managerial
assistants, sometimes acting as high-ranking leaders, by planning enhanced organisational potential through the use of their own
achievements, knowledge and ideas in the instruction and leadership of subordinates, demonstrating an excellent degree of specialist
knowledge and an active capacity for career development.
2. With a superior level of specialist skill, knowledge and experience, able to bring a contribution equivalent to 1.
Grade A5
1. In accordance with management plan, able to bring an valuable contribution to business improvement, as the most highly qualified middle
managers, demonstrating fairness in ambition, knowledge and ideas and an excellent degree of specialist knowledge and an active
capacity for career development in the instruction and leadership of subordinates, positively planning a suitable environment at section or
similar organisational level.
2. With an even higher level of specialist skill, knowledge and experience, able to bring a valuable contribution equivalent to 1.
Grade A6
1. In accordance with management plan, able to bring a valuable contribution to business improvement, as the most highly qualified middle
managers or dept., room and branch manager, demonstrating fairness in ambition, knowledge and ideas, with an excellent degree of
specialist knowledge and an active capacity for career development in the instruction and leadership of subordinates, positively planning a
suitable environment at the level of dept., room and branch vision.
2. With a valuable level of specialist skill, knowledge and experience, able to bring a valuable contribution equivalent to 1.
Grade A7
1. In accordance with management plan, able to bring an invaluable contribution to dept., room and branch business results, as depts., room
or branch manager with the highest level of responsibility, can demonstrate in the running of an organisation superior qualities of character
and judgement, prominent leadership and capacity for instruction, as well as an excellent degree of specialist knowledge and capacity for
career development, positively planning a suitable environment in all respects at club-room level.
2. With a managers strong sense of self-awareness, superior qualities of character and judgement, invaluable specialist knowledge, skill and
high degree of experience, able to bring a leadership contribution equivalent to 1.
Figure 8 Career staff A qualification requirements at DK bank. Source: Interview at DK Bank (April 1999).
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Qualification Requirements
Grade B1 Under the specific instructions of ones superior, able to use basic specialist skill and knowledge to deal correctly with the work assigned, in a
specific field both for bank work in general and in striving to acquire basic related knowledge.
Grade B2 Under the general instructions of ones superior, able to use specialist skill and knowledge and ones own judgement to deal correctly with the
work assigned, in a specific field both for bank work in general and in striving to acquire related knowledge.
Grade B3 1. With an understanding of the depts., room and branch management plan, able to use ones own judgement as someone with core responsibility,
dealing effectively in a specific field with work using specialist skill and knowledge backed up with flair and initiative, both for bank work in
general and the ambition to assimilate related knowledge, and able to participate in dept., room and branch planning for business improvements.
2. With an excellent level of specialist skill and knowledge, able to bring a contribution equivalent to 1.
Grade B4 1. In accordance with dept., room and branch management plan, ever aware of the link between specialist work and bank work in a specific field,
as team leader able to make full use of ones excellent specialist skill, knowledge and experience to contribute to business improvement.
2. With an even higher level of specialist skill and knowledge, able to bring a contribution equivalent to 1.
Grade B5 1. In accordance with dept., room and branch management plan, fully conscious of the link between specialist work and bank work in a specific
field, as high-ranking team leaders, using their own achievements, excellent degree of specialist knowledge and skill in the leadership of
subordinates, to accomplish clubroom business smoothly in accordance with appropriate planning and drafting, thus contributing to business
improvement.
2. With an even higher level of specialist skill and knowledge in a specific field, able to bring a contribution equivalent to 1.
Grade B6 1. In accordance with dept., room and branch management plan, able to contribute to business improvement in a specific field as managers or
managerial assistants, sometimes acting as high-ranking leaders, by planning enhanced organisational potential through the use of their own
achievements, knowledge and ideas in the instruction and leadership of subordinates, demonstrating an excellent degree of specialist
knowledge and capacity for career development.
2. With an even higher level of specialist skill, knowledge and experience in a specific field, able to bring a contribution equivalent to 1.
Grade B7 1. In accordance with management plan, able to bring a valuable contribution to business improvement in a specific field as the most highly
qualified middle managers, demonstrating fairness in ambition, knowledge and ideas, with an excellent degree of specialist knowledge and an
active capacity for career development in the instruction and leadership of subordinates, positively planning a suitable environment at section or
similar organisational level.
2. With an even higher level of specialist skill, knowledge and experience in a specific field, able to bring a contribution equivalent to 1.
Grade B8 1. In accordance with management plan, able to bring a valuable contribution to business improvement in a specific field, as the most highly
qualified middle managers or a dept., room and branch manager, demonstrating fairness in ambition, knowledge and ideas, with an excellent
degree of specialist knowledge and an active capacity for career development in the instruction and leadership of subordinates, positively
planning a suitable environment at the level of dept., room and branch vision.
2. With a valuable level of specialist skill, knowledge and experience in a specific field, able to bring a contribution equivalent to 1.
Grade B9 1. In accordance with management plan, able to bring an invaluable contribution to dept., room and branch business results in a specific field, as
dept., room and branch manager with the highest level of responsibility, demonstrating in the running of an organisation superior qualities of
character and judgement, prominent leadership and capacity for instruction, as well as an excellent degree of specialist knowledge and capacity
for career development, positively planning a suitable environment in all respects at club-room level.
2. With a managers strong sense of self-awareness, superior qualities of character and judgement, invaluable specialist knowledge, skill and high
degree of experience in a specific field, able to bring a leadership contribution equivalent to 1.
Qualification
Figure 9 Career staff B qualification requirements at DK Bank. Source: Interview at DK Bank (April 1999).
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as payment based on job and performance, plus child allowance (Interview,
1999).
If we consider first child allowance: by abolishing family allowance, and
introducing child allowance in the light of the financial burden of those
upbringing children, this meant that those with a spouse only would receive no
child allowance. This led to a marked drop in salary for almost 80 per cent of
male bank clerks (Ginko Man, 1996), with banks also forced to re-examine the
rapid changes in mitigation procedures in view of considerations of stability
and livelihood of employees (Interview, 1999).
Next, let us consider the content of payment based on job and performance.
While there is a set amount based on job and performance for first-year
employees, the initial payment based on job and performance for those not
subject to a set amount is determined according to ability, experience,
educational level, nature of work, etc., of the person in question. Although
career staff are assigned a class or rank determined by the bank according to
the work in Grade 1 of each course, the allowance provided is set according to
the table for payment based on job and performance corresponding to the
work of the person in question. However, from the month following the
employees 55th birthday, payment based on job and performance becomes
thereafter fixed according to the rank for that age, level and work, etc., as set
out in the table for payment based on job and performance. For example, the
case of Career staff A (under 55 years of age) of rank No. 70 and class 55
would be evaluated at 3,360 or that of Career staff B (under 55 years of age) of
rank No. 70 and class 59 would be evaluated at 3,640. Each upgrade in rank
corresponds to a f500 increment; with the detailed sub-divisions in the table,
the general payment based on job and performance is thus able to correspond
to individualized management (Interview, 1999).
Qualification
Career
Staff A
(Grade)
Career
Staff B
(Grade)
Position
A7 B9 Research Officer, General Manager
Aged
under 55
A6 B8 Section Chief, Financial Affairs Manager, Deputy Chief
years A5 B7 Section Chief, Financial Affairs Manager, Deputy Chief
A4 B6 Section Chief, Vice-Section Chief, Deputy Chief
A7 B9 Research Officer (Specialist Business)
Aged 55
years or
A6 B8 Section Chief (Specialist Business), Financial Affairs
Manager
above A5 B7 Section Chief (Specialist Business), Vice-Section Chief
(Specialist Business), Financial Affairs Manager
A4 B6 Section Chief (Specialist Business), Vice-Section Chief
(Specialist Business)
Figure 10 Theoretical equivalences between qualification and position at DK Bank. Source:
Interview at DK Bank (April 1999).
Takashi Watanabe
129
1. Shift from Major Staff to Career Staff A
Currently At Time of Shift
Current
Qualification
Type Position
New
Qual.
New Position Other
Conditions
Class Position
Councillor Section Chief Grade Deputy Manager (Branch) 46 Executive Officer
Deputy Chief A7 General Manager 46 Executive Officer
Exclusive Duty Research
Officer
Research Officer 47-49 Executive Officer
Research Officer Research Officer 46-49 Executive Officer
No designated position No designated position 39 Senior Officer
Vice- Section Chief Grade Deputy Manager (Branch) 42 Executive Officer
councillor ranking Section Chief A6 Section Chief 37 Senior Officer
Financial Affairs Manager Financial Affairs Manager 37 Senior Officer
Deputy Chief Deputy Chief 37 Senior Officer
Deputy Section Chief Deputy Section-Chief 36 Senior Officer
Specialist Deputy
Research Officer
No designated position 35 Senior Officer
Deputy Research Officer No designated position 33-35 Senior Officer
No designated position No designated position 29 Senior Officer
Junior Section Chief Grade Section Chief 33 Senior Officer
Ranking Financial Affairs Manager A5 Financial Affairs Manager 33 Senior Officer
Deputy Chief Deputy Chief 33 Senior Officer
Deputy Section Chief Deputy Section-Chief 32 Senior Officer
Specialist Deputy
Research Officer
Deputy Research Officer No designated position 29-31 Senior Officer
No designated position No designated position 25 Business Leader
Senior
Figure 11 Shifts in grade and hierarchical ranking according to qualification and position at DK Bank.
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Director Senior Section Chief Grade Section Chief 28 Senior Officer
Ranking Deputy Chief A4 Deputy Chief 28 Senior Officer
Deputy Section Chief Deputy Section-Chief 25 Business Leader
Chief Examiner No designated position 22 Business Leader
No designated position No designated position 18-20 Business Leader
Junior
Ranking
Deputy Chief Examiner Grade
A3
No designated position Qualification
experience=
1 year or +
16 Business Leader
Qualification
experience
= 0 year
14 Business Leader
No designated position No designated position qualification
experience=
1 year or +
11-13 Business Leader
qualification
experience
= 0 year
9-11 Business Leader
Managerial
Grade 2
No designated position Grade
A2
No designated position qualification
experience=
1 year or +
6 Business Staff
qualification
experience
= 0 year
5 Business Staff
Managerial
Grade 1
No designated position Grade
A1
No designated position 2 Business Associate
Current
Qualification
Type Position
New
Qual.
New Position Other
Conditions
Class Position
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2. Shift from General Staff to Career Staff B
Current Qualification New Qualification Other Conditions Class Hierarchical Ranking
General Grade 5 Grade B5 18-19 Business Leader
General Grade 4 Grade B4 12-13 Business Leader
Qualification experience = 1 year or + 8-9 Business Staff General Grade 3 Grade B3
Qualification experience = 0 year 8 Business Staff
Qualification experience = 2 years or + (business) 5 Business Associate
Qualification experience = 2 years or + (office work) 4 Business Associate
Qualification experience = 1 year Shift Grade 2 Business Associate
General Grade 2 Grade B2
Qualification experience = 0 year
Shift Grade 1 Business Associate
General Grade 1 Grade B1 Qualification experience = 1 year or + 1-2 Business Associate
3. Shift from Specialist Staff to Career Staff B
Current
Qualification
Current Position New
Qualification
New Position Other Conditions Class Hierarchical
Ranking
Superintendent Section Chief Grade B7 Section Chief 37 Senior Officer
Deputy Section Chief Deputy Section Chief 34 Senior Officer Grade 2
Deputy Research
Officer
Superintendent Section Chief Grade B6 Section Chief 33 Senior Officer
Grade 1 Deputy Section Chief Deputy Section Chief 30 Business Leader
No designated position No designated position 23-35 Business Leader
Specialist Grade 4 No designated position Grade B5 No designated position 18-19 Business Leader
Specialist Grade 3 No designated position Grade B4 No designated position 13-14 Business Leader
Qualification experience = 1 year
or +
9-10 Business Staff Specialist Grade 2 No designated position Grade B3 No designated position
Qualification experience=0 year
8
Business Staff
Specialist Grade 1 No designated position Grade B2 No designated position Qualification experience = 1 year
or +
5-6 Business
Associate
Figure 11 Continued.
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Re-examination of the class evaluation is made based as required on the value
of the work in question (the degree of responsibility, workload, specialization,
market value, etc.) and the degree of strategic expectation substantiated by
performance to date. Moreover, it is stated that according to the annual
performance of an individual for the work in question namely the
contribution made and capacity for accomplishment displayed upgrading is
made, generally taking effect on 1 July each year with a maximum set at the
highest rank in each class in the table of payment based on job and
performance. However, no upgrading occurs from the first of the month
following an employees 55th birthday. In this way, payment based on the job
and performance component of the career personnel system comes to attach
importance to the value of the work of each individual employee, indicated by
the degree of responsibility and workload involved, the specialization and
marketability and the degree of strategic expectation, as well as the
performance ability displayed, the degree of contribution and the results
achieved.
Career-up programme
In January 1999 a career-up programme (CUP) was introduced in DK
Bank and officially launched in March of the same year. This consisted of
active supportive measures for the independent career development and
self-actualization of administrative employees aged 40 or over (approx-
imately 5,000 people), with such initiatives as personnel transfer to related
firms branching out into new fields of business. As opposed to the
aforementioned career challenge system or job-posting system for intra-
corporate transfer, as well as the career support system aimed at Career staff
A aged 25 or over, this system is concerned with the dispatch and transfer of
middle-aged employees.
The CUP is aimed at older ambitious administrative employees; they
undergo examination for grade certification or qualification incentive in a field
of their own choice, and with an overall appraisal of their effort and career
development results management will consider transfers and dispatch of such
employees to related companies within the bank (Interview, 1999). As the usual
age for this type of transfer in the major city banks is around 50, this
programme is designed to facilitate dispatch and transfer to related firms,
thereby providing a means of active self-investment in a new business field. In
specific terms, this entails:
(a) an independent report on performance development in eight designated
fields,
(b) an officially recognized qualification linked to each field,
Takashi Watanabe
133
(c) a career-up challenge test,
(d) guidance on career enhancement during a personnel interview.
The officially recognized qualification may be any one of around 60 vital to
new business fields, ranging from qualifications directly related to bank work,
such as financial planner or chartered accountant, to sign language interpreter,
care worker, boiler welder, electrician, etc. (see Figure 12).
Features of the DK Bank Career Personnel System
Expansion of career paths beyond the company framework
Conventional employment management by career course selection was
basically concerned with the treatment of specific career courses within
business organizations. However, the career personnel system, based on the
premise of transfers both within and across a corporate group, with the
introduction of an intra-company system, represents the introduction of a
philosophy for using the active application of the functions of the internal
corporate market for the evaluation and treatment of personnel. In other
words, the introduction of the intra-company system has meant that, as the
heads of each company have authority over their personnel, each company can
adopt a flexible approach to the way those personnel are utilized. Therefore,
even though personnel reshuffling operates on the basic principle of providing
a career path to nurture professionals in each company, if more notice is taken
of an individuals requests and areas of specialization regarding his career when
assessing how best to fill a position, personnel transfer may go beyond the
company framework. Thus, the new system differs from the old in that it takes
advantage of the function of internal personnel market/labour market for the
purpose of assessment and treatment of personnel.
Independent career choice based on freedom and self-responsibility
Although for forms sake conventional employment management by career
course selection professed personal respect of the independent will of each
individual, in content it was a system that allowed the pursuit of two or three
top-down fixed career courses as laid down by the bank. However, the career
personnel system, corresponding to the labour transfer in and out of the
corporate group which accompanied the introduction of an intra-company
system, persistently upholds the importance of independent career choice
based on freedom and self-responsibility. Consequently, in order that each
individual bank employee may be able to make an independent career choice
not limited by the company framework, the conventional career challenge
Takashi Watanabe
134
Field Content Recognised Qualification Grade
Deposits
Foreign
Exchange
None (Test Administered)
Office Work
Business
Financing
Business and
knowledge of business
work based on this
banks business
procedures
None (Test Administered)
Credit Management
Collection
Knowledge of the laws and business
for credit collection None (Test Administered)
Individual
Tax relating to
individuals, knowledge
of asset management
FP Grade 1, FP Grade 2 (individual),
Licensed Tax Accountant, Social
Insurance Consultant, Chartered
Accountant
Total Finance
Corporation
Asset acquisition
know-how relating to
core/ small & medium-
sized corporations.
Knowledge of taxation
business legal affairs.
FP Grade 1, FP Grade 2
(Corporation), Licensed Tax
Accountant, SME Consultant,
Chartered Accountant, Securities
Analyst, Management Consultant of
Socio-Economic Productivity Centre
Real Estate
(Business Division)
Dealer in Housing Land, Real Estate Investigator, Real Estate Appraiser
(Assistant)
(Surveying Division)
Real Estate Appraiser
(Development/Design Division)
Real Estate Investigator, Registered Architect, Architectural
Maintenance Worker
(Building Management Division)
Electrician, Electrical Construction Manager, Construction Manager,
Chief Electrical Engineer, Chief Gas Engineer, Equipment Manager,
Building Mechanical & Electrical Engineer, Boiler Engineer, Boiler
Maintenance Worker, Boiler Welder, Boiler Installation Operations Chief,
Boiler/Turbine Chief Engineer, Boiler Service Agent, Building
Management Supervisor, Instrumentation Engineer
Taxation Business/
Legal Affairs
Taxation Business/ Legal
Affairs Specialist Staff
Chartered Accountant, Licensed Tax
Accountant, successful candidates in the
Bar Examination (2nd Round), Patent
Attorney, Judicial Scrivener, Bookkeeping
Certification Grades 1 & 2 (Japan
Chamber of Commerce & Industry
Bookkeeping)
Insurance Knowledge of Insurance
Products and of Taxation
Business/ Legal Affairs for
Sales
Actuary, FP Grade 1, FP Grade 2 (Life
Insurance), FP Grade 2 (Indemnity
Insurance) (Test Administered)
System Specialist knowledge for
Systems Development
Type 2 Information Processing Engineer,
Type 1 Information Processing Engineer,
Junior System Administrator, Senior
Administrator, System Operations
Management Engineer, Database
Specialist, Network Specialist, Application
Engineer, EDP Auditing Engineer, Project
Manager, System Analyst, Database
Retrieval Engineer
Other Useful and required
qualifications for the whole
of this banking group
Office Work Specialist, Advisory Specialist
for Consumer Affairs, Travel Business
Supervisor, Leisure Development
Provider, Social Worker, Care Worker,
Care Attendant Service, Sign Language
Interpreter
Figure 12 Official qualification and fields of capacity development in the career-up programme
at DK Bank. Source: Interview at DK Bank (April 1999).
Takashi Watanabe
135
system is expanded to accommodate the complete spectrum of work in the
personnel needs of each company. Moreover, the job-posting system was
introduced to allow each individual an independent choice of work in terms of
transfers within each company. In this way, while there is clearly a far greater
degree of freedom of individual independent career choice in the career
personnel system than in employment management by career course selection,
it also entails increased self-responsibility. In short, every individual makes an
independent career choice based on self-responsibility, with self-enlight-
enment calling for the acquisition of highly marketable expertise and a strong
sense of professional consciousness.
All staff as true professionals in non-routine work
Although conventional employment management by career course selection
was designed according to the philosophy that major and specialist
staff=non-routine work, while general staff=routine work, this has been
subject to much re-examination and restructuring. Career staff=non-routine
work has become the underlying assumption of the career personnel system,
with the aim that all staff should be true professionals. In other words, all
administrative staff members are called upon to exhibit professionalism
treating business, office management, planning and research, general manage-
ment, internationally related work, system engineering, etc., as non-routine
work. The major difference presented by the career personnel system is
essentially characterized by the fact that the concept of general staff=routine
peripheral work found in conventional employment management by career
course selection has disappeared and by the fact that all office employees
perform non-routine work, aspiring to be highly marketable true professionals.
Routine work basically dependent on part-time workers and employees of related
firms
In conventional employment management by career course selection, general
staff were not subject, as a rule, to a change of workplace which would entail a
change of residence and, with promotion being limited to general Grade V,
received no designation of official position. Moreover specialist staff were as
a rule not required to relocate from an assigned district, with promotion
limited to Grade II Superintendent and the highest possible official position
being that of Section Chief & Deputy Research Officer. In either case, there
was the systematic assumption of the impossibility of promotion to the
hierarchical ranking of senior management.
However, in the newly introduced career personnel system, while conven-
tional general staff and specialist staff have shifted to Career staff B, it is
Takashi Watanabe
136
possible to be appointed to the hierarchical ranking of senior management in
the capacity of Executive Officer. However, with the introduction of this new
system it also became possible to transfer staff in the major category to general
staff or employees of related firms, or from general staff to part-time workers,
thus achieving returns commensurate with personnel costs and developing the
level of work specialization (Interview, 1999). Consequently, while the
potential now exists for any career staff member (administrative employees)
to be appointed in the light of his/her performance to the echelons of senior
management, there is conversely the suggestion that those penalized will be
replaced by employees of related firms or part-time workers. In general terms,
the routine work of the conventional general staff can be seen basically to be
shifting to employees of related firms or part-time workers (Interview, 1999).
Eliminating the concept of basic salary and expanding the weighting of job-based
salary
In conventional employment management by career course selection, monthly
salary was made up of basic pay, job-based allowance, family allowance and
technical allowance. In other words, this comprised the basic pay awarded
following a comprehensive and rational appraisal of job performance ability,
substantiated by results achieved (ability-oriented pay), as well as a job-based
allowance awarded for a ranking of specialist staff Grade I or above and
managerial level or above, commensurate with the current degree of
responsibility and workload, the expected contribution and nature of
specialization, a family allowance and technical allowance.
In the new career personnel system, these components have been grouped
together and classified as job-based pay and child allowance. In short, from a
wage system based on the qualification of job performance ability, a further
level of importance is attached to the degree of responsibility and workload
involving by various factors current work, the specialization and market-
ability which form the work value and degree of strategic expectation, the job
performance ability displayed towards the work and the degree of contribu-
tion, with increased weighting being given to the job-based pay component of
the conventional basic pay and job-based allowance, brought together under
the new title of job-oriented pay. The concept of basic pay has thereby been
completely abolished and refined to form a job-oriented pay based on
performance-oriented principles, allowing a more precise reflection of the
treatment of process and achievements. Furthermore, the job-oriented salary
table gives a very thorough breakdown, with individualized management
classifications, emphasizing the fact that the work assigned represents a bold
business challenge, with each person taking responsibility for the results.
Generally speaking, whereas in conventional employment management by
Takashi Watanabe
137
career course selection, job performance ability was unconditionally assessed in
a comprehensive and rational manner and a pay system based on this
performance ability (ability-oriented pay) was awarded commensurate with
qualification promotion, the career personnel system is based on increasing the
job-oriented pay weighting, which assesses performance in the job in question
(lateral job-based pay), and translating this into a performance-oriented
reward system. Furthermore, the abolition of the family allowance and
subsequent replacement by the child allowance points to large reductions in
personnel expenses.
Conclusion
To what extent can the career personnel system (performance-oriented
management with its basic criterion of independent career development for a
wide range of individuals and mediated by the freedom and self-responsibility
of those individuals) be adapted? It may be influenced by the state of business
organization and industrial structure; the increased fluidity of the labour and
internal personnel markets that have accompanied corporate disintegration
(divisions) and the arrival of the intra-company system; and the individuals
approach to working life, professional consciousness, aspirations will and
skill etc.
With regard to these points, while note should be taken of the three
groupings listed by the Japan Federation of Employers Association
(Nikkeiren, 1995) the Long-term Accumulated Ability Group, Specialised
Ability Group and Flexible Employment Group as well as the three
formats envisaged by the Japan Trade Union Confederation (Rengo, 1995)
Low Risk Low Returns, Medium Risk Medium Returns and High Risk
High Returns, regardless of their intentions or aims, they are a reflection
of the spread of the individualized multi-tracked personnel system diffused
over recent years.
Even if the diffusion of the individualized personnel system with a shift
towards this type of diverse individual career aspirations accompanies on the
one hand performance-oriented management reinforcement led by the cost
principle, on the other hand, it also provides a rational progressive format
which corresponds to the new human model (that of the independent
individual or the socially self-actualized person) born out of the socialization
of the labour process.
In other words, if we consider managerial success brought about by
performance-oriented management, whereby necessary personnel are recruited
and utilized only for the required period of time and in the required quantity,
this may lead to a sophisticated differential structure of promotion in position,
Takashi Watanabe
138
rank and salary within the corporate group, and to a heightened sense of
competition between individuals. This may cause increased unemployment
coupled with employment mismatch. In particular, if the power of trade unions
to resist the cost principle is weak, if there are problems with the independence
and will and skill of individuals hired, coupled with a lack of sufficient legal
protection for the various rights, and insufficient social and political
infrastructure for working life, then the career personnel system will cause a
majority of employees unacceptable levels of anxiety and distress. In this
respect, direct or indirect opposition, dissatisfaction or resistance in the
reaction of the workers is virtually unavoidable, making the partial occurrence
of social friction and tension a historical inevitability. In this respect, we should
be prepared to listen to the alarm bells sounded by these people.
However, at another level, there is also a need to remain objective. In other
words, in terms of rational restructuring of the general form of the labour
process, the career personnel system attaches importance to the professional
consciousness, initiative and independence of various individuals responding to
their diverse wills and skills and desires for self-actualization, thus adopting
(or having no choice but to adopt) a rational progressive format which
corresponds to a model of independent individual or socially self-actualized
person. This means that a system which mediates between a workers freedom
and self-responsibility and independent intention when choosing a career
course may be seen as a step forward when compared to a unilateral autocratic
system designed to allow posting, transfer and promotion (Shimoyama, 1987).
Even if such mediation through individual intention and will may be
unlimitedly external/formal, the fact that more business organizations are
forced to adopt these systems implies the existence of the material basis which
produced the socialization of the labour process. At the very least, we should
take note of the historical step that has been achieved here. Of course, while a
unilateral exaggerated evaluation is not right, it is necessary to keep an
objective observation of such reality. For this reason, it is accepted and
tolerated to a certain degree by employees, thus demonstrating the
effectiveness of this system.
A contradictory relationship exists as the reinforcement of management is
achieved by performance-oriented management via a form of rational
progress in the labour process; or conversely as it accompanies a form of
rational progress reinforcement of management achieved. It may be that
while anxiety caused by stress and problems are unavoidable at each stage of
development, awareness of human rights develops when employees resist and
challenge each stage (Shimoyama, 1987). Even if the diffusion of an
individualistic system such as the career personnel system does indeed lead
to a choice involving intolerable anxiety and distress on the one hand, it is also
true that at the same time it continues to create and cultivate, in an objective
Takashi Watanabe
139
manner, individuals who are awakened to democracy, with a political
awareness of human rights the independent individual overcoming
collectively oriented company-ism and pursuing self-actualization and skill
development in an environment fraught with inconsistencies.
In Japanese corporate society today at least as regards the white-collar
workers in big companies a new medium-term flow-type management
system is being introduced that is individual-oriented and centred around
individual career development, with the premise of freedom and self-
responsibility for the independent individual. This type of new trend can
be seen as one element leading to a major shift in the depths of Japanese
corporate society. International watchers of Japanese management will also need
to keep an eye on this aspect of new trends in Japan (Watanabe, 2000a, b, 2001).
Acknowledgements
We thank Ms. Sue Schneider for her translocation of this paper from Japanese to English.
Notes
1 The banking industry was chosen for the case study as it represents a typical illustration of a
rapidly spreading individual-oriented medium-term flow-type personnel management system
based upon the desire to pursue individual career development. Similar personnel systems have
been introduced in general trading companies or manufacturing businesses (indirect sectors),
generally aimed at white-collar workers in large corporations; thus, the introduction and
diffusion of such personnel management has become a common phenomenon in Japan.
2 Abegglen may be seen as the first foreigner to point out the collective characteristics inherent in
Japanese management systems (Abegglen, 1958). Identifying the three areas of lifetime
employment, seniority-based system and enterprise labour unions, this work pointed out how
the characteristics of Japanese management differed from Western European models; it was to
have a marked influence on research into Japanese management both inside and outside Japan
thereafter. Later came Dore, with the observation that, as opposed to the market-oriented
system and company according to company law of British big businesses, Japan was
characterized by an organization-oriented system and community-style companies (Dore,
1988). Each of these studies focused on and analysed the Japanese factory during the period of
high economic growth, providing excellent and accurate research into one aspect of the historical
features of the time.
We may say that most researchers in Japan and elsewhere agree with the collective/community-
style features (although this term cannot cover all aspects) inherent in Japanese management.
However there have been various opinions, too numerous to summarize here, on the reasons for
this, with possible explanations being the backwardness of Japans capitalist development and
also the shame culture explanation based upon behavioural characteristics of the Japanese
people (the culture theory approach). Therefore there seems some reason for the argument that,
even with the collapse of Japans high economic growth and the ensuing economic recession after
the bubble economy, the collective/community-style features inherent in Japanese management
are unlikely to disappear overnight.
However, in recent years, with the fluidity of the labour market following the breakdown of the
bubble economy, a new medium-term flow-type management system, more individual-oriented
Takashi Watanabe
140
and based on the premise of freedom and self-responsibility for the independent individual, has
become popular. This management method is particularly aimed at white-collar workers in large
corporations such as major banks and trading companies, and it is strikingly different from
conventional Japanese employment systems. A new trend such as this requires us to re-examine
or re-investigate Dores view that it is something of an overstatement to say that the Japanese
employment system is dead and gone (Dore, 1990). However, I am not claiming here whether or
not the Japanese employment system is dead and gone. Neither is it my intention to claim that
the Japanese employment system should shift to a Western European-style individual-oriented
system (or what Dore calls a market-oriented system) nor to assert its superiority. The
objective of this paper is to stress the need for an analytical observation of trends in the new
personnel systems aimed at white-collar workers of large corporations, which continue to be
introduced and diffused in the process of flexibilisation of the labour market that emerged after
the collapse of the bubble economy, rather than to predict the future or surmise reality.
References
Abegglen, J.C., The Japanese Factory, The Free Press, 1958.
Dore, R., British Factory, Japanese Factory, George Allen & Unwin, 1988.
Daiichi Kangyo Bank (1999) Keiei no Kenzenka no tameno Keikaku (Plans for Sound Manage-
ment), Tokyo: Daiichi Kangyo Bank.
Ginko Man (Bank Man) (1996) Osaka: Kansai Ginkou Mondai Kenkyusho.
Nikkin (1999) Tokyo: Nihon Kinyuu Tsushinsha.
Nikkeiren (1995) Shinjidai no Nihonteki Keiei (A New Age of Japanese Management), Tokyo:
Japan Federation of Employers Association.
Rengo (1995) Atarashii Hatarakikata no Sozo o Mezashite (Towards the Creation of a New Way of
Working), Tokyo: Japan Trade Union Confederation.
Rodosho (Ministry of Labour) (1999) Heisei 10, Jyosei Rodo Hakusho (White Paper on Female
Labour, 1998), Tokyo: Ministry of Labour.
Shimoyama, F. (1987) Shimin Seikatsu to Ho (The Citizens Life and the Law) Tokyo: Sobunsha.
Watanabe, T. (2000a) Kyaria Jinji-seido no Donyu to Kanri (The Introduction and Management of
the Career Personnel System), Tokyo: Chuo Keizaisha.
Watanabe, T. (2000b) Jinteki Shigen no Soshiki to Kanri (The Organization and Management of
Human Resources), Tokyo: Chuo Keizaisha.
Watanabe, T. (2001) Kosubetsu Koyo Kanri to Jyosei Rodo; zoho ban Employment Management by
Career Course Selection and Female Labour; Enlarged and Revised Edition), Tokyo: Chuo
Keizaisha.
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