Career Employment in Japanese Enterprises: Jobs and Appraisal System of Employees

Mr. Hiromasa Suzuki
Emeritus Professor, Waseda University
Associated researcher at IDHE-ENS-Cachan, France Fellow Researcher

 

In most Japanese enterprises, the department of human resources is a cornerstone of the organization; it has a central responsibility in recruitment, career development, collective bargaining and the nomination of managers up to senior positions. Because of its central coordinating role, the chief of the HR department reports directly to the CEO and sits on the board of directors. The position of the HR department is quite different from the American model in which most functions of HR are decentralized to each production unit and where the most important strategic role is held by the financial department (CFO).

 

The strength of the HR department in Japanese enterprises derives from its function of long-term career development and its capacity to select suitable candidates for top management positions. Instrumental to career development is the appraisal system. Twice a year, all employees, from production workers to middle managers, are assessed by their superior for their performance and work attitude. This performance appraisal is not linked to any incentive pay or advancement. Rather, the information contained in the appraisal system is used for career development and the selection of bright potential employees who would be future leaders in different specialisations. Therefore, the appraisal system – whose form varies from one enterprise to another – tends to stress employees’ aptitude to work within a team rather than their short-term performance. In fact, Japanese employee’s career looks like a long distance race; they join an enterprise just after graduation and follow a career path provided by the HR department. The selection to a managerial position is also a slow process. Up to 10 years of service, most employees advance at similar speed; but then after only good performers are assigned to most demanding positions. If they succeed in those positions, they will be promoted to higher positions. One particular feature of Japanese employment practice is that employees recruited in career employment are expected to stay in the same enterprise all their professional career and that all management positions (including top management) are filled with internal promotions. The main purpose of this internalized HR management is to foster the motivation of the employees of the same enterprise by making them understand that they form a community whose destiny is narrowly tied with the prosperity and the survival of their enterprise.

 

Excluded from the scope of career employment are the so-called non-regular employees, such as part-time workers or temporary agent workers. They are recruited for particular jobs with market rates without any possibility of career advancement. With the rapid increase of the service sector, these non-regular workers at national level account for around 40% of all employees.

 

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