Developing Human Resources: The Japanese Way

The first article, in the 42nd issue, pointed out the importance of advancing common goals between employers and their employees in their efforts to transform industrial relations. This second article deals with human resource development (HRD) strategies in Japanese companies, characterizing them as the “making” of human resource within internal labor markets, rather than “buying” them from external labor markets. In addition, I point out the characteristics of the employers’ strategic choices concerning who to train and what to teach.

A MIT cross-national comparative study of the automobile manufacturing firms found that the Japanese companies spent almost nine times more training and education hours in the first six months for the newly hired production workers than the American competitors in North America did, and that the Japanese affiliates in North America, more than five times than the Americans. This indicates that the Japanese employers regard their production workers as core employees and a source of competitiveness as well. In contrast, American companies invest in managerial personnel.

The course contents of Japanese HRD programs include the classes that are unique to Japanese management. They offer classes on the management process; an introduction to the simplified management processes of Plan, Do and See for rank and file production workers, and four management processes of PDCA for the first-line foremen. Every employee is expected to behave like a manager, relating their daily work with corporate- level activities. The initial training and education alone does not make everyone a core worker. Further investments in the employees are in order.

Many Japanese employers expect their employees to stretch their job skills and knowledge and to become multi-skilled. They rely more on on-the-job training (OJT) than off-the-job training (Off JT) in stretching the employees. They usually post a sheet on a shop floor wall that describes the skill inventories and the levels of each employee. Looking at skills senior employees have acquired, junior employees can visualize their skill progression ladders from the sheet. The employees can also foresee their organizational career in relation to their stretching.

Finding career development opportunities within the organization, Japanese employees find their interests overlap more with their company than with workers’ organizations in external labor markets. As a result, the employees tend to commit themselves to the company. Close and tight linkages between the employers and their employees facilitate sound labor-management relations. Both the employers and their employees benefit from the “making” of human resource within organization.