In 1950’s, many economists and foreign business people underestimated the Japanese employment system. They supposed the productivity of Japanese labor must be low because companies placed more importance on years on continuous employment of labors than on performance of them. However, their evaluation had been changed during a period of Japanese rapid economic growth, and Japanese management system was highly admired by them since they noticed guaranteed lifetime employment and seniority system generate high loyal sentiment and solidarity, which makes high productivity. Due to this background, Japanese companies and Japanese were proud of the advantage of these employment systems, and these systems took a root in Japanese society.
Go back to the first topic.
Which system is better for worker?
“Seniority system vs Pay for performance system”,
“Guaranteed long-term employment with job changing vs Short- term employment with job changing”
It depends on workers. Someone who place importance on lifestyle stability desire Japanese employment system and others who are confident of their ability choose American employment system. In case of Japan, most workers were former.
However, the demand for the employment system has been changed as Japan gets richer, and it means people work not only for their life but also for their happiness in these days. In addition, companies also desire the change of the employment system because they faced to the problem of the lacking of flexibility of labor market. It is one of disadvantage of the Japanese employment system and created serious damage on Japanese economy under the recession since the system prevented companies from corporate restructuring for financial reform.
Next, I will focus on the Japanese labor market reform.
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