Abstract
This chapter discusses the reform of work organization that proceeded in parallel with corporate governance reform. It is argued that performance-related pay was introduced in tandem with the introduction of the corporate executive officer system. While the latter intended to strengthen strategic management, the former intended to stimulate employees’ incentives for work. On the other hand, long-term employment practice has been maintained despite the prolonged depression and mounting pressure to shift to shareholder orientation. Japanese firms reconstruct their organization as a hybrid structure composed of market-based performance-related pay and organization-based long-term employment. As in the case of corporate governance reform, change and continuity unfold as the reform proceeds. However, Japanese firms are surrounded by many arguments to insist on an overall institutional change modeled on the US-style market-based employment system. We examine them in detail and demonstrate the fallacy of the claim for such a radical change.
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Notes
- 1.
This will be discussed in Chap. 4 in greater detail.
- 2.
In this respect, the German system should be referred to, wherein collective bargaining is connected with industrial policy; whereby, relatively high wages are set for the small-scale sectors; thus, low-performing firms are weed out (Streeck 1992). As a result, small-scale firms achieve high productivity compared to other countries. However, there is not such a wage system in Japan. Furthermore, as discussed later, wage bargaining power has declined in the large-scale sectors; thus, the small-sectors are continuing low wages.
- 3.
We will discuss the employees’ attitude to the participation in corporate governance in Chap. 5.
- 4.
We will discuss the employees’ attitude to union’s voice in Chap. 5.
- 5.
During the period from 1997 to 2006, the number of regular workers decreased by 4.70 million, while the non-regular workers increased by 5.12 million (Labor Force Statistics: Ministry of Internal Affairs and Communications).
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Miyamoto, M. (2018). Reform of the Work Organization: Performance-Related Pay and Employment System. In: The new Japanese Firm as a Hybrid Organization. Evolutionary Economics and Social Complexity Science, vol 16. Springer, Singapore. https://doi.org/10.1007/978-981-10-8851-3_2
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