Japanese Work Ethic and Culture

Abstract

IntroductionAccording to Takahashi (2004), essence of Japanese-style personnel system is that (i) it is not a system that rewards with pay, but instead rewards with new work. The content of one's expected new in itself functions as a motivation, and this is most natural model in theory of intrinsic motivation. On other hand, (ii) pay system at Japanese firms has not been designed merely for motivation; wage curve has been designed from perspective of guaranteeing living expenses. The type of wage curve based on a so-called age-based living expense guarantee was designed to be merely a baseline or mean with a wide range. The combination of (i) and (ii) has supported growth of Japanese firms. This is clearly not a seniority system; it is a system that differentiates based on seniority.Takahashi (2004) referred to this as Japanese-style seniority-based system. In particular, (i) theory of new in reward for is termed as Work-Work Theory. In contrast, generally assumed theory of pay in reward for is termed as Work-Pay Theory.In Work-Pay Theory, performing one's job well simply leads to a higher pay, whereas not performing one's job well leads to a lower pay. If such a system merely differentiated pay with no change in job content, pay would continue to fluctuate within same range throughout one's career. This is because regardless of years of experience one accumulates, one's job content would remain unchanged. For example, a situation would never arise in which those responsible for making photocopies could do their job so well that their pay would skyrocket above rewards earned by company's president. They would only be paid an amount commensurate with copying duties. In other words, Work-Pay Theory does not encompass promotions or advancement, and it only raises pay for good performance and lowers pay for poor performance. Thus, initial work differential continues until retirement. In a society run under Work-Pay Theory, people who want to advance above a certain pay level must change their jobs. If they do not change their jobs, situation would never arise in which their company would give them an advancement, a promotion, or even a real raise. Thus, company would never commit such a folly of employing new hires if both veterans and new hires were employed at same pay level, with same pay given for same work, regardless of job seniority. The unemployment rate among youth in European countries would inevitably be high compared with unemployment rate of youth in Japan.In contrast, under Work-Work Theory system, on which employees' performance evaluation is based becomes increasingly challenging, and their pay increases as they advance to higher wage brackets. Because competition within firm accelerates differentials in content, while it may sound contradictory, pay differentials over long run are actually much easier to increase under a system that operates according to Work-Work Theory than under system following Work-Pay Theory. This paper discusses characteristics of Work-Work Theory that can generally be observed in Japanese firms.For this, let us now focus on actual system operation, rather than on formal setup of Japanese firms. For example, considering cases of several factories, Abegglen (1958) states that although pay systems of those working in factory and of those working in office differ, the output generally exceeds standard figure, productivity allowance remains remarkably stable in amount and is taken to be a regular part of worker's income. The pay system rests on base-pay formula, which is a function of age and education (Abegglen, 1958, pp. 50-54). In other words, Japanese seniority-based pay was not originally considered to be a pay system; it was considered to be a system operation. …