Human Resource Management (HRM)

• Refers to the activities an organization carries out to use its human resources effectively

• Four major tasks of HRM – Staffing policy

– Management training and development

– Performance appraisal

– Compensation policy

International Human Resource Management

• Strategic role: HRM policies should be congruent with the firm’s strategy and its formal and informal structure and controls

• Task complicated by profound differences between countries in labour markets, culture, legal, and economic systems

International Human Resource Management

WELCOME TO JAPAN

ようこそ日本へ

JAPAN’S

• General Business environment

• Recruitment and Staffing Strategies

• Compensation Strategies

• Diversity management

Information collected is a collation of cases from different Japanese companies

Japan’s work environment

Life time employment model Long working hours Unusually strong devotion to one’s company Slow deliberate decision making process high context culture High on collectivism High respect and valuation given to credentials

and experience

• During the meiji restoration in the period of 1920’s a lot of changes took place

• Most prestigious companies retained the talent by offering better benefits and truly life time job security.

• Employers are expected to work hard and they prefer benefits like-job security, housing subsidies, good insurance, recreational facilities, bonuses and pensions.

• Promotions base on seniority and ability

• Leadership based on ability to create consensus rather than assertiveness and quick decision making

• Individual are motivated to maintain wa(harmony) and participate in group activities, not only on job but after job,nomikai

Employement scenario

• Difference between temporary and permanent workforce

• Unemployment rate low and women participation high.

• Permanent-high wages;sectors-finance,real estate,publicservice,petroleum

• Temporary-low wages;sectors-textiles,apparel,furniture,leather

• In standard model workers receive two large bonuses as well as salary twice an year.

Working conditions

• On average, employees worked for a 46 hr/week back in 1987.

• Large corporations-5day/week+2 sat/month

• Small corporations-6days/week

• The average Japanese worker is entitled to fifteen days of paid vacation a year but usually take only seven days.

Karoshi

• Karoshi is a term that refers to death by overworking in the Japanese workplace. It is brought on by high amounts of stress from working 60 hours or more per week

RECRUITMENT AND STAFFING

Human Resource Processes

Promotion

Evaluation

Training and Socialization

Selection and Hiring

Applicant Attraction

Recruitment

Missed opportunity

Termination

Image or fit problems

Suboptimal hire

Plateau

Recruitment - “Is the process of searching the candidates for

employment and stimulating them to apply for jobs in the organization. Recruitment is the activity that links the employers and the job seekers”

Staffing-

“Selecting individuals with requisite skills to do a particular job also as tools for developing and promoting corporate culture”

Major groups.

REGULAR Male employees

Special employees, including women, part time and temporary recruits.

What they believe

“ The Most desirable employee is not a specialist trained in a particular WHAT but a generalist who can fulfill a collective need within a particular WHERE”

Recruitment Policy Cohorts drive the Japanese system. Upcoming university graduates and companies begin

courting each other (with professors or teachers often acting as go-betweens)

“gakubutsu” After an employer-employee match occurs begin to exert

claims on their incoming cohort by sponsoring group activities, like camping trips, and providing pre-employment training.

All of the firm's new employees usually begin their employment together, consummating the recruiting and entry process.

Japanese recruiting criteria's

• Commitment towards company for lifetime.

• Emphasize personal rather technical attributes.

• Personal philosophy compatible with corporate climate “SHUFU”

• Ability to work in a group

Types of Staffing Policy

Ethnocentric

Key management positions filled by

parent-country nationals

Polycentric

Host-country nationals manage

subsidiaries, parent company

nationals hold key Headquarter

positions

Geocentric

Seek best people, regardless

of nationality

COMPENSATION MANAGEMENT

Base Pay

• Base pay should be considered the price you pay for membership to the club

• It ensures you that the employee– will show up at work– that you may call them at night or

weekends with business questions– that you can send them out of town and

disrupt their personal life

Incentive Pay

• The price you pay to get employees focused on what is important to the company.– Addresses motivation and reward for achieving

a pre set goal– Should be related to critical areas that the

employee can impact– “line of sight” should be direct– Should consist of no more than 3-5 goals– Simple and measurable is best

Long Term Pay

• Stock options for public companies• Long term incentive plans for public and private

companies• Traditionally tied to value of the company, or

some long term goal (achieving $X in gross revenues)

Pay with what?

• Direct Financial– Money– Bonuses– Premium pay, shift pay– Ownership– Cash recognition

Pay with what?

• Indirect Financial– Benefits– Non cash recognition– Perquisites

Pay with what?

• Affiliation– Organizational support– Work environment– Organization citizenship– Title

Pay with what?

• Work content– Variety– Challenge– Autonomy– Meaningfulness– Feedback

Pay with what?

• Career– Advancement– Personal Growth– Training– Employment security

Traditional Japanese Pay structure

• Under the traditional Japanese system, employee compensation has four forms : base pay, bonuses, benefits, and allowances

• Base pay accounts for 60 to 80 percent of employees' monthly pay.

• Bonuses are typically paid twice a year (i.e., summer and winter), and the amount is calculated by multiplying employees' monthly base pay by a multiplier.

• Social security, unemployment insurance, and workers‘ compensation are legally mandated benefits in Japan.

• Firms provide additional benefits such as corporate pension, company housing, and company private banking.

National Differences in Compensation

Country CEO HR Director

Accountant

Mfg. Employee

Japan $545,233 $235,536 $59, 107 $51, 994

Canada 742,228 188, 070 44,866 36,289

Germany 421,622 189,785 61,375 36,934

Taiwan 179,486 102,491 30,652 11,924

United Kingdom

719,665 268,302 107,839 28,874

United States

1,403,899 306,181 66,377 44,680

Source --- Study on compensation by Minoru Nakazato, J. Mark Ramseyer & Eric B. Rasmuse

DIVERSITY MANAGEMENT

• Four principles of diversity are:1.Diversity is strategy , that utilize diverse

human resources2.Diversity bring firms growth and individual

happiness3.Diversity consideration are underpinned by

personnel management principle of recognizing different attitude and values.

4.Top management should implement “offensive strategy” using diversity.

Global effects: Incipient association

• Diversity concerns calls for coordination of equal opportunities for global firms

• International exposure leads to complexity of legal provisions which requires proactive management approach

• Japanese firms present a different picture altogether

Interesting fact

• Japan hosts the headquarters of a large proportion of world global firms but still Japanese labor laws have remain largely unaffected by expansion of anti discrimination legislation.

Three key points

• Equal employment opportunities

• Employment stability law for older workers

• Amendment of labor standard laws

However the impact of this legislation is questionable…..

• Japanese firms have retained homogeneous workforce in HQs in Japan. Core workers in international Japanese firms are predominantly male and Japanese, contrast to other global firms.

Effects of globalization on Japanese firms

• Higher level of diversity

• increased participation of female workforce

• Reduced family size

• Foreign nationals joining workforce

• Closer ties with international trade organization ( ICFTU, ASIA PACIFIC TRADE UNION ORGANISATION)

Regional and National effects

• Ministry of health labor and welfare regularly publish reports and disseminate their suggestions.

• But, these are merely informative and don’t constitute policy guidelines.

• Government policy framework should effectively address diversity management concern.

• Trade union movement in Japan is weak in Japan, characterized by “ eneterprise unionism” or “firm unionism” .

• Neither sectoral unions nor Rengo Japanese trade union confederation and Nippon keidanren (Japan business federation) are actively involved in negotiations with employees. As well as these policy guidelines issued by them are not legally binding.

Winds of change

• Due to global level alliances social and labor laws moving towards equality and legally binding framework, e.g. ILO pushing for international labor standards.

• Sharing of knowledge and best practices shaping management opinion.

• Some global car manufacturing companies are setting offices to tackle diversity issues, but more needs to be done at national level.

Suggestions

• More political support .

• Adopt global standards.

• Amendments in equality laws.

• Adopting designated “ global ” diversity management.

Conclusion

• Changes in attitude of Japanese firms

• More European and American CEO’s in Japanese HQ’s

• Meritocracy

• Pink Slips e.g. NEC