Survey on Realities and New Trends in Labor-Management Relations in Japan


1. Objectives of Survey

   Employment systems in Japan now face a critical turning point due to the impact of changes in industrial structure with the advancement of globalization and an information-oriented society, transformations in attitudes to and perceptions of work, and shifts in needs and business restructuring on the part of enterprises. Consequently, it is observed that there is a pressing need to reconsider conventional ways of viewing human resources management (i.e. recruiting, training, utilization and compensation) which has traditionally placed emphasis on long-term stability in employment and a so-called seniority system, and for efforts to search for solutions to optimize employee structures and forms of employment in Japan and abroad.
   In order to address these waves of environmental changes in employment and labor, it is indicated that those systems impeding a smooth labor turnover should be reviewed, and flexible employment systems with a broad range of options for both labor and management, a labor market which allows for easy entry and transfer, and individual labor-management relations which benefit both labor and management be established.   Therefore, in order to obtain an accurate picture of the realities of these challenges to the enterprise community, and to put the direction of reforms concerning employment relationships in perspective, a questionnaire survey was conducted with individual workers as well as persons in charge of human resources and labor management. Herein is an analysis of that survey.

2. Method of Survey
1) Individual Survey
Sample: 2,300 individuals, including 2,000 members of private unions affiliated with Rengo (the Japan Trade Unions Confederation) who work in administration, sales and services, and engineering departments (so-called white-collar workers), and 300 executives above manager level at enterprises including those listed in the First Section of the Tokyo Stock Exchange.

Time Period:  February to March, 1998
Number of Respondents:  1,192 (144 respondents above manager level, and 1,048 respondents below section chief level.)
Response Rate:  51.8%.

2) Enterprise Survey
Sample: 300 enterprises including those listed in the First Section of the Tokyo Stock Exchange.
Time Period:  February to March, 1998
Number of Responding Enterprises:  38.
Response Rate:  12.7%.

3) Distribution and Collection Method
   For the individual survey, questionnaires were distributed to unionists at member unions affiliated to Rengo via each industry-specific organization and independent enterprise-based union. Completed questionnaires were returned by respondents by mail directly to the JTUC-RIALS. In the case of executives above manager level in the individual survey and in the enterprise survey, questionnaires with requests for cooperation attached were directly mailed to the subjects after random sampling, and completed questionnaire were sent back to the JTUC -RIALS by mail.

3.  The Gist of the Survey Results

1) Existence and Awareness of the Need for New Human Resources Management Systems (Practices) --- A Shift to Meritocracy-based Pay Systems is Supported by both Labor and Management.
  This survey first queried as to whether the need for several new human resources management practices which have been determined to be necessary to the creation of a viable labor-management relationship in a new era has been acknowledged and whether such systems exist as of yet. It was found that the percentage of enterprises that have introduced a maternity leave system and a home nursing care leave system was high, partly because provisions for such systems are required by law. It was also found that systems for Transferenceand changes in employment for older people, systems to declare one's preferences concerning human resources management, and systems to have interviews between the reviewer and the person to be reviewed on the occasion of their merit rating were introduced by as many as 80% of the respondents.
   In terms of the recognition of needs on the part of employees, strong needs for a home nursing care leave system, followed by a maternity leave system, a self-declaration system, and an interview system with a superior were acknowledged. Also, as for systems which demonstrate large gaps between present status and needs, the following were notable: a re-employment system for ex-employees who have left the corporation at a young age, has already been introduced at 20% of the responding labor unions while 60% deemed that it was needed, an opportunity announcement system, which has been introduced at 30% of the respondents while acknowledged needed by 60%, and an in-house venture support system, which has been introduced by less than 20% of the respondents while acknowledged needed by 40%.
   As to the reasons why employees wish to have such reforms in human resources management systems, the two answers namely that diversified treatment is started to be demanded, and that rewards for employees' contributions is expected, topped the list, followed by other answers that ranked high on the list such as meritocracy- and performance-based practices should be fully implemented, excellent human resources should be secured and their outflow should be prevented, human resources management systems should be used as incentives for ability development, human resources management which facilitates different treatment to different individuals should be implemented, and female employees' participation should be optimized. The enterprise survey found that the responses of meritocracy- and performance-based practices should be fully implemented scored at the top of all answers, selected by about 85% of the total respondents while the two responses that systems should be used as incentives for contributions to the corporation and that diversified treatment has started to be demanded ranked next, both of which were indicated by more than half of respondents, this followed by the answer that human resources management which facilitates different treatment to different individuals should be implemented, which was selected by about 40%. It is observed that moves in the direction of meritocracy- and performance-oriented systems is supported by both labor and management in spite of underlying differences in their motivations and expectations, namely pride in their performance on the part of employees, and reductions in total personnel costs on the part of enterprises.

2) Acceptance of the Introduction of More Ability-Oriented Systems --- Significant Distrust in the Fairness of Present Merit Rating Practices Exists.
   The fairness of human resources management and acceptance of its evaluation system are the most important keys in the process of promoting meritocracy- and performance-based initiatives, but employees currently do not exhibit high trust in these. Among the total respondents, approximately 40% feel current practices are fair, while about 50% feel they are currently unfair. As the respondents get older, those who give the answer fair tend to increase, seemingly corresponding to the fact that about 70% of the general manager class and about 50% at manager level among respondents answered fair to the question. (It is quite possible that the general managers and managers are winners who have already benefited from the existing merit rating system, and they may be convinced that the system is fair because they are now themselves in charge of rating the merits of their subordinates.)
   The enterprise survey found that the average age of the youngest person promoted to manager level was 36.6, and that the average annual income differentials among employees at age 35 who were freshly hired out of college was 1.08 million yen, ranging from 100,000 yen for the first decile to 2.3 million yen for the ninth decile.

3) Distress Concerning Resignation and Job Changing --- Desire to Change Jobs may be Strong, but when It Comes to the Point when the Employee might Act, Anxiety Prevails.
   Questions as to whether or not respondents may have considered changing jobs from their present positions, and what was the reason that they may have abandoned the idea, were asked. In total, 35.6% answered that they had never considered changing jobs or leaving the company, indicating in turn that approximately over 60% of respondents have considered and then abandoned the idea of changing jobs. As to the reasons, the answer that their labor conditions will go down if they join other companies ranked at 30.2%, followed by the answer that only a limited number of enterprises practice mid-career hiring (20.1%), and that the respondent was quite worried about such a change in their work environment (19.1%).
   On the question of what kind of reasons could make the respondent consider changing jobs in the future, approximately 40% answered that they would not think about changing jobs, while the remaining 60% assumed the possibility of and gave reasons for changing jobs. The major reasons include that there seem to be other workplaces where the respondents can make the better use of their abilities (28.6%), and that they would like to venture into new work environments (20.1%).


4) Chances for Female Employees to Demonstrate their Abilities --- Current Optimization of Abilities is Insufficient and a More Proactive Approach is Required.
   With respect to chances for female employees to fully demonstrate their abilities at enterprises, 24% answered that their abilities are sufficiently utilized, against as many as 68% who answered that their abilities are not sufficiently utilized. In this regard, female employees themselves share approximately the same perception.
   To the subsequent question on required provisions on the part of enterprises or their superiors to utilize female workers, the answer of assigning female employees to jobs with more responsibilities (71.4%) was predominant in the total, but deepening understanding among seniors and colleagues was the number one answer from the female respondents themselves(57.1%). Other responses included the further advancement of equal treatment for males and females, selected by many male and female respondents, and the need for support systems to deal with both domestic duties and the job ranked high as an answer, mainly contributed by women.
  To the question of what kind of efforts should be made on the part of women to utilize them, many respondents indicated that completing assigned jobs with responsibility (81.3%) was a priority, followed by the response that they should propose new plans and suggestions of their own (59.0%).


5) The Working Environment for Older People--- A Desirable Retirement Age is Varied, while Health Exams and Job Environment Improvements are in Demand.
   As to the question of what age the respondent would want to continue working until, 14.3% answered below 59 years old, 31.3% answered 60 years old, and the remaining respondents (53.4%) answered that they wanted to continue working past age 60. In a breakdown of these, 27.8% gave 65 years old, 14.1% selected 61 to 64 years old, and 11.5% chose past 66 years old. By age group, the older respondents tend to desire to work until a higher age.
   Regarding the question on required approaches to provide an environment that facilitates workers' needs, it was found that there were strong demands for both provisions for medical examinations and for improvements in the job environment.


6) Approaches towards Improvements in Ability and Knowledge --- The Necessity for Self-Development is Recognized, but Time and Funds are Short.
   As to what is the preferred present training approaches to improve ability and knowledge, 52.0% answered it is attending training courses assigned as a part of the job, 27.2% answered it is self-development at external institutes with no relation to the company, 25.3% answered it is self-development by selectively attending training courses set by the company, 18,4% stated they have no intention to engage in self-development because they devote all their energy to the job, and 32.5% said they have a desire to self-develop but conditions do not allow it. The results show that 80% of the respondents want to engage in some form of self-development and one in two actually does.
   The obstacles or issues which hamper such self-development efforts were also inquired into. The largest impediment mentioned was time shortage (66.5%), followed by matters of restrictively high costs of such activities (39.8%).


7) Grievance Procedures and Their Effectiveness --- Complaints are Mainly Directed to Superiors, so while Their Function as a Grievance Mechanism is Respected, Unions are not much Utilized.
   With regard to measures for dealing with grievances, questions on five related topics, namely (1) assessment and evaluation, (2) promotion, (3) transfer and relocation, (4) Transferenceand (5)change in employmentwere asked. On every topic, the answer of direct consultation between the person and his or her superior was dominant. For those respondents who gave the answer of consultation via labor union, their numbers reached almost 30% for such personnel reshuffling-related issues as Transference, transfer and relocation, and change in employment, while a few less respondents, 10+% of the total, selected the answer of consultation via labor union on such evaluation-related issues as assessment and evaluation, and promotion. The function of consultation via labor union itself however, won higher ratings (on it's effectiveness) as a procedure in general compared with other measures.
  In the enterprise survey, direct consultation between the person and his or her superior prevailed on every aforementioned topic. The second most popular answer, however, was consultation via a focal point like the human resources management department in the corporation. Selected by around 30% of respondents, this shows a distinct difference from the result of the employee survey. This option tends to be the source of self-praise, in that 80 to 90% of respondents answered that it was currently functioning well. This phenomenon should be kept in mind as the trend towards individual treatment accelerates in the future.