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The two most significant changes to corporate employment practices in Japan since the collapse of the country’s asset price bubble in the early 1990s have been the introduction of performance related pay and the expansion of the proportion of non-regular employees, writes Arjan Keizer in this excellent and detailed overview of the employment system in large Japanese firms in the early 21st century. Keizer goes on to argue that, despite repeated predictions of a collapse in a corporate system that is rooted in the employment of regular workers at a single organization for the majority of an employee’s working life, no such collapse has taken place and, if the intentions of employees and management to maintain the normative and institutional legitimacy of lifetime employment are anything to go by, there will be no collapse in the foreseeable future (p. 21-23). Such is the nature of a set of practices that is locked into a tight system of national and corporate institutions and which has become deeply embedded into Japanese society as a normative principle.
Changes in Japanese Employment Practices: Beyond the Japanese Model begins with the simple proposition that the “institutional character of employment practices is fundamental to explaining the changes that have and have not taken place” (p. 4). Using a series of case studies of 11 firms in four industries taken in 2002 and 2007 as a basis for the investigation, Keizer works through the justifications for his analysis in an empirically detailed and theoretically sophisticated manner. The first three chapters lay out the theoretical groundwork for the study, arguing that the logic of lifetime employment lies both in its institutional complementarity with other corporate systems as well as in the dialectical relationship between national principles and their implementation at the level of the firm; that Japan’s is a firm-centred political economy and employment systems need to be analyzed with an appreciation of this institutional context.
With the theoretical discussions and literature review laid out, Keizer’s study then presents five chapters of detailed empirical analysis that provide the factual basis for the book’s final three chapters of discussions and conclusions. The first of these empirical chapters provides analysis of macro-level data on adjustments in employment and employment practices, while the next four move one by one through the firm level analysis, which is arranged according to their four industrial sectors: automotive and electronics manufacture, construction, and retail. In these we find that management by objectives and performance related pay have been introduced across the board, with some differences in implementation between firms, and that the implementation of these systems does not amount to an abandonment or weakening of lifetime employment. Chapter 8 on the retail sector shows the most marked evidence of the increasing diversity of employment styles in the Japanese firm, with far greater use of non-regular employment than in the other three sectors. Keizer explains this differential by reference to the nature of service sector employment and management in a sector where fluctuations in demand can be sudden and severe.
Chapter 9 then provides the first of the books two main conclusions; that the introduction of performance related pay, or seikashugi, has been the most significant change to corporate employment practices, while Chapter 10 argues that the second has been the expansion in non-regular employment. Importantly, Keizer contends that neither of these two changes amount to a change in the nature of the system itself. Indeed they may be indicative of its persistent strength, since seikashugi is described as being enabled by lifetime employment as an adaptation within a more encompassing institutional framework, proving the system’s flexibility and durability. Keizer also argues that the increase in the proportion of non-regular employees, particularly in the retail sector, serves to confirm the continued existence of regular employment as the other side of a persistent employment dualism. We then are introduced, in Chapter 11, to the book’s main conclusions; that the recent history of corporate employment practices can be characterized by the presence of these continued and renewed dualities, and that there has not been an appreciable convergence of Japan on Anglo-American market-based systems.
This book demonstrates well that there is no substitute for painstaking and detailed empirical data collection, and that multiple perspectives of analysis are necessary for an accurate representation of contemporary employment systems in developed countries. Keizer investigates the vertical relationships between national, sectoral and firm systems, as well as the coexistence of horizontal differentiation and unity across sectors and firms. The one area that the book does not cover is that of the individual employee; whether he or she is comfortable with these continued and renewed dualities, or whether underlying feelings of antipathy to employer demands are placing strains on the system from below. However, this gap is understandable within the context of this study, given that Keizer has his hands full simply to gather and interpret the data from his sample firms. But there is room here for further research, as the author no doubt already appreciates.
All in all, Keizer has done an excellent job in presenting such a balanced set of conclusions, skilfully avoiding the overblown rhetoric of previous studies that have hailed a complete transformation or collapse in lifetime employment in Japan. The book deserves to be read by scholars from the fields of management studies, economics, and sociology who are interested in contemporary employment practices in developed countries, and is an excellent example for graduate students who are themselves engaged in firm level field work. In short, this book is a welcome dose of good sense on a subject that routinely requires a grounding in real world data analysis in order to retain balance. I look forward to reading more from Keizer as he deepens and extends this research.