Lifetime Employment? No Thanks
COLLEGE STATION, TEXAS
WITH all of the recent layoffs in corporate America, college students aiming for management positions might be expected to appreciate corporate Japan's practice of guaranteeing employment during good times or bad.Skip to next paragraph
Subscribe Today to the Monitor
Management majors were "universally appalled" when the concept was explained to Regena Farnsworth's human resources management class by Shinji Arita, a United States-based Japanese executive, last week at Texas A&M University's Japan-US Business Day.
"How could anybody stand to work for the same organization all his life?" Prof. Farnsworth's students debated later. "No way" were they interested, she says.
"After a while, I get bored with things," confirms Craig Rotter, a senior who hopes to work in politics in Austin. "As long as my personal goals are met, I wouldn't see a reason to change."
Another student, Susan Lee, noted that along with lifetime employment come demands that leave far less time for the family. "I personally don't feel that it's worth the sacrifice," she says.
Japanese firms employ 400,000 Americans in the US, a number that continues to grow.
In Japan, Mr. Arita says, for companies with 1,000 or more employees, 82 percent of white-collar workers and 53 percent of blue-collar workers spend their entire career with one employer. The percentages fall to 40 and 23, respectively, for companies with 10-99 employees. Arita says the Japanese system produces better blue collar workers; the US system, better engineers.
US companies usually hire the most experienced person to meet an immediate need, while Japanese companies hire college graduates and train them for future work. Thus new hires have a better chance of immediate fulfillment in the US but long-term fulfillment in Japan, he says.
Salaries are higher in the US than in Japan. But a recession leads to layoffs and loss of confidence by employees in their US company. In Japan, layoffs are avoided by such measures as overtime reductions, temporary reassignments, and bonus and salary cuts. Preserving jobs inspires employee confidence and productivity, Arita says.
Farnsworth's "22-year-olds apparently are not as impressed with security as we are," she says. She attributes that attitude to their belief that they possess unique, superior abilities and that job hopping is a shorter road to salary increases than steady employment is.
Arita agrees that job hopping brings fast wage gains in the US. It doesn't in Japan, where promotions and pay increases rely more heavily on seniority.
Arita says he turned down two better-paying jobs in order to maintain the job security he has with a subsidiary of Hitachi, the giant electronics firm (300,000 employees and $55 billion in 1990 worldwide sales).
It's true that the Japanese system earns employee loyalty and stimulates productivity, says Jon Alston, a Texas A&M sociology professor and author of "The American Samurai: Blending American and Japanese Managerial Practices."
The system tends to require excellent work but offers no reward for achieving better than mediocre results, he says. Americans in blue-collar jobs often are far happier working for Japanese managers because of the equality and collegiality on the factory floor, Dr. Alston says.
Preserving employment at all costs means plenty of what the Japanese call "window jobs," in which underemployed white-collar workers stare at the scenery. That's one reason why US companies working in Japan are more profitable than their local competition, Alston says.
Underemployment happens, Arita agrees, but adds, "We need to consider the long term." Maintaining morale is worth carrying employees until work is found.
As vice president of Hitachi Semiconductor (America) Inc., a maker of computer chips, Arita guides personnel policy for the Irving, Texas-based company's 8,400 employees. Although the company has withstood two recessions without having a layoff, neither does it have Japan-style lifetime employment. Most of the employees are mid-career hires.
Arita would like to blend Japanese and US systems. He would hire more college graduates and set aside perhaps a third of the company's positions as lifetime jobs. People joining the company in mid-career would bring new ideas, which is rare in Japan.
The Hitachi employees in Irving do not sing a company song or participate in morning exercise routines together, but the company encourages employees to form clubs and athletic teams, create quality circles, and obtain additional job training.
The Japanese practice of staying out late every evening with coworkers hasn't caught hold, however. Arita says that he has invited employees to socialize after work, but "they say they have to call their wife, and she usually says 'No.' "