Japan's labor markets have undergone significant changes with the deceleration of medium-term economic growth, aging of the labor force, and an increasing share of woman workers. Under such changing economic circumstances, the long-term employment practices which were supported by high rates of economic growth has been changing steadily. This is reflected by the following: one, flattening of the age-wage profiles and widening of wage differentials within the same age group; two, increasing share of the workers without job security; three, declining share of the labor union membership; fourth, lowerring share of single-earner households which are replaced by double-earners households. Japanese companies are required to change their personnel management to meet with these labor market changes.

For the first time in the post-war period, issues surrounding employment became inseparable from financial instability. That is, the major recession in the '90s after the collapse of the economic bubble originated from a critical state in which large financial institutions carrying considerable bad loans fell bankrupt. In the autumn of 1997, the ample flow of funds that had been circulating through mortgage fell stagnant when land and stock prices dropped along with the mortgage rate. The effect of this situation immediately spread to all financial institutions throughout Japan. In addition, raising funds overseas became impossible due to a lack of confidence in Japanese institutions. Moreover, instead of lending out money, financial institutions back home had begun to focus on collecting outstanding loans because of insufficient equity capital. Yet, at the end of 1998, Laws of Financial System Stabilization were approved which led to the injection of public funds into large financial institutions at the end of March in 1999. As a result, shortage of funds as well as other problems pertaining to their flow as faced by financial institutions gradually improved.

During the seven years after the period of the economic bubble, business cycle underwent major changes unlike anything experienced in the past. First, striving for improvements in gains, financial institutions and other enterprises with loans enforced radical employment reductions. Second, this was due to the poor results produced by firms in the capital market. Third, during the period of the economic bubble, greater amounts of loans were made out to small and medium-sized firms. As a result, these firms later faced worsening economic deterioration. Fourth, production stagnated due to diminished finance, and demand also dropped. Thus, firms became burdened with over-employment accumulated during the economic bubble period. Fifth, this over-employment led to reforms made in personnel administrative measures, particularly in relation to the wage system, form of employment and welfare of employees. Finally, as the long-term employment system of maintaining employees practiced by Japanese firms began to founder, labor became increasingly mobilized, Therefore, the labor laws are now facing amends to recognize not only regular workers as had been in the past, butalso irregular workers.

Yet, the major transition from a stable employment relationship to increased mobilization of labor has been enough to shake the supporting pillar of the economy. The debate still continues even among scholars over the fixation of labor and the mobilization of labor (derived from a dispute over market-oriented capitalism which is advancing under the term “globalization”).

At present, expectation in relation to macro-economic policy on employment is gradually changing. There are limits to making the policy more effective within a fixed budget, particularly through effective demand policy directed at having the government assuming the role of private enterprises through public investment. This measure probably would have been effective as a short-term, counter-cyclical policy. However, with the current long-term recession brought on by financial instability, the times have shifted to implementing active employment policy, such as heightening occupational capacity of individuals and investing directly in to workers' human capital.

There are a lot of studies on industry with local tradition. These studies have not argued the employment system on local small enterprise. So, we cannot evolve the employment system model from them. They say that a feature of Japanese employment system is lifetime employment system. There are some opinions about features of Japanese employment system: affirmative opinion and adverse opinion. A model of the lifetime employment system has not discussed the interface between enterprise and external labor market and does not included family worker in it. So, we can not use lifetime employment system for investigating employment system on local small enterprise. Therefore, we must present a model for analyzing it. Our model composes of employment sub systems, criteria of organizing employment system and restrictions.

Employment system can be categorized four employment sub systems (Temporary worker model, manpower model, professional model and careerist model) by two dimension: labor market and knowledge and skill for doing task. If enterprise organizes its employment system, it is based on five criteria of organizing its employment system (Cost minimizing, the flexibility of labor cost, deployment, the escape from uncertainty and the resource of having the advantage). There are conflicts between the criteria cost minimizing and the flexibility intend to external of labor market and the other criteria intend to internal of labor market. The problem to organize employment system is to minimize the conflict. Between internalization and externalization of labor market. When enterprise organizes its employment system, it faces on restrictions (Technology, labor custom, the situation of external labor market and labor policy).

Local small enterprise has located countryside where the excess working population is. It has organized its employment system in dependent on cost minimizing and the flexibility. The environment to surround local enterprise has been changing, it can not keep the traditional employment system. Especially, its production system is changing from mass production to limited production of a wide variety of goods, the life cycle of goods is getting shorter. These changes are necessitating agile competition for local small enterprise. This trend makes local enterprise change management style from cost leadership to speed management. For example in netting industry, the enterprise that has never started oversea operation has been turning a big profit. The enterprises that have located plant oversea can not correspond to these changes and have poor profit. This change of management style makes small enterprise change criteria from cost minimizing to deployment, the escape from uncertainty and the resource of having the advantage. The meaning of cost leadership on industry with local tradition is changing from labor cost minimizing to minimizing total cost of production process. So, it is very reasonable that local enterprise chooses manpower model instead of temporary worker

Labour law and human resources management has interdependent relationship. This mutual relationship shall be analyzed in this paper.

The aim of labour law is to establish fair relationship between labour and management through industrial autonomy, for example collective bargaining. For the purpose labour law has two means. One is to prohibit to conclude labour contract whose contents are less than minimum labour standards provided by labour law, especially the Labour Standards Act and related Acts. Another is to determine working conditions through collective bargaining between management and labour union. For the purpose workers' right shall be guaranteed to organize labour unions. On the other hand, the purpose of human resources management is to manage manpower efficiently to get high productivity in an enterprise. Therefore labour law places emphasis on fairness and human resources management on efficiency.

But the opinions of labour unions and management can be considered to make and amend labour laws at the government committee. And in an enterprise the opinions of labour side can be reflected to decide how to conduct personnel management. Therefore, as a result, efficiency and fairness shall be balanced between both sides.

The person in charge of human resources management shall observe provisions of labour law. Penal punishment shall be imposed to the breach of Labour Standards Act. But the numbers of punishment are so few. Administrative supervision is often available to secure the enforcement of the Act. Soft sanctions are useful in Japan. And to promote employment security various kinds of subsidies are paid under Employment Insurance Act.

Recently deregulation of labour law is asserted in order to secure and promote employment opportunity. And labour market shall be entrusted to market-oriented mechanism. But labour law pursuing fairness is necessary to prevent harmful influences suffered from market-oriented mechanism. Considering the new employment system, we will confirm this resolution.

The first is diversity of workers' consciousness. So it becomes difficult to manage workers collectively. Individualization of human resources management is necessary in stead of collective human resources management. This means that individual labour contract becomes important to determine working conditions. For this purpose, provisions on labour contract are deregulated under the Labour Standards Act. But the degree of deregulation is now low.

The second is the mobilization of labour market. To adopt the trend Employment Security Act and Workers' Dispatching Act is amended to loosen the regulations. But there are some parts to tighten regulations in order to avoid harmful results.

The third is diversity of working style. Flexible working hours system is adopted to correspond to the expansion of service economy and the spread of information technology. The Labour Standards Act adopts four types of flexible working hours, but it regulates the conditions strongly in order to introduce this system. And it also strengthens the upper limit of overtime work hours to reduce annual working hours. It is considered to be important to reduce working hours. Stronger regulation of overtime work is reflective of fairness of labour law.

The fourth is diversity of employment form. All workers do not want to enjoy long-time employment system. A part of them prefer to work as irregular workers because they can freely arrange working hours. So the numbers of irregular workers are increasing, for example part-time workers, casual workers and contract workers and etc. Part-time workers have been deemed to be an auxiliary labour force. But it has become necessary to improve employment management for them. This is understood to keep fairness pursued by labour law.

View PDF for the rest of the abstract

The two oil shocks paralyzed Japanese rapid economic growth. The Japanese shipbuilding industry confronted many hardships. As a first step, the management reduced the percentage of items ordered from outside suppliers and reduced overtime work. Many surplus employees were temporarily transferred to subsidiary and associated companies. As a second step, the company decided to implement the following three strategic policies. These were

(1) the diversification of operation

(2) introduction of microelectrics technology, and

(3) shutting down the old non efficient facilities and concentration of production.

The key was technical skill's development. According to these practices, the Japanese shipbuilding industry reconstructed the business power. But the management policy of minimizing the employees' number affected definitively the age structure and technical abilities of work groups. A large number of high-skilled workers will retire in these 10 years. After their retirement the technical power of production will undoubtedly decline without effective measures.

To maintain and improve the core technical abilities of the company, the succession of the technical skills inside the firm has turned into the key problem of management. New education and training program for the succession of technical skill has to be developed besides the ordinary OJT program. Management will encourage the young people to develop own career program for the special technical skill.

In this article, we, using data on 263 Japanese companies from a 1998 survey conducted in Aichi prefecture, examine what variables are associated with an organization's adoption of “performance-based pay system” and investigate the relationship between the adoption of “performance-based pay system” and the type of human resource systems.

The findings indicate that (1) some factors significantly positively associated with an organization's adoption of “performance-based pay system” are implementing “protector-oriented strategy” that emphasizes product development or market development rather than low cost, and having an organization's way of thinking to productivity that it helps to encourage some excellent employees for the organizational performance improvement; (2) the relationship between the adoption of “performance based pay system” and “external market-oriented human resource systems” is significantly positive.

These findings imply that (1) organizational characteristics rather than economic reasons and institutional pressures have a strong impact on an organization's adoption of “performance-based pay system” and (2) there are some degree of fitness between “performance-based pay system” and the other human resource practices.

For Japanese firms to survive the further intensifying international competitions, R&D divisions should play a more important role than in the past. It is an important challenge for the Japanese firms in the future to revitalize individual researchers and to promote performance in order to improve performance of R&D divisions.

There have been researches into the factors to improve performance of researchers in Japanese firms but many of them do not make analysis by distinguishing basic researchers from development researchers. Both of them have different purposes and the process of research is different between the two. Therefore, the factors to improve performance are considered to be different between basic researchers and development researchers.

In this paper, I conducted investigation by questionnaire into attitude, information and research performance, covering 483 basic researchers and 461 development researchers in five leading and major pharmaceutical companies. By analyzing the responses, I clarified the factors to improve research performance for both basic and development researchers.

Specifically, by classifying basic and development researchers into seniors and juniors, I analyzed how attitude and information for each category have influence on the academic and business performance.

As a result of the analysis, it turned out that it is important to maintain high level of job involvement and to actively acquire technical information in order to improve academic performance of basic researchers. Further, in the case of junior basic researchers in particular, organizational commitment had adverse effects.

Only the job involvement of seniors had positive influence on academic performance of development researchers but other factors did not have significant influence.

Job involvement, professional information as well as internal information had positive influence on the business performance of senior basic researchers. In comparison with this, I found that job involvement, organizational commitment and internal information are important in improving business performance of senior development researchers.

I found that retention of attitude and information necessary for improvement of performance by supervisors and team leaders, rather than the attitude and information of researchers themselves, had positive influence on business performance of juniors for both basic and development researchers. Therefore, it is assumed that managerial persons or team leaders are playing the role of gatekeepers concerning business performance in particular for both basic and development researchers.

In this paper, I clarified that not only factors to improve performance differ among job characteristics such as basic and development research but also various factors have influence on improvement of performance depending on type of performance such as academic or business performance or on age groups such as juniors and seniors. In considering management or researchers, it is necessary to perform more sophisticated management in consideration of the factors clarified in this paper.

As the analysis was conducted for each category of job characteristics, performance types and age groups in this paper, I could not clarify the relationship among categories such as difference in importance depending on performance types between basic and development research. From now, it is necessary to make development including the relationship among categories and examine their validity including cause-and-effect relationship.