For an employee, a promotion opens up huge pathways for progress within one’’s career. Japan’s corporate culture is no different with this practice; however the way candidates for promotions have been chosen has a different basis than one might expect. But the seniority system is slowly changing with the times.
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Employment system in Japan
A country known for its rapidly growing development, the Japanese are hard workers that waste no time in building their career path. With this kind of drive and attitude, Japan has developed a rather unique approach in its job-hunting, in addition to a diverse career path.
The concept of Lifetime employment
Before you can fully grasp an understanding of the traditional practice “shushin koyo”, or lifetime employment, you first need to understand the types of employment in Japan. The concept of lifetime employment begins when firms hire new graduates who are hunting for jobs. Once employed, companies generally retain their employees until mandatory retirement age. Although newly-hired graduates seem to be tied up to this corporate norm, they are of course still free to leave their posts.
There are many types of employment or career paths that is known to Japan, but the two notable ones are Sougoushoku 総合職 and Ippansyoku 一般職. Sougousyoku can be considered a path to a career in a company, a full-time general position wherein promotion is expected; meanwhile, Ippansyoku is typically known as general office or clerical work in which promotions rarely or never happen.
Corporate drive
‘Corporate drive’ are factors that give shape to a company's business. In the labor market of Japan, consolidation of employees plays a vital role both in its human resource power and economic rationality. The concept of lifetime employment applies here. Firms train newly hired employees according to their needs, thereby creating an exclusive labor force, which can only be useful to fields in the same genre. In this process, valuable human resources are secured which can generally be kept long-term. Hence, recruitment and training costs for newly-hired graduates can now be considered as investments by companies, gaining intangible assets for its labor costs.
Dynamics of promotion
In relation to the topics mentioned above, being selected for promotion is based on tenure— how long you have been working in the company. Competing for promotions are against staff that entered the company together in the same year, or nenji. The process for selection and promotion is like a tournament that is achieved in stages. You would have to be promoted to team leader, section chief, department manager, and so on, but only in that order. You can’t skip a step and expect to be promoted above a superior in this system.
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Job promotion in Japan
Job Positions
Sougoushoku, the general position wherein promotions are given, and Ippansyoku, the clerical work which offers no promotional benefit, have been introduced earlier. Specific General Position (Specialist) is a position that is specific to a certain field. The dissimilarity between the General Position and Specific General Position is easy to distinguish. A General Position is one that does not necessarily require a specialization because during tenure to this post, one wears different hats from each department, making him almost all-knowing, and in contrary to that, having a Specific General Position means one’s job is limited to his/her expertise in one department, he/she does not move around departmental posts. Specific General Position/Specialists are rarely seen in traditional companies as the majority of employees are generalists, thanks to the heavy influence of the concept of lifetime employment and corporate drive.
Basis for Promotion
Majority of traditional corporations in Japan have adapted a seniority system (nenkou joretsu) which determines promotion based on length of time in the company or by age, that is in contrast to the belief that one should be chanced to climb the corporate ladder by experience, skills, and achievements. Due to the world’s adaptation to the latter’s beliefs, the seniority system is starting to disappear. Furthermore, due to recent changes in the country's labor market, corporations are starting to base their promotions on staff's achievement and performance instead.
Adopting the practice of shanai shoshin or “promotion from within”
As you may have known by now, Japanese corporations recruit employees after their graduation and normally retain them until mandatory retirement age, or shushin koyo. Associated with this approach is the policy of Shanai Shoshin, wherein firms give promotions to its own employees. This process effectively maximizes its training costs to newly hired recruits, gives motivation to staff by means of career growth, and secures the company's competence in its labor pool.
Lately, more companies are moving away from traditional practices of shushin koyo, and are shifting to a more flexible way of staffing. Hence, shanai shoshin will decline gradually but will not diminish completely. Japanese firms still tend to give their full-time staff, known as seishain, the chance to be promoted to a managerial position, thus maintaining the practice of shanai shoshin.
Aspects of promotion
Compensation for promoted employees
Traditionally, how employees in Japan are remunerated has four forms: base salary, allowances (such as covering commuting costs), benefits (such as insurance), and seasonal bonuses. These are affected by factors such as employee seniority and the number of years employed. It is rare for compensation to be based on academic excellence, or employee achievement.
Hence, the factors that are considered in computing compensation for promoted employees is based directly on seniority and the number of years employed as mentioned above. Seniority between employees who are of the same age and began working at the same time may differ because of their promotion and job performance, for which in this instance, is considered.
Changes in roles and responsibilities
As employees move upward the promotion ladder, they are assigned to different positions within different departments. Firms do this so employees can be assigned in any of the departments throughout the staff's career. That is why job titles are rarely used because each individual is considered to be part of a team or department, individuality is almost non-existent. Supervisors at the level of kacho, or section chief and above, have titles but are technically just descriptions of their rank and department. Therefore changes in roles and responsibilities cannot be specifically identified.
Promotion as a career progress
It is mentioned before that promotions happen within the company, and with firms still practicing lifetime employment, employees can assume a level of security and satisfaction with regard to their career growth.
Working in the company for long, staff acquire the "seniority status" which can be considered as a promotion in comparison to other countries. During the first few years in a Japanese firm, an individual's salary may be quite low compared to other developed countries. However, since compensation is directly based on length of service, seniority plays a vital role in increasing pay thereby negating the low salary experienced in the earlier years of one's career.
Summary
Traditions and certain systems make careers in Japan distinctive from foreign countries. Seniority, or the length of time working in a firm, directly affect many factors such as promotion and compensation. Although inflexible, many large companies follow this set of rules as it is still effective in the long term. However, as a new generation of workers arise, a set of new traditions and systems will occur. Promotions based on time and age may decline as the landscape for labor force change. If corporations continue to adapt a flexible contract for its workforce, promotions based on performance and employee achievement will become more relevant.
