This essay gives an account of the Japanese HRM1 practices used in subsidiaries in China.
This essay is organized as follows: the first section is about the HRM practices in Japan and their development; the second part is about the main differences between Japanese and Chinese HRM practices and the third and last one examines the problems that the Japanese HRM practices face in their subsidiaries in China.
Firstly the focus will be on the Japanese HRM system and his features, and especially on the significant changes that have occurred in the 1960-1980 period and from the 'Bubble Economy' decade onwards.
The second section compares these features with the Chinese HRM system, highlighting the common and the different points; this analysis is useful to understand the main problems that Japanese companies face when they manage subsidiaries in China. These issues are studied in the last section of this essay.
Human Resource Management in Japan
Human Resource Management is the process by which a company manages people to get a result (Keeley, 2001, 17).
HRM practices of a country are strictly linked with his cultural, socio-political and physical environment. Culture is one of the most important aspects to consider when studying HRM practices; the influence of culture is essential throughout all the HR cycle: selection, recruitment, feedback, evaluation and interviews (Kaminsky, 2002).
HRM practices in East Asia are believed to be significantly influenced by Confucian values; in particular Japan manifests this paternalistic vision of life with some key components, like: Lifetime employment, the importance of the needs of the employee and the encouragement of team processes (Pucik and Hatvany 1983, quoted in Bebenroth and Kanai, 2011: 16).
For three decades (1960 to1980) Japanese firms experienced a strong global dominance, but, after the collapse of the 'Bubble Economy' in the beginning of 1990s, these firms lost a large part of this global competitiveness (Kishita, 2006). Simultaneously, HRM practices followed this trend and have been re-engineered after 1980. The most common HRM system used in the 60s-80s decades was the commonly called 'People Oriented' system; this structure, which is to some extent still used, is characterized by five main points: The selection of University graduates, the Lifetime employment, seniority-based rewards, Enterprise internal trading system and Enterprise Unions. (Kishita, 2006).
The two main pillars of this system are lifetime employment and seniority system. Under lifetime employment, workers remain in the same company for very long periods, even until retirements; on the other hand, under seniority system, increase of wages are determined by seniority rather than by work performance (Zhongxing, 2010).
The end of the 'Bubble Economy' decade and the consequent economic stagnation forced Japanese firms to change their HRM practices to decrease costs. Many companies started to implement a...