Abstract
Japanese firms have undertaken two types of corporate reform, corporate governance (CG) reform and human resource management (HRM) reform, during the ‘two lost decades’ of the Japanese economy. These reforms tended to diversify Japanese firms, which have been stereotyped as being characterized by the coexistence of seniority-based pay and long-term employment practices, by introducing a new hybrid type of organization, based on the combination of long-term employment (LTE) and performance-related pay (PRP). However, it is not yet clear whether such an organization works effectively in the Japanese societal context. In particular, the adoption of a strong PRP scheme, promoted by market-oriented CG, may contradict the maintenance of LTE practices. Then, the firms that intend to strengthen the effects of PRP may be led to abandon the LTE policy, and become what is apparently a non-Japanese type organization. Alternatively, the hybrid organization can survive, if the effects of PRP are weakened, in other words, if the PRP scheme is designed for being compatible with LTE practices. From these contradictory perspectives, in this article we aim at examining how PRP operates within a hybrid organization by using two sets of data obtained by surveys done in 2005 and 2009 by a Japan Institute of Labour Policy and Training (JILPT) team. These questionnaire-based surveys included 2802 and 8353 respondents, respectively. These data sets provided useful and original data permitting us to analyze employees’ work motivation problems which could be specified as three types: achievement of individual performance, contribution to the overall company performance, and meeting the challenge of a new task. Evidence showed that these three types of motivation are affected differently by the PRP scheme and this led us to interpret the survey results from the viewpoint of a multi-task problem. Furthermore, we investigated to what extent further organizational diversity is viable among Japanese firms in connection with the issue of employees’ work motivation.
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Miyamoto, M., Nohara, H. Can Hybrid Organizations—Based on the Combination of Long-term Employment and Performance-related Pay—Operate Effectively in Japan?. Evolut Inst Econ Rev 10, 217–243 (2013). https://doi.org/10.14441/eier.A2013012
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DOI: https://doi.org/10.14441/eier.A2013012