Defeating Three Obstacles is Crucial to Promote Women's Advancement

OWAN Hideo
Faculty Fellow, RIETI

In its growth strategy, the government of Prime Minister Shinzo Abe has pledged support for women's greater participation and advancement, putting forward the target of increasing the ratio of women in leadership positions to 30% by 2020. In this article, I explore the background of why there are few women in leadership positions in Japan and propose measures to get closer to the target.

There are three institutional factors hampering women's participation in society. First, there exists a norm of long working hours. Assuredly, society benefits when highly competent people work long hours during their prime years. However, Japanese companies tend to allow coordination tasks to be performed outside regular hours too easily, and work instructions are given without specific priorities among multiple tasks. As a result, subordinate workers are often forced to work overtime irrespective of the productivity of such work and regardless of whether or not those individuals wish to do so.

Second, Japanese companies are typically slow to promote employees. Since the selection of employees to be promoted to management positions takes place at a relatively late stage in one's career, many of those who make great sacrifices for working long hours give up their careers before reaching that point. If women give birth after getting promoted to highly-paid positions, they would be able to continue on with their careers by utilizing homemaking and childcare services. However, under the current "slow promotion system," many women choose to give birth before promotion to management positions in consideration of risks associated with giving birth at an older age.

Third, the social norm on the division of labor in family remains that women should stay home to take care of domestic tasks and men should dedicate themselves to working for their companies. Because of this, working women often exhaust themselves out with much of the burden of homemaking chores and child-rearing falling on them.

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Findings from our recent study show that those three institutional factors are mutually complementary and induce one another. More specifically, the norm of long working hours makes the unbalanced division of labor in family a rational choice, thus lowering the cost of working longer hours for men, which in turn makes the slow promotion system an efficient choice for companies. Therefore, solving just one of the three problems is not an option. In order to support women's active participation in the workforce, all of them must be addressed at the same time.

In order to promote this effort, there needs to be a shared understanding that expanding opportunities for women will spread economic benefits in the process and help improve the productivity of Japan in the long run. The greatest benefits can be derived by eliminating the inefficiency of long hours and better utilizing those women who possess high potential and yet have been stored away.

Another important benefit is the effect of gender diversity, i.e., having both men and women with their respective sets of capabilities, behavioral patterns, and information sources. This will enable companies or other organizations to improve productivity through an efficient division of roles, information sharing, and decision-making based on diverse abilities and information.

For instance, male and female workers would be able to collect gender-specific market information—such as preferences and things in fashion that differ between men and women—through their respective networks. Meanwhile, it is widely known that there are certain gender differences in cognitive abilities, with men relatively excelling in analytical and problem-solving abilities, and women in language-related abilities (reading comprehension and linguistic expressions).

Also, studies in the fields of social psychology and experimental economics have shown that there are distinct differences between men and women in their personalities and behavioral patterns. For instance, women are more sensitive to other people's feelings, more cooperative, more altruistic, and less identified with the specific groups to which they belong. Such behavioral patterns and high communication abilities make women suitable for coordination tasks. Men's tendency to overestimate their own abilities has been confirmed by many experiments, and it is hoped that women's participation in decision-making would reduce the occurrence of misjudgment.

While I was teaching at a university in the United States, my colleagues and I examined the relationship between the levels of performance on a group assignment and team member attributes. Our analysis found that teams including men and women in equal or nearly equal numbers outperformed those dominated by either gender, even after eliminating the effects of differences in individual students' abilities. This result can be interpreted as indicating that teams falling in the former category had an advantage in that they had a well-balanced combination of analytical, coordination, and communication abilities.

However, it is also known that the introduction of gender diversity often lowers the functionality of the workplace in the short run by causing various sorts of conflicts and impairing communication among workers.

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In order to prevent such negative effects from being generated as a result of promoting women, it is necessary, as a short-term measure, to focus more efforts on increasing the understanding of the promotion of diversity and creating role models, rather than on addressing the aforementioned three issues. Currently, the types of jobs in which there are a relatively large number of female university graduates and women in management positions are mostly in specialized areas, where coordination with other departments is limited. Some companies have gone so far as to set up all-women teams. While such approach can help mitigate adverse effects associated with gender diversity, it will also reduce positive effects.

Going forward, as we move into the second stage of gender diversity promotion, it is necessary to enable women to build work experience in a greater variety of functions so as to derive positive effects. Earlier studies have shown that having experience in a broad range of functions is an advantage in getting promoted to top management positions. Recruiting women for specialized jobs or setting up women-only workplaces can increase the number of women serving as front-line managers, but they would not be able to advance into executive management positions. It is necessary to promote cross-functional transfers and let female executive candidates experience both intra- and inter-company coordination.

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For that to happen, the government and business leaders need to take bold steps that can overcome the three key problems.

First, performance evaluation systems for employees in management positions must be reformed drastically in order to change the norm of long working hours. For instance, managers should be evaluated based on the productivity efficiency of teams under their supervision. That is, an outcome of work done per total number of hours worked by all team members—not an outcome of work per se—should be the basis for evaluation.

The business community may as well consider making it a rule to refrain from holding meetings with or making calls to business partners outside regular working hours except for emergencies. If the government is to change the labor law to introduce white-collar exemptions, it should also promote the creation of a workplace environment that would enable individual workers to arrange their working hours more flexibly, for instance, by not holding business meetings outside regular working hours.

In order to avoid the negative effects of slow promotion, it is desirable, as a transitional measure, to provide training to those in middle management positions to take extra care to convey to highly competent female employees about how their performance is viewed and what expectations are placed on them. Under the slow promotion system, companies typically keep secret which employees are considered as promising candidates for management positions so as to maintain the motivation of all employees.

Such a secrecy policy might be effective when most employees can work long hours at little sacrifice, but it is ineffective when a substantial portion of employees face the high cost of working long hours. In order to prevent highly competent women from giving up their careers, it is necessary to identify candidates for higher positions at an early stage, give them positive feedback in an explicit manner, and help them continue their efforts by assigning them to positions in which they can build up their human capital effectively.

It appears that many companies are already taking different approaches in dealing with male and female employees. The figure below illustrates the relationship between the number of hours worked and the probability of promotion for men and women. We can see that women working longer hours have a greater probability of getting promoted, while such a correlation is much weaker for men.

Figure: Correlation Between Working Hours and Promotion Is Clearer for Women
Figure: Correlation Between Working Hours and Promotion Is Clearer for Women
Note: The graph shown above represents the results of analysis by the author and others of personnel data of a certain manufacturing company. The values plotted here are not actual average values but are based on an estimated model.

The secrecy policy, under which all employees believe that they have a fair chance for promotion, tends to weaken the correlation between the degree of efforts and promotion. In contrast, an open policy, under which employees are informed of their supervisors' expectations, tends to strengthen the correlation, because those who received positive feedback would work harder whereas those who did not would lose their drive.

Lastly, in order to bring changes to the division of labor in family, it is necessary to implement additional measures to promote men's participation in household chores and child rearing. Sufficient incentives are already given to individuals, as seen in the Papa & Mama Childcare Leave Plus system, which provides an additional parental leave period for childrearing couples when both husband and wife take childcare leave. Nevertheless, only about 2% of men eligible for parental leave actually take such leave. Indeed, there are many measures that the government should consider for implementation in a bid to draw out support from companies, such as requiring companies to disclose the percentage of fathers taking paternity leave and changing the current tax system that provide excessive incentives for married women to stay home.

While those measures are expected to have a positive impact in the long run, their negative aspects tend to come to the fore in the short term, triggering strong protests from those with vested interests. There is no doubt that a clear vision and leadership of political and business leaders are crucial to addressing this challenge.

>> Original text in Japanese

* Translated by RIETI.

August 13, 2014 Nihon Keizai Shimbun

September 12, 2014

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