Job-specific employment is suddenly attracting public attention now. The term "job-specific employment" is a term used to describe a form of full-time employment in which either the job duties, location or working hours are limited. In retrospect, job-specific employment first made headlines in 2013. At the time, I was a member of the Council for Regulatory Reform and chairperson of its Employment Working Group, and I was involved in promoting the spread of job-specific employment as a last resort to reform the existing employment system.
One of the reasons why job-specific employment is once again in the spotlight is that the Japan Federation of Economic Organizations (Keidanren) has become more proactive in promoting job-specific employment, but another major reason is that various issues related to employment management have come to light as teleworking is forcibly promoted under the COVID-19 crisis. It is often said that teleworking makes it difficult for employees to communicate with each other and for managers to evaluate their subordinates.
However, in this second period of interest in job-specific employment since last year, there are many occasions where I feel that it is not always properly understood. First, the misunderstandings stem mainly from incorrect definitions. Specifically, it is a mistake to use job-specific employment as an antonym for membership-type employment, and using membership-type employment as a synonym for the Japanese employment system. However, it is a misunderstanding to assume that all the characteristics that do not exist in the Japanese employment system are included in job-specific employment; for example, freedom of termination, performance-specific employment, and so on may not be included in job-specific employment.
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The intention of Keiichiro Hamaguchi, director of the Japan Institute for Labour Policy and Training, who presented the concept of job-specific employment, is to contrast job-specific employment (working according to one's occupation) and membership-type employment (working for a company). In other words, in Japan, getting a job, especially in a large company, is more about becoming a member of a particular company than it is about getting a specific job.
The essential difference between the two systems lies in recruitment and transfers. The characteristics of Japan's conventional unlimited regular employee system can be summarized as follows: recruitment based on no limits stipulated through a job description, a centralized transfer system led by the human resources department, and transfers that require obligatory acceptance, and a wage system that is linked to ability to perform obligatory duties and consequently dependent on age and years of service.
On the other hand, the job-specific regular employee system found in Europe and the U.S. can be characterized by the following features: hiring with a clearly defined job description, transfers after hiring that are mainly through internal recruitment, transfers and relocations that require the consent of the employee, and a wage system linked to the responsibilities and success in performing the role of the particular job or position. In other words, in essence, hiring and transferring are done through open recruitment in the case of the job-specific system.
In this way, explaining job-specific employment as employment based on a job description is a misunderstanding. Job descriptions are presented because it is an open recruitment process, and the presence or absence of a job description is not an essential difference. In terms of the misunderstanding that "job-specific employment is performance-based," it is clear that performance-based employment is not inherent in job-specific employment, because wages are basically tied to the job duties.
However, this misunderstanding is intentional in some respects. This is because those who are selling the job-specific model to companies have an ulterior motive of using the job-specific model as a cover for the performance-based system. From the late 1990s to the mid-2000s, there was a boom in the performance-based system in Japan, particularly among large companies. However, the boom fizzled out when the long-term relationship of trust between employers and employees was fractured. If employers continue to treat the job-specific system as a performance-based system in a different form, their success in adopting it is unlikely.
Although it does not stem from the definition, I believe that it is also a misunderstanding to assume that employers must switch to the job-specific employment for the purpose of promoting teleworking. It is true that in the days when information and communications technology (ICT) was not fully developed, teleworking was difficult unless the work only required limited coordination with others, was self-contained, and the ex-post outcomes could be easily measured.
However, it is possible to almost "duplicate" the current workplace on the desktop if we take advantage of the new technologies available and use some creativity. Rather than making job-specific employment a requirement for promoting teleworking, we should promote teleworking separately.
Now, why is it that the percentage of teleworkers has not increased much under the second and third state of emergency declarations while there are calls for further use of teleworking? We need to consider the more essential factors that are inhibiting teleworking.
The key is not so much the way of working, but rather the system used to process information, including the production, sharing and transmission of information and the decision-making apparatus within the organization that provides support from the rear. Here, we can refer to a series of studies conducted by the late Masahiko Aoki, professor emeritus at Stanford University, who discussed the relative merits of information processing systems under information uncertainty.
Professor Aoki came up with a simple organizational form in which the organization is divided into two layers: a higher-level division that performs managerial and administrative tasks and a lower-level division that performs on-site tasks under the higher-level division, and the lower-level division is divided into two sub-divisions that perform different tasks (see figure). He also showed prototypes of the organizational forms which differ in the way they handle their tasks, for example, macroeconomic forecasting to the entire organization.
In the classic hierarchical organizational form, only the higher-level departments process information and pass it on as orders to the lower-level departments, and the two lower-level departments do not share information. This is simply the scientific labor management method that characterized the U.S. manufacturing system in the past, where the management and working departments were separated and the working departments also had a thorough division of labor, which is complementary to job-specific employment.
On the other hand, the system for processing information in Japanese companies is characterized as an organizational form in which information is processed while sharing information between upper and lower levels, as well as between the two lower-level departments (as in the example of the figure above). This system is referred to as "horizontal hierarchy" (vertical and horizontal information assimilation). This type of system has contributed to the superiority of "matchmaking manufacturing" (automobiles, electronics, machinery, etc.), where coordination between departments is particularly important.
Aoki emphasizes that processing information under a "horizontal hierarchy" is in many cases not structured and "implicit," and "context-oriented" in the sense that a department needs to take into account the perceptions and interpretations of other departments.
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In this way, in the case of membership-type employment, where "working for a particular company " rather than "working based on the content of the job description" is important, employees are collectively hired as new graduates and spend much time together in the same company and therefore, they understand each other without explicit communication and are capable of utilizing implicit knowledge thoroughly.
On the other hand, it cannot be denied that in the case of membership-based employment, the "big room" or "face-to-face" principle, which underlines the benefits of sharing the same time in the same place, has been overly emphasized and falsely regarded as an absolute. This tendency is stronger in the middle-aged and older generations who are responsible for management, and this has led to a distrust of teleworking.
It is possible to create a "horizontal hierarchy" even in a virtual space by using technology and creativity. A drastic change in thinking is now required.