Compensation System in Japan, UnitedStates and European Countries

Chen Yuping
Institute for International Labor Studies
Ministry of Labor and Social Security, P.R.China

2003 – 2004

With the development of market economy, in China th e problem for compensation
system becomes an important issue that have to be dealt with. While a great progresshas been achieved in recent years, for instance, collective bargaining system has been
introduced initially, we are still facing many challenges. Major tasks include setting up
a sound payment distribution mechanism, which is full of motivation. The purpose ofthis report is to analyze the compensation system in Japan and other developed
countries, and then absorb useful experiences.

1. Composition of compensation（１）Compensation structure in Japan
Compensation structure refers to a series of payment items that composes the totalcompensation paid to an employee. Normally, compensation consists of wages, bonus,
legal welfare and non-legal welfare as shown in figure 1.
Figure１.

Composition of labor costs

Non-scheduled
wages
Monthly
wages
Various
allowances
Cash wage
Labor cost

Scheduled wages
Basic

Annual bonus

wages
Health insurance

Labor cost

Legal welfare

Besides

expenses

Employee pension

Cash
Wages

Unemployment insurance
OthersCost of nonlegal welfare

Housing

expenses
Health insuranceRetirement
payments

Meals

Educational

Culture, physical and recreational

training
expenses

Private insurance systems

Recruiting

Employee accident premiums

expenses
Money gifts for congratulations
Othersand condolences
Property funds
Others

Source: Yoko Sano, Human Resource Management in Japan, 1995, p 116. Takashi Araki, Labor and Employment
Law in Japan, 2002, p 73.

A. Monthly wages
Generally, cash wages can be divided into monthly wages and bonuses. Monthly wages
are divided into scheduled wages (i.e. basic wage and various allowances) andnon-scheduled wages （such as overtime or rest-day work allowances）. Scheduled wages
are further divided into basic wages and various allowance. Various allowances
regularly paid include job-related allowance （allowances for taking special posts,
special skills, perfect attendance or good performance）and other allowances which arepaid according to employee’s personal circumstances such as family allowances, housing
allowances and commuting allowances.
The main feature of the Japanese payment system is that many companies employ a“seniority-based system”, whereby salaries are increased in nearly direct proportion toage and the years of service. While in the strict sense salary increase is based onseniority, this is not to say that salaries are increased based on age and years of service
regardless of a person’s job and skills.
Currently, basic wages normally consist of two types of wages: age and seniority-based
wages that are increased in accordance with workers’ age or length of service, andskill-based wages determined under the “skill-based grade system”.
The “skill-based grade system” is a grading and wage system based on the level of skill

and competence development. This wage system has been adopted in many Japanesecompanies to attempt to coordinate lifetime employment practices with the need toremunerate workers in accordance with their performance and skills. Under this plan,
there are a certain number of grades （e.g. A-G）, which are further divided into
subgrades （A1-A5, B1-B5, etc.）. A high school graduate may start at A1, and auniversity graduate at B1. Although one can be promoted to a higher subgrade after
certain years of service in a particular subgrade, a worker whose performance is
excellent will be promoted in a shorter period and may sometimes skip subgrades. In
order to move to a higher grade, workers must fulfill certain prerequisites, undergo
evaluation, and complete the required training. Promotion to higher grades or
subgrades is decided on the basis of job-performance evaluations conducted by theemployer as well as the worker’s length of service.
Since length of service is one of the most important factors affecting wages, a Japanese
worker’s wage profile has a steep curve. Although such a wage profile is not uncommon
for white-collar workers in other countries, it is unique that the wage profile forJapanese blue-collar workers also has a similar pattern. Please refer to figure 2.
Figure2. International comparison of wage differences by age group（Male production workers, manufacturing industries）(Wages of 20-24 age group=100)
Japan
UK
W.Germany
France
Italy
Sweden

180

160
140

120
100
80

60
〜19

20〜24

25〜29

30〜44

45〜54

55〜
(Age Group)

Source: Figure is calculated based on the information from Japan Ministry of Health, Labor and Welfare, and EU,
Structure of Earnings Statistics 1995

B. Bonuses

Bonuses, which are typically paid twice a year（ in June and December）, are one of themost important features of the Japanese wage practice. They amount to more than 20%of the annual wages of an average Japanese worker. Just like wages, the amount of thebonus at unionized companies is determined by the annual collective bargaining
agreements. The decisive factor in the collective bargaining to determine the amount ofbonuses is the company’s economic performance. Almost all Japanese companies pay
bonuses, and certain portion of the bonus is assessed in accordance with the employee’s
evaluation during the period in which it is applied, and even employees receive thesame wage, the amount of their bonuses are generally different.
C. Welfare
According to the Results of Welfare Expense Survey in 2002, conducted by Japan
Business Federation, when a company employs someone, besides salary and bonus, itpays about 17% of them as additional personnel expenses. The benefit cost (the averagein all industries) per employee in 2001 is 95,883 yen, 2.9% increase from the previous
year. The amount of the benefit cost that is stipulated in laws was 68,482 yen, showing
4.7% increase from the previous year, while the amount of the benefit cost that is notmandatory was 27,401 yen.
A company’s welfare expenses consist of “legal welfare” and “non-legal welfare”. Legal
welfare mainly includes health insurance, employee pension insurance, nursing careinsurance, unemployment insurance and workman’s compensation insurance forjob-related accidents. In 2001, health insurance premiums are 32.8%, and employee’s
pension insurance premiums are 52.7%, so that those two compose about 85.5% of thecompulsory benefit costs that organizations are paying out for employees. Labor
insurance premium occupies 11.8%, broken down as 8.2% for unemployment insurance
and 3.6% for employee’s compensation insurance.
In recent years, the mandatory benefit cost has shown more increasing tendencies than
the actual increase in the annual salaries. The total annual salary in this survey – theaverage amount including bonuses, and allowance – was 562,098 yen, 2.1% increase
from the previous year, while the mandatory benefit cost shows 4.7% increase. The ratioof the mandatory benefit cost to the total amount of the annual salaries became 12.2%(11.9% for the previous year ).
Non-legal welfare includes support for housing, medical insurance, gifts of familycelebration and condolence, mutual aid and so on. The non-mandatory benefit cost per
employee for a month is 27,401 yen in 2001, 1.4% decrease from the previous year. Thisdecrease seems to reflect employers’ efforts to review their benefit systems. The ratio ofthis benefit cost to the amount of the annual salary became 4.9%, the lowest since thestart of the survey. While the non-mandatory benefit cost shows a decreasing tendency
in recent years, employers have been struggling to review their system to reallocate thelimited amount of the benefit cost.
（２）Compensation structure in other developed countries
In terms of compensation structure in other developed countries, from table 1, we foundthat even the percentage for each item of labor cost in those countries is different, forinstance, the statutory welfare cost in France and Germany is higher than that in othercountries, the items of the whole composition are similar, which means they all include
such items as cash wages, non-wage costs, statutory welfare costs and so on.
Some foreign investment companies in Japan, for example, in Nippon Polaroid （US）,
besides salary and bonus, the company provides all legal welfare programs including
health insurance, pension plan, employment insurance, accident compensation
insurance and nursing care insurance. Polaroid is a member of a health insurance
association and also has contracts with private services such as resort houses andexercise clubs that provide cultural, education or recreational facilities at reasonable
prices.
In Sun Microsystems, Inc.（US）, in addition to salary and bonus, company also provides
employees with social insurance allowance, benefits and some voluntary social benefits.
Social insurance allowance includes health insurance（nursing care insurance）, pension
insurance. Benefits compose of medical examination, by which a medical examinationfor employees is performed once a year; group term insurance; compensation scheme forindustrial accidents not required by law; group long-term disability insurance, and soon. Other kinds of benefits such as annual leave with pay, summer holidays, club
activities, sports club, rest houses, etc. are also available.
Table 1. Comparison of labor cost components by cost items （manufacturing industries）
Japan

1985

1988

1991

1995

1998

Total

100

100

100

100

100

Cash wages

84.3

83.7

83.0

82.3

81.2

Non-wage costs

15.7

16.3

17.0

17.7

18.8

Statutory welfare costs

7.6

7.9

8.5

8.9

9.5

Voluntary social benefits

3.1

2.8

3.1

3.1

2.9

Retirement allowance

4.0

4.3

4.1

4.9

5.5

Others

1.0

1.3

1.4

0.9

0.7

United

Total

100

100

100

100

100

StatesCash wages

82.6

80.7

71.8

71.6

81.9

Non-wage costs

17.4

19.4

28.2

28.4

18.1

Statutory welfare costs

6.6

8.5

9.1

8.5

7.8

Voluntary social benefits

5.7

10.6

16.1

15.8

Retirement allowance

4.9

--

2.9

4.0

Others

--

0.3

0.1

0.1

United

Total

100

100

100

100

100

Kingdom

Cash wages

82.3

81.6

86.0

85.1

83.8

Non-wage costs

17.7

18.4

14.0

15.0

16.2

Statutory welfare costs

8.9

9.4

7.3

7.5

8.5

Voluntary social benefits

6.0

6.3

4.2

4.7

5.0

Retirement allowanceFranceGermany

10.2

0.0

Others

2.7

2.7

2.5

2.9

2.8

Total

100

100

100

100

100

Cash wages

70.0

69.9

69.0

68.1

65.2

Non-wage costs

30.0

30.1

31.0

32.0

35.0

Statutory welfare costs

19.0

18.9

19.2

21.8

21.8

Voluntary social benefits

2.8

3.1

4.5

7.0

7.4

Retirement allowance

3.7

3.7

4.0

Others

4.5

4.4

3.5

3.3

4.2

Total

100

100

100

100

100

Cash wages

78.5

78.2

77.0

78.8

73.8

Non-wage costs

21.5

21.9

23.0

21.6

26.3

Statutory welfare costs

16.2

16.1

16.5

15.3

15.9

Voluntary social benefits

0.2

0.2

0.1

3.1

0.6

Retirement allowance

3.2

3.4

4.2

3.1

0.6

Others

2.0

2.2

2.2

3.2

2.2

1.8

Source: Japanese Working Life Profile, 2003 – Labor Statistics, p 57.
Eurostat, Labor Cost 1992. Japan: Ministry of Health, Labor and Welfare, General survey on Wages andWorking Hours System. United States: Bureau of Labor Statistics 2000: trial calculation, Department ofLabor.
Notes: (1) In the U.K., Germany, and France, this includes allowances paid in kind. However, in Japan, allowances
paid in kind are included under others.
(2) Includes pension and savings, e tc.
(3) Training costs, taxes, subsidies, etc.
(4) Derived from March surveys by an index based on 1980.
(5) Germany figures for 1988 and earlier are for former West Germany.

2. The amount of compensation for technical staff and middle levelmanagers(１) The amount of compensation for technical staff and middle level managers in
Japan
In Japan, employees of the same company like, for example, white-collar and blue-collar
worker, are managed under the same system of human resource management,
regardless of job type. In other words, the characteristic of the Japanese wage profile isthephenomenon

called “the white-collarization of

blue-collar workers”.

Thephenomenon of the white-collar workers’ wage rising with age is observable not only inJapan, but in Europe and the United States as well. While the situation for blue-collar
workers are different. In other nations, the wages of blue-collar workers rise a little
with age, and these wage increases are invisible after age 30. In Japan, However, eventhough the wage profile for blue-collar workers does not rise as sharply as that ofwhite-collar workers, the two curves are similarly shaped, indicating that wages
increase as worker’s age.
Therefore there are not evident wage differences based on educational backgroundamong white-collar and blue- collar employees. For example, the average starting salaryin all industries in fiscal 2000（monthly salary） for male university graduates was
195,100 yen, while that figure was 154,000 yen for male high school graduates. The
salary for male high school graduates in their fourth year working at the company
would be very close to the starting salary for a male university graduate.1
Table 2.

Wage indices by education and age
Graduates of university（Male）

Total

20-24

25-29

35-39

1

Graduatesofjunior Graduates of seniorcolleges （Male）

high schools （Male）

Wages（thousand yen）

Wages（thousand yen） Wage（thousand yen）

1975

2001

1975

2001

1975

2001

169.9

404.4

178.2

306.8

133.0

313.8

177

186

196

155

145

159

95.8

217.1

90.7

198.1

92.4

196.8

100.0

100.0

100

100

100

100

121.4

257.5

115.8

239.0

115.0

236.8

127

119

128

121

125

120

203.1

405.6

171.8

338.6

157.8

311.1

Ministry of Health, Labor and Welfare: Basic Survey on Wage Structure in Fiscal 2001.

45-49

50-54

212

187

189

171

171

158

267.4

516.8

234.8

415.5

178.4

373.2

279

238

259

210

193

190

285.3

569.8

252.3

441.9

190.6

392.8

298

262

278

223

206

200

Source: Ministry of Health, Labor and Welfare, Basic Survey on Wage Structure, 2001. Japan

From table 2 we found that by reading rows, which reflect educational background forsame age span, the statistics show little difference. By contrast, when reading columns,
which reflect the different age groups of same educational background, we see evident
gap. It indicates that age is important than educational background in the respect ofwage level determination. The other conclusion drawn from table 2 is that the older theemployees become, the bigger the wage ga p between them caused by educational
background. For example, for employees who are in their 45-49, wage differences are
more evident than that in their young age. It is also true in terms of company scale,
which means bigger enterprises bring higher level of wage. Please refer to table 3.
Table 3. Trends in enterprises wages differentials by enterprise size （industry total）（1,000 or more＝100）
1980(Male)

1990(Male)

1997(Male)

2001(Male)Contractual

Scheduled

Contractual

Scheduled

Contractual

Scheduled

Contractual

Scheduled

Cash

Cash

Cash

Cash

Cash

Cash

Cash

Cash

earnings

earnings

earnings

earnings

earnings

earnings

earnings

earnings

100

100

100

100

100

100

100

100

100-999

83.5

86.3

82.6

84.6

83.0

83.8

82.0

82.8

10-99

76.4

81.2

75.0

79.3

75.4

77.9

73.0

75.2

1,000
or moreSource: Ministry of Health, Labor and Welfare, Basic Survey on Wage Structure.
Note: (1) For 1996 and earlier, differential of scheduled cash earnings as of June for each year.
(2) From 1980 and thereafter, results are for private enterprises.

Compare with education background, class of position is more important in wage level
determination. From table 4 it can be seen that for each class, from director to
non-position, the actual earnings differential is between 20%-30%, and the amount of
actual earnings of director is about two times higher than that of non-position.
Table 4. Wage differentials by class of position（1000 yen）

1980

1990

2000

2001

Contractual cash Actual earnings

401.1

575.6

638.0

636.3

earnings

100

100

100

100

2,153.0

3,051.1

2,872.7

2,843.9

100

100

100

100

Contractual cash Actual earnings

320.6

463.8

521.1

526.2

earnings

79.9

80.6

81.7

82.7

1,644.2

2,433.2

2,308.4

2,349.5

76.4

79.7

80.4

82.6

Contractual cash Actual earnings

271.8

390.2

435.8

436.6

earnings

67.8

67.8

68.3

68.6

1,185.9

1,710.6

1,733.8

1,729.9

55.1

56.1

60.3

60.8

Contractual cash Actual earnings

182.1

268.2

315.0

318.7

earnings

45.4

46.6

49.3

50.1

609.3

919.1

1,013.9

1,024.6

28.3

30.1

35.2

36.0

Director

Annualdifferential
special Actual earnings

cash earnings

differential

Section chief

Annualdifferential
special Actual earnings

cash earnings

differential

Chief clerk

Annualdifferential
special Actual earnings

cash earnings

differential

Non position

Annualdifferential
special Actual earnings

cash earnings

differential

Source: Ministry of Health, Labor and Welfare, Basic Survey on Wage Structure.
Note: Enterprises surveyed have 100 employees or more. Differentials were calculated on the basis of director＝100.

From the above analysis it can be seen that in Japan the wage gap between middle level
managers and blue-collar workers is higher than that between technical staff andblue-collar workers. As the table shows that a chief clerk’s wage, which is nearest to
non-position, is about 20% higher than that of non-position.
（２）The amount of compensation for technical staff and middle level managers inother developed countries
The statistics in table 5 and 6 indicate that in other developed countries the salarysystem has their own features. One of the characteristic is that the salary gap between
production employees and management and office employees is evident. Usually, salaryof management and office employees is at least 40 or 50 percent higher than that ofproduction employees. The biggest difference, such as in Italy, is 159 points for man in55 or more years old group. The second characteristic is that age affects more in wage
determination to management and office employees than to production employees.
Sweden can be seen as a typical model in this regard. In Sweden, for production
employees, the wage difference between employees of 20-24 years old and employees of
45-54 years old is only about 12 points, but for management and office employees thewage difference between employees of 20-24 years old and employees of 45-54 years old
is 63.6 points. The third characteristic is that for both production and management andoffice employees, the length of service does not affect more on wage level determination.
In this regard, the extreme example is France. In France, for production employees, thebiggest differential is 50.1 points f o r an employee who work for one year and theemployee who work for 20 years or more. However, the biggest differential for
management and office employees is 31 points.

Table 5. Wage indices by age group （manufacturing industry, production worker）
Production employee
Country

Sex

Total

19 or less

20-24 years

30-44 years

45-54 years

55 or more

years old

old

old

old

years old

Japan

Man

140.8

83.9

100.0

146.4

168.8

148.6

--1997

Woman

98.7

89.6

100.0

100.5

98.8

94.3

Man

118.5

78.8

100.0

125.7

125.2

113.2

–1995

Woman

104.9

87.8

100.0

109.4

106.5

95.9

Germany

Man

114.4

87.3

100.0

115.8

119.8

115.5

--1995

Woman

103.3

89.5

100.0

103.9

104.0

101.7

France

Man

131.9

91.5

100.0

134.7

155.0

173.2

--1994

Woman

114.9

102.3

100.0

115.0

126.3

137.0

Italy

Man

114.3

86.5

100.0

117.9

125.4

115.6

--1995

Woman

108.2

94.7

100.0

111.6

116.9

126.5

Sweden

Man

106.3

86.4

100.0

106.6

112.1

102.6

--1995

Woman

110.5

--

100.0

117.0

110.1

104.1

19 or less

20-24 years

30-44 years

45-54 years

55 or more

years old

old

old

old

years old

Unitedkingdom

Management and an office employee
Country

Sex

Total

Japan

Man

177.6

77.3

100.0

107.6

218.0

206.9

--1997

Woman

117.7

86.2

100.0

128.4

135.3

133.0

Man

156.7

67.3

100.0

164.1

178.9

154.2

–1995

Woman

122.6

75.2

100.0

137.4

118.6

112.6

Germany

Man

176.9

86.0

100.0

171.8

195.6

199.2

--1995

Woman

133.6

83.2

100.0

142.5

145.3

141.8

France

Man

192.1

71.1

100.0

185.7

233.3

265.0

--1994

Woman

141.2

83.0

100.0

143.3

163.5

207.1

Italy

Man

182.2

93.4

100.0

176.4

223.5

274.3

--1995

Woman

125.0

96.5

100.0

130.3

156.0

168.0

Sweden

Man

149.5

--

100.0

151.5

163.6

146.1

--1995

Woman

123.6

--

100.0

129.8

130.1

110.8

Unitedkingdom

Source: The Japan Institute of Labor, Comparative Labor Statistics-Japan and Other Major Countries 2000, p 118.
Japan: Ministry of Labor “Basic Survey on Wage Structure”
Others: EU “Structure of Earnings Statistics 1995”
Note: Wages of Japan are monthly contractual cash earnings. EU each country is the monthly total income ofmoney.

Table 6. Wage indices by the length of service（manufacturing industry, production
worker）
Production employee
CountrySex

0-1 years

2-4

years

（0-2years）（3-4 years）

5-9 years

10-19 years

20 yearsor more

Japan

Man

100.0

106.5

117.0

137.8

172.0

--1997

Woman

100.0

105.3

110.1

115.4

138.6

Man

100.0

107.7

112.9

118.0

119.6

–1995

Woman

100.0

106.7

110.8

112.8

105.0

Germany

Man

100.0

105.8

111.7

119.8

123.9

--1995

Woman

100.0

103.6

109.9

114.5

116.3

France

Man

100.0

116.1

122.9

133.5

150.1

--1994

Woman

100.0

104.9

108.9

119.2

123.1

Italy

Man

100.0

104.2

110.1

117.1

122.7

--1995

Woman

100.0

102.9

103.7

111.1

118.5

Sweden

Man

100.0

111.6

110.6

109.5

112.4

--1995

Woman

100.0

106.4

115.1

105.9

109.7

5-9 years

10-19 years

20 years

Unitedkingdom

Management and an office employee
CountrySex

0-1 years

2-4

years

（0-2years）（3-4 years）

or more

Japan

Man

100.0

105.8

116.9

146.4

194.2

--1997

Woman

100.0

106.2

114.5

131.4

162.6

Man

100.0

107.0

112.0

113.5

101.9

–1995

Woman

100.0

97.8

101.9

100.9

115.1

Germany

Man

100.0

105.9

111.3

119.2

126.9

--1995

Woman

100.0

104.2

110.7

123.9

131.5

France

Man

100.0

110.8

124.9

126.1

131.0

--1994

Woman

100.0

114.4

119.8

115.9

121.7

Italy

Man

100.0

105.7

110.1

118.2

133.6

--1995

Woman

100.0

106.0

112.0

121.4

128.6

Sweden

Man

100.0

110.0

112.3

127.5

112.9

--1995

Woman

100.0

97.6

96.5

103.1

97.0

Unitedkingdom

Source: The Japan Institute of Labor, Comparative Labor Statistics-Japan and Other Major Countries 2000, p 119.
Japan: Ministry of Labor “Basic Survey on Wage Structure”
Others: EU “Structure of Earnings Statistics 1995”
Note: （）is Japan. Wages of Japan are monthly contractual cash earnings. EU each country is the monthly
total income of money.

3. The mechanism for compensa tion standards determination（１）The mechanism for compensation standards determination in Japan
In Japanese companies the amounts of pay increases are determined by collective
bargaining, in which some factors, like performance of the company and the increase
rate of consumer prices will be taken into consideration. Since companies in the same
industry or in the same type of business decide pay increase amounts around the sametime through collective bargaining, while differences do occur between industries andbusiness types, a “public market” has been formed in the same industry and the same
type of business so that there are few occurrences of large differences in salary increaseamounts. For companies without trade unions, the wage negotiation results from theindustries and business types similar to them will be their benchmark. According to thestatistics from the Ministry of Health, Labor and Welfare, the wage hike rate for thisyear’s spring labor negotiations is 1.63%. The data was compiled by 189 companies
listed on section 1 of either the Tokyo or the Osaka Stock Exchange, with paid-in capitalof two billion yen or more, with 1000 or more employees, and with labor unions. 2
Once the wage increase rate has been set up, the following task is to distribute it among
employees. Salary increases generally take place once a year, which is called “periodic
salary increase”. As mentioned above, in Japan technical staff and blue-collar workers
are managed under the same system of human resource management. Currently, theirbasic wages normally consist of two types of wages: age and seniority-based wages thatare increased in accordance with worker’s age or length of service; and skill-based
wages determined under the “skill-based grade system”. Basically, employees in thesame company receive similar salary increases for the first several years of work. Then,
when they have reached the age for rank promotion for their job skills, their skill rank
is determined according to the appraisal by their immediate senior and the results ofrank promotion examinations.
The amount of bonuses is also determined through negotiation between labor andemployers. Bonuses are paid twice a year, in summer and winter. It is possible to adopt
the sliding scale of the amounts and conditions of these bonuses in connection withperformance at the company. The amount of bonus is generally calculated bymultiplying the calculated basic amount（base pay）by the coefficient determined by thesituation at the company（e.g., this is often calculated as × number of month of thecalculated basic amount）, and adding the rate of attendance at the company during the2

www.jil.go.jp/emm/vol.50

period to which the bonus is applied and the evaluation coefficient ( according to theresults of the personnel appraisal).
As for the mechanism of compensation standards determination for middle level
managers, usually they are not covered by collective bargaining, so the rate of salary
increase for them is not determined by negotiation between managers and labor.
However the result of the collective bargaining in their companies could be a benchmark.
The rate of salary increase for them is little bit higher than the result of collective
bargaining, sometimes in the same level. We can also find some characteristics from thesurvey conducted by the Japan Institute of Labor in 2002, which covers large
manufacturing companies with employees between 5000–20000 and trading/physicaldistribution companies with employees between 1500-10000.
With the heightening of competition due to globalization and predictions of the further
aging of Japanese society, companies have become concerned about the burden imposedby the high salaries paid to the growing ranks of middle-aged and older employees. To
create a better balance between those employees’ salaries and their productivity, and tofurther motivate workers, many companies began to adopt a salary system based on
annual performance for managers. In some companies the broadband-type of salary on
job evaluation（broadband-type job-based pay）has been adopted for the basic pay for
managers（compensation is determined based on job title）. For each job, job points are
determined on job value＋degree of responsibility. A grade is therefore determined.
Unlike the employees who are not in management positions, there is no concept of
periodic salary increases for managers because of the introduction of the job-based pay
system. In some companies, a division chief or a person in an equivalent receives anannual salary based on job performance assessment (basic annual salary + annual
salary based on job performance). A department chief or a person in an equivalent
position receives a salary based only on performance. A Section chief or a person in an
equivalent position receives basic salary （40%）and salary based on job performance（60%）3.
Therefore we may say that in Japan at present, basically, pay system for non-position
employees is based on age ＋skill rank system. For middle level

managers, newmechanism has been introduced initially, which means that job-based pay（based onroles ）and function-based pay（based on function the company expects employees tofulfill）are added.（e.g., roles of a department chief are managing staff, making sales
plans, and improving business performance.）. In other words the mechanism of salary

3

The Japan Institute of Labor, Reference guide to Japan Human Resource Management-Manufacturing, p 7.

determination for middle level managers is changing gradually, while the portion ofseniority declines the portion of perforce-based increases.
（2）The mechanism for compensation standards determination in foreign-affiliatedcompanies
The principles of salary system in Hewlett-packard Japan Ltd., （US）, expressed below,
are typical for many companies in other developed countries. They are:lMarket Driven:
Salary is determined by market valuation of the job.

l

Pay for Performance:
Individuals who achieved higher performance will be paid more than others.

lFairness:
Treat everyone fairly as much as possible. Therefore, the system is disclosed asmuch as possible. 4

These principles summarized the ideas that are currently prevalent in many
foreign-affiliated companies. A set of management methods and procedures, such as job
design, market survey, and assessment system are supportive in achieving the above
mentioned goals.
A . Job design
In other developed countries, job-based wage system is widely adopted in many
companies. Under this system, every employee belongs to a specific job level according
to his/her position and salary is determined within the respective salary range based on
individual evaluation.
In United States, blue-collar workers usually receive hourly wages and are paid byweek. The actual wages paid are determined based on the job performance and skills
within the job-based wage range. Companies must pay overtime allowance of 50% overtheir normal pay for the time exceeded 40 hours per week. For white-collar workers towhich the system of annual salary applies basically has the same concept of “job-basedsalary”. The range of the annual salary amount for the worker engaged in the job isdetermined based on the evaluation by each workplace. A worker’s annual achievement
objective is decided through discussion with the worker’s senior, and that worker isevaluated based on the degree by which the objective has been achieved.
In regarding to job design, actual methods can be different from company to company.

4

The Japan Institute of Labor, The Personnel Management Cases of Foreign-affiliated Companies, 2, p9.

For example, having already applied a job grading system, American Express
International, Inc.（Japan）changed it to a broadband system called the “Job Band
System”, in which the previously-existing 12 job grades, with the manager class at thehighest, have been merged into three bands, please refer to figure 3.
Figure 3. Job band system in American Express International, Inc.（Japan）
Non-managerial positions

Grades 1 to 5=>

1 bandSupervisors

Grades 6 to 8=>

2 bandManagers

Grades 9 to 12 =>3 bandSource: The Japan Institute of Labor, the Personnel Management Cases of Foreign-affiliated Companies, 4, 2002,
p 5.

Getronics Japan, Ltd. （Netherlands） introduced the “job family system”, which is a
globally-common position grading system used by Getronics. Job family is referred toa group of jobs that are the same or similar in terms of the nature of the work involved.
There are 5 job families, each of which is stratified into 4 or 5 levels. This arrangement
makes it possible to rate individuals based on globally-common criteria and company
implements various personnel management schemes according to this system. Figure 4
tabulates the jobs defined under the job family system with respect to the salary level at
8 grades. The job grading system is a pay-grading system applied on the basis of these 8
salary grades.
Figure 4. Relationship between pay-grade and job familyPay-grade（ New job

Job Family
Supportgrade）

Technical

Business

Technology

servicedevelopment

consulting

Professional

8

PR5

7

PR4

6
5

BD3B

TC4

PR3

TS4

BD3A

TC3

PR2
PR1

4

SU4

TS3

BD2B

TC2B

3

SU3

TS2

BD2A

TC2A

2

SU2

TS1

BD1

TC1

1

SU1

Source: The Japan Institute of Labor, the Personnel Management Cases of Foreign-affiliated Companies, 1, 2002,
p 4.

The salary is decided according to the salary range set for each grade within the job

grading system. The characteristics of the company’s salary system are: to treat
employees based on

their accomplishments andcontributions; tolaunchaperformance-linked bonus that reflect the company’s performance, the division’s
performance and the individual’s performance.
Getronics Japan, Ltd. applies two salary systems on the base of job family ratings. The
company introduced the annual salary system, together with the discretionary work
system, which is applicable to BD2A, BD2B, BD3A, BD3B, TC2A, TC2B, TC3, TC4, PR1,
PR2, and PR3. The other system, pay for work system, is applicable to SU1, SU2, SU3,
SU4, TS1, TS2, TS3, TS4, BD1, and TC1.

Figure 5. Breakdown of annual salary

Base salary

Grade 6

12

Grade 4/5

12Grade 3

12

Fixed

Performance-basebonus

d bonus

Source: The Japan Institute of Labor, the Personnel Management Cases of Foreign-affiliated Companies, 1, 2002,
p 8.

As shown in figure 5, in Getronics Japan, Ltd., the performance-based annual salary（performance-based bonus）varies with the company’s performance, the division’s
performance and the individual’s performance. Higher job grades are subject to morevariables and the annual salary is substantially dependent on the performance-based
bonus. The fixed bonus is paid regardless of performance: a certain number of month’s
pay is given commonly at each job grade（minimum guarantee）. It also can be seen fromthe figure that the ratio of performance-based bonus increases with grade and the ratioof fixed bonus is higher in lower grades. Specifically, the performance-based bonus forthe fiscal year is decided based on the performance in the previous year, and is paid
biannually, in summer and winter.
In terms of measures for deciding the bonus payable to the employees subject to pay forwork, the company decides the number of months pay as the annual bonus for those in
job grade 4 or lower, based on spring-time negotiations with the labor union. The
performance-based portion is reflected in the year-end bonus.
Global Knowledge Network Japan, Ltd.（US）sets its salary level in accordance with job
rank system. The rank starts at J0（rank of recent school graduates）, and goes up to J1,
J2, J3 and J4. Each rank is divided into quarters and the amount of pay may vary
widely within the same rank.
Employees know about the quarter to which they belong. They are ranked Q1 to Q4
depending on the results concerning the achievement of the contribution target, andtheir promotion and pay rise are decided based on the rank. For example, the evaluation
might be the same for two employees, but an employee in the first quarter will get a 5%
pay rise whereas an employee in the second quarter will get a 4% pay rise. Employees inthe third quarter or above are encouraged to move onto the next rank because theamount of pay rise is limited.
Figure 6.

Salary rank system in Global Knowledge Network Japan, Ltd.

Q4
Q3
Q2
Q1

J0

J1

J2

J3

J4

Source: The Japan Institute of Labor, the Personnel Management Cases of Foreign-affiliated Companies, 2, 2002,
p 3.

B . Marketing survey
In some industries, such as IT industry, the competition for acquiring human resource isfierce. As the pay range and the remuneration level need to be competitive incomparison to rival companies, some companies design their salary systems bymarketing survey. For instance, Global Knowledge Network Japan, Ltd. （ US ）participates in a salary survey conducted by a consulting firm, and reviews it once every
few years. The starting salary in the company is also determined in such manner that itmatches the general market value according to the age and position identified by asalary survey. The other example is that SAP Japan, Co., Ltd.（Germany）decided tosustain the salary at a level that ranks between the top 10 to top 25 in the industry,based on salary survey conducted by a number of consulting firms.
In GE Yokogawa Medical System, Inc.（US）, base wages are determined in accordancewith the grade of job of each employee. One central figure is set for each grade of job andsalaries range between 75% and 125% of this amount. Employees in the same positionof job are treated equally in the salary system, regardless of age or the number of yearsof employment. This central figure is called the base wage policy line and shows a salarylevel that the company should pay in each band of job. The base wage policy line is amarket standard of salary calculated on the basis of various research on salaries,
representing the current salary range existing at GEYMS and its external
competitiveness.
C . Evaluation system
In other developed countries, there are some kinds of evaluation system that currently
used. They are Management by Objective（MBO）, Management by Result（MBR） andManagement by Behaviors, Process and Results. Most companies use MBO system toconduct performance appraisal. In American Express International, Inc.（Japan）, theobjective achievement evaluation is conducted at the end of every business year, inwhich the degree of achievement by each employee is measured against his/her own
goal that has been set at the beginning of the year in such a manner that it shouldmatch the three categories of “what to do for employees”, “what to do for customers” and“what to do for shareholders”. The percentages allocated to these three categories differ
depending on the job or position, they are generally 25:25:50. The evaluation process
takes a two-tier form in which the direct supervisor of an employee first conducts theevaluation and subsequently a more senior supervisor further scrutinizes theevaluation results and gives an approval. Prior to such evaluations by their supervisors,each employee is required to submit his/her self-evaluation. It is an established practicethat, after final evaluation results are determined, the employee and his/her supervisor
have a meeting to discuss the grounds for such evaluation or the gap between that andhis/her self-evaluation, and a development plan etc.
I n some companies, for instance, in Global Knowledge Network Japan, Ltd.,（US）evaluation linked to the salary system is based on management by result （MBR）. It is
not on management by objective,（MBO） as they believe that results are subject toevaluation rather than the process. MBR involves the evaluation of two areas: thebusiness performance during the year（i.e. business target）, and the contribution madetowards building the organization（i.e. contribution target）. The evaluation is performedby the manager and the employee on a one-to-one basis and the evaluation results mustbe signed by the evaluated employee, which means the results must be acceptable to theevaluated employee as well.
In Nihon Ericsson company（Sweden）, performance evaluation is conducted on the basisof three elements, i.e., “behaviors”, “process” and “results”.

“Behaviors” refer toattitudes towards work, including strict punctuality in keeping promises and appointed
times, prompt transfer of all messages taken from customers. “Process” refers to aprocess taken b y an employee until a result is attained. As it is known that theexistence of an adequate “process” is essential for an employee to continuously show
good performance, Nihon Ericsson has made the observation of a “process” one of thesignificant points in performance appraisal. “Results” means sales and/or profits,
customer satisfaction, final quantitative and qualitative results attained, such ascompletion of a project etc.
D. Measures to ensure fairly evaluation
In order to gain fair evaluation results, two main methods have been adopted in many
companies. The first one is to offer training courses to managers. For example, in Nihon
Ericsson (Sweden), recognizing that appraisal skills on the part of managers areimportant, the company had all its managers go through a special training program
focused on appraisal issues when it introduced the new personnel system, and they alsoplan to offer such programs on a regular basis. The other measure is to conduct360-Degree Survey. As a tool for employees to learn “how people see me in theworkplace” and improve and develop themselves, a “360-Degree Survey” is conducted
once a year in many companies, although its results do not directly affect theirevaluations.
In General Electric International Inc.(US), an employee is evaluated by 8 to 15 people inthree different relationship categories, i.e., supervisors, colleagues and customers, thatthe employee chooses himself/herself under the advice of his/her supervisor, who are
asked to answer 5 to 60 questions on the web. Customers as referred to here are notnecessarily restricted to external people and may also be employees in otherdepartment. As the 360-degree survey is first and foremost a tool designed for the
purpose of giving feedback to employees, no one else can access its results. Employees
are encouraged to prepare an “Action Plan” in response to the results of the 360-degree
survey and submit it to the respondents of the survey in return.
In Nippon Becton Dickinson Company, Ltd., 360-degree feedback is conducted by morethan 6 members, direct supervisor, subordinates and peers. It is not a process for others
to evaluate an individual. The findings are used to improve performance in thefollowing year.
In Johnson＆Johnson(US) , each employee is subject to a 360-degree survey in which
his/her supervisor, workers working under him/her and his/her colleagues answer aquestionnaire. Survey results thus obtained are fed back to the employee so that he /shecan identify room for improvement to become an ideal employee, draw up an
improvement plan and achieve growth on his/her own.

E. Methods of salary and bonus distribution
Job design, marketing survey and performance evaluation system provide a foundation
for payment distribution. Just like the different job design and performance evaluation
systems adopted in many companies, the salary distribution system in many companies
are

also

different

in

terms

of

implementing

methods

even

they

are

all

performance-based system.
The pay structure in Nihon Ericsson （Sweden） is composed of base pay and variable
pay. The amount of base pay is reviewed every year on the basis of performanceappraisal results with reference to the market standards of salaries. Company
determines a pay range by first classifying all the work positions existing in thecompany into 11 job categories and subsequently combining the job category with the 6role grades. Variable pay can be divided into two portions, namely, a guaranteed portion
and a variable portion. Unless there are any problems with the number of working daysor some other work-related circumstances, employees can receive the guaranteed
portion for sure. On the other hand, the variable portion is determined on the basis ofannual performance evaluation: in principle, the higher the role grade, the larger theamount of pay variation will be. See table 7.
Table 7.

Variable pay guideline
Maximum months

Minimum months

Grade 4

6

2

Grade 3

5

3

Grade 24.5

3.5

Grade 1

4.25

3.75

Source: The Japan Institute of Labor, the Personnel Management Cases of Foreign-affiliated Companies, 1, 2002,
p 24.

The pay structure for employees with the role grade of 5 or higher（senior manager levelor higher）is not based on the combination of a base pay and a variable pay. Instead of avariable pay, they are paid a short-term-incentive. The STI is an incentive programcommonly applied to all Ericsson group companies worldwide and its recipients are
given separate notice regarding their compensations.
Sun’s （Sun Microststems, Inc）wage system consists of base salary, allowances,seasonal bonus and performance-based bonus. The base salary in each job rank may go
down to 80% or go up to 120%. For ordinary employees, performance-based bonus iscalculated by multiplying the basic salary by a certain type of coefficient, which isdetermined on the basis of company’s performance and the individual’s performance.

The coefficient accounting for the company’s performance is set at 0 if no more than 80%of the target of sales, profits, etc. has been achieved and at 2 if at least 140% of suchtarget has been achieved. The coefficient accounting for the individual’s performance isset between 0 and 22% depending on the extent to which the job target has beenaccomplished. In other words, if the company achieves at least 140% of the target andthe individual’s performance earns the highest rating, assuming that an employee’s
basic salary is 5 million yen, the employee will be paid a performance-based bonus of 2.2
million yen.
5 million yen×2（company’s performance）× 22%（individual’s performance）＝ 2.2
million yen.
On the other hand, if the company can not fulfill 80% of the target, or if the individual’s
performance rating is 0, he/she will not be paid bonus.
For management-level employees when account for their performance-based bonus, theindividual’s performance is set at between 0 and 24%, which is 2 percent higher thanthat of ordinary employees.
In some companies, such as Nippon Polaroid (US), pay system is a more demanding one
for senior managers because of two reasons. One reason is that the heavier the
responsibility becomes, the greater the change in the compensation according tobusiness performance becomes. The other reason is that there are no upper or lower
limits for performance-based portion in the compensation for directors and managers.
The system is strongly linked to business performance for senior managers sincedivision manager and above are on annual salary system, indicating that a large portionof their compensation is based on performance. Section managers and below receive
monthly salaries, performance-based compensation, bonus and allowance. A maximumof 25% compensation is linked to business performance. Bonus for section managers andbelow also varies according to business performance and differences may be about fourtimes of the total monthly salary at the maximum. Factors such as the level of difficultyin achieving the objective are considered for evaluation of salaries, but bonuses are
based solely on actual achievement.

4. Compensation system comparison between Japan and other developed
countries
Through payment system studies we find that there are some differences between
Japan and other countries. The main differences are as follow:（1）Bonus

Bonuses, which are typically paid twice a year（ in June and December）, are one of thecharacteristics of Japanese payment practice. They amount to more than 20% of theannual wages of an average Japanese worker. In some industries such as banking andinsurance, the total amount of yearly bonus even is around 5-6 monthly salary. Fromtable 8, it can be seen that the amount of bonus in Japan is about 18 times higher thanthat in UK and 2 times higher than that in Germany and France. Perhaps because
bonuses in Japan is part of compensative salary paid in addition to one’s monthly
salary.
Table 8. The amount of bonus in some developed countries（percentages）

BonusesUK

Germany

FranceJapan（1992）（1992）（1992）（1991）

1.09

7.91

9.68

19.00

Source: Japan: Ministry of Labor, General Survey on Wages and Working Hours System and Basic Survey of Wage
Structure.
EC: Eurostat, Labor Cost Survey; USA: US Chamber Research Center, Employee Benefits.

（2）Incentive system
The main method of incentive in Japanese companies is uniform bonus which paid to all
employees. In other developed countries, such as United States, many companies haveadopted incentive system, and there are some kinds of measures. Bonus are paid basedon achievement and mainly paid to managers and white-collar employees. Please referto table 9.

Table 9. Example of pecuniary incentive program in United States
Type

Main targets

Ta rgetAmountAchievement

periodProfit sharing

All employees

1year

effectDependingon

profitStock option

Upper management

3 years

Expected

Dependingonstock prices

Increasing profit

Retaining

ratio

employees,

Increasing profit

long-term

ratio

motivation,
recognitionbycompany

Commission

Sales

1 yearAnnualPeopleincentive

positions or higher

Milestone

Engineers

occupying

1 year

0.5-2 years

incentives

Award

AroundIncreasing sales

Luring35%-65% of baseapplicants,pay

retaining

AroundSuccessful MBO

employees,

10%-50% of baseshort-termpay

motivation

AroundAchieving

10%-40% of basedevelopmentpayobjectives

Given Immediately for short-term contributions by an employee（This is a

Recognition andsmall amount of around $100. Gifts other than cash are also given.）praiseforresults achievedby an employee
Source: The Japan Institute of Labor, Guide to Human Resource Management, Comparative HRM Between Japanand United States, p45（3）Employee share ownership schemes
The employee share ownership schemes, which include variable forms, such as stock
option and so on, as one of the additional resource of income, are widely used in the
United States. From 1980 to 1990, it began to be introduced in m a n y European
countries in such measure as financial participation. Financial participation isparticipation of employees in profits and enterprise results. It is a form of remuneration
additional to an employee’s wage or salary. It is usually seen in two main forms:
profit-sharing or employee share ownership. In Japan now some foreign investment
firms have introduced the share holder system. For example, in Nihon Ericsson Japan（Sweden）, the top 20% of key contributors among employees of Ericsson groupcompanies worldwide are granted Ericsson stocks free of charge under the stock option

system. In GE Yokogawa Medical System, Inc.,（US）,about 5% of the highest performing
employees are assigned GE stock. This privilege used to be offered to employees inmanagement position only, but the system has been utilized as a means to increase thedegree of job achievement of employees in recent years and beneficiaries have therefore
been selected regardless of whether they are in management or clerical position. Table
10 shows the current situation in this regard in Europe.
Table 10. Business unites with financial participation schemes in European countries %Country

Percentage

Austria9

Belgium

29

Denmark

21

Finland

30

France41

Germany

20

Greece23

Ireland

34

Italy

15

Netherlands

45

Portugal

5

Spain

19

Sweden26

United Kingdom

45

Source: Employee Share Ownership and Profit-Sharing in the European Union,
Luxembourg: Office for official publications of the European Communities,
2001, p31

Compare to the statistics from European countries, share ownership system in Japan is
not as prevalent as that in Europe. According to the 1999 General Survey of Wages andWorking Hours System by the former Ministry of Labor, in Japan 4% of companies with
1000 or more employees have introduced stock options, allowing workers the choice ofpurchasing stock in their companies at a price fixed in advance. According to the survey,
it can be expected that the introduction of this system will continue in the future,
focused on large-scale enterprises. 5 Actually in Japan now, some newly founded firms,
5 The Japan Institute of Labor, the Labor Situation in Japan 2002/2003, p 38.

which have special technology and are targeted at new investment, are introducing thestock option system. There are also such so many firms in Japan.

5. Experiences from Japan and other developed countries
Above all we have examined the compensation system in Japan and other developed
countries, and maybe some conclusions can be drawn from the research as follow:（1）Compensation system should be suitable to the circumstance of a country
In the process of study we found that with Japan ese characteristic, seniority-based
wage system is a very successful practice and has been playing a very important role inthe development of Japan’s economy. When explained the phenomenon Mr. Haruhiko
Hori wrote: Under this system, “by staying at one firm, workers acquired skill with
their employer’s proprietary technology. Employers, in return, used promotions toreward employees for their skill development. Additionally, the tendency of the cost ofliving to increase as employees aged further justified linking wages to seniority. Thus,
promotions following skill improvement and increases in cost of living were connected tolonger years of service, and the seniority-based wage system was established to raise
wages with advancing age and years of service.” 6 Therefore, both employers andemployees benefit from the system and it might be the reason for the success of thissystem because it fits the situation in Japan . Furthermore the experience in Japan
indicates that for a country, a good compensation system is a system that suits thesituation of the country as each country has its own social background such as different
history, culture and so on. From this point of view we may say that the newcompensation system satisfied with the demands of market economy, which is expected
to be established in the process of economic reform in China, should reflect its own
characteristics. In other words, we should absorb experiences from other countries inaccordance with the specific circumstance in China.
（2）Compensation system should be adjusted according to the changing situation
Compensation system should be founded in accordance with the circumstance of acountry; on the other hand, it also should be changed with changing situation. Due tothe changing condition there are going to be some adjustments, by which some newmeasures will be introduced and some obsolete practices and regulations have to beabolished or replaced with alternative methods. For instance in Japan the portion of

6

The Japan Institute of Labor, the Labor Situation in Japan 2002/2003, p 31.

allowance and welfare in salary has decreased in recent years because company’sburden of legal welfare expenses and retirement allowance is expected to increase, sothey have to make an effort to curtail the non-legal welfare expenses as much as
possible. In addition, there is a growing trend of abolishing personal allowances that are
not related to job, such as allowance for family and allowance for housing. The otherexample is that some major banks, such as Bank of Tokyo-Mitsubishi, The Resona Bank
Group and Mizuho Financial Group plan to cut the pension benefits they provide to
employees retired by 7-20%, 48% and 40% respectively. 7 T h e Analysis of the Labor
Economy 2003, shows that more than 70% of the companies plan to change their wage
system, and more than 30% of the companies have increased the weighting ofachievements and performance as wage determination factors. 8 The experiences fromJapan told us that adjustment of payment system based on the changes in the field ofsocial and economy is necessary, or the development of economy will be hampered.
(3) Evaluation system is essential for the implementing of performance-based wage
systemAs discussed above, many companies intend to expand the portion of performance-basedin their wage system, but the main problem for them is that while employees approve
the introduction of a performance-based wage system and wage differences based on
evaluation, they feel some concern a s to whether such evaluations would be fair.
According to the information from Ministry of Health, Labor and Welfare, there is a riskthat depending on how objectives are set and implemented, the performance-based
wage system may have a negative impact on employees’ desire to work and humanresources development. For this system to function effectively, it is important to gain
the agreement of employees by setting proper objectives, maintaining transparency andfairness. 9 The analysis from Japanese government introduced the current situation in
Japan, it also might be a challenge for us because we also plan to adopt
performance-based wage system in China. Therefore it is important to pay attention toand enhance research work on this issue.
（4）Incentive mechanism should be combined with enterprise’s culture
In China, before economic reform, the major problem in terms of payment system inenterprises is that there were no effective incentive measures. Under this system wage

7
8

The Japan Institute of Labor, The JIL Labor Flash/vol. 38, E-mail Journal, 03,17,2003.
Ministry of Health, Labor and Welfare, Summary of the Analysis of the Labor Economy 2003, p22.

9

Ministry of Health, Labor and Welfare, Summary of the Analysis of the Labor Economy 2003, p23.

standards for all employees were set and regulated by government, so employees were
paid same amount of wages regardless of contributions to their enterprises. Thissituation has changed gradually with the development of economic reform and theintroduction of experiences from other countries in regard of payment system. Whilemotivation system has been adopted in some enterprises, the importance of enterprise’sculture should also be emphasized. The enterprise’s culture refers to the loyalty and the
feeling of identification to the companies employees serve for. For employees, in mostcases, their satisfactions can’t be fulfilled only by the amount of wages or salaries. Whatthey desire, except for economic rewards, should include the feeling of success fromcareer development. Therefore one of the important tasks for companies is to provide
their employees with harmonious working environment, as well as payment systemthat is full of motivation to keep labor force stable.

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The Japan Institute of Labor, The labor situation in Japan 2002 / 2003.
The Japan Institute of Labor, Japanese working life profile, 2003 – Labor statistics
The Japan Institute of Labor, Comparative labor statistics Japan and other majorcountries, 2000.
Yoko Sano （1995 ）, Human resource management in Japan, Keio University Press,
Inc.
Akira Takanashi（ 2002 ）, Shunto wage offensive, The Japan Institute of Labor
Takashi Araki （ 2002 ）, Labor and employment law in Japan, The Japan Institute ofLabor.
Robert A. Hart and Seiichi Kawasaki （ 1999 ）, Work and pay in Japan, Cambridge
University Press.
The Japan Institute of Labor, （ 2002 ）,Guide to human resource Management –Comparative HRM between Japan and US.
The Japan Institute of Labor, （ 2002 ）, The personnel management cases of foreign –affiliated companies.
The Japan Institute of Labor, （ 2002 ）, Analysis of the Labor Economy 2003.