Available online at www.sciencedirect.com
Procedia - Social and Behavioral Sciences 65 (2012) 253 – 259
International Congress on Interdisciplinary Business and Social Science 2012 (ICIBSoS 2012)
The Role of Japanese Human Resource Planning Practices for
Increasing Industrial Competitiveness
Didik Purwadi*
Industrial System Management Laboratrory
Universitas Gadjah Mada
Jalan Flora 1 Bulaksumur Yogyakarta 55281 Indonesia
Abstract
Recently, many companies have been making adjustment for increasing their competitiveness through getting smart performance. Human resource planning should be done by companies to determine the dynamic equilibrium between demand and supply human resources in order to anticipate the change of business environment. Firstly, this paper will discuss the characteristics of Japanese style of management, especially for dealing with human resource planning. Then provide a deep discussion on the practices of Japanese human resource planning. Finally it will evaluate the role of human resource planning practices for increasing industrial competitiveness.
© 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES University, Jakarta
Keywords : Japanese management, Human Resource Planning, industrial competitiveness,
1. Introduction
1.1. Background
Agroindustrial development in Indonesia is influenced by the mainstream Asia business which includes Asian firms expanding overseas, internationalization of emerging-market firms (Peng et al,
2010). The success of a company now more than ever depends on the quality of its workforce.
* Industrial System Management Laboratory. Tel.: +62 812 1551 1700; fax: +62 274 55 1220.
E-mail address: didik@ugm.ac.id.
1877-0428 © 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES University, Jakarta
doi:10.1016/j.sbspro.2012.11.119
Workforce that means human resource must be planned from the beginning of their career until their retirement age. Human Resource Planning should be done to avoid redundant employees and lack of employment in the near future.
Managers work with three organizational resources: physical, financial and human resource. Of the three, human resource is the most important since it has a strategic place. The Carnegie Foundation says that 85% of the factors of success are due to the personal qualities and only 15% can be attributed to technical knowledge.
1.2. Previous Research
Hwang and Kogan (2003) described that human resource planning has always been a key issue to professional companies, explicitly considering its structure, cost of recruitment and hiring, workload, etc. Moreover Purwadi et al (1999) explained that the Japanese management style has given a good condition for planning the human resource itself. Lifetime employment system gives a good relationship between employers and employees. Rough behavior of cutting excess employees is unacceptable in Japan. Companies and their employees work together, and employees work for the same company throughout their entire life. They give all their effort for the company. Companies hire the inexperienced younger people, then educate and train them. Companies should avoid dismissing employees as much as possible by resorting to various employment adjustment mechanisms. Geelhaar et al (2003) explained that many new topics, interdisciplinary team work and the call for fast success in learning are challenges for advanced training. Nagaraj and Kamalanabhan (2005) concluded that there is a link between the business strategy pursued by the firm and its human resource policies and practices.
1.3. Purpose
The purposes of this paper are (1) elaborate the characteristics of Japanese style of management, especially for dealing with human resource planning; (2) provide a deep discussion on the practices of Japanese human resource planning; (3) evaluate the role of human resource planning practices for increasing industrial competitiveness.
2. Method
System approach is methodology research which is very important for compromising the different sub- system interests. Planning human resource faces some different sub-system interests, such as recruitment system, training and promotion system, retirement system, etc. There are also some actors which have different interest, such as workers, managers, employers, and may be government. After designing a system, it is important to analyze the external factors which influence to the system. This paper uses the secondary data and the result of previous research for building a deep descriptive-qualitative analysis.
3. Human Resource Planning in the Japanese style of Management
Japanese style of management at least consists of 3 characteristics: lifetime employment system, seniority waged-based system, and company based labour union. Most of them are dealing to the human resource issues, especially for human resource planning. Design a Human Resource Planning is begun by need analysis. What kind of workers will be needed for near future? Recruitment strategy should be decided in order to increase company's effectiveness and efficiency. Training and promotion should be planned in order to decrease unproductive human resource. Redundancy which is caused by unbalanced condition between desired man-hours and potential man-hours becomes a serious problem particularly in
the recent tight competitiveness of industry. Retirement must be planned for generating the employee's spirit to work hard, because company will give a stable and safe condition of the employees in the future time, after they retire from this company.
Human Resource Planning should be suitable with the trend of technology. So far the span of control of supervisory job will become wider. With using new tools, supervisors can do their job easily and fast. Nowadays, Japanese Companies face difficulties to gather the employees for dangerous jobs, dirty jobs
and hard jobs. In Japanese terminology, they are called 3K, means Kiken (dangerous), Kitanai (dirty),
Kitsui (hard). Robots is one alternative for providing a solution. The demand for robots will continue to grow. Robots will replace human resource for 3K jobs. So the trend of Human Resource Planning should compromise with the possibility for using robots in production system.
Because of many external factors which have possibility to influence the human resource system, Human Resource Planning will become more important in the near future. The scope of Human Resource Planning will become wider. It means that the scope of Human Resource Planning is not only static but dynamically grows.
In Japan, within a very short time human resource surplus has shifted from a state of extreme undersupply to extreme oversupply. In the future, there will be more employment problems, because the numbers of the unemployed will increase.
Turnover rates in Japanese company is very low, employees work at their company from the beginning their career until their retirement age. This is one of the main characteristics of Japanese employment. Japanese companies do not recruit new employees from experienced candidate, but they recruit mostly the young and inexperienced candidates. As they are still young, they are capable of being socialized into a good employee.
4. Findings and Discussion
4.1. Human Resource adjustment for lack
When there is a lack of workers, recruitment sometimes is not the best solution. There are three alternative methods for human resource adjustment.
Increasing over time work.
Overtime means time worked in excess of an agreed upon time for normal working hours by an employee. Working after 5 p.m., during holidays, or weekends is referred to as overtime work.
When numbers of normal potential man-hours is smaller than desired man-hours, firstly company increase the overtime work to overcome the man-hours gap. Too big in overtime work is not efficient because overtime work should be paid more than normal time work.
Increasing part-time employment
As described above, Japanese companies use the lifetime employment system or permanent employment. There is a tendency for employees to continue being employed for a long time in one company. They are mostly full-time employees, but some of them are part-time employees.
Part-time employees are employees who have less than a full-time organizational commitment on the part of the employee. They usually do not receive the same health insurance, retirement, and other benefits full-time employees receive.
When company faces a lack of man-hours, part-time employment is increased to overcome man-hours shortage. Sometimes it is better than recruitment, because in some cases, part-time employment is cheaper
than full-time employment. Because there is no strong commitment to company, part-time employment is bad in the long run.
Recruitment (full-time employment)
Recruitment is the last alternative which should be done if lack of man-hours cannot be overcome by increasing overtime work and increasing part-time employees. The consequence of recruitment is company has to keep employees who are recruited as members of company until their retirement age.
There are two factors that must be noticed during the recruitment process: the qualitative and quantitative factors of employees recruited. In order to maintain employees based on Japanese style of management, so in practice, Japanese companies usually recruit new employees no more that their needed, it is about 50-75% of needed. There are many procedures for measuring the qualitative factor. Psychology test, written test, detailed interview for gathering the information about their educational background, their family background, etc. can be used for selecting the employees. The quantitative factor, that is the numbers of employees who shoul
Available online at www.sciencedirect.com
Procedia - Social and Behavioral Sciences 65 (2012) 253 – 259
International Congress on Interdisciplinary Business and Social Science 2012 (ICIBSoS 2012)
The Role of Japanese Human Resource Planning Practices for
Increasing Industrial Competitiveness
Didik Purwadi*
Industrial System Management Laboratrory
Universitas Gadjah Mada
Jalan Flora 1 Bulaksumur Yogyakarta 55281 Indonesia
Abstract
Recently, many companies have been making adjustment for increasing their competitiveness through getting smart performance. Human resource planning should be done by companies to determine the dynamic equilibrium between demand and supply human resources in order to anticipate the change of business environment. Firstly, this paper will discuss the characteristics of Japanese style of management, especially for dealing with human resource planning. Then provide a deep discussion on the practices of Japanese human resource planning. Finally it will evaluate the role of human resource planning practices for increasing industrial competitiveness.
© 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES University, Jakarta
Keywords : Japanese management, Human Resource Planning, industrial competitiveness,
1. Introduction
1.1. Background
Agroindustrial development in Indonesia is influenced by the mainstream Asia business which includes Asian firms expanding overseas, internationalization of emerging-market firms (Peng et al,
2010). The success of a company now more than ever depends on the quality of its workforce.
* Industrial System Management Laboratory. Tel.: +62 812 1551 1700; fax: +62 274 55 1220.
E-mail address: didik@ugm.ac.id.
1877-0428 © 2012 The Authors. Published by Elsevier Ltd.
Selection and peer-review under responsibility of JIBES University, Jakarta
doi:10.1016/j.sbspro.2012.11.119
Workforce that means human resource must be planned from the beginning of their career until their retirement age. Human Resource Planning should be done to avoid redundant employees and lack of employment in the near future.
Managers work with three organizational resources: physical, financial and human resource. Of the three, human resource is the most important since it has a strategic place. The Carnegie Foundation says that 85% of the factors of success are due to the personal qualities and only 15% can be attributed to technical knowledge.
1.2. Previous Research
Hwang and Kogan (2003) described that human resource planning has always been a key issue to professional companies, explicitly considering its structure, cost of recruitment and hiring, workload, etc. Moreover Purwadi et al (1999) explained that the Japanese management style has given a good condition for planning the human resource itself. Lifetime employment system gives a good relationship between employers and employees. Rough behavior of cutting excess employees is unacceptable in Japan. Companies and their employees work together, and employees work for the same company throughout their entire life. They give all their effort for the company. Companies hire the inexperienced younger people, then educate and train them. Companies should avoid dismissing employees as much as possible by resorting to various employment adjustment mechanisms. Geelhaar et al (2003) explained that many new topics, interdisciplinary team work and the call for fast success in learning are challenges for advanced training. Nagaraj and Kamalanabhan (2005) concluded that there is a link between the business strategy pursued by the firm and its human resource policies and practices.
1.3. Purpose
The purposes of this paper are (1) elaborate the characteristics of Japanese style of management, especially for dealing with human resource planning; (2) provide a deep discussion on the practices of Japanese human resource planning; (3) evaluate the role of human resource planning practices for increasing industrial competitiveness.
2. Method
System approach is methodology research which is very important for compromising the different sub- system interests. Planning human resource faces some different sub-system interests, such as recruitment system, training and promotion system, retirement system, etc. There are also some actors which have different interest, such as workers, managers, employers, and may be government. After designing a system, it is important to analyze the external factors which influence to the system. This paper uses the secondary data and the result of previous research for building a deep descriptive-qualitative analysis.
3. Human Resource Planning in the Japanese style of Management
Japanese style of management at least consists of 3 characteristics: lifetime employment system, seniority waged-based system, and company based labour union. Most of them are dealing to the human resource issues, especially for human resource planning. Design a Human Resource Planning is begun by need analysis. What kind of workers will be needed for near future? Recruitment strategy should be decided in order to increase company's effectiveness and efficiency. Training and promotion should be planned in order to decrease unproductive human resource. Redundancy which is caused by unbalanced condition between desired man-hours and potential man-hours becomes a serious problem particularly in
the recent tight competitiveness of industry. Retirement must be planned for generating the employee's spirit to work hard, because company will give a stable and safe condition of the employees in the future time, after they retire from this company.
Human Resource Planning should be suitable with the trend of technology. So far the span of control of supervisory job will become wider. With using new tools, supervisors can do their job easily and fast. Nowadays, Japanese Companies face difficulties to gather the employees for dangerous jobs, dirty jobs
and hard jobs. In Japanese terminology, they are called 3K, means Kiken (dangerous), Kitanai (dirty),
Kitsui (hard). Robots is one alternative for providing a solution. The demand for robots will continue to grow. Robots will replace human resource for 3K jobs. So the trend of Human Resource Planning should compromise with the possibility for using robots in production system.
Because of many external factors which have possibility to influence the human resource system, Human Resource Planning will become more important in the near future. The scope of Human Resource Planning will become wider. It means that the scope of Human Resource Planning is not only static but dynamically grows.
In Japan, within a very short time human resource surplus has shifted from a state of extreme undersupply to extreme oversupply. In the future, there will be more employment problems, because the numbers of the unemployed will increase.
Turnover rates in Japanese company is very low, employees work at their company from the beginning their career until their retirement age. This is one of the main characteristics of Japanese employment. Japanese companies do not recruit new employees from experienced candidate, but they recruit mostly the young and inexperienced candidates. As they are still young, they are capable of being socialized into a good employee.
4. Findings and Discussion
4.1. Human Resource adjustment for lack
When there is a lack of workers, recruitment sometimes is not the best solution. There are three alternative methods for human resource adjustment.
Increasing over time work.
Overtime means time worked in excess of an agreed upon time for normal working hours by an employee. Working after 5 p.m., during holidays, or weekends is referred to as overtime work.
When numbers of normal potential man-hours is smaller than desired man-hours, firstly company increase the overtime work to overcome the man-hours gap. Too big in overtime work is not efficient because overtime work should be paid more than normal time work.
Increasing part-time employment
As described above, Japanese companies use the lifetime employment system or permanent employment. There is a tendency for employees to continue being employed for a long time in one company. They are mostly full-time employees, but some of them are part-time employees.
Part-time employees are employees who have less than a full-time organizational commitment on the part of the employee. They usually do not receive the same health insurance, retirement, and other benefits full-time employees receive.
When company faces a lack of man-hours, part-time employment is increased to overcome man-hours shortage. Sometimes it is better than recruitment, because in some cases, part-time employment is cheaper
than full-time employment. Because there is no strong commitment to company, part-time employment is bad in the long run.
Recruitment (full-time employment)
Recruitment is the last alternative which should be done if lack of man-hours cannot be overcome by increasing overtime work and increasing part-time employees. The consequence of recruitment is company has to keep employees who are recruited as members of company until their retirement age.
There are two factors that must be noticed during the recruitment process: the qualitative and quantitative factors of employees recruited. In order to maintain employees based on Japanese style of management, so in practice, Japanese companies usually recruit new employees no more that their needed, it is about 50-75% of needed. There are many procedures for measuring the qualitative factor. Psychology test, written test, detailed interview for gathering the information about their educational background, their family background, etc. can be used for selecting the employees. The quantitative factor, that is the numbers of employees who shoul
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