Mitsuko is a large Japanese electronics company that has been established for 40 years. It is a member of both a horizontal and a vertical keiretsu .The company is considering getting rid of its lifetime employment and seniority pay system.
What would you advise Mitsuko to do with regards to its policy of providing lifetime employment and seniority pay
"It does not make sense for a Japanese employer to offer recruits, in the twenty first century, the promise of permanent employment and payment by seniority." Discuss
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Explanation of lifetime employment and seniority pay
1) What is lifetime employment?
A commitment by both organisation and employee to continue the working relationship from entry from the education system to retirement.
There is no contract specifying this as it would amount to a type of slavery.
Understanding that only certain employees affected directly.
What type of worker is most likely to enjoy/not enjoy the privilege of lifetime employment?
A male university graduate is most likely.
A female high school graduate is much less likely to benefit from this system.
What was the major influence in the development of the seniority pay system in the post war period?
A. The enterprise unions considered that older people had more responsibilities and so deserved more pay
How does the seniority pay system affect female wages?
A. Women are expected to leave to look after their children. If they return they may lose seniority years and more likely come back as part time workers with no seniority pay rights
Recognition that Japanese business practice is in transition
Positives of getting rid: non sense
Future fixed cost of core labour force with increasing wage bill; Flexible specialisation;
Non lifetime employment may suit today's worker
Would be more able to recruit relevantly skilled employees in mid...