Pay And Employment Practices In Japan

Part A

1. Comparison and contrast of the pay and employment practices in Japan with Germany

Japan adopted Seikashugi which is a performance-based remuneration system that is also used by Germany. Both Germany and Japan reward their employees with job security, housing, insurance, recreational facilities at the workplace, bonuses, and pensions (Nakakubo and Araki 70). In both countries, employment contracts are drawn according to the labor laws and the contracts entail all the duties, responsibilities, rewards, and penalties that pertain to work. The potential labor force is shrinking due to having an aging and diminishing population (Jacoby 28).

In contrast, Human Resource Management (HRM) practices differ in Japanese and German companies due to their different cultural practices. Loyalty to the business and good behavior is emphasized in Japan as compared to the emphasis on job performance in Germany (Pudelko 124). Japan promotes employees based on ability, seniority and social standing amongst peer group. However, experience and performance are used to develop employees in Germany. Sixty is the retirement age in Japan while Germans retire at the age of sixty-five years (Jacoby 32).

2. Factors affecting external competitiveness in pay levels

The factors are labor market factors, product market factors, and organization factors. The labor market factors are divided into nature of demand and nature of supply, while the level of product demand and degree of competition are the two classes of the product market factors. Industry and technology, the size of employer, and the employee preferences make up the organization factors (Ombasa 13). The nature of demand considers the number of employees that an employer requires his/her ability and willingness to pay the employees. Nature of supply focuses on the available potential employees, their qualifications, and the remuneration they are willing to accept for their services. The degree of competition affects the pricing of products and thus revenue to the company. The level of product demand puts a cap on the maximum compensation level that a business can set. The type of industry influences the degree and type of technology to be used and thus determining the pay level. For example, education sector pays lower than the petroleum industry (Ismail and Mohd Noor 13). The size of employer determines how much to pay each employee, big organizations with over 500 employees tend to pay 12% more for the same job category than smaller organizations with less than 100 employees. Employee preferences determine what the salary level will be. Choices like insurance, bonuses, basic pay, and holidays play a key role (Bratton and Gold 387).

3. Ways used to judge a job analysis to ensure it’s an effective organizational tool

A job analysis can be assessed by checking the responsibilities and tasks of the job. This section should include effort, skill, frequency, equipment, standards, duration, and complexity. The working environment of a job influences the physical conditions required for a job to be performed (DeCenzo and Robbins 144). The tools and equipment needed to perform certain duties are also used. A plainly laid out company hierarchy, where the employees know who to report to and who is their subordinate, is necessary. The abilities, knowledge, and skills needed to accomplish a task should be clearly laid out (Pulakos 3). 

Part B

1.Overcoming objections to small starting salary by describing present value of earnings

According to Milkovich et al., showing a new hire that the job offers security, learning opportunities, and provides recognition for the effort put in assists in them accepting a lower salary (120). Providing an allowance based on performance can be used to persuade the employee. Excellent work-life programs like vacations, childcare, healthcare and flexible work arrangements are influential (Milkovich et al. 121).

2. Differentials and factors determining them

A differential is the initial salary adjustment that reflects on specified job requirements and makes the wages competitive in the industry. Differentials are determined by geographic locations of the jobs, efforts, and abilities of the workforce, human capital, and the nature of the job (Pryce et al. 588).

3. Major cost-containment strategies for benefits

Probationary periods are used by companies to gauge a new hire’s abilities while paying less than the other employees. By limiting or removing benefits, the company only pays the base salary thereby reducing payroll expenses. By reduction of administrative costs, an organization can put a cap on costs. Copayments, whereby the employee has to pay a fixed amount for covered services, thereby removing the costs from the company (Barr 18).

4. Policy decisions that make up the left side of the pay model

Internal consistency which is defined as the comparison of jobs and ability levels in an organization regarding their relative contribution to the set objectives. External competitiveness ensures that the pay offered is sufficient to retain employees and to attract new talent. Employees contribution is the importance placed on their input which in turn affects attitude and work behavior. Administration of the pay system encompasses the above policies by making sure that they are implemented as required (Pryce et al. 595).

5. Most effective performance appraisal for employee development

Behavioral checklist or the numerical rating scale is considered the most useful tool in performance evaluation because it lets employers rate their employee performance in some areas like reliability, teamwork and communication skills (Pulakos 5).

6. The outcome of using reinforcement theory to Performance-based pay system

Positive reinforcement theory preserves the desirable factor thus ensuring the employee’s productivity is retained while negative reinforcement theory eliminates the undesirable factor that makes an employee unproductive (Wei and Yazdanifard 10).

7. Characteristics of an executive, according to the Fair Labor Standards Act exemptions

The employee must earn at earn at least $23,660 per annum. Their primary duty should be managing the business or a recognized department or a division of the firm. An executive must direct the work of two or more other full-time employees (Mayer et al. 8).

8. Objectives of using the balance sheet for determining expats wage level

A balance sheet is used to ensure that the expats neither lose nor gain financially. The balance sheet method has been shown to minimize the adjustments that would be required of the expats when they relocate. Lastly, the method guarantees cost-effective movement of people to worldwide assignments (Pryce et al. 600).

9. Differences between a health maintenance organization (HMO) and a preferred provider organization (PPO)

In HMO, doctors, hospitals, and other providers must be chosen from within the network while in PPO  doctors, hospitals, and other providers can be selected from within or outside the network, but the out of network providers will cost more. A primary care physician (PCP) is a must in HMO, but not necessary in PPO. In HMO, you need a referral from your PCP to see a specialist, while in PPO a referral is not required (Barr 22).

10. Development and execution of Improshare

Improshare uses previous production details to come up with base performance standards. It is executed when the actual output is greater than the reference point and thus a percentage of the savings is distributed among the employees (Bratton and Gold 87).

11. Pros and cons of ranking as a job evaluation tool

The ranking is a method of job evaluation where jobs are arranged in comparison to each other, based on their perceived importance to the organization. The ranking is straightforward and efficient when there are fewer than thirty jobs to be evaluated. On the contrary, if the number of jobs increases it becomes challenging to administer, and the ranking conclusions are subjective (Pulakos 7).