All this, again, is in principle if the system were to operate as cited above, all older employees would automatically graduate into the "managerial" and "executive" ranks—in other words, everybody would eventually become kacho and bucho. However, there are fewer kacho positions than there are employees from the same annual class. The number of bucho positions is even lower, so all kacho cannot be promoted to bucho at the same time. Out of these few bucho, management executives are singled out.
In order to resolve this discrepancy in the seniority system, Japanese management has introduced the annual merit-rating system, in which, at least in theory, the individual is rated in relation to specific job demands and his accomplishments. However, in the typical Japanese plant or office, the job is done on a group basis and no one tries to demonstrate individual brilliance or dynamic leadership. It is therefore extremely difficult to isolate individual competence or job responsibility and to carry out a fair rating of each employee. Because of such difficulties, a leader tends to evaluate subordinates with small differentials in ratings. Not only work performance but attitude toward superiors, sociability, and other personal qualities are taken into account in the merit calculation in order to be fair to the employee. The halo effect may also influence the evaluation. In any case, large differentials in ratings are avoided, for they would cripple human relationships in the work group.
All the ratings are reported to the personnel department, and again, to eliminate any unfair report and maintain the wa of the company, the department tries on its own initiative to balance all the ratings within a small marginal range. As a result, unlike the Harvard or Stanford MBA who becomes a vice president after two or three years on the job, no Japanese worker can become a star.
Nevertheless, an employee should not discount that small differential in rating if he hopes to be kacho when his time comes. During his 15- to 17-year apprenticeship, he tries ceaselessly to accumulate those small point margins which will indicate that he is the one to be appointed kacho first, or next. To be in the "managerial" or "executive" category in Japan requires a great deal of patience, endless effort, and the steady display of individual competence. Any careless mistake, therefore, decreases a worker's merit-rating points and deters his progress. A blunder could be fatal to his career.
Mr. C was a promising member of a large firm. With his credentials from Tokyo University, he was appointed Chief of the Welfare Section when his annual "class" was considered for kacho positions. He climbed up the pyramid rapidly and seemed destined for an executive post. One day, as the head of employee Welfare Section, he hired a carpentry service to repair the company apartment house. At the time, he and his family were living in the same housing unit, and his wife asked the carpenter to repair the doorknob of their apartment. Since it was a private order, his wife offered to pay the carpenter personally. The carpenter refused such a small payment because he wanted to please the Chief of the Welfare Section and be hired again by the company. So the wife did not pay for the work on the doorknob. Another housewife living in the same quarters learned of the incident and told her husband about it at the dinner table. The next day, he related the incident to another member of the company, and the story found its way to a certain company executive. It came out that the Chief of the Welfare Section had had his door repaired at company expense. Thus his merit-rating record was dealt a fatal blow. His one and only mistake (actually his wife's mistake) spoiled his rosy future. For 15 years he remained kacho in an unimportant corner of the company while some of his comrades in the same annual class rose to bucho.
In summary, to prevent possible complaints and maintain the Japanese sense of egalitarianism, a company makes only a small marginal differential in rating each employee. At the same time, for the purpose of screening candidates for managerial positions, it takes considerable points away from the employee who has made obvious mistakes. Management is really undertaking an awesome task in trying to maintain harmony among its employees.
Overtime Work as a Safety Valve
One of the most widely held beliefs is that the Japanese work harder than Americans or Europeans, but the observation should be made with some caution. It would not be accurate to draw this conclusion solely on the basis of total hours worked without taking into account the density of work and the reason that Japanese workers remain longer in the workplace.
In opposition to the general principle that overtime work is required to meet urgent production needs, many Japanese factories call for overtime work regularly and pay workers a premium for it. This premium comprises a considerable portion of the workers' income. The reasoning behind this unusual practice is that management needs the overtime work schedule as a buffer in order to manage the fluctuating workload with the minimum labor force it maintains under the lifetime employment system. To bridge the gap between an inflexible workforce and fluctuating business conditions, management also uses temporary workers, part-timers, and subcontractors. However, these workers are not up to the standard of their own experienced employees and are not always reliable. Therefore, the flexible overtime work schedule is the best way to maintain the desired productivity and keep up with swings in the business cycle. Thus workers receive an overtime work allowance as a portion of their regular income, though it fluctuates a bit on the wave of the company's business dealings.
Looking at the widely used subcontracting system in Japan, we see that the overtime work schedule is an important safety valve in meeting the inflow of work from a parent company. Work orders are issued irregularly from the parent company and are distributed through secondary and tertiary subcontractors, or even further down the line. (See Figure 7.)
The further the orders are distributed, apportioned in smaller pieces, the more rigidly the delivery date is fixed and the tighter the production schedule becomes. The delivery date has to be met by any possible means and the subcontractors have to work intensively for a short period.
Overtime work is essential for the subcontractors. This is not to say that the workers are always kept busy during their regular working hours. In fact, in the lower subcontracting firms, workers are often idle during the regular hours and busy in the overtime hours. This is the main reason why base pay is deceptively low in the smaller companies; the workers earn their sustenance through the overtime work allowance. Thus, for the workers as well as management, the overtime schedule is an absolute necessity, and this safety valve functions well in the Japanese organization.
White-collar workers too put in long hours, but often away from the job. For instance, at the lunch table, over drinks on the way home, and on the golf course on Sundays, they are fond of discussing matters related to their work. This does not mean that the Japanese are, to use the word now in vogue, "workaholics." Devotion to the job is part of their samurai tradition. In the Tokugawa period, samurai were supposed to be on "24-hour standby," ever ready to devote themselves to the lord of their fief.