Job-based employment, which has been practised mainly in Europe and the United States, has spread to Japan in recent years. Unlike in membership-based employment, an employee in a job-based employment system is assigned a clearly defined job description. They can perform specific tasks in accordance with that job description.
In some cases, some may be hesitant to adopt job-based employment due to concerns about teamwork. Introducing it directly into an organisation or corporate culture formed by membership-based employment can create a mismatch. How can a company transform its organisation and culture to maximise teamwork and improve results while implementing job-based employment?
Membership-based vs. Job-based employment
Up until now, membership-based employment has been commonly practised among Japanese companies. Under this system, employees are expected to stay with the company until retirement (lifetime employment). The company provides them with experience in various types of jobs (job rotation). They also provide training in the long term. While employees are more likely to have job security, they are less likely to develop specialised skills.
On the other hand, job-based employment refers to employment that states the nature of the job and the employee's expertise. It includes the knowledge, skills, experience, and qualifications required. The specifics and requirements of the job are outlined in the job description which is readily available to job applicants. The employee who fills the position should possess the required expertise and further develop his or her skillset. This is a common type of employment system in Western companies.
Membership-based employment requires employees to have a sense of belonging to the organisation rather than expertise. Having a sense of belonging to the organisation takes precedence over anything else. This system, with its bulk hiring and lifetime employment, allows for repeated job rotations and promotions. It also has the advantage of allowing for in-house replacement. Vacancies can be resolved by hiring someone from within the department or from another department. Organisations with a membership-based employment structure tend to recruit individuals who are willing to transfer to any position. Therefore, a generalist who can transfer to any position is more valuable.
Conversely, the emphasis in job-based hiring is on the specialised knowledge and skills that are necessary for the position. If a vacancy arises, a person with the relevant expertise will be recruited. If no one within the company is capable of filling in the position, the company will recruit externally. Job-based employment is the opposite of membership-based employment. It's supported by a graduate recruitment system and job rotation. Moreover, it's based on a highly mobile labour market. Nevertheless, there is a movement among Japanese companies towards embracing job-based employment.
Why more companies are introducing job-based employment
The movement towards job-based employment began well before, although the adoption of telework within Covid-19 was one of the factors. Globalisation and the advancement of technology are main drivers of this shift. With domestic and foreign markets intricately connected through globalisation, Japanese companies must now compete against foreign companies. This means that companies need highly specialised workforces. Foreigners are experts with decades of experience in their field. But their Japanese counterparts cannot compete with someone who has just been transferred from an unrelated department several months ago.
Additionally, the rapid development of technology and globalisation have made businesses more agile. Retraining and reallocating people between departments can hinder the ability to keep up with the speed required in this environment. For example, a wiring engineer reassigned to programming is unlikely to be able to compete with a foreign engineer with a doctorate in computer science. Generalist approaches to talent development and placement in membership employment are becoming obsolete. More emphasis is being placed on the acquisition of highly specialised talent. This is reflected in recent trends of steering away from mass hiring of new graduates and lifetime employment. The introduction of "equal pay for equal work" and the review of the seniority-based system are part of this trend.
Against this backdrop, Covid-19 has led to widespread remote work. Consequently, the growing need for performance-based evaluation systems has drawn attention to job-based employment as a better fit.
Examples of Japanese companies that have introduced job-based employment
Here are two companies that have decided to introduce job-based employment.
A major Japanese manufacturer converted 300,000 employees worldwide, including 160,000 in Japan, to a job-based employment system. The goal is to improve individual and organisational performance. They assign the right people to the right jobs based on their abilities and motivations. Hence, it would lead to increased productivity and innovation. To achieve this, the company will need to create 300 to 400 different job descriptions and implement a performance-based evaluation system.
In response to the pandemic, a major Japanese telecommunications company decided to promote job-based employment as part of its commitment. So that they can create a work style that allows employees to deliver results regardless of the time and place. Their goal is to develop a compensation system based on merit and professional development.
Both companies are introducing job-based employment to improve the skills and expertise of its people. This is in response to Covid-19 and the globalisation of the talent market.
Is job-based employment compatible with Japanese companies?
It may seem like a good idea to switch to job-based hiring right away. However, some Japanese companies have reported difficulties in implementing job-based employment. The concern is that because job-based employment focuses on individual achievements, it is difficult to foster cohesion and teamwork. This often happens when membership-based organisations attempt to immediately adopt job-based hiring.
Membership-based organisations have the advantage of teams that can cover the work of others. It's because individual roles are not as clear as they could be. Some people worry that if an organisation is job-based, everyone will only do their own job. If this happens, the team will break down. What is the difference between membership-based teamwork and job-based teamwork?
Vision and engagement are key
In a membership-based organisation, employees are expected to feel a sense of belonging to the company. As a result, they don't often reflect on the reasons for wanting to be a part of the organisation.
In a job-based organisation, there is no pre-condition for employees to feel a sense of belonging. They need to constantly reassess their motivations for belonging to an organisation. Then conclude if they are best suited to work there. The key is to share in what the company wants to achieve for society through its business vision. Also, whether your personal growth is aligned with the company's business growth.
It is important that each employee is aligned with and engaged in the organisation’s vision. This way, they can feel a sense of growth and achievement in bringing value to society and business.
If the type of teamwork in a membership-based organisation is useful to the organisation, the type of teamwork in a job-based organisation contributes to the growth of the business, not the organisation.
Four steps to make job-based employment work as a team
Here are four steps to develop a shared vision and enhance engagement to make job-based employment work as a team.
1. Share goals, purpose and milestones
To ensure members are all on the same page, routinely share the company's business objectives, social purpose, goals, and milestones. Consider breaking into focus groups or discussing off-site. This allows for more casual and lively discussions where opinions are exchanged freely.
2. Align individual growth with company growth through 1-on-1’s
1-on-1 meetings with managers offer a chance to share any challenges or problems that are preventing progress. Through communicating, the manager can understand the issues his/ her teams are facing. They will be able to offer guidance that aligns with the company's goals and growth.
3. Leverage everyone’s strengths to resolve challenges
Most challenges in a business setting cannot be solved alone. When you have a concern, your boss, your subordinates and your team members should engage in knowledge sharing. Everyone works together to solve it by leveraging everyone’s own strengths. The more you collaborate with others, the easier it will be for your team to understand the significance of teamwork.
4. Share successes and celebrate achievements
It’s important for team members to share accomplishments with each other on a regular basis. It's a great way to stay motivated as well as reaffirm the cause of what was achieved. Share the magnitude of the work accomplished, and the benefits gained by collaborating with others. Hence, employees will be more aware of how much can be achieved by working as a team.
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