Jiro works for a Japanese company. He is unhappy in his job and wants to quit, but he is afraid he will not find another job, since most Japanese companies do not hire laterally. So he stays put and simply disengages psychologically. In another office building on the other side of Tokyo, Akira works for an American company in Japan. Akira feels he has the option to change jobs if he wants to, but since the downturn, he has become afraid of being laid off. In the current economic environment, after the “Lehman Shock,” will he, too, become disengaged? How does employee engagement differ in Japanese companies and American companies in Japan? And what can we, as managers in American companies in Japan, do to keep employees like Akira engaged?
The ACCJ Human Resources Committee invited leading Human Resource Management directors to take a look at the situation surrounding employee engagement in American firms in Japan. Here, they consider how it has changed since the Lehman Shock. More importantly, they share what we as managers can do about it. The following HR leaders shared their insights and advice as part of the ACCJ HR Committee’s focus on employee engagement: Vikram Cardozo, Human Resources Leader, Asia Pacific, GE Capital; Robin Conn, Human Resources Manager, Asia Pacific, Bloomberg; Sherry Greenfield, Vice President, Human Capital Management Division, Goldman Sachs; Mari Ikegaki, Executive Director, Human Resources Department, Morgan Stanley; Jun Morita, Executive Director, Human Resources, 3M Japan Group; and Bianca Wong, Managing Director, Human Resource Service North Pacific & APAC, HR Information System and Solution, FedEx Express.
CURRENT SITUATION OF EMPLOYEE ENGAGEMENT IN JAPAN
To begin to define employee engagement, GE Capital’s Cardozo notes, “Highly engaged employees are willing to put in discretionary effort towards the company’s success. They perform significantly more effectively than those who are moderately engaged, and are less likely to leave the organization.” Based on a sample consisting of half Japanese companies and half multi-national companies in Japan, a 2010 Towers Watson survey found that 5 percent of Japanese rated themselves as “engaged” (compared to 21 percent globally), and 14 percent rated themselves as “disengaged” (compared to 8 percent globally). Yet Bloomberg’s Conn points out that, “It is difficult to assess and compare non-Japanese and Japanese employee engagement. Non-Japanese and Japanese employees express engagement differently. Non-Japanese managers often assume it is only the lively, enthusiastic, vocal employees who are engaged. Yet, many Japanese employees who are not vocal are also engaged. It is very easy for non-Japanese managers to get into the trap where they think Japanese employees are not engaged, when that is not the case.”
“Japanese don’t openly say that they love their companies, but they are often committed nonetheless,” notes Morgan Stanley’s Ikegaki. Speaking out is also more apparent in Western companies in Japan, where employees have much more voice and feel they really can change jobs and do something else if they prefer.
DIFFERENCES IN JAPANESE AND WESTERN CONTEXT
Goldman Sachs’s Greenfield points out contextual differences between Japanese and Western firms that shape engagement: “In traditional Japanese companies with seniority promotion and lifetime employment, people are in the same place a long time and can become complacent or lose inspiration.” FedEx’s Wong continues, “In contrast to employees in firms with lifetime employment, those in foreign-affiliated firms are more inclined to move if they are unhappy. With lifetime employment, employees feel they have no place else to go if they are unhappy in the current position.” 3M’s Morita adds, “Employees in Japanese firms still fear changing jobs. The mid-career labor market is an unknown world. Even if they don’t like their jobs, they feel they have no choice but to stay. Instead of leaving the company, they check out psychologically. Physically they are here, but not mentally. This increases disengagement.”