Taking stock of the research on evolving relationships between Japanese human resource management practices and firm performance
Both aspects common to Western companies and unique aspects of Japanese human resource management/international human resource management practices (HRM/IHRM) have been examined in numerous studies. This chapter reviews this literature to examine the historical relationship between Japanese HRM/IHRM practices and firm performance, and to identify current changes that are occurring in Japanese HRM policies and practices. The chapter first briefly summarizes the general evidence on HRM/IHRM practices and compares HR practices in Western and Japanese contexts. The development of Japanese HRM/IHRM practices is examined in a formative historical context, in relation to changes stimulated by the economic crisis of the 1990s and current changes that have resulted from various economic and contextual influences. The chapter highlights basic dilemmas faced by Japanese firms. On one hand, there is a desire to retain the fundamental HR practices that have been elements integral to Japanese management practice and firm performance. On the other hand, a number of changes are occurring with long-held practices. Will Japanese firms be able to retain critical HR practice elements while making adjustments and converging with IHRM best practices in other regions of the world?