Has Work Motivation Among Japanese Workers Declined

This study uses data collected from workers employed in the Japanese electric and electronics industry to explore how Japanese worker motivation changed between 1994 and 2005, a period when a number of Japanese firms shifted from a seniority-based HRM to a more merit-based system. It focuses on two questions: whether there are occupational differences in how worker motivation changed, and whether workers’ perception of HRM impacted on motivation and how this changed over time. Results show that while individual demographic characteristics were important determinants of motivation in 1994, many of the effects had disappeared by 2005. Our results also suggest that whether merit-based compensation enhances worker motivation depends on occupation. We found more variability in the direction and size of occupational effects in 2005 than in 1994. We also found that the negative effect of worker dissatisfaction with HRM on motivation became stronger in 2005. Our findings imply two things. First, the merit-based human resource policies found in Japanese firms today do not necessarily improve worker morale uniformly across occupations; second, whether merit-based HRM produces desired outcomes depends not only on the design of a system, but also on how it is managed in the workplace.