The J-Files

Back to Contents of Issue: December 1999


A cure for the mid-management flu?

by William Adam

A new malady is hitting middle management in corporate Japan, called "APPD," for Acute Pay Packet Disorder. It comes on when middle managers reach their mid-fifties, and involves salary loss, reduction of responsibility, and demotion or transfer.

APPD is one manifestation of what we here call resutora, which means restructuring. Japanese friends pronounce it "re-su-to-ra" for short. Japanese love abbreviations.

This sort of thing was never supposed to happen. Employment in corporate Japan was supposed to be lifetime, or so the management books tell you. Actually, it isn't. Lifetime employment was never actually for a lifetime, but for a period of permanence that ended when a company's official retirement age was reached, usually around 60. It was more of an understood social contract than one writ in stone, or on paper for that matter. It became the accepted employment system when the economy was expanding and Japanese corporations needed employees to cope with never-ending expansion. Now middle managers are discovering it was in water writ.

When recession descended earlier in the decade, growth ground to a halt. Enter resutora and the purging of the ranks of middle management, Japanese-style. One foreign friend is a victim of resutora, although he has negotiated his way out of APPD. He was employed as a communications specialist on a contract with beaucoup expat goodies, including a nice apartment in central Tokyo, when his company restructured him, taking away expat perks but turning him into a permanent staff member -- or seishain. With some pride he told me, "From being listed in staff directories at the bottom of the department personnel entries as contract worker', I now found myself near the top of the page listed as a kacho, or section chief."

That's a rare distinction for a non-Japanese in a major Japanese corporation. But wait. . . His salary was much the same -- the monthly amount dropped a little -- but was bolstered by the now twice annual bonuses. He was given a comfortable company apartment. All seemed fine.

But last month he turned 55. Resutora reared its ugly head again, for in his company, when managers reach that age, pay is docked by 25% and working time cut by 20%. They must also take early retirement, but are then re-employed, either by the parent company handling another, lesser job, or by reassignment to subsidiaries. In the case of my friend, the basic salary-and-work-hours cut was to be his fate, but with a twist. Because of his specialist field of operation, no other jobs were open. In fact, the company wanted him to stay where he was, for they were acutely aware that they desperately needed his skills. Cutting his actual working hours would lead to problems -- for the company. They offered him an extra assistant. He pointed out that this would cost them more -- so why not leave things as they were? Can't do, they said -- this policy rule must apply to everyone.

A pragmatic solution was found, as it is so often the case here. On transformation into a seishain, he had been placed into the top management stream. Membership in this elite group meant the age-55 rule applied. But a bright staffer in human resources pointed out that the man was, in fact, a specialist. That changed everything. "A management category for specialists actually exists," advised the staffer. Specialists, he explained, were necessary to do detailed and usually technical jobs that elite generalists couldn't handle, and as some of these tasks carried a certain level of responsibility, they were given managerial rankings to confer at least some status and make them happier. What was more important, he pointed out, was they were exempt from the age-55 rule.

So by a simple shuffle of paper and a few seals stamped here and there, my friend has been technically demoted, but his income is preserved, and everybody is happy. Except of course, the 55-year-old managers who still have to follow the rule. Still, points out the company human resources chief, "They still have jobs, albeit at lesser salaries. Isn't the kindly way we restructure middle managers here better than the harsh Anglo-Saxon way?"

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