Japanese business myths


The myths of bilingual Japanese employee pay

3.  the myths of bilingual Japanese employee pay

Continuing from the previous section on Japan business myths, here are a few of the myths relating to the more hopeful expectations of your Japanese company employees:

  1. Myth - Your bilingual Japanese subsidiary President will expect at least $200k/year (or considerably more) salary guaranteed for 2 years irrespective of performance even if you only have 2 or 3 employees at the subsidiary.
    Fact - Japanese executives can be expensive; especially now the Japanese economy is rapidly recovering and for many executives "the good times are back"; but a quality executive should accept performance related salary to reduce start-up costs. Try him/her with $100k base and $150k performance bonus.
  2. Myth - it costs $100k/year to hire a competent bilingual secretary.
    Fact - she wishes! 15 years ago it was true and many of those super-bilinguals were of very questionable quality (and often background) but in 2004 you can hire a very capable 22 - 30 year-old bilingual secretary for $40k - $60k per year.
  3. Myth - bilingual staff are 2x the cost of regular Japanese staff.
    Fact - again it was true 15 years ago but in 2004 you may find many younger Japanese who will happily work at your subsidiary for much the same salary as a domestic company would pay, simply because they like the different work environment.
  4. Myth - no Japanese will work for a performance-related bonus, they expect a guaranteed salary with guaranteed summer and winter bonuses.
    Fact - since 1993 I have never paid a guaranteed bonus to a Japanese (or other nationality) employee. Only once did an employee ever resign because they felt their salary was too low and even then salary was not the primary cause of her resignation. While summer and winter bonuses had almost become a thing of the past in recent years, just today (July 22, 2004) it was announced that Japanese companies are paying their employees near-record 2004 summer bonuses of up to ¥1million (US$9,260) so while not impossible, structuring performance related pay is going to become more challenging.
  5. Myth - Japanese employees expect to be hired for life and it will cost you heavily to dismiss an employee even with cause.
    Fact - Japan's Labor Standards Law allows any employee to be dismissed, with or without cause, simply by giving him/her 1 month written notice or 1 month salary in lieu of notice; there is no such thing as a statutory job for life. Also, Japanese are typically very company oriented (see the section on the company in Japanese business culture) and dislike litigation unless deliberately abused and provoked. Be sensitive and play fair and you will have far less labor problems in Japan than in any other market where you do business.
    I have dismissed several Japanese employees in the past 10 years, have never had problems subsequent to dismissal.
  6. Myth - all Japanese speak, read and write English because they had to learn it at school.
    Fact - just as most English people over 20 (including me!) have forgotten the 5 years of French they studied at school, so it is with the majority of Japanese - and shouting instructions at the taxi driver in English will not improve his/her comprehension however hard you try!
  7. >Myth - if you do not operate in Japan as a kabushiki kaisha (equivalent to a US C-corporation or a UK plc) customers will not believe you are credible and your Japanese business will fail.
    Fact - your customers will probably be impressed that you are making any form of long-term commitment to Japan - kabushiki kaisha or otherwise.
    Exxon-Mobil operates in Japan using the much simpler yugen kaisha (equivalent to a US LLC) and if its good enough for the world's #1 oil company..



Japanese business myths

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