Q88  In Europe and the United States, length of service and age are not remuneration-related considerations, staff instead being evaluated according to results and overall contribution to the company. Why did a seniority-based wage system become the norm in Japan?

A88   Since in a seniority-based wage system salaries increase with age and length of service, staff are adversely affected if they resign during their career. The system thus allowed companies to maintain stable workforces, and has had the added benefit of making it easier to manage staff and human relations. It has also benefited staff, allowing them to make lifetime plans regarding their future, including marriage and raising children. The system became the norm in Japan because organizations take priority over individuals and results are evaluated at the organizational not individual level. Another factor is the Confucian way of thinking, namely, that it is natural for older people to hold the most senior positions.