Work and Pay in the United States and Japan

By Clair Brown; Yoshifumi Nakata et al. | Go to book overview
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crease the portability of knowledge and skill acquired on the job, thereby encouraging greater investment in their acquisition. New skill credentials might also help to justify a steeper rise in earnings with experience for workers who remain with their employers, which could also stimulate greater investment in training for young employees.

While the development of new skill credentials is based on the recognition of widespread worker mobility in the United States, government action can also do more to promote training while at the same time preventing unwanted separations of workers from their employers. We have argued in Chapter 2 that employment security within the firm stimulates training directly as well as indirectly through greater employee involvement in problem solving. One particularly strategic public policy would therefore be to subsidize training for employees during business downturns so that firms can better afford to retain some valued employees who would otherwise be laid off. As described in Chapter 2, the Japanese government has provided such subsidies since the 1970s. In the United States, a number of state governments have created agencies to support training by and for firms, and some of this aid has been used to prevent layoffs. For example, a $5 million training grant from the state to Together Manufacturing helped avoid layoffs when the company was operating at 60 percent of capacity for several months due to slack demand. This example illustrates how targeted public support for training can enable companies to maintain all three mutually reinforcing elements of SET.

Summary: Employee Involvement and Training in the SET Model

Employee involvement and worker training constitute interrelated elements of the SET model. We have argued in this chapter that SET firms involve workers more actively in the daily tasks and decisions of the work place and that better workplace- based training facilitates this form of work organization. Firms modeled on SET structure each of these elements carefully and integrate them closely into the company's HR system.

Firms structured on the SET model find ways to build continual learning into the work process itself. This "just-in-time learning" appears to be more efficient than off-the-job training. Unlike JAM firms, in which EI and OJT each tend to be unplanned, voluntary, and haphazard, SET firms create deliberate structures to recognize and support learning in the work process. These learning structures enhance the firm's productivity and flexibility by transmitting knowledge and skill efficiently from those who have them to those who need them. Because they are closely connected to the El structures, these learning arrangements also stimulate a continuous flow of new ideas for improving the company's products, services, costs, and operating methods.

United States companies that have adopted the SET model, or are trying to adopt


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