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Chapter 5
The Relationship between Business Performance,
Personnel Policies and Non-regular Employees
Kazuya Ogura1
1. Introduction
It is often said that the reasons for the increase of non-regular employees, considered
from a macro economic perspective, lie on both the sides of demand and supply. However
Furugori’s (1997) summary of the debate so far has shown the lack of results for research
supporting the supply side. Specifically she concludes that the influence of changes in
corporate actions accompanying changes in industry structure (the growing service economy)
is much larger than that of the increasing numbers of women and young workers or changes
in their values and attitudes to work. These changes in corporate actions refer to the need to
have an adjustable work force conforming to required working times and the need to reduce
labor costs, both needs having become more pressing due to intensifying international
competition. Osawa and Houseman (2003) also point out the increasing demand for a
flexible labor force in response to the intensifying international competition accompanying
economic globalization.
At the same time, Miyamoto and Nakata (2002) make the point that there is not
necessarily a substitutional relationship between the reduction in regular employees and the
increase of part-timers in individual businesses (e.g. large-sized department stores). This is
in opposition to Ono’s (2001) finding that substitution of part-timers for regular employees is
advancing, based on research into case studies of large retail businesses. In research based
on macro data, for Ishihara (2003) it looks like a substitutional relationship between full-time
workers and part-time workers can be seen on an overall economic level in the late 1990s, but
trends differ from business to business, and Hara (2003) shows a complementary relationship 1 Vice Senior Researcher, Japan Institute for Labour Policy and Training (JILPT).
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to be stronger at the overall economic level. Furthermore an analysis of time-series data
from 1995 to 2001 by Ishihara, Hara and Sato (2005) shows the relationship to be
complementary for industries with a high part-timer ratio (the retail business, restaurants) but
conversely substitutional for industries with a low part-timer ratio (manufacturing industries
excepting food products).
In research reports such as that of Ishihara, Hara and Sato (2005), the sales volume
and profit of individual businesses and business places are included in the estimate equation,
but the data is limited and the studies focus on the relationship between full-time workers and
part-time workers. However, as can be seen in JILPT (2006), the reasons why companies
employ people can be considered to differ2 according to non- regular employee work patterns
(contract workers, temporary agency workers, part-timers etc.).
The results of Kobayashi (2000) demonstrate how part-timers whose qualitative work
force has become the key part in the company3 do not necessarily have more positive work
attitudes compared to other part-timers. Shinozaki, Ishihara, Shiokawa and Genda (2003)
found that when there is little real difference between regular employees and non-regular
employees in terms of job functions and conditions but a large discrepancy in pay the
part-timers do not feel satisfaction with pay.
Based on the results of research such as that given above, in this document individual
data from the JILPT’s survey held in 2004 will be reanalyzed with a view to clarifying points
such as the following. Firstly, the relationship between changes in the number of
non-regular employees and business performance in terms of volume of sales and ordinary
profits of individual enterprises as well as reasons for employment. In high performing
companies a relationship where the numbers of both regular and non-regular employees
increase has been observed, yet a great deal of research is limited to part-timers. Here we
will explore the relationship between changes in the numbers of non-regular employees in
various types of employment such as part-timers, contract workers or temporary agency
2 In a survey by the Ministry of Health, Labour and Welfare (MHLW), principal reasons why businesses employed non- regular employees differed according to various forms of employment such as contract worker, part-timer or temporary agency worker.
3 The increase in numerical terms of part-timers and so forth into a significant force in the work place is called quantitative change, whereas work under the same terms as regular employees is called qualitative change.
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workers and business performance and reasons for employment. Secondly, it will be
considered to what extent the personnel policies of individual businesses and quantitative or
qualitative workplace changes affect the level of satisfaction of non- regular employees.
There has been some research like this before, but none handling the various categories of
non-regular employees. We hope to make a definite contribution regarding this point.
2. The Outline of the Survey Data Used
The data used in this document was taken from companies and employees respectively
in the December 2004 JILPT “Survey on Personnel Strategy and Work Attitudes under the
Society of Population Reduction” (hereafter referred to the JILPT Survey). 1,237 answers
were received from 10,000 companies with over 100 employees. 9,407 answers were also
received from 100,000 regular- and non-regular workers employed at responding companies4.
Table 1 shows the nature of the responding companies. The ratio of responding
companies involved in electricity, gas, heat or water supply industries, information and
telecommunications, real estate, restaurant, accommodation, medical, social welfare,
education, or learning support industries was low enough to warrant combining them for later
tallying and analysis with the “Other service industries” and defining them as “Service
industries.”
4 Refer to JILPT (2005) for more details about the survey.
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Table 1: Responding Company Attributes (%)
Note: (1) The total number includes unknown companies in each attribute.
Table 2 shows the nature of the respondents. Definitions of forms of employment are
in accordance with the definitions below.
a) Regular employees (RE): Persons who work on a full-time basis and are employed by the
company without a fixed term of employment. Those workers transferred to other
companies are eliminated.
b) Contract employees (CE): Persons hired by contract for specialized jobs.
c) Extra / daily workers (EDW): Persons to be employed temporarily or daily, whose length of
employment is shorter than a month.
d) Part-timers (PT): Persons who are referred to as “part-timer” by the company and whose
designated working hours in a day are shorter, or whose designated working days in a week
are fewer, than regular employees.
e) Full-time fixed term employees(FFE): Persons who are referred to as “part-timer” or other
name by the company and whose designated working hours in a day or working days in a
week are the same as regular employees.
f) Transferred employees (TE): Persons who are transferred, based on loan agreements with
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other companies. It was not asked whether they were registered with the original company.
g) Temporary agency workers (TAW): Persons leased from a labor leasing business in
accordance with the Manpower Dispatching Business LAW.
h) Workers from subcontractor (WS): Persons who are employed by subcontractors and
deployed at client companies.
Here Regular employees (RE) are labeled ‘a)’ and Non-regular employees (NRE) from
‘b)’ to ‘h)’. As can be seen in Table 2, those of c), f) and h) are too few in number to
warrant being used in subsequent tallying and analysis.
Table 2: Respondent Attributes (%)
Note: (1) The total number includes unknown respondents in each attribute.
There is also a large bias in the structure by type of the respondents due to the
distribution and collection methods of the JILPT Survey. The JILPT Survey’s ratio of
“managerial work” is somewhat higher and that of “office work” considerably higher than
the distribution of employees by occupation as seen in the Ministry of Internal Affairs and
Communications “Labor Force Survey” in Table 3. Hence this point must be given due
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attention in the tallying and analysis that follow.
Table 3: Distribution by Occupation of Employees in Japan (%)
Source: Ministry of Internal Affairs and Communications, Monthly Labor Survey (2004)
3. The Relationship between Business Performance and Increase / Decrease of NRE
What sort of relation is there between the increase and decrease of NRE and business
performance? Have only NRE or both RE and NRE increased to the extent that businesses
are prospering? Firstly we will consider such relationships between the increase or decrease
of NRE and managerial index relevant to business performance.
Table 4: Correlation between Company Managerial Index and NRE Rate of Change
Note: (1) * = P< .05, * * = P< .01 (2) Values over +1,000% or under -100% are excluded for (A) to (E)
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Table 4 presents a correlation of the managerial index of individual companies and
change in NRE numbers. (A) gives the rate of change for NRE as compared to three years
ago (from the point in time of the current survey), (B) gives the rate of change for RE as
compared to three years ago, (C) gives the rate of change for all employees (RE + NRE) as
compared to three years ago, (D) gives the rate of change of sales volume as compared to
three years ago, (E) gives the rate of change of recurring profits as compared to three years
ago5.
(B), (C), (D) and (E) stand in statistically significant correlation to the rate of change
of NRE in (A). In other words, there is a positive correlation between the rate of change of
NRE and those of RE, all employees, sales volume and recurring profits. In particular there
seems to be a high correlation with the rate of change of all employees (C), though at the
same time there is positive correlation with the number of RE. The rate of change of sales
volume (D) has a positive correlation with (A), (B) and (C), as does that of recurring profits
(E) with (A) and (C). This shows the tendency for the numbers of all employees, RE and
NRE to increase as business sales and recurring profits increase.
Though it was stated at the beginning that a principal reason why companies employ
NRE is to reduce labor costs, a tendency to increase employment of both RE and NRE when
the sales volume and recurring profits increase is confirmed by Table 4. In order to see this
more clearly increases and decreases have been separated and shown in Tables 5 and 6.
5 Where the value of three years ago and now is constant it is set at 0%. For all variables anything less than -100% or greater than +1,000% was ignored. This was decided upon from the state of the answer distribution, only in a very few cases were any of the variables less than -100% or greater than +1,000%. Theoretically there ought to have been some values below -100%; the sample selection bias of the companies responding to the questionnaire cannot be denied.
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Table 5: Cross-tabulation of NRE Change with other variables (%)
Note: (1) Add "-" to values of "Decrease", and "+" to values of "Increase". (2) Cases of "±0" have been excluded.
Table 6: Cross-tabulation of RE Change with other variables (%)
Note: (1) and (2) are the same as Table 5
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Table 5 and 6 separate the increases and decreases of NRE and RE respectively and
cross-tabulate them with the increases and decreases of other factors. Looking at the
increases in NRE in Table 5 the positive correlation of decrease – decrease, increase –
increase for change in the number of all employees is comparatively clear. However, in
65.8% of companies with increases in NRE the number of RE has decreased. This is
confirmed by Table 6. Specifically, in 63.6% of businesses with decreases in RE the number
of NRE has increased. Furthermore, a comparison of the relationship between changes in
sales volume and recurring profits in the two tables allows us to see that the ratio of
companies with decreasing sales volume and recurring profits is higher among companies
with increasing NRE than those with increasing RE.
There was a positive correlation in Table 4 between the rate of change of NRE and that
of RE. But a closer inspection with Tables 5 and 6 shows that the cause of the low
coefficient in Table 4 is the decline in RE numbers in two thirds of businesses where NRE
have increased. Moreover, there was a positive correlation between the rates of change of
NRE and sales volume and recurring profits in Table 4, but we can see in Table 5 that this also
is not as strong as the correlation of the rate of change of RE and sales volume and recurring
profits, as over 40% of businesses with increasing NRE have decreasing sales volume and
recurring profits. Such businesses can be thought to have increased the number of NRE to
reduce labor costs as necessitated by declining sales volume and recurring profits.
We have seen that the rate of change of NRE has a consistent positive correlation with
the managerial index, next we will look at the causal relationship of the two made consistent
with various other business attributes.
The dependent variable will be the rate of change of NRE. For the independent
variables we will use the rates of change of RE, all employees, sales volume and recurring
profits in addition to types of industry6, the total number of employees (current RE + NRE
numbers, ln), average age of RE (men and women combined), a dummy variable for emphasis
on NRE utilization7, a dummy variable for emphasis on NRE skill development8, the number
6 Construction, manufacturing (bench mark), wholesale / retail, finance / insurance, service, other industries.
7 Relevant = 1, irrelevant = 0 8 Relevant = 1, irrelevant = 0
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of NRE performing the same labor as RE9, a feeling of excess or lack of RE10, and a feeling of
excess or lack of NRE11. However, in cases where there is a high correlation between the
independent variables, such as in the rates of change of RE and all employees or the rates of
change of all employees and the sales volume, these will be input into different estimate
equations.
Table 7 shows the result of estimation. As stated before, in consideration of cases
where the correlation between independent variables is high, multiple linear regression
analysis (OLS) was made with two types of estimate equations. Estimate equation (1) was
shown to be an unsuitable method due to the low value of F. On further investigation using
only estimative equation (2), the rate of change of all employees and the dummy variable for
emphasis on NRE utilization have a statistically significant effect on the dependent variable of
the rate of change of NRE.
The tendency for NRE to increase to the extent that the number of all employees
increases means a positive correlation between the two in Table 4 is confirmed as a causal
relationship.
Companies emphasizing NRE utilization have a tendency toward less NRE. Why
would this be? One explanation to be considered is that emphasizing NRE utilization means
focusing on NRE quality over quantity. If this is the case, the number of such NRE valued
for their utility may not only fail to increase but actually decrease. To put it another way, as
NRE are to some extent sorted for quality of utility, rather than just anyone being suitable, a
fall in numbers over three years becomes conceivable.
9 Many, some (bench mark) or none. 10 Lacking, sufficient (bench mark) or in excess. 11 Lacking, sufficient (bench mark) or in excess.
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Table 7: OLS Estimates (NRE Rate of Change)
Note: (1) * = P< .05, * * = P< .01
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While the low F value of estimate equation (1) gives an inappropriate result, even
estimate equation (2) fails to give a statistically significant value for the rate of change of
recurring profits. A positive correlation between sales volume / recurring profits and NRE
numbers was seen in Table 4, but once the influences of industry type and scale of employees
are removed, the result of analysis does not show a clear causal relationship between these
two variables. This may be the result of the influence of a negative correlation between
NRE and sales volume / recurring profits being more common than compared to RE, as seen
in comparison of Tables 5 and 6.
4. The Relationship between Individual NRE Numbers and Managerial Index /
Reasons for Utilization
Next we will look at the effect of business performance and reasons for employment
on the number of employees in each form of employment. As stated previously, the nature
of the answers meant only CE, TAW, PT and FFE were used. The current number (ln) of
each of these forms of employment was made into the dependent variable, and the rates of
change of RE, the sales volume and recurring profits were used as independent variables in
addition to industry types, the total number of employees, average age of RE, a dummy
variable for emphasis on NRE utilization, a dummy variable for emphasis on NRE skill
development, the number of NRE performing the same labor as RE, a feeling of excess or
lack of RE, and a feeling of excess or lack of NRE. The reasons for utilization were also
used for each form of employment. Specifically, the following five types were each input as
dummy variables: (i) Unable to secure regular employees, (ii) To fill specialized positions,
(iii) For personnel able to contribute immediately, (iv) Due to employment adjustments, (v)
To reduce labor costs. If “(iv) Due to employment adjustments” corresponded to any of the
four categories of “Regulation of volume of employment in response to changing business
conditions,” “In response to long working (operating) hours,” “In response to fluctuating
work levels daily or weekly” or “In response to temporary or seasonal changes in the volume
of work,” its value was ‘1’; otherwise its value was ‘0’. Similarly if “(v) To reduce labor
costs” corresponded to either the category of “To economize on wages” or “To economize on
labor costs apart from wages” its value was ‘1’; otherwise its value was ‘0’.
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Table 8-1 shows the estimation result concerning CE numbers (estimate equation (1))
and TAW numbers (estimate equation (2)) and Table 8-2 that for PT numbers (estimate
equation (3)) and FFE numbers (estimate equation (4)).
Neither the rates of change of sales volume or recurring profits have any statistically
significant impact in any of the estimate equations. Judged solely from this, changes
between business performance three years ago and now cannot be said to have had any clear
impact either on change in NRE overall or in regard to numbers employed in each form of
employment. Also, the current numbers of all employees in all forms of employment have a
positive value, but there is no particular need to explain this as the larger the business the
greater the number employed in these forms of employment. At issue is the lack of impact
of changes in RE on all the forms of employment. Specifically, when the impact of these
independent variables concerning the individual companies is made consistent no clear
relation can be seen between the changes in RE and the numbers employed in these forms of
employment. Thus it cannot be concluded to be in a substitutional or complementary
relationship12. For the industry types, wholesaling / retailing is affecting CE, TAW and PT
numbers. Specifically, CE and PT numbers are high while TAW numbers are low for
wholesaling / retailing. We can see that CE, PT and FFE numbers are up for businesses
emphasizing the utilization of NRE, and we can also grasp that in businesses emphasizing
NRE skill development PT and FFE numbers are also high.
What is of great interest is the impact of the reasons for utilization. (v) To reduce
labor costs is affecting the high number of CE, while the high number of TAW is affected by
both (iv) Due to employment adjustments and (v) To reduce labor costs. Furthermore the
high numbers of PT is affected by (iv) Due to employment adjustments and (v) To reduce
labor costs while that of the FFE by (iv) Due to employment adjustments.
We can see in the Ministry of Health, Labour and Welfare Survey (hereafter MHLW
Survey) that (ii) and (iii) are common given as reasons for CE employment, with (ii), (iii) and
(iv), common for TAW and (iv) and (v) for PT13. However, if we consider numbers of NRE
12 However, as the dependent variable is the current number of people in each form of employment, not signifying increase or decrease, no precise judgments are possible. Unfortunately there is no past data for numbers of each form of employment.
13 Refer to the JILPT (2006)
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for each form of employment from the JILPT Survey data without the influence of other
variables, (iv) and (v) are shown to affect all four form of employment categories while
reasons such as (ii) and (iii) have no significant influence on CE or TAW numbers. In the
MHLW Survey answers for these forms of employment giving “reasons for employing even a
single person” can be considered possible. So it follows that when viewed from the aspect
of “numbers of people employed overall” there is a strong possibility of impact on even CE
and TAW numbers by motives such as (iv) and (v). In detail, reasons for employing CE or
TAW assume to some extent a “certain someone,” and are considered to be for the sake of
expertise, but the increase in the numbers employed is because of employment adjustment and
labor cost reduction. If employment adjustment is also considered as a means to make labor
costs into variable costs, the biggest reason for increasing NRE can be concluded to be the
reduction of costs.
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Table 8-1: OLS Estimates (Each Form of Employment / Part 1)
Note: (1) * = P< .05, * * = P< .01 (2) Each individual form of employment has its reasons for utilization, but as the terminology is the same they have been shown combined together.
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Table 8-2 OLS Estimates (Each Form of Employment / Part 2)
Note: (1) and (2) are the same as in Table 8-1
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5. Personnel Policies and NRE Satisfaction
Various questions were asked to RE and NRE working at the responding companies in
the JILPT Survey. Here we will use the combined data14 from the answers of the employees
and companies to look at the level of satisfaction of NRE with their jobs. We will examine
what sort of effect on NRE satisfaction the NRE rates and those in the same employment form
(as a representative indicator of substantial quantitative change) have, the existence of
personnel systems or skill development programs for NRE in the company, and whether the
company is active in the utilization and development of skills of NRE.
Table 9: Mean Satisfaction Scores by Forms of Employment (1 point = discontent, 5 = satisfaction)
Table 9 shows the average satisfaction score by forms of employment. The level of
satisfaction was measured with a five-point scale where a score of 1 means dissatisfaction and
5 means satisfaction.
Satisfaction for wages descended in order of PT (2.90), TAW (2.90), RE (2.71), CE
(2.69), and FFE (2.54). Satisfaction with working hours descended in order of PT (3.87),
TAW (3.81), FFE (3.64), CE (3.62), and RE (3.29). Satisfaction with skill development
followed the order CE (3.00), PT (2.99), RE (2.86), TAW (2.77), and FFE (2.75). Looking at
the essential details of the work like this we can see that PT satisfaction is relatively high and
RE satisfaction is relatively low.
However, a comparison of RE and NRE satisfaction requires careful attention. For
example, not all PT working to supplement their household budget are going to compare their
14 9,407 answers were received from the employee survey, but when matched with the company data only 7,320 answers were valid
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wages with those of RE. As Shinozaki, Ishihara, Shiokawa and Genda (2003) point out,
when RE become the object of comparison from the aspect of job details, a drop in
satisfaction can be considered possible, meaning an analysis taking into account the nature of
the job is necessary. Again, in the case of benefits and skills development, the possibility of
RE having access to benefit programs and facilities, and of having an opportunity for skill
development is comparatively high, and it would be difficult to consider NRE opportunities
for skill development (part timers in particular) to be on the same level as for RE15. Thus, in
order to gain a more accurate comparison we must observe the level of satisfaction after
dividing the sample between each individual form of employment and making consistent
conditions such as personnel systems on the company side.
Next is analysis of the dependent variables of the level of satisfaction for each form of
employment. In use are the three dependent variables of the level of satisfaction for wages,
working hours and skill development, plus the principle independent variables of rate of
change of NRE, the percentage of relevant NRE out of all employees, company emphasis on
NRE utilization dummy variable, company emphasis on NRE skill development dummy
variable, the existence of a personnel policy in the company16, and the nature of the work
itself17. The control variables are the level of education18, type of occupation19, weekly mean
working hours (ln), principle work income (ln), changes in working hours20, changes in
wages21, reason for taking present job22, type of industry employed in, current total number of
employees, and rate of change of sales volume.
15 Furthermore, for TAW this is an issue for the temporary agency rather than the place of work. However in the survey data used the answer is by the personnel representative at the place of work. Accordingly TAW is excluded from the analysis of satisfaction in this document.
16 For planned OJT, off-the-job training systems, self-development support systems, conversion system of NRE to RE respectively, relevant=1, irrelevant=0
17 For responsible work, specialized work, atypical work and the same work as NRE, relevant=1,irrelevant=0
18 Junior/senior high school graduates (bench mark), junior college, university / graduate school 19 Specialized / technical work, managerial work, office work (bench mark), sales work, service work, security work, transport and communications, laboring work, other.
20 (Compared to three years ago) Increased, unchanged (bench mark), decreased. 21 (Compared to three years ago) Increased, unchanged (bench mark), decreased 22 For interest in the job itself, desire to make use of skills, convenient working days, complementary income, expectation of high income, expectation of stable employment, lack of other appropriate work, lack of RE work available, easy to combine with family or other activities, can take a day off easily, can quit easily: relevant=1, irrelevant=0
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Table 10 shows the estimation result of CE satisfaction. For the main independent
variables, nothing is effective for more than two types of satisfaction. The “Conversion
system between NRE and RE” and “Responsible work” have effect on skill development
satisfaction, while “Specialized work” and “Same work as RE” take effect on wage
satisfaction. Of great interest is the fact that the “conversion system of NRE to RE” causes
the skill development satisfaction level to drop. The issue of fairness amongst CE in the
operation of the conversion system can be considered as the background allowing this sort of
result to occur. Considered realistically, not all CE will be converted into RE. However, if
there is not sufficient agreement among the CE regarding the company’s selection of CE to be
converted to RE, the possibility exists that this conversion system will on the contrary give
rise to CE dissatisfaction. On the issue of wages, the level of satisfaction for CE answering
“Specialized work” and “Same work as RE” is low. This result reflects consideration of
lower wages despite having expertise above the RE or doing the same job as them. In other
words, CE feel dissatisfied with their pay when they judge themselves to have become
qualitatively the principal workforce. There were no variables valid for more than two types
of satisfaction levels in the control variables.
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Table 10: Ordered Probit Estimates of CE Satisfaction
Note: (1) * = P< .05, * * = P< .01 (2) To simplify the appearance of the results, excepting for the main ones independent variables are shown only if they have a statistically significant value. Refer to the text on the independent variables used.
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Table 11 shows the estimation result of PT satisfaction. For the principal
independent variables, “NRE rate of change,” “Planned OJT,” and “Atypical work” have
impact on over two types of satisfaction. The higher the “NRE rate of change,” the lower
the PT satisfaction with wages and working hours. Increase in NRE does not necessarily
express the PT’s quantitative change to a significant force, but the possibility remains that
working conditions such as wages and working hours have worsened as the labor supplied by
NRE (including PT) in companies has reached excess levels through increase of NRE. Even
when working conditions have not actually worsened anxiety over such due to the large pool
of competitors may contribute to increased dissatisfaction. Low satisfaction with wages and
skill development for PT where there is “Planned OJT” may stem from a similar situation to
the conversion system for CE. Specifically, even if “planned OJT” is carried out by
corporation, in cases where not all PT are involved those left out may feel dissatisfaction.
Those PT proud to be doing “Atypical work” have high satisfaction with wages and skill
development. Not all PT are limited to doing routine work, and accordingly those who enjoy
“Atypical work” can be considered to have high satisfaction. Four additional control
variables have impact on more than two types of satisfaction: “Service work,” “Reduced
working hours,” “Interested in the nature of the work” and “No RE work available.” The
low level of satisfaction of PT employed in “Service work” indicates the issue of treatment of
part-timers in this type of work. Higher satisfaction when working hours are reduced shows
even part-timers on short hours are concerned with the length of working hours. Where
there is a sense of “lack of RE work” there is dissatisfaction with wages and skill
development. These “reluctant” PT have low satisfaction even when other conditions are
consistent, and this fact is an important factual discovery for discussing equalized and
balanced treatment. High satisfaction in wages and working hours where “interested in the
nature of the work” has been selected can be explained as the opposite of “lack of RE work.”
Whether one took the job because of interest or out of reluctance ought to have a great
influence on one’s level of satisfaction.
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Table 11: Ordered Probit Estimates of PT Satisfaction
Note: (1) and (2) are the same as Table 10
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Table 12 shows the estimation result of FFE satisfaction. “FFE ratio” has impact on
wage satisfaction. That means the quantitative increase of FFE uphold the level of wage
satisfaction. For the independent variables, the “Company emphasis on NRE skill
development dummy variable” has impact on more than two kinds of satisfaction. Of
particular interest is the fact that FFE working at responding companies emphasizing NRE
skill development had low satisfaction for wages, working hours and skill development.
This might also have a similar explanation to the CE conversion system and PT “planned
OJT.” Simply because the fact that company answers itself as “emphasizing NRE skill
development” does not necessarily mean all FFE are actually satisfied with the situation.
However, as the company’s opinion of itself as giving emphasis differs from the actual
existence of a system, it is difficult to give an accurate answer. For wages, the value of the
“responsible work” parameter is negative whereas those for “specialized work” and the “same
work as RE” are positive. This means satisfaction is low when the work is understood as
“responsible work” but high for “specialized work” and the “same work as RE.”
Additionally nine control variables have impact on two or more types of satisfaction;
variables of “junior college,” “specialized / technical work,” “managerial work,” “laboring
work,” “principal work income,” “reduced wages,” “convenient working times,” “expectation
of steady work,” and “lack of other appropriate work.” Satisfaction with wages for FFE who
answered “specialized / technical work” for their work type was low, yet the complete
opposite result appeared for the satisfaction of FFE who answered “specialized work” for the
nature of their work. This shows that the case where selecting only “specialized / technical
work” out of the ten work types is not necessarily consistent with the case where any or many
works can be selected from all four types (“responsible work,” “specialized work,” “atypical
work” and “same work as RE”) in nature of work. Using cross tabulation we find that only
13 of the 425 FFE selected “specialized / technical work” for “work type (single answer).”
In contrast 58 selected “specialized work” for “nature of work (multiple answer).” Only 10
people overlap in both “specialized / technical work” and “specialized work.” Thus, it
would seem that those doing “specialized / technical work” as their work type have low wage
satisfaction, and those conscious of the nature of their work as being “specialized work” have
a high level of satisfaction. Skill development and wage satisfaction rise the higher
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“principal work income” is, and in the case of “reduced wages” the satisfaction level for
wages, working hours and skill development falls. This shows FFE satisfaction and wages /
income to be in a clear causal relationship. What can we make of the fact that selection of
“convenient working hours” means dissatisfaction with wages and working hours? As one
explanation we can consider the possibility that “convenient working hours” was an initial
reason in taking the job of FFE but in the course of work the long hours and part-time status
may reduce the current satisfaction level. FFE who selected “expectation of steady work”
has dissatisfaction with working hours and skill development. Usually the employment
contracts of RE and suchlike have no time limits, hence they would probably mean a choice
of “steady employment.” However FFE too may have long periods of employment with
repeated renewal of their employment contracts. If this sort of situation can be expected in
advance we can expect FFE also to have the “expectation of steady work.” However, even
with steady employment promising long-term work there is dissatisfaction with working
hours and skills development. Possibly such FFE is comparing himself/herself to long-term
employment RE.
129
Table 12: Ordered Probit Estimates of FFE Satisfaction
Note: (1) and (2) are the same as Table 10
130
6. Conclusion
Changes in business performance in terms of sales volume and recurring profits did
not have a clear influence on the number of those employed as CE, TAW, PT and FFE. This
means that business performance cannot be said to quickly affect the number of NRE
employed in each employment type. However, the variables concerning business
performance as used in this document are a comparison of two points in time (three years ago
and the present), so perhaps it would not be appropriate to conclude that it is only from this
point that influence is lacking. There is a need to take into account long-term trends in
various other managerial indexes such as the capital equipment ratio and the labor’s relative
share. Also the lack of information due to data constraints on changes in each type of
employment mean that issues remain in terms of the verification of the substitutional and
complementary relationship with RE.
One factual discovery of interest in this document was the impact of the reason for
utilization. In the MHLW Survey the reasons why companies employed CE, part-timers and
TAW differed in each case. Yet when we observe the numbers employed in these forms of
employment in this document’s analysis, both “for employment adjustments” and “to reduce
labor costs” affected the CE, TAW, PT and FFE alike. When attention is paid to the fact that
employment adjustments is executed mainly for making labor costs into variable costs, in the
final state of affairs there is a high possibility that cost reduction is the primary goal of any
increases for the number of CE, TAW, PT or FFE.
On the second issue of this document a certain amount of results were gained. Firstly,
company personnel policies toward NRE may, depending on the situation, lower the level of
satisfaction. This is proved from the low level of satisfaction of NRE working at companies
with such systems as a “NRE to RE conversion system” for CE and the “planned OJT” for PT.
One background factor that can be imagined is that such company plans for the NRE do not
cover all such workers, and discontent may arise towards those particular NRE that are
eligible for such plans. Also, the results using the NREs’ own self-awareness toward the
nature of their job as a representative indicator of a qualitative change to a significant force in
the work ended up being rather mixed. Specifically, CE conscious of themselves doing
“specialized work” or the “same work as RE,” PT conscious of themselves as doing the “same
131
work as RE,” and FFE conscious of themselves as doing “responsible work” all have low
satisfaction with wages. And yet PT conscious of themselves as doing “atypical work” and
FFE conscious of themselves as doing “specialized work” or the “same work as RE” all have
high satisfaction with wages. In sum, the impact on NRE satisfaction of a qualitative change
to a significant force in the work shows itself clearly for CE, but no consistent trend can be
seen for the part-timers. Furthermore, the percentage each form of employment took up of
the total number of employees was used as a representative indicator of a quantitative change
to a significant force by NRE, but this had almost no influence on satisfaction of CE, PT or
FFE (excluding wage satisfaction of FFE). Hence, however much the number of co-workers
in the same form of employment increases (or decreases), this may have no impact on the
level of satisfaction.
Issues for the future are the need for precise estimation from the use of survey data of
even greater sample size and data integration with even more detailed company information.
132
Descriptive statistics for Table 7 and Table 8
133
Descriptive statistics for Table 10
134
Descriptive statistics for Table 11
135
Descriptive statistics for Table 12
136
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