By Jon Miller | Post Date: August 31, 2008 11:27 AM | Comments: 1
Doing some more research into the "voluntary" overtime issue as a management practice in Japan, we found that American fast food giant McDonald's was recently hit with the same ruling as Toyota and must now pay their managers for overtime worked. Specifically, McDonald’s Japan was ordered by the Tokyo District Court to pay just over 7.5 million yen in overtime pay to a store manager in January of this year. The court rejected McDonald’s argument that store managers, being in management positions, were not entitled to overtime pay. Having "manager" in the title is no longer enough to make you exempt from fair labor standards laws in Japan.
Spending $11,111 to Retain Talent
Earlier this year we commented on Toyota's announcement that it would start paying for ‘voluntary’ overtime conducted for off-hours kaizen activities, and the seeming dissonance between this and their core value of respect for people. On the other hand Toyota made a bold thumb-nose at Wall Street while sticking to their principles by recently choosing to spend $50 million in not laying off workers in their factories idled by the slowing demand for vehicles in North America. Not coincidentally, this was a great PR move.
Worker as Samurai
This is a demonstration of one cultural bias of Japanese companies is seeing a broader view of society as stakeholders and aiming to do good by them, rather than putting shareholders first. In theory this elevates the consciousness of the entire workforce and creates alignment toward a common goal, making personal sacrifices seem less so. But as the cultures change, individualism increases and young people become disaffected with the myth of the worker as samurai serving their lord in the name of the industrial and economic development of their country, Japanese firms are finding it harder to ask and receive the type of voluntary dedication towards kaizen. In the simplest and oldest definition of the word, "samurai" means "one who serves" and they served the feudal lord, who in turn looked after the samurai and their families. One can imagine that the bright and yellow food service brand inspires samurai loyalty even less.
Exempt from FLSA or Not, Nonexempt from Kaizen
This issue of this policy of voluntary kaizen or unpaid overtime for the sake of improving company performance raises several questions. The first and most obvious one is whether kaizen activity should be voluntary, strictly paid or some combination of the two? We should be clear that kaizen should be mandatory and never voluntary to everyone in an organization trying to be lean. There is no good reason for not trying to improve one's lot. This is quite different from saying that voluntary equals unpaid, however. To be fair, Toyota and other companies that have thriving kaizen systems including suggestion programs, jishuken activities and QC circles do pay directly for kaizen ideas as well as give group rewards to promote these activities. Some of these kaizen activities are done in the course of work, and others during off-hours. It is this latter category that can be subject to misunderstanding or abuse.
The Success Environment for Kaizen
We could take the cynical view that the culture of kaizen that is part of TPS is only achievable within Japanese workplace culture that existed between 1950 and 1980-something. This "dirty secret" view of Toyota's success implies that their employees have been putting in countless extra hours of kaizen and QC circle activities, in a few cases to the point of death by overwork, in exchange for the promise of job security and fair treatment. This dedication to getting the job done regardless of the hours was a common sense way of working for the generation brought up in the "catch up and surpass America" post-war growth years in Japan. But it is increasingly not acceptable to or desired by the workforce of many developed countries. It is a serious question to those of us seeking to achieve similar success to Toyota's kaizen efforts: what sort of business environment and workforce culture is required to maintain full engagement in kaizen over decades?
A Sense of Urgency
We are All Knowledge Workers
These are just questions raised by the voluntary kaizen policy at Toyota that has been in the news, not necessarily answers to these questions. It all comes back to "How do we make the act of doing things better, better?"Comments are moderated to filter spam and inappropriate content. There may be a delay before your comment is published.