Compensation Practices During The United States And Japan

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“Compensation is known as one of the most complex areas of international human resource management” (Bohlander, Snell, Morris, 2016). For many years there has been a debate on the wages CEO’s in Japan versus those in the United States. It has been reported that CEO’s in Japan make one-sixth of the income of a CEO’s in the United States (Jilani, 2011). This research paper will examine the similarities and differences of compensation practices utilized in the United States and Japan. In order to truly examine the similarities’ and differences of compensation practices, the following aspects of compensation; salary and wages, job evaluation process, and benefits, will be examined. To fully understand the differences and similarities it is important to understand the history of compensation practices in both of these countries and how their current practices were adapted.
World War II also known as second world war which took place between 1939-1945, is known as one of the deadliest wars as Japan economically suffered great defeat. Following World War II several individuals were tremendously affected prompting several lawsuits filed against the Japanese Government for loss of family members, bodily injuries and loss assets (Umeda, 2008). Since the defeat of World War II, Japan has made several improvements in their compensation practices. Currently Japan compensation practice can be identified as life-term employment with a seniority based wage system (Umeda, 2008).

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