Retirement Allowance System and Organizational Commitment—A Case Study of a Japanese Major Electric Appliance Manufacturer

The main purpose of this paper is to verify the changes in Japanese-style management and organization, especially in lifetime employment, using organizational commitment as a variable. Until now, most Japanese companies have adopted a retirement allowance system (RAS) in order to retain their core workers and strengthen their loyalty (e.g. Hazama, 1963). This paper focuses on the change of RAS. Many Japanese employees receive a large lump sum of money when they retire, but only if they have worked at one company for a long period of time. In recent years, however, some companies have begun to use what is called an "advance payment of retirement allowance system (APS)" through which they pay their employees money equivalent to the retirement allowance while they are working (e.g. Nagano, 1997). In this paper, we investigated a Japanese company that adopted this system. We conducted e-mail survey about organizational commitment and APS for 1,000 engineers through a LAN. Ultimately, 711 usable questionnaires (71.1%) were returned to us. Employee commitment to the organization was used as the index for analysis. The results of this survey made clear that selecting the APS had an impact on employee attitude and that the organizational commitment of those who chose the APS was weaker than those who did not. Our findings contribute to a proof of a connection between HRM practices and actual role behaviors.