Developing Skills and Pay through Career Ladders: Lessons from Japanese and U.S. Companies

by Clair Brown, Michael Reich



U.S. companies' adaptations of Japanese training practices typically have been concerned with increasing formal classroom training for incumbent workers. Research in large companies in Japan and the U.S. indicates that Japanese training systems primarily take the form of structured on-the-job training, embedded in long career ladders that simultaneously increase skill and pay for Japanese workers over their careers. Meanwhile, training in U.S. companies tends to be informal and sporadic and is embedded in short job ladders. U.S. firms can improve the efficiency of their training for non-exempt employees by providing structured on-the-job-training and creating career ladders that improve skills and pay over their employees' tenure. Such reforms can increase productivity, lengthen careers and increase pay for front-line workers without relying upon employment security policies or massive increases in firm or government expenditures.

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