C-2023-001-3WE

1. “Employees,” “work style,” and job satisfaction

The theme of the 2023 CSR White Paper is “work styles.” In this article from the white paper, we will discuss corporate purpose and job satisfaction from the perspective of one of the author’s specialist areas: corporate ethics, based on knowledge from human resource management in business administration, which is an area that deals with human issues, with the aim to provide a new perspective for companies when responding to their employees as part of their corporate social responsibility (CSR).

To this end, firstly we will reflect on how employees, who are the main actors when it comes to “work styles” and “job satisfaction,” and their roles have been considered within corporate management, and summarize the relationship between “work styles” and “job satisfaction.” In this article, the term “employee” refers to all individuals who work as members of the company organization, and we will not delve into differences between employment forms or classes. In addition, the organizations discussed in this paper are assumed to be for profit corporations, which are represented by the “C” in “CSR.” However, we believe that some points of discussion raised here will also be applicable for other types of corporations, such as intermediate corporations and non-profit corporations.

(1) Employees as the “people” in an organization

Now, in managing a corporation which pursues profit, it goes without saying that management of the people within the organization, namely its employees, is important. Regarding the management of these people, Kobe University’s Professor Kanbayashi, who specializes in human resource management theory, notes that there was a shift from what was previously called personal/labor management up until around 1990, to the idea of human resource management (HRM), which originated primarily in the United States and has since become mainstream in Japan. These two ideas can be compared as shown in Figure 1 (Kanbayashi 2016).

 

Figure 1: From personal/labor management to human resource management 

	Personal/labor management (until around 1990)	Human resource management (from around 1990)
Connection with corporate strategy	Weak	Linked to corporate strategy
Independence of activity	Passive	Active/Independent
Contract to focus on	Legal employment contracts only	Emphasis on psychological contracts in addition to legal contracts
Employee learning	Only recognizes humans as a cost	Perception of people as the source of sustainable competitive advantage with emphasis on learning effects
Motivation	Understands the motivation of the entire group as a whole	Focusing on individual motivation and aiming to achieve organizational goals

Source: Created based on Norio Kanbayashi (2016),  Human Resources Management Chuokeizai-sha

 

In post-war Japan, the management of employment, working hours, wages, safety and health, etc. came to be called personal management, while measures for trade unions and handling of complaints from employees came to be called labor management, with personal and labor management being considered a general term for these. This term mainly represents a passive mindset of preventing employees from losing motivation and dealing with dissatisfaction, and rather than focusing on individual employees, appears to emphasize the collective management of workers as a group.

In contrast to the above, human resource management is strongly linked to company-wide management strategy and is positioned at the center of proactive and independent strategic management. Of course, this does not mean that the concepts, including personal management and labor management, that personal and labor management had been responsible for have disappeared. In other words, processes such as the management of working hours and wages started to be discussed in a more integrated and strategic manner, including their effects on employee motivation and learning, and connection to outcomes such as customer satisfaction and innovation. The outcomes of these discussions were then reflected in and developed into concrete management measures. Furthermore, in recent years in Japan, the term human capital management has been proposed. If the term human resource management is understood to be as described above, knowledge gained through this human resource management can also make significant contribution in this regard.

The theoretical basis for human resource management comes from results within the Organizational Behavior (OB) discipline, which explores human behavior within organizations through the application of psychology. Against this background, human resource management places more emphasis on psychological contracts (implicit mutual psychological expectations between managers and employees) than contracts in the economic or legal sense, and focuses on the motivation of individuals rather than the group as a whole. There is also the aspect of “people” within organizations seeking economic self-interest. Furthermore, these “people” are considered able to learn and grow through various settings and experiences, possessing complexity and the social desire to cooperate with others and be recognized, along with the desire for self-actualization.

While the way we think about “people” in an organization is called the “humanity model” or the “assumptions of human nature,” current human resource management relies on a view of humanity called the “complex man.” This is based on the view that human beings, as mentioned above, are “complex beings who have a variety of desires and can change them depending on their stage in life.” Thus, we should understand that this humanity model or view is based on the idea that the “people” in an organization are not motivated solely by economic conditions such as wages and working hours (although these are important elements, they do not constitute all conditions).

(2) Two meanings of “work style”

In this way, human resource management focuses on the motivation to “work” and its underlying desires, and a wealth of research has been carried out on this, with outcomes that are highly informative for confirming the scope of the term “work style” and reaffirming the position of “job satisfaction.” For this reason, we shall take a look at (the somewhat classic) Herzberg’s two-factor theory, which explores factors motivating employees.

American clinical psychologist Frederick Herzberg surveyed over 1,000 working individuals and asked them to describe their experiences of dissatisfaction and satisfaction at work. As a result, factors that can lead to employee dissatisfaction and factors that can lead to employee satisfaction were identified, and the two-factor theory was proposed (Herzberg 1968). The former factors were termed hygiene factors while the latter factors were termed motivational factors, with each listed as shown in Figure 2.

 

Figure 2. Hygiene factors and motivation factors (two-factor theory)

Hygiene factors	Motivation factors
・Corporate management policy ・Quality of management ・Salary ・Physical working conditions ・Interpersonal relations ・Job guarantee	・Opportunity for advancement ・The work itself ・Personal growth opportunities ・Achievement ・Award ・Responsibility

Source: Created by the author based on Herzberg, F. (1968), “One more time：How do you motivate employees?” Harvard Business Review 46, p.57

 

Based on the results of his research, Herzberg concluded that the opposite of “dissatisfied” was “no dissatisfaction,” and the opposite of “satisfied” was “no satisfaction.” Factors that lead to job satisfaction (motivating factors) are different from factors that lead to job dissatisfaction (hygiene factors) and eliminating the factors that lead to dissatisfaction does not lead to satisfaction. According to Herzberg, improving salary and physical working conditions can alleviate dissatisfaction, but do not lead to a motivation to work, and therefore, factors such as accomplishment, recognition, responsibility, growth, and the work itself should be focused on in order to increase motivation to work.

Although Herzberg’s two-factor theory has also been criticized, it has been widely accepted and is still well-known throughout the business world, influencing the way in which “people” are considered in organizations. If we replace this framework of hygiene factors and motivational factors with more plain Japanese words relating to “work style,” we can use the terms “ease of work” and “job satisfaction” for the contrasted factors. Furthermore, using the “complex man” mentioned above, we can summarize and consider this point as follows. When trying to improve or reform the “work style” of employees, that is, the “people” in an organization, it is important to focus not only on their “ease of work,” relating to the working environment and economic conditions in a broad sense, but also on their “job satisfaction,” including achievements, growth through work, and the work itself. Here, “ease of work” is the aspect relating to hygiene factors, while “job satisfaction” is the aspect relating to motivation factors. Only when these two aspects come together can employees’ “well-being through work” be realized.

Of course, issues such as working hours, working environment, appropriate wages, and harassment, which are hygiene factors (factors that cause dissatisfaction) and in extreme cases concern human safety and survival, should be promptly addressed and resolved. However, when it comes to improving and reforming “work styles,” it is necessary to pay attention not only to economic and conditional aspects but also to psychological aspects, and if possible, to put equal emphasis on them. In other words, this can lead to respecting employees as stakeholders who are “people” with hearts, while at the same time, from the perspective of managing a for-profit company, directly lead to producing “results” in terms of achievements, profits, and corporate value etc.   

Based on the summary and ideas above, the next section will focus on employees’ “job satisfaction” and examine the factors that can create this value.

2．Job satisfaction and the sense of meaning

(1) Knowledge of psychological well-being

In 1. (2), we stated that employees’ “well-being through work” can only be achieved when “ease of work” and “job satisfaction” are both achieved. The concept of well-being has recently been attracting attention in various fields including CSR, and knowledge surrounding a concept called psychological well-being is also being accumulated in the psychology discipline. Furthermore, a new discipline called positive psychology has emerged, which aims towards “creating a happy state” rather than to “eliminating a sick state.”

Regarding psychological well-being, there is a method of thinking that organizes and understands well-being based on the framework of hedonia and eudaimonia, two categories of happiness presented by the ancient Greek philosopher Aristotle (Ryan and Deci 2001). Simply put, hedonia is a temporary sense of comfort and pleasure, and eudaimonia refers to the realization of “virtue” based on a rationality unique to humans. Well-being based on these frameworks can be defined as a state where one feels meaning and significance in life through growth and accomplishment.

According to American psychologist Martin Seligman, a proponent of positive psychology, (psychological) well-being, as shown in Figure 3, has five elements: “positive emotions,” “engagement,” “meaning,” “achievement,” and “relationships (with others).” (Seligman 2011).

 

Figure 3. Five elements of well-being (according to Seligman)

Positive emotions	Things that make a person feel “pleasant” such as enjoyment, joy, ecstasy, warmth, and comfort.
Engagement	A state of immersion (a flow state) in which a person is so absorbed in their work that they forget the time.
Meaning	The feeling or (objective) state of belonging to and serving something that a person believes is greater than his/herself.
Achievement	A “life of accomplishment” where a person accumulates temporary accomplishments, and accomplishments for the sake of accomplishment.
Relationships	Positive and good relationships with others.

Source: Created by the author based on Seligman, M. E. P. (2011), Flourish：A New Understanding of Happiness and Well-Being：and How to Achieve Them, Nicholas Brealey Publishing (Seligman, M. E. P. (2014), Pojitybu shinri gaku no chosen: “kofuku” kara “jizokuteki kofuku” e, translated and supervised by Kaori Uno, Discover 21)

(2) Sense of meaning in work

Based on these findings, we could say that “ease of work,” one aspect of happiness through work (well-being), has a higher affinity with hedonia, and that another aspect, “job satisfaction,” has a higher affinity with eudaimonia. Regarding the latter, “job satisfaction,” it is understood that “meaning and significance” are important along with other factors such as growth and achievement. This sense of meaning and significance in work is expressed in English as the meaningfulness of work, or meaningful work, and there are active debates on this in Europe and America. This concept can be translated into Japanese as “仕事の有意味感 (meaningfulness of work).”

The idea that finding meaning and significance in ones work leads to “job satisfaction” is highly convincing, but when do we consider work meaningful? From a management perspective, what kind of environment can be created to produce meaningfulness of work in employees?

Regarding this perspective, nearly 40 factors have already been identified in Europe and the United States, and these are broadly categorized into “personal factors,” “factors related to the job itself,” “organizational factors,” and “social factors.” Additionally, the author analyzed data from multiple surveys conducted in Japan, concluding that the state of the organizational culture influences Japanese employees’ sense of meaningfulness of work. Specifically, concepts of other-orientedness and prosociality, or compassion and contribution, are key to a sense of meaningfulness. A sense of meaningfulness of work is produced in employees, who will then be led to job satisfaction, through an organizational culture that emphasizes not only consideration for and sensitivity to people within the company, but also contributions and responsibilities to a wide range of people outside the company, and a workplace where employees can feel that their work has an impact on and is useful to others outside the company is also a factor. In contrast to the sense of meaningfulness in Europe and the United States, which is closely related to the concept of so-called self-actualization, in Japan a sense of contributing to others is viewed as important.

This concept of business activities with people outside the company in mind, was also expressed in the old merchant philosophy of prosperous coexistence among sellers, buyers, and the public, and is today considered to be similar to the management philosophy of companies. However, it is said that the management philosophy of Japanese companies has changed in the post-war period. In the following section, we would like to conclude this paper by looking back at the evolution of management philosophy and examining its relationship with corporate purpose and job satisfaction.

3. Corporate purpose and job satisfaction

(1) Management philosophy of Japanese companies

There are several comprehensive surveys and studies on the management philosophy of Japanese companies, and by looking at these, we can trace its transition. These studies discuss the idea that a management philosophy must combine two functions: the “principle of internal integration” and the “principle of social adaptation.” The former is the idea that the spirit and lessons of the founder and successive managers are reflected in decision-making as the “heart” of the company, unifying the vision of the people within the organization and forming a sense of unity. The latter is the principle of adapting to the times and changes in the environment, and remaining consistent with social values to gain support and sympathy from people. Furthermore, specific forms of these can be categorized into the following three types: (1) the “self-discipline type,” which illustrates the manager’s own attitude and example for successors; (2) the “normative type,” which aims to lead and manage employees within the company; and (3) the “policy-oriented type,” which communicates a company’s management strategies and policies not only within the company but also externally to society (Toba and Asano 1984).

Based on this summary, changes in management philosophy from the post-war period to recent years can be outlined as follows.

Firstly, the management philosophy of Japanese companies before the 1960s often fell under the “self-disciplined type,” which contrasted (at the time) with American companies that often featured the “policy-oriented type.” However, from the 1960s to the 1980s, elements indicating employee behavior such as “harmony” and “honesty” were incorporated, and the system shifted towards the “normative type.” Then, during the 1990s, external concepts such as “improving customer satisfaction” and “coexistence with society” began to be included in management philosophy, shifting it towards the “policy type,” and from the 2000s onwards, concepts relevant to the idea of “coexistence with society” became more important than “improving customer satisfaction” (Nomura 1999, Yokokawa 2010).

Furthermore, according to a survey conducted on Japanese companies in 2010, out of the two functions required as a part of management philosophy as mentioned above, it was confirmed that functions included in the “principle of social adaptation,” such as “clarification of the direction of corporate management,” “clarification of the company’s significance of existence in society,” and  “improvement of awareness of social responsibility” were working. As a result of this analysis, it has been pointed out that “companies that emphasize ‘coexistence with society’ as their philosophy are likely to have a relationship where they have clarified the significance of their existence in society” (Yokokawa 2010).

(2) Considering based on the relationship between purpose and means

The following findings emerge from these surveys and studies. Today’s “management philosophy” actually goes by various names, we can assume that these “philosophies” have undergone the changes described above and reached the present day. If this is the case, Japanese companies today have already (for a relatively long time) placed emphasis on coexistence with society, the way in which they exist within it, and the responsibilities they should fulfil, while also expressing these externally and adopting them as guidelines for their organizations. Today’s Japanese companies already place emphasis on the specific meaning of their companies’ existence and whether to fulfil their responsibility under the principle of “coexistence with society,” and have also expressed this externally and used it as a guideline for their organizations. Using this as a guideline also means giving it the highest priority as a standard for decision-making and actions taken. For for-profit companies that are the subject of this paper, which of these will (or should) be prioritized: “coexistence with society” or “pursuing one’s own interests (such as by increasing profits and corporate value)”? In other words, which should be positioned as their purpose and which as their means?

Since the ultimate purpose of a for-profit company is to pursue “profit,” one way of thinking suggests to “coexist with society” is a means to this end. Putting it another way, because “coexistence with society” has advantages that lead to profits (or there are disadvantages to not coexisting with society), companies take appropriate actions. However, this approach supports the idea that companies do not have to take actions that are necessary for society but do not lead to their own “benefit.”

Another way of thinking about this is that the purpose-means relationship must be defined, to pursue the company’s own “benefits” and continue to “coexist with society,” or in other words, to continue to exist. Here again, a company’s “profit” is positioned as something that should be actively created, but beyond this, society is also seen as an object to which companies should coexist and contribute.

(3) Company’s purpose and job satisfaction

In the first half of this article, we explained that there are two aspects to an employee’s “work style,” which are their “ease of work” and “job satisfaction.” In addition, we also discussed that in order to create a sense of meaningfulness within work, which is an important element for “job satisfaction,” it is necessary, especially for Japanese employees, to feel that their work is useful to the people in the society at large and to feel a sense of contributing to others in a prosocial manner. Refocusing on management philosophy that emphasizes “coexistence with society,” which has already been adopted by Japanese companies, and business activities that continue to fulfill this social responsibility in daily business operations may actually be key to achieving this. At the same time, it may be necessary to resolve the relationship between this and the pursuit of “profit.”

One important aspect is whether employees actually feel like their daily work connects and contributes to society in some way. Of course, there are things that a company as an organizational body can and should tackle, and departments/divisions and activities are necessary to promote these. However, the larger an organization becomes, the more likely it is that a distance forms between these activities and general employees. In addition to “CSR activities undertaken by companies and organizations as a whole,” fostering a work environment and culture in which employees can perceive that “their daily work is of use to society” is desirable.

To this end, it is necessary that people’s perception of the meaning of their work is consistent with the purpose of their company. If a company’s ultimate purpose is to coexist with and contribute to society, then the perception that one’s work is contributing to society will be consistent with this. In this case, there is a shared purpose between the company and the employee, which creates engagement and leads to job satisfaction. However, if “coexistence with society” is a means to an end, then the feeling that a person’s work is contributing to society is also ultimately a means. “Conducting good work for our customers and society based on our philosophy, and even the existence of those of us doing this work, are ultimately just a means.” When employees have this feeling, any “management philosophy” will be regarded as a formality and will become a mere shell. In addition, the relationship between the company and its employees will become nothing more than a legal contract (and no further contribution or sense of belonging will be created).

So far, we have used the term “society,” but from the perspective of corporate social responsibility (CSR), the concrete image of “society” refers to “stakeholders.” Employees are also (important) stakeholders for companies. Achieving “work styles” that lead to happiness for employees, and implementing improvements and reforms toward that end, are in themselves a corporate social responsibility. This is also likely to be one of the purposes for a company, as indicated by today’s “management philosophy.”

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References

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