Recruitment and Human Resource Management Policies at a Large Japanese Firm

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In this research, we use a unique personnel data of a large manufacturing firm in Japan to analyze the interactions among vertical promotion, horizontal transfer, and organizational changes of the firm. Of particular interest is to see if the substantial difference between employees with and without previous work experience in promotions can be accounted for by the systematic difference in the policy of skill formation through lateral transfers. Major findings are summarized below.(1) Employees with previous work experience tend to move across sections within a firm less frequently, which in turn results in narrower specializations in skill formation and tend to generate negative impact on promotion probability. The same tendency is found also for employees with lower level of education attainments.(2) Horizontal transfers are more frequent among younger employees but concentrated within functionally close sections, whereas, for senior workers, we find that transfers are less frequent but relative frequency of transfers across divisions increases with age.(3) Lateral transfers, especially those at younger age, significantly increase promotion probability.(4) Transfers induced by job destructions within a section significantly reduce the promotion probability.(5) We find statistically significant 'fast track' effect, i.e., we find significant negative effect on promotion probability of the number of years required for the promotion to the current rank.