Fascination with Japanese employment and remuneration systems arises from the fact that both the structure and the performance of the labour market have been regarded as exhibiting significant features that differ radically from those of other advanced industrial economies. Not only have perceived differences been of interest in their own right but they have also provided distinctive labour market contrasts against which international comparative studies have been more effectively focused. This has been apparent in the growth of comparative empirical work on Japan, Europe, the United States and elsewhere. Asking why such-and-such a country's employment and pay experiences contrast with comparable Japanese practices and outcomes, given known institutional and organisational differences, has provided added insight into and understanding of labour market behaviour. Certainly, such approaches can achieve significant added value compared with (the preponderance of) single-country studies. Concomitantly, as particularly exemplied in the work of Aoki (1984, 1988), major theoretical gains in the understanding of human capital investment, principal–agent relationships, strategic bargaining, firms' optimising behaviour and industrial organisation have stemmed from international comparative settings that include and highlight Japanese practices.

But are work and pay differences more apparent than real? There is a persistent view that, in fundamental respects, Japanese industrial relations, employment and work incentive systems have the appearance of uniqueness at first levels of analysis, whereas, when examined in greater depth, they amount essentially to common experience, albeit ‘packaged’ in a somewhat different way. A particularly interesting example in this respect was reported in chapter 1.