How to Manage Underperformance in Japan Without Losing People or Legal Ground | Dale Carnegie Tokyo

In Japan, incompetence isn’t a legal reason to fire someone.
Japanese courts often rule that the employer—not the employee—is at fault for poor performance, because management failed to assign the person correctly or provide adequate training. For foreign leaders, this is a shock. Yet in a country facing historic labor shortages, mastering performance management through communication is now a critical leadership skill.

Verify whether expectations were ever clearly defined. Vague KPIs or inconsistent communication often make the leader—not the employee—the weak link. Gather objective, documented data before initiating a discussion.

Every employee does something right. Start by recognizing what’s working before addressing what isn’t. In Japan’s conscientious workforce, appreciation builds psychological safety and opens the door to constructive dialogue.

Focus on the behavior or result, not the person—“pay the ball, not the man.”
Explain where performance deviates from expectations and ask for their perspective. Sometimes it’s the first time they’ve heard there’s a problem.

If the employee argues or deflects, restate expectations and potential consequences. Stay factual, avoid emotion, and clarify that improvement—not punishment—is the goal.

Japan’s job market is red-hot; mid-career mobility is no longer taboo.
Underperformers can easily find another job, which paradoxically makes fair performance management easier—courts are less hostile when employees have options.

Facing possible termination is demoralizing. If the employee accepts responsibility, shift to rebuilding confidence. A sincere leader helps them regain motivation.

Provide coaching or training to bridge skills gaps. This signals genuine commitment to their success and helps retain valuable staff.

Japan’s population decline means “hire-and-fire” is obsolete.
Leaders must develop underperformers, not discard them. That requires advanced communication, empathy, and consistency.

We equip leaders with proven frameworks for performance conversations, coaching, and motivation through our Leadership Training, Executive Coaching, and Communication Skills Programs.
With over 100 years globally and 60 years in Tokyo, we help leaders turn underperformance into growth.

• In Japan, poor performance ≠ firing grounds.

• Clear KPIs, evidence, and empathy protect both leader and company.

• Praise first, then address performance gaps constructively.

• Rebuild confidence with coaching and consistent support.

• Retain and develop talent—the new competitive advantage.

Request a Free Consultation to learn how Dale Carnegie Tokyo can help your leaders manage performance and motivation effectively in Japan.

Founded in 1912, Dale Carnegie Training develops leaders worldwide through leadership, communication, sales, and coaching programs.
Established in Tokyo in 1963, Dale Carnegie Tokyo helps executives lead with trust, respect, and clarity in Japan’s evolving workplace.