There is inconsistent evidence as to how much Japan has shifted from its traditional performance management practices towards Western approaches. Japan’s aging workforce, compounded by shrinking numbers of youth, is leading to a greater reliance upon women and non-Japanese workers, represent new challenges for Japanese firms. A total of 78 interviews were conducted across multiple organizations and organizational layers to explore both policy and practices. We found evidence for an emerging dual track system, with traditional Japanese practice for permanent generalist employees, and Western performance management practices for contract specialist employees. We also categorized companies into four types, which differed in the proportions of generalists and specialists used. These types are the traditional Japanese with generalists, the Western type with specialists, and international hybrid and new Japanese firms using variable mixtures of generalists and specialists.