It’s not about losing face. It is the fact that seishain, or permanent employees are very hard to fire. The company needs to keep a record of the employee’s failures.

In addition, the company needs to implement and execute improvement plans. The results of those need to be reviewed. The next plan has to be implemented. And so on.

Only when they fail to show improvement a certain number of times (I don’t know exactly) can they be legally fired. You can’t just fire someone like in the U.S. style of at will employment. That would be a lawsuit waiting to happen.

So it is easier and cheaper to “persuade” the employee to resign.

However, this terrible behavior is considered to be power harassment, and all large companies now have ethics hotlines. Also, companies have to provide annual trainings on issues like this. So, I hope this practice is decreasing.