Basically, banishment rooms are departments where [large Japanese] companies transfer surplus employees and give them menial or useless tasks or even nothing to do until they become depressed or disheartened enough to quit on their own, thus not getting full benefits, unlike if they were actually let go.From here.
I know from first hand accounts that U.S. government agencies, particularly in the District of Columbia and its vicinity, does the same thing.
In both cases, security of employee tenure, by virtue of civil service laws in the U.S., and by strong social and business norms to some extent in Japan, making firing employees very difficult leading to human resources management policies like these. In smaller entities, the cost of carrying a bad employee is to high proportionately to allow for the use of such costly and wasteful alternatives.
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