TOYOTA Human Resources Management

Practices

By: Maged Madeh MOHAMMED

• TOYOTA Briefly• History• Mission and Vision• BUSINESS OBJECTIVES OF TOYOTA • Competition Strategy• Human Resource Management in TOYOTA • HR activities at TOYOTA • Recruitment process • Performance Appraisal • Compensation Benefit• Training and development of TOYOTA

Index

TOYOTA Briefly:

• Company name : TOYOTA • Industry : Car Manfacture • Headquarters : Tokoyo, Japan• Company type : Multinational Company• Key persons : Takeshi Uchiyamada, (chairman), Akio Toyoda(CEO)• Products : Avalon, Camry, Corolla, Yaris, lexus , land cruiser,……..• Employees : 338,875 (as of March 31, 2014)

Toyota History• Brief History The establishment of the Toyota

• Sometimes we'd never ask - ask in our minds, how its history to Toyota automotive company can grow up big and as famous as this ini. This isa brief review of the history of the Toyota.

• In April 1935, 75 years ago he laid the foundation of Toyota, namely Sakichi Toyoda with his son, Kiichiro Toyoda automotive engine successfully completed the first prototype, named Type A.

• Type A machine which completed the process in April 1935, the cost of development is only obtained from small households, which was pioneered by Sakichi Toyoda, a yarn spinner tool. Thanks to this dynasty, Toyoda looms could realize his dream of making cars.

• A year later or rather April 1936, Kiichiro began mass-producing the first car, with the name A1. Not only cars, in the same month also produced a mini truck with the nickname G1.

• Apparently response to the public from Toyoda product was beyond expectations. Both the first automotive products get good response from the community. Armed with the positive progress that is, Kiichiro had founded the Toyota Motor Corporation Ltd., on August 28, 1937.

• Kiichiro deliberately replacing the letter 'D' on Toyoda with 'T', because he wanted a name is easier said Toyota pronunciation. With an easy pronunciation, then Kiichiro hope that Toyota will easily attached to the minds of consumers.

• Kiichiro confidence now become a reality. Toyota became the world's largest automotive manufacturer with a variety of products in various countries.

• It turned out to achieve the success it is today a long road winding nan that unpleasant also been adopted by the founder of Toyota.

• To achieve success requires knowledge, enthusiasm, and ingenuity in seeing the opportunity, and also the most important blessing of God Almighty

Toyota History

Mission and Vision• Vision:• “To be the most respected and successful enterprise, delight customers with a wide range of

products and solutions in the automobile industry with the best people and best technology.”• The most respected.• The most successful.• Delighting customers.• Wide range of products.• The best people.• The best technology.• Mission:• Mission of Toyota is to provide safe & sound journey. Toyota is developing various new

technologies from the perspective of energy saving and diversifying energy sources. Environment has been first and most important issue in priorities of Toyota and working toward creating a prosperous society and clean world.

BUSINESS OBJECTIVES OF TOYOTA1.The manufacture, sale, leasing and repair of motor vehicles, industrial vehicles, ships, aircraft, other transportation machinery and apparatus, space machinery and apparatus, and parts thereof;

2. The manufacture, sale, leasing and repair of industrial machinery and apparatus and other general machinery and apparatus, and parts thereof;

3. The manufacture, sale, leasing and repair of electrical machinery and apparatus, and parts thereof;

4. The manufacture, sale, leasing and repair of measuring machinery and apparatus, and medical machinery and apparatus, and parts thereof;

5. The manufacture and sale of ceramics and products of synthetic resins, and materials thereof;

6. The manufacture, sale and repair of construction materials and equipment, furnishings and fixtures for residential buildings;

7. The planning, designing, supervision, execution and undertaking of construction works, civil engineering works, land development, urban development and regional development;

8. The sale, purchase, leasing, brokerage and management of real estate;

9. The service of information processing, information communications and information supply, and the development, sale and leasing of software;

10. The design and development of product sales systems that utilize networks such as the Internet; sales, leasing, maintenance of computers included within such systems, and sales of products by utilizing such systems;

11. The inland transportation, marine transportation, air transportation, stevedoring, warehousing and tourism businesses;

12. The printing, publishing, advertising and publicity, general leasing, security and workers dispatch businesses;

13. The credit card operations, purchase and sale of securities, investment consulting, investment trust operation, and other financial services;

14. The operation and management of such facilities as parking lots, showrooms, educational facilities, medical care facilities, sports facilities, marinas, airfields, food and drink stands and restaurants, lodging facilities, retail stores and others;

15. The non-life insurance agency business and life insurance agency business;

16. The production and processing by using biotechnology of agricultural products including trees, and the sale of such products;

17. The sale of goods related to each of the preceding items and mineral oil;

18. The conducting of engineering, consulting, invention and research relating to each of the preceding items and the utilization of such invention and research; and

19. Any businesses incidental to or related to any of the preceding items.

BUSINESS OBJECTIVES OF TOYOTA

Competition Strategy 1. Cost Leadership In cost leadership, a firm sets out to become the low cost producer in its industry. The sources of cost advantage are varied and depend on the structure of the industry. They may include the pursuit of economies of scale, proprietary technology, preferential access to raw materials and other factors. A low cost producer must find and exploit all sources of cost advantage. if a firm can achieve and sustain overall cost leadership, then it will be an above average performer in its industry, provided it can command prices at or near the industry average. 2. Differentiation In a differentiation strategy a firm seeks to be unique in its industry along some dimensions that are widely valued by buyers. It selects one or more attributes that many buyers in an industry perceive as important, and uniquely positions itself to meet those needs. It is rewarded for its uniqueness with a premium price. 3. Focus The generic strategy of focus rests on the choice of a narrow competitive scope within an industry. The focuser selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

Human Resource Management in TOYOTA• "Because people make our automobiles, nothing gets started until we train

and educate our people." As seen in these words, which were expressed by Honorary Advisor Eiji Toyoda, Toyota seeks to develop human resources through the activity of making things. • Toyota believes that the development of human resources requires the

handing down of values and perspectives. In conjunction with the geographic expansion of business and the growth of business areas, undertaking global actions for the development of human resources has become a priority issue. Toyota is building both tangible (a new learning facility) and intangible (course content) structures relating to team member development that ensures a secure and steady flow of qualified human resources to conduct Toyota's global business in the 21st century.

HR activities at TOYOTA

• Basic Concept of Human Resource Development• We are working to develop human resources by implementing an

educational program based on OJT (on-the-job-training), which is crucial for the development and generational transfer of excellent monozukuri (manufacturing), with the five Toyota Way keywords as a fundamental basis.

Recruitment Process:

1. Complete on-line application2. On-line assessment (Aptitude Tests)3. Assessment Centre at Toyota4. Final Interview5. Conditional Offer of Employment6. Final Employment Checks7. Unconditional Offer of Employment8. Open Day for New Recruits at Toyota9. Commence Employment

Performance Appraisal

• Toyota appraises its employees three times a year: • once for promotion and wage increases and twice for bonus payments where

there is a detailed evaluation standard followed (Kono, 2001). To improve employee performance, intensive training of management and production personnel is enhanced. The company wants to develop personnel capable of functioning in international business environments which prompted the establishment of the Toyota Institute, spearheaded by Toyota President, Fujio Cho (Kono, 2001). Moreover, the Global Knowledge Center at the University of Toyota which is an educational facility of the company in the US was established to promote the Toyota Way in sales and marketing. In addition, there are like establishments such as the Toyota Academy in Europe, Thailand and South Africa which aim to develop Toyota employees (Cho, F 2004). With the new education facilities Toyota has established, more and more employees are equipped with the skills they need to cope with the demands of their jobs in the company.

Compensation Benefit:

• Toyota Motor Corporation has never faced an issue with their employee compensation and benefits packages. Part of their philosophy has been people are their greatest asset and they treat them as such by paying them a good salary and empowering their employees. How can they attract top talent? Well even the top executives at Toyota do not make a seven figure salary. Wages are determined with a fair market value in mind, but it is the “me” versus “we” attitude that drives Toyota's success.

How Toyota motivates its workers

• i. Agreed to guarantee lifetime employment for employees

• ii. Developed a system of internal promotion• 1. enabled workers to rise within the hierarchy

• a. casual workers could receive permanent contracts• b. could go on to become team leaders, foremen and even managers.

• 2. worker can become a sort of minor manager

• iii. Provides a pay scale based on three components of company profitability• 1. One bonus based on seniority - not job classification• 2. Another bonus payment related to team’s performance• 3. Additional bonus payment allocated to worker’s merit• 4. Wage would increase from 85% to 115% from amount allocated

• In return, Toyota employees are constantly committed to making improvements rather than just responding to problem

Compensation Benefit:

GM had:• Excessive wage costs for its unionized workers.• Pension crisis with salaried and unionized retirees.• Uncompetitive factories with low-quality products.Toyota had:• Lower compensation costs due to young work force.• A weak currency in Japan.• A lucky break from high oil prices in those years.As a result:• Toyota won.

Compensation Benefit:

Our suggested structure to pay employees

Common to all types of jobs• Basic pay- depend on the class/grade where a employee is positioned.

• Should be based on:nature of work• Physical work involved.• Mental work involved.• Knowledge & technical skills involved.• Volume of Duties & responsibilities.• Nature & no of Task/activities contained.• Level of Skills to be exhibited in the work• Burden on employee & complexity of job to do it.• on par with other Similar org’s pay structure for same job.• On par with cost of living/money value in that area/country.• As per latest pay commissions/govt guidelines.

Compensation Benefit:

Add value to the organization by developing your people and partners

• Grow leaders

• Develop exceptional people and teams

• Respect your extended network of partners and suppliers by challenging them and helping them.

Training and development of TOYOTA

Higher education• Toyota established the Toyota Technological Institute in 1981, as Sakichi

Toyoda

• It founded the Toyota Technological Institute at Chicago in 2003

• Supporter of-

- Toyota Youth for Understanding Summer Exchange Scholarship Program

-Toyota Community Scholars

-contributed to a number of local education

Training and development of TOYOTA

Training and development of TOYOTA • Training is essential to the on-going development of individuals and supporting

improved company performance.• From day one, On- the-Job Development (OJD) supports individuals to learn their own

jobs to a level of expertise where they can support the development of others.• All employees are multi-skilled and so broaden their knowledge and optimise

production flexibility.• Also, employees are involved directly in running the Toyota Production System. They

are given the responsibility for the quality of their own role in the production process, passing on only good work to the next stage on the line which they see as their ‘customer’.

• Each occupational classification within the company has a structured development path with clearly identified courses to develop employees’ skills and provide a pathway to the next level within the company.

• Courses offered are a combination of Toyota Way Development, Technical Development and Management Development. The company offers financial support for employees who wish to complete external education to support ‘life long learning’.

• To provide a 'learning culture' where individual members own and drive their own development. Our Leaders actively engage in this continuous process through 'on-the-job' coaching and mentoring.

We aim to provide clear career pathways with the appropriate balance of Toyota, technical and personal skills development, enabling each Member to maximise their capability.

In addition, we endeavour to provide the appropriate academic rigour at each stage of their career, along with formal recognition of skills gained and qualifications acquired.

Supporting the wider community is also important. Schools, businesses and charitable causes benefit through the provision and sharing of skills by our Members, enabling us to demonstrate our commitment of 'lifelong learning' to our stakeholders.

Training and development of TOYOTA

By: Maged Madeh MOHAMMED