Toyota Motors Co. is one of the leading automobile manufacturing firms that operate across six continents. The average life cycle of employment at Toyota is 25 years and the average churn rate is 15 % in Japan and the figure may differ in North America and Europe. The company’s culture is a combination of both, world class management practices and Japanese traditional bureaucratic values. On one hand, employees have freedom to participate in the policy making process to ensure goal congruence while on the contrary, they are expected to respect organization’s hierarchy and perform their duties as directed by the top management. In the corporate world, Toyota is well known for flexible, proactive and employee friendly human resource policies and practices. The management of the company recognizes the importance of human resources and shows its full commitment towards corporate social responsibility. Despite of the fact that company has an expertise in exploring human excellence, the human resource policy is not free from defects. A part from employee empowerment and flexible working environment, Toyota has been facing several HR issues such as retaining the motivation levels of workforce, retention of employees and challenging operational deadlines. The details of the problems and its remedies will be discussed as follows in the report before that it is essential to briefly look at the human resource policies and practices of the company (Jyothi et al., 2006).
The career prospects at Toyota are formed on the concept of working in collaboration with the groups where individual members are assigned with particular task and the successful execution of these tasks collectively produces the desired results. In the pursuit of its broader objectives, Toyota believes in grooming employees to attain competitive advantage over its rivals. Job rotation is one of the most outstanding features of the company’s human resource policy. Under this practice, the employees having specialization and expertise in a specific field are given the opportunity to work on different functional roles to enhance their skills and understand the working of other departments that ultimately smoothes the overall functioning of the organization. The strategic management believes that efficient working does not only mean doing a specific job well, but also in converting individual job responsibilities into profit making activities. With the advent of latest technology and best industry practices, the management function and HR policy at Toyota has begun to play a role much larger in scope, stronger in impact and everlasting in effect. No organization provides career development opportunities as Toyota does. In fact, the company is the founder of various management practices which are taught in business schools and corporate trainings such as Total Quality Management, Kaizen Costing, JIT Principles, Quality Circles, and Target Costing etc (Norton et al., 2008)
The recruitment in Toyota is not a process of filling vacancies by hiring graduates from leading institutions. The process of recruitment and selection in the company is a true example of transforming corporate strategies into manpower planning and human resource development. The company hires people having a combination of academic knowledge, relevant skills, and experience and those who have the potential to make difference from the inception. The individuals intend to be a part of Toyota team must be willing and highly motivated to pay their contribution towards the accomplishment of organizational goals. In other words, Toyota selects those people whose personalities are in conformance with the company’s values. To make new employees familiar with the organizational culture, a proper induction program is conducted which help the new comers to understand the process, culture, norms and code of the conduct of the organization. As we have discussed above about the HR issues facing the firm, it is recommended to introduce some reforms in the induction process to ensure maximum output from the employees. Induction is an integral part of a recruitment process and it teaches new comers about their job descriptions. I would recommend Toyota to include skill development programs in the process of induction to boost employee’s morale. The skill development process should contain programs like change management, corporate communications, importance of team work, negotiations between departments and other functional trainings. To sustain or retain motivational levels of employees, it would be worthwhile to design customized jobs instead of standardized jobs. This would ensure that jobs are assigned to individuals appropriate for them. The allotment of best suited tasks will ensure proper allocation of resources and would also justify performance related pay structures. To boost individual and group performance, psychological training should be provided. This training will enable individuals to perform their duties in the best interest of the organization and also in accordance with the stakeholder’s expectations (Toyota.co.jp, 2002).
Toyota operates a very effective performance management and appraisal system that fairly recognizes individual’s achievements. The appraisal system intends to provide continuous learning and development and consistency in employee’s working. It not only rewards employees with monetary and other benefits but also increased their productivity that ultimately results in the enhanced profitability of the organization. The basic motive behind the formation of an effective performance management system is to account for the interests of the work force and the strategic management. The company believes in forming strategic partnerships with the employees. The implementation of gain sharing arrangement system is one of the examples of Toyota’s commitment towards its workforce. One of the most inspiring features of gain sharing arrangement is that it empowers employees to make decisions without considering the consequences of failing. It makes employees more confident and daring in performing their jobs and applying new methods of attaining organizational goals.
Keeping in view the global dynamic business environment, the company realizes the importance of training and development to keep workers updated of the latest development by the acquisitions of skills and expertise by attending various workshops and programs conducted in house and by other institutions. Toyota enjoys a competitive edge because it has its own training centre which has a facility of offering all sorts of training and skill development programs to its employees. Moreover, Toyota technological institute Japan is the producer of world’s most competent work force which is then employed by Toyota corporations or its subsidiaries located worldwide. The teaching curriculum is designed in such a way that it trains students who are actually potential employees for upcoming professional responsibilities. Moreover, it operates other programs in collaboration with the University of Chicago and other leading institutions to train people having little exposure of the industrial sector preferably auto manufacturing industries (Toyota-global.com, 2002).
The company apportions a massive amount of fund in their annual budget for the purpose of training because the management firmly believes that training is the substitute of work experience and it also ensures the usage of resources with efficiency and effectiveness. The investment which is made by the company in the development of human resources provides high returns in the long run and it increases the competitive position. Training is basically a support for innovation that can bring about a dramatic change in the business processes of the organization. It gives an edge over rivals because the workforce learns to manage resources with care. It also introduces some methods to make a profitable use of the available capacity during idle hours which out performs competitors from all business dimensions. Training actually teaches the workforce to work in such a way that as required by the company. The company fulfills its responsibility to train and develop its employees to strengthen their skills and exploit their potential to meet the business objectives. The management of the company accepts that in order to achieve competitive advantage and to increase productivity and also to introduce new and innovative strategies, it is crucial that employees should participate in decision making process (Mathis et al., 2011).
Like many other large scale industries, Toyota has also become a victim of labor-management disputes at number of occasions in the history which resulted in severe losses. To make sure that such disputes never occur again an effective policy should be formulated. The labor unions and other representative bodies of workers should be given space so that they can bargain for their rights through the negotiation process otherwise they would exercise their power to shut down business operations which could be detrimental for the company as a whole. Moreover, a culture of alternate dispute resolution should be promoted to avoid court proceedings which waste valuable organizational time and resources that could be applied elsewhere. The process of employee involvement in the process of strategy formulation brings fruits of development for the organization. Usually the senior management is reluctant in discussing corporate strategies with the managers of the SBUs and operational staff because they think that upper management is more experience and make viable business plans and the bottom up process of strategy formulation would not be fruitful because managers deliberately set goals which can be easily attainable to them. But in today’s vast business environment it is really important to take on board the subordinate managers because this is the most important productivity factor and employees feel that their services are recognized by the senior management and they are given due importance. Most of the time, young managers play a decisive role in the setting the direction for the business and in determining its priorities and goals. The senior management must realize this fact that today’s subordinate managers are the leaders for tomorrow (Ere.net, 2013).
References
Ere.net (2013). Increasing Employee Productivity: The Strategic Role That HR Essentially Ignores - ERE.net. [online] Retrieved from: http://www.ere.net/2011/05/16/increasing-employee-productivity-the-strategic-role-that-hr-essentially-ignores/ [Accessed: 19 Jul 2013].
Jyothi, P. and Venkatesh, D. (2006). Human resource management. Delhi: Oxford University Press.
Mathis, R. and Jackson, J. (2011). Human resource management. Mason, OH: Thomson/South-western.
Norton, A., Hughes, J., Best, N., Dalton, C. and Harris, D. (2008). CIMA managerial level. Oxford: Elsevier.
Toyota.co.jp (2002). Human Resources Development. [online] Retrieved from: http://www.toyota.co.jp/en/environmental_rep/03/jyugyoin03.html [Accessed: 19 Jul 2013].
www.toyota-global.com (2002). Relations with Employees | TOYOTA MOTOR CORPORATION GLOBAL WEBSITE. [online] Retrieved from: http://www.toyota-global.com/sustainability/csr_initiatives/stakeholders/employees/index2.html [Accessed: 19 Jul 2013].
