Human Resources Management- Practices Applied by Toyota - Case Study Example

HUMAN RESOURCES MANAGEMENT- PRACTICES APPLIED BY TOYOTA By Location Contents Introduction 3 Performance Management as a leading HR practice in the Toyota Company 3 The 360-degrees Feedback in Performance Management 6 Equality and Diversity in the Toyota Company 7 Conclusion and Recommendations 8 Bibliography 10 Human Resources Management- Practices Applied by Toyota Introduction The Toyota Company has a remarkable reputation of its outstanding human resource development. The company has perfected its strategies of managing the human resource to the level whereby the human resource has become a determining factor of its competitive advantage. The company has adopted unique human resource strategies and followed them to ensure that all their employees are motivated and with the right qualifications. The company beliefs in integrating human resource development and product development. This explains why it is famous for using the lean management system in managing its manufacturing and human resource. Although other companies trying to emulate Toyota’s strategies in human resource management and development have often failed, the company has continued to be a leader in this sector. This is because it has defined human resource practices that conform to its business strategy and organizational culture. Moreover, the company has had these practices in use for a long time explaining why they seem to work perfectly for the company. This paper will consider two of its outstanding human resource practices, namely the performance management, and equality and diversity. Performance Management as a leading HR practice in the Toyota Company Since the founding of the Toyota Company in the 1920s, it has exhibited a culture of developing and managing its human resource, which is different from what other companies have in place. The company has adopted a lean culture, which forms the basis of its human resource development and performance management. Evidence of the success of this strategy is globally visible because the company launches new products into the market within the defined time and budget. Moreover, a close analysis of the products released into the market also serves as evidence that the chief engineers involved in the manufacturing of cars are well aware of the needs of the customers. In the Toyota Company, every employee is regarded as a team member explaining why all the employees commit themselves to achieving the annual goals of the company. In addition, the Toyota company executives have defined long-term trends and clear strategies, which are communicated to every team member (Baker 2010, p. 480). The company realized that people’s thinking and behaviour conforms to a company’s philosophy and principles. Therefore, Toyota recognized that empowering people to think in terms of the company goals would translate to a better performance. In order to achieve its lean management strategy, the company recruits only a selected team of individuals who exhibit qualities that conform to lean management. Moreover, a rigorous training process is carried out in different phases to ensure that all the employees have the required skills to cope in a lean manufacturing industry. Since Toyota relies on lean management, it has studied the type of employees who are more suited for this type of management. In its case, Toyota prefers highly developed people who can be trusted contrary to the mass production system adopted by other companies (CoLeman 2013, p. 21). For performance to be outstanding, all the employees who are referred to as team members in Toyota must demonstrate their devotion and willingness to recognize problems and be willing to develop solutions for such problems. This defines the basis for continuous improvement in a Toyota. Worth noting is the fact that lean enterprises such as Toyota are committed to giving value to the customers through a defined set of activities. These activities and processes aim at transforming inputs into valuable outputs. The lean system has determined standards, which compel the enterprise to discard anything that does not meet the expected standards of value. Toyota has been an outstanding model for the lean system for many years. One of the principles the company has developed in an effort to improve performance and empower the employees to take an active role in promoting performance is the just-in-time principle. According to this principle, the employees have the responsibility of identifying problems at the time they occur in the manufacturing process and raising alarm immediately. This ensures that the identified problem does not proceed to other stages of production (Liker & Hoseus 2010, p. 3). Therefore, the production chain or string focuses on value so that its output may be products that add value to customers. Without doubt, the Toyota Company has adopted a unique perspective of managing performance through its lean system. It focuses on ensuring that employees who are recruited exhibit qualities that can promote its production system. This is because the company considers the human resource as a key competitive competency. The company responds to the need of developing people to the level of experts so that they can handle different responsibilities in the production system and ensure that performance is of high quality. Although a lean system focuses on eliminating waste products, the Toyota Company does not reduce its labour costs by firing employees (Liker & Morgan 2006, p. 10). However, it focuses on just in time principle and reduces its inventory leaving a manageable number that can register a better performance. There is a system of ensuring that each team member can recognize problems and raise alarm. This is based on a rigorous training process that enables the employees to become familiar with the expected standards. Team members are also taught to lay a leading role in reporting the deviations from the standards without fear of victimization. This system exists to ensure that problems are tackled as soon as they emerge so that they do not affect the quality in the value stream. In an effort to achieve this, the Toyota executives have integrated people development and manufacturing system development. Employees are empowered to make critical decisions that affect performance (Liker & Morgan 2006, p. 16). They are taught to feel appreciated and be more responsive in cases of deviations from the expected quality. The 360-degrees Feedback in Performance Management The Toyota Company has been using the 360-degree feedback model in an effort to ensure that employees are empowered to register the level of performance expected in Toyota’s lean culture. The 360-degrees feedback system was developed to replace other performance systems proved inefficient in ensuring efficient performance management. The 360-degrees feedback system has proved effective in providing a platform for multidimensional feedback to managers, peers, and line managers (Liker 2004, p. 67). It is also an effective tool in identifying the needs of employers in relation to learning and development. The Toyota Company has been using this strategy in an effort to develop and educate employees. The company recognizes that unless the employees have the right type of training and skills, they cannot effectively manufacture quality cars. This is the reason why the company has taken initiatives of developing all its employees as it embarks on expanding its business areas. For Toyota, the development of human resource is a priority that supersedes other strategies. The only empowered employees have the capacity to register an outstanding performance. For Toyota, outstanding performance translates to quality cars that will be well received in the market. The 360-degrees feedback model has helped the Toyota Company to recognize the specific needs of its employees. This further enables the company to develop learning facilities that can serve to develop the employees to the required level. There are intangible structures at the company that ensure the successful development of each team member. In addition, there are company-wide and departmental training sessions that impart employees with skills that are applicable on the job (McPhaul 2005, p. 32). These programs also ensure that all the team members utilize their potential in an effort to achieve the company goals. Without doubt, this explains why the company registers outstanding performance evident in the quality of its cars. The 360-degrees feedback system has been integrated with the lean culture of the company to define its outstanding performance management. Equality and Diversity in the Toyota Company The emphasis on embracing diversity as one of the critical human resource practices has prevailed in the globe in the recent past. The Toyota Company had conformed to the need for promoting workforce diversity. This is evident because the company has been named as a leader in the top companies who have adopted diversity. For example, it was included in the top 40 best companies for diversity by Black Enterprise. In the view of the senior vice president, equality, diversity, and inclusion are some of the company’s priorities in its different branches. As the company succeeds in developing its workforce, it strives to ensure that an inclusive environment is fostered. Its corporate environment has been designed to reflect the communities that define its market. The company has made efforts of launching a diversity office in its different branches. In addition, the company defined a diversity strategy in 2001, which highlighted the need for promoting diversity in its employment as well as the procurement procedures (PR 2011, p. 16). This means that the Toyota Company promotes diversity among its employees and proves to be diversity conscious in choosing its suppliers and dealers. Many of the branches of Toyota have an external diversity advisory board. For example, the North American branch has a board comprising of seven individuals (Schwagerman III & Ulmer 2013, p. 5). This board has ensured that 30% of the company’s employees comprise of people of colour. In addition, a remarkable percentage of its suppliers are from the minority groups. In addition, the company has been recognized for its efforts in promoting both employee and supplier diversity. The Toyota Company has learned how to integrate workforce diversity and its business strategy. The company relies on the creativity and innovation exhibited by the employees in the development of new products. Without doubt, the company has recognized the potential brought about by incorporating people with diverse talents and skills. Notably, people of different races, religious groups, personalities and genders exhibit varied talents and skills. It has been the focus of the Toyota Company to develop human resource potential to the level of ensuring that it defines its competitive competency (Takeuchi 2009, p. 37). Embracing workforce diversity is one of the strategies that the company uses to source different people with remarkable qualities and skills that can conform to its lean system and culture. Therefore, the company has embraced diversity and made it an asset, which is critical in promoting the business strategy. Since the lean culture of the company considers each employee as a team member, people from diverse backgrounds feel respected and appreciated by the company. It is evident that all the team members who exhibit remarkable diversity work together incorporating their varied skills and talents to develop Toyota’s products seen in the market today (Yang & Yang 2013, p. 450). Embracing the workforce diversity has also been important in helping the company understand the needs of the highly diverse customers. Conclusion and Recommendations Evidently, the Toyota Company has unique human resource practices that have propelled it to the market. As highlighted above, the company recognizes that launching new automobiles in the market requires the effort of all the employees. These employees need to be empowered and developed so that they can register a remarkable performance. Notably, the automobile industry relies on creativity and innovation. Unless employees are empowered, and self actualized, they are unable to come up with innovations. Therefore, employees need to be trained in order to impart them with the relevant skills needed to register exemplary performance. The Toyota Company relies on a lean management system, which promotes the value in its products. This means that the company has strategies in place that serve to ensure that all the team members utilize their potential fully and commit themselves to the company’s goals. The 360-degrees feedback model has helped the Toyota Company achieve a higher performance. In addition, the company has embraced diversity and equality, a human resource practice that ensures it has a highly talented workforce. The following recommendations can help the company improve its human resource practices and propel itself to higher performance; The company should introduce more training opportunities for employees in each category to ensure that they perfect their skills. The company should sustain its lean culture because it is highly integrated with its human resource development programs. The company should introduce diversity consciousness, appraisal systems in order to assess the views of employees and managers on the significance of diversity. The company should introduce diversity training programs that will increase diversity consciousness. Bibliography Baker, Nn 2010, Employee feedback technologies in the human performance system, Human Resource Development International, 13, 4, pp. 477-485, Education Source, EBSCOhost, viewed 12 November 2014. 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