Performance Management and Human Resource Management Approach at Toyota India - Case Study Example

Performance Management at Toyota India Name Institution Module Instructor Date Introduction In the recent past, most of the organizations have shifted their focus to the use of performance management as a method of ensuring their productivity and improved performance. Performance management has enabled the organization’s management understand their work and employees expectations, goals, identify development and learning issues, evaluate performance outcomes and provide the management with feedback on operations efficiencies. Some of the benefits associated with performance management to the organization include enhancement of continued improvement, adaptation of the employees to the organizational change, promoting creativity and promotes professional development among other benefits. Successful application of the performance management in an organization relies on the adoption of the performance management principles and process. This includes performance planning, daily coaching and feedback, quarterly performance and formal review of performance in an organization. Purpose of this report and scope of this report This report will analyze in detail the performance management system in the Toyota India Company. This will include providing an overview of the organization’s human resource approaches, goals and its structure. Additionally, the report will analyze some of the organization’s management policies and procedures, strategies, policies, tools and evaluations methods used in the organization. The report will end by providing some of the recommendations that can be adopted in the organization to enhance its competitiveness, performance and productivity. The success of this report will depend on the use of various research articles to create the ideal picture of the ways in which the operations are managed in the Toyota India organization. Background and Description of Toyota India and Human Resource Management Approach Toyota India is one of the world’s most known companies associated with vehicle manufacturing and provision of vehicle parts. The company is a subsidiary of the Toyota Motor Corporation of Japan. The organization’s heightened visibility is attributed to its quality products and first class customer care services. Some of the organization’s quality and luxurious products include Etios Liva, Etios, Innova, Fortuner, Prius, and Camry among other products. Other services provided by this organization alongside vehicles production include motor racing, vehicles sales, service network, and sales performance services. Toyota India Company success is highly attributed to its system of human resource management approach. The organization has adopted the skill-based approach of managing human resource. This approach is based on the principle of rewarding employees depending on the skills they have mastered and not their current job position. From this approach, the organization’s employees have been motivated to demonstrate wide skills in their operations increasing productivity, quality and promoting innovation (Armstrong, 2003). However, such views have been somehow contradicted by actual practices. In 2012, Shekar Viswanathan, who was serving as deputy managing director was promoted to the post of vice chairman while Sandeep Singh, former deputy managing director, sales, marketing and customer service was promoted to deputy managing director (DMD)–cum-chief operating officer (Balachandar, 2012). This contradicts the skill based approach because it is clear the firm in this case favored current job position. Pulakos and O'Leary (2011) differ with Armstrong (2003) in that the skills based approach is best and says that a combination of promotion systems must be employed to achieved best results. The organization also uses the principles of the contingency model as a method of managing its human resources. The model links the organization’s specific aspects of production and marketing environment to the policies of human resources management adopted (Guest, 1997). Moreover, the organization’s success is attributed to its ability to adopt the HRM assessment approach. This approach has enabled the organization’s policy makers, human resource practitioners and management understand HRM challenges facing their organization are possible solution to the challenges (Youndt et al., 1996). In 2012, the firm restructured its operations in India Toyota India history, structure and strategic goals The company was started in India in the year 1997. The company is a subsidiary of the Toyota Motor Corporation in Japan. The organization has grown in the recent past to increase its products export to a total of more than 70 countries in the year 2011 as compared to less than 45 countries in the year 2005. The organization’s structure is highly inked to its customer attraction and the quality of services and products provided by the company. The company has established an organizational structure that accommodates all of their consumer needs. However, such strategies can be challenging to implement in reality as many organizations have found out (Pulakos & O'Leary, 2011). Toyota India adopts two major types of structures that directly contribute to its ability to provide quality products. These structures include the bureaucratic structure, and functional structure (Delery & Doty, 1996). The organization has bureaucratic structures where the overall organizational performance is based on set degree of standardization. The structure enables the organization’s employees to perform complex activities. Thus, through this structure, the employees responsibilities at the workplace are clearly defined, and employees practice respect for performance (Becker & Gerhart, 1996). Additionally, the organization uses the functional structures as a method of enhancing their performance and productivity. Functional structures involve undertaking operations in accordance with the employee qualifications and job specification. This structure benefits the organization through enhancing the production of standardized products in large volumes but with reduced costs (Wright & McMahan, 1992). One of the organizational goals is to ensure that Toyota India becomes one of the most preferred companies by the customers globally. This is achieved by ensuring that high quality products and services are provided to the customers. Additionally, the organization’s goal is to ensure that it strives to improve its products quality, mobility and promotion of innovation among the employees. The organization strives to ensuring environmental sustainability through the introduction of environmental sustainable programs in India. Other goals of the Toyota India company include engaging talent and passion of the committed employees, and ensuring zero casualties secondary t road accidents (Becker & Gerhart, 1996). Human Resource Approaches within Toyota India Company The organization uses varied approaches to ensure improved efficiencies, employee motivation, innovation, consumer satisfaction and quality production is achieved. One of the approaches used in this organization is the establishment of an open system of communication. Open communication across all the organizational level facilitate sharing of ideas among the employees and also enhances their freedom at the workplace. Additionally, the organization uses transformational and transactional leadership styles. These leadership styles facilitates employee autonomy, freedom, ability to make decisions. This leads to the employee motivation, innovation and improved productivity (Murphy & Cleveland, 1991). Furthermore, the organization has adopted the culture of recognizing the customer and the employee as the key assets determining its performance. Thus, the organization strives to provide its customers with high quality products and services that meet their demands. The employees needs are taken into consideration. This includes providing them with rewards, better remuneration and compensation. The organization ensures that employee individual and professional growth is addressed to. This is done through the provision of training opportunities to equip them with the necessary knowledge and skills required for assigned task accomplishment (Woodruff & Kositpaiboon, 1990). Performance management policies, strategies, tools and procedures in the Toyota India The organization has developed various policies that guide its employees on their daily activities. Some of these policies include striving to meet their clients demand by ensuring that there is total employee commitment, provision of quality services and goods, and continuous improvement. Other policies include quality assurance, and enhancing equality. Effective adoption of policies benefit the organization by ensuring that the organization meets the stated laws, improves the quality of their products, and identification of both the employee and consumer needs (Wright & McMahan, 1992). The organization has adopted various management strategies to ensure that effective adoption of the above stated policies is accomplished. One of the strategies adopted by the organization is the employee performance appraisal. Appraisal refers to a process involves reviewing employees performance, evaluating, developing discussion and coming up with the desired employees recommendations. Through performance appraisal the organization is able to evaluate the employees training needs and set organizational goals. Additionally, the organization uses behavior management as a strategy for ensuring quality and adoption of the above policies. This is done through observing, appraising and measuring the employees capabilities in performing the stated task (Armstrong, 2003). Furthermore, the organization has adopted careful selection and provision of structured training to its employees. The core aim of providing the training is to enhance the employee knowledge and skills required for undertaking various tasks in the organization. The organization has also adopted the principles of total quality management as a strategy of managing policies and quality performance in the organization. This include taking into consideration the value played by the consumers to the overall functioning and success of the organization. From the total quality management principles, the organization has been able to appreciate the importance of employee and consumer involvement in making some of the organizational decisions. Consequently, these strategies lead to employee motivation, and continued provision of quality services and products(Murphy & Cleveland, 1991). One of the management tools used by the organization to guide its performance, and ensuring achievement of sustainable results is the balanced scorecard. Balanced scorecard enables the organization accomplish its objectives by comparing the past organizational performance with the current and coming up with ways of improving future outcomes basing on the lessons learnt from the past experiences. Therefore, this tool promotes organizational culture of learning and growth alongside catalyzing organization’s internal process that aim at improving productivity. The organization also uses the Baldrige as a tool of measuring its level of management efficiencies. The tool allows the organization view the organization as a whole and not in terms of organizational departments. Other tools adopted by the organization for managing its operations include the Lean method that focuses on the employees working smarter and the Studer that take into consideration staff inspiration in promoting productivity in the organization (Becker & Gerhart, 1996). Another strategy used by Toyota is the SMART goals model in objectives and goals formulation. The model’s name is an acronym for specific, measurable, attainable, relevant and time-bound. This is most evident in environment and sustainability management policies for many multinationals (Schaltegger, & Wagner, 2011). The authors further note that the sustainability today includes social entrepreneurship which involves meeting societal goals and institutional entrepreneurship which involves efforts to change institutions like market regulations to suit current needs. For Toyota India and its global enterprise, The Fifth Toyota Environmental Action Plan (FY2011 - FY2015) has set to improve average fuel efficiency in all vehicles by the year 2015 by 25% with 2005 base year. Furthermore, the company has set to promote increased use of electric and hybrid vehicles for short distance travel and make sales in tens of thousands. All these goals are clearly articulated and meet the SMART goals criteria in the sense that they are specific (all vehicles), measurable (fuel efficiency or distance per unit o fuel), achievable (has been continuously improving fuel efficiency in particular models), relevant (green living is a concern for a niche market) and time bound (year 2015) as presented in the action plan (Toyota, 2013). Evaluating Management Functions in the Toyota India Company Evaluation is one of the critical functions that can be conducted in an organization to determine the effectiveness of their operation. Evaluation is determined by various factors including the evaluation area, the type of project to be evaluated, and availability of capacity and resources. Toyota India company uses three methods to evaluating its operational systems effectiveness. The methods include the AHP model process, Quality Management Systems ISO and the Systems Balanced Score Card. APH model focuses on principle of logical judgment compatibility, ISO focuses on certifying organizational achievements, and System of balanced score card focuses on series of organizational indicators of various aspects in an organization (Becker & Gerhart, 1996). The evaluation process is done taking into consideration various factors including validity, reliability, cost effectiveness, and fairness of the adopted intervention. The tool used for evaluative purposes should produce similar results when conducted by different tool in the organization. The evaluation conducted should be able to show differences that exist between the results and effectiveness of the interventions adopted in the organization. The organization’s interventions should be cost effective. Cost effectiveness ensure that the organization invests in interventions that are not expensive both to the organization and the consumers. Additionally, the evaluation tool used should promote fairness. This is to ensure equality both to the organization and the organization’s consumers (Armstrong, 2003). Recommendations Toyota India faces stiff competition from other motor vehicle producing countries globally. Therefore, the organization should strive to come up with more sophisticated and luxurious motor vehicles to maintain its position in the competitive global market. The products introduced in to the market should be unique and different from the products from its competitors. This will ensure that the organization attracts most of the customers leading to increased productivity, performance and consumption of the organization’s products (Becker & Gerhart, 1996). Additionally, the organization should strive to invest more in most of the countries that have not been adequately exploited. This is achieved by conducting a comprehensive markets analysis to identify the markets gaps that should be filled by the organization. The organization should consider investing more of its resources on issues related to social life and environmental sustainability. This will act as a source of attraction to the customers as they are able to appreciate the organization’s efforts towards supporting their social lives and environment (Wright & McMahan, 1992). The company should consider using the social media as a strategy of marketing its products. This is because the social media is one of the most common media constantly used by the global population. Therefore, the organization will be able to market its product heightening its visibility (Hartson et al., 2001). Conclusion From the above analysis, it is evidently clear that effective performance management in an organization contributes greatly to the overall performance of an organization. the organization is able to understand the varied customers, employees and organizational needs that should be addressed to realize the organizations’ objectives. Therefore, managers should play their role of ensuring that effective management strategies are adopted to improve the performance of their organizations and increase efficiencies in tasks undertaking. References Armstrong, M. (2003). A Handbook of Human Resource Management Practice. Kogan Page Publishers. Balachandar, G. (2012). Toyota India rejigs management as firm seeks to expand operations. Retrieved from http://www.mydigitalfc.com/companies/toyota-india-rejigs-management-firm-seeks-expand-operations-755 Becker, B., & Gerhart, B. (1996). The Impact of Human Resource Management on Organizational Performance: Progress and Prospects. Academy of Management Journal, 39(4), 779–801. doi:10.2307/256712 Delery, J. E., & Doty, D. H. (1996). Modes of Theorizing in Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurational Performance Predictions. Academy of Management Journal, 39(4), 802–835. doi:10.2307/256713 Guest, D. E. (1997). Human resource management and performance: a review and research agenda. The International Journal of Human Resource Management, 8(3), 263–276. doi:10.1080/095851997341630 Hartson, H. R., Andre, T. S., & Williges, R. C. (2001). Criteria For Evaluating Usability Evaluation Methods. International Journal of Human-Computer Interaction, 13(4), 373–410. doi:10.1207/S15327590IJHC1304_03 Murphy, K. R., & Cleveland, J. N. (1991). Performance appraisal: An organizational perspective (Vol. xiv). Needham Heights, MA, US: Allyn & Bacon. Pulakos, E. & O'Leary, R. (2011). Why is performance management broken? Industrial and Organizational Psychology. 4(2), 146–164. Schaltegger, S. & Wagner, M. (2011). Sustainable entrepreneurship and sustainability innovation: categories and interactions. Business Strategy and the Environment , 20(4), 222–237. Woodruff, G. M., & Kositpaiboon, R. (1990). Multimedia traffic management principles for guaranteed ATM network performance. 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