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Human Resource Accounting PDF

Added on - 25 Jan 2022

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(Submitted by: Bhargavi Mehta28108)
Looking Beyond Gas Pedals-How Human Resources Lead to Toyota’s Failure
Toyota today is riddled with quality problems. Quality was once theprimeUSP of this
company. The problem reachedsuch a critical levelthatthecompany had to recall almost 9
million cars worldwide. Obviously, this led toasignificant lowering of the brand value of the
company, andadrop in sales. John Sullivan (2010) attributes such failure of Toyota tothe
poor HRM function of the company. Sullivan added that while hull design flaw contributed
to this catastrophe, the root cause of the problem was human error. Human error at times
caused for factorsthatcould be beyond the control of employees. It cascades for the actions
of the senior management. People attheoperations level may have inadequate information
and poor job training.
Toyota’s poor HR practices,which Sullivan classified under eight categories, attributed to
such mechanical failure, causing recalling of their supplies. Such HR practices arereward
and recognition, training, hiring, performance management process, corporate culture,
leadership development and succession, retention,and risk assessment. In all these HR
practices, the company failed to integrate with the business goals. Moreover, HR decisions
were not backed with data, rather itwasin accordance with the existing systems and
standards. Hencethesystematic failure of management contributed to quality problems and
subsequent recalling of cars, resultinginseveral billionlossesto the company. With data-
driven HR decisions, HR managers could have been more analytic and predictive in
foreseeing such problems and warned the top management.
Question: In the context of this case study, do you think Toyota could make a difference
with HR analytics? Elucidate your answer.
I completely agree that Toyota could make a difference in HR analytics for a variety ofreasons,
1.Training: If Toyota training had been more effective, employees would have had the
skills and capabilities to deal with any situation that arose.
2.Hiring: The goal of great hiring is to bring on top-performing individuals with high
levels of skill. A problem can be caused by poorly designed recruiting and assessment
elements, as was the case in this case.
3.Risk Assessment: Most Human Resources Departments do not even have a risk
assessment team whose purpose is to identify andcalculate risk caused by ineffective
employee processes.
Toyota's problem is not the result of a single individual making an isolated mistake, but
rather of the company concealing a series of mistakes that are all related to one another. If
Toyota had usedHR Analytics, it could have made a significant difference.
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