An Analysis of HRM Practices and Leadership in the Toyota Company

This report examines the human resource management (HRM) practices and leadership within Toyota, a major player in the automobile industry. It begins with an introduction to HRM and its importance, followed by an analysis of different HRM models, including the Fombrun, Tichy and Devanna Model, the Harvard Model, the Guest Model, and the Warwick Model, highlighting the model used by Toyota. The report then critically discusses key HR functions at Toyota, such as recruitment and selection, and human resource development, and suggests improvements. Furthermore, it evaluates potential HRM software programs that Toyota could adopt to streamline its processes. Finally, the report explores the characteristics of effective leaders and relevant leadership models that can justify the motivation issues within the company. The report concludes with a summary of findings and references used.

MANAGING HUMAN
CAPITAL AND
LEADERSHIP

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1............................................................................................................................................1
Types of HRM model, Model used by the organisation..............................................................1
TASK 2............................................................................................................................................3
Critical discussion of HR functions in the organization..............................................................3
TASK 3............................................................................................................................................7
Evaluation of HRM software programs in the organization........................................................7
TASK 4............................................................................................................................................9
Characteristic of effective leader and models which will help to justify the analysis.................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The Human Resource Management is necessary for all small and medium business as it
helps in recruiting qualified candidates and managing the workforce for a long time and the
managers leadership skills help them to retain employees by maintain the strong relationship
throughout the management. This report includes the HRM management practices and functions
in the Toyota Company which function in the automobile industry. It shows evaluation of HRM
software programs which can be adopted by Toyota to ease the recruitment and selection process
and at last this report explains about characteristics of effective leader and model which justify
the motivation issue.
MAIN BODY
TASK 1
Types of HRM model, Model used by the organisation
Human resource management (HRM) is the process which helps the manager to have an
efficient employee in the organisation as HRM recruits, select and trains the employee. There are
4 models of the Human resources management which have different features to offer to the
manager. Toyota also uses the HRM model to make a good HR decision in the organisation
The Fombrun, Tichy and Devanna Model: As per the thought of Mok Kühner and Yeates,
2017 Fombrun, Tichy and Devanna Model being the first model of HRM just focuses on the four
function that are selection, development, appraisal and reward, as these model looks at selection
of a employee, development of employee skills and appraising them for their work and also
providing reward for their performance only in the organization so many philosopher called
these model as a uncompleted model as these model does not look at external environment and
contingency factor which affect the decision making of the HR. Toyota also believes the same as
the philosopher as Toyota also not use these model in the organization as these reduces the scope
for the HR decision in the organisation, for the global organisation such as Toyota it can harm
the performance of the organisation as they have to see all the internal and external factor before
making a decision in the organisation.
The Harvard Model: As per the author Chang and Ma, 2015 Harvard model is a better HRM
model used by the organisation as these model sees the six dimension of the HR decision six
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dimension are stakeholders, interests, situational factors, HRM policy choices, HR outcomes,
long-term consequences and a feedback which helps the firm in touching more approaches as
compare to the The Fombrun, Tichy and Devanna Model which only focuses on aspect relating
to the employee but these covers the aspect of external and internal environment also. Toyota
also not uses this model in the organisation as this model also lacks at some place to overlook all
the aspect of the business which negatively affects the business of the organisation.
Guest Model: As per the author Deresky, 2017 model develop by David Guest in the year 1997
was very superior model as compare to the other model in the universe as these model shows that
every HR in the firm has the strategy to execute in the organisation and after certain practices if
the strategy is executed then it will result in the outcome of the strategy for the organisation.
These outcomes can be the change in the behavior, performance of the organisation. This model
emphasis on the six basic component of HR such as strategy, practices, outcomes, behavioral
outcomes, performance and financial consequences. This model is called superior as this model
provides the road map for the HR has it covers almost all the aspect of the decision making. This
is the model which s used by the Toyota in their organsation as these help the Toyota to take a
correct decision in the long run of their business.
Warwick Model: As per the writer ( ) model develop by two researcher Hendry and Pettigrew
of Warwick University. This model focuses on five element of the HR, element includes Outer
context, Inner Context, Business Strategy and HRM context and HRM content. These model
covers the entire environment as Outer one covers the macro environment and Inner one covers
the micro environment of the business and the other element covers the different HRM concept.
This model mainly focuses on the business strategy and the HR practice in the organisation but
also focuses on the factors in which business organisation dealt. The main importance of this
model is that it also focuses on the external and internal environment factor which influences the
HRM decision. This model is also used by the Toyota Company in making the decision as it
helps the business to take a decision more efficiently as it involves many features which are not
offered by the Guest model the main feature offered is that they look the environment also but in
case of Guest model it is not looked.
HRM Model Practice in the Organisation
As per the writer Raineri, 2017 in Toyota there are two main practice in the HRM model, first
practice is the practice of Guest model as mentioned above that they use these model in the
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organisation. This model showcase the proper plan and business strategy before taking any HR
decision in the organisation, In other word it can be said that Toyota develops a HRM plan and
strategy in accordance with the goal of the business and in the second practice, Toyota mix the
local ethos with the international practice in the HRM decision of the organisation which helps
the organisation to gain a effective human man power in the organisation. These are the main
HRM practices which are used by the company to improve the HRM of the business as these
practices helps the business in employee commitment, workforce flexibility and adaptability;
and, finally, an emphasis on quality.
TASK 2
Critical discussion of HR functions in the organization
Toyota suggest that HRM goals can be achieved through four main functions
 Recruitment and selection
 Human Resource Development
 Motivation
 Performance
Recruitment and Selection
Recruitment - Lean manufacturing strategies have become the standard for choice of operations.
To reduce unnecessary costs during the manufacturing process, employees must have different
characteristics than normal techniques.
 team work and collaboration - social communication
 thirst for new things - enthusiasm
 Consistent - audible decision making
Toyota has a careful calling process and picking techniques from various sides. That requires
standard behaviour. For example, when Toyota conducts interviews, judges will consider skills,
techniques, and characteristics (Chang and Ma, 2015). Companies need employees who can
fulfil general obligations from their positions, which require flexibility and adaptability.
There are different types of sources in recruitment process, the most common is internal
and external recruitment and Toyota adopted both of them. Internal and external recruitment both
are time consuming and money taking. Therefore, in order to increase the efficiency of HR
recruitment process, company can adopt internet recruitment as the era of technology has started,
internet play crucial role in everyone’s life. It is therefore not surprising that the Internet has
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changed recruitment practices too. The tendency to use online selection is common to both small
and medium-sized companies and large companies, helping to quickly create a large number of
eligible candidates. Online recruitment will soon replace most traditional recruitment sources,
such as advertisements in newspapers and employment agencies. There are a number of external
selection sources, some of which are followed by Toyota:
Job counselling gives many job seekers the opportunity to enroll in company job
openings and rely on job interviews and technical skills to qualify for the recruitment and
selection process. Recruitment colleges and universities offer Toyota a number of talented and
fresh candidates who want to acquire skills and gain knowledge when technology emerges.
Toyota can have talented new candidates who can help improve company performance.
Toyota can adapt internet recruitment process as access to the Internet has many
advantages. One of the most important is that it is profitable, which means that organizations
cannot invest large amounts in this process. In addition, it is easy and fast to publish or delete
advertisements, and many responses come very quickly and offer a wider choice of candidates.
Online recruitment can also save time for human resource managers by automatically rejecting
inappropriate candidates through recruitment tests.
Selection - After completing the recruitment process, candidates will undergo various types of
tests such as oral tests, group discussions, final interviews and job openings in an organization.
Selection practices and procedures in Toyota has the selection process which consists of eight
steps such as initial confirmation interviews, filling out application forms, complete job
interview, conditional work, background studies, medical examinations, and permanent job
offers.
They can improve their selection process in order to take the HR practices to the next level
by choosing a team leader and group leader which takes into account the characteristics that
make up a strong coach. The team leader knows all the work in their area so that they can be
trained for all jobs. To recruit the most talented people, HR managers must consider various
criteria. Therefore, they can tie talented and qualified candidates by introducing new tests into
the selection process that determine their abilities, skills and qualifications as follows:
 Ability test includes the choice of tests includes two types of tests namely the first
mathematical skills, logical thinking skills in reading, etc., and the second test concerns
technical, marketing and mechanical skills.
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 Integrity testing helps measure attitudes and experiences that connect potential employees
with their tendency to be honest, reliable, and reliable. These tests are closely related to
ethics and because they are the perfect complement to personality tests.
 Personality tests provide knowledge about the behaviour and attitudes of candidates and
organizations to work.
 Group situational examinations are designed to show the ability of candidates to work in
a group team, organizational skills, leadership skills, and communication skills etc. As a
rule, a group of candidates receives assignments or problems that need to be resolved
Team and supervised by voters. In such tests, observers see the candidates' interpersonal
skills, their ability to deal with situations, and behaviour during a crisis.
 Work simulation tests create a real work atmosphere, including assignment. This choice
Methods help employers find out whether a candidate is capable of complete the
assignment and whether the qualifications and skills are suitable. The fact that work
simulations are basically identical to work content making this selection method a better
indicator of candidate performance.
Human Resource Development
Training is the crucial part for the individuals to improve their skills and abilities in order
to grow with the company. Toyota gives on job training to their employees through which they
can learn their work within the organization and can support the development of others. The
training offered at Toyota is technical development and management development.
Toyota also carry out development programs that enhance employees and prepare them to
assume higher responsibilities within the organization. Toyota can improve its development
program in two ways:
 Traditional Approaches - With this approach, Learning Managers can provide good
business development skills and abilities.
 Modern Approach - In this approach, HR Managers are responsible for providing good
staff training, career development programs and requirements, and resolving employee
conflicts that enhance team development and employee skills.
Off-the-job training - It includes programs that are not held at work and carried out by
professional trainers. Unfortunately, this type of training is relatively expensive and sometimes
workers cannot apply new methods and skills at work. Toyota can improve this HR practice
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more efficiently in order to compete with marketplace by ensuring that their employees must
provide with on-site-training or internship where the individuals can grab the practical
knowledge and technical experience for the development in the future. Toyota can use hard
model approach as this model is considered a solid HRM because it emphasizes that employees
are treated as a means to achieve company strategy. This approach focuses on the organization
and how it can respond to the external environment. This approach assumes that Human
Resource cycles have an impact on individual and organizational outcomes.
Behavioural training – It is related to practice and skills development. This includes, for
example, role plans, simulations and case studies, and aims to change behaviour to achieve
desired results. In addition to training, the development program focuses primarily on preparing
future leaders for the organization and to do this, Toyota must develop leadership strategies.
First, they must evaluate the current leadership in the company and the next step is the
development of a personalized leadership plan and identification of leaders who respond to
culture and values. The final step is to choose a leader with many features which can take the
HRD on next level in order to compete with marketplace.
Motivation
Companies offer exceptional salaries to their employees to satisfy their work and
dedication to their work. They also offer services such as paid holidays, free food, health and
medical services. Toyota also offers flexible working hours by maintaining and providing
excellent working conditions that not only increase employee motivation, but also protect
employees from labor law issues.
Employee Orientation – Toyota can follow this method in order to keep their employees
motivated and connected to the organization. The first day of a new job is always a big pressure
for new members of the team. And it's amazing when new employees feel welcome and
expected. Therefore, employers must encourage other workers to present themselves and create a
positive atmosphere. The control or input process starts and communicates the organization's
main philosophy, goals, rules, policies and procedures.
Performance
Toyota focuses on the overall performance of the system, not individual performance. It
is important to look beyond individual work when assessing standardized work and studying the
overall picture in the workplace (Pirozzi and Ferulano, 2016). Toyota promotes the isolation of
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fluctuations in the work process. It has an integrated structure that allows value-added team
teams to focus on their own tasks and not be bothered by other problems and this emphasizes
performance assessment very much.
Balance score card and KPI’s - Toyota can use different approaches to check the performance
of their employees and organization one of is Harvard model, this model considers employees as
resources, but not as another resource, because they cannot be managed. In other words, this
focuses on people's performance and business results and other is balance score card or key
performance indicator which records and analyse the performance of each individual within the
organization.
Regular Meetings - Toyota can hold regular meetings within the company to discuss the results
and performance of its employees. In this way, organizations can monitor the work of employees
by interacting directly with them during meetings. They can also review the progress of the
organization to achieve its goals and tasks.
TASK 3
Evaluation of HRM software programs in the organization.
Toyota has a good HRM software programs that helps in improving its business
efficiency by automating work processes, recruitment, payroll, and compliance. This software
collects all data information about their employees in the HR managers computer system which
is only access by them. There are other software also in the market that will help Toyota to
improve its efficiency of the organization by recruiting and selecting the right candidates and
will be beneficial for the Human Resource Management. The following are the softwares which
are available off the shelf in their HRM named as:
BambooHR - One of the most popular and comprehensive HR applications on the market, offers
a unique candidate tracking system that manages all aspects of the employee's life cycle and
provides the transparency that employees need (Dinkmeyer and Eckstein, 2015). Toyota can use
this software to improve its training and development function within the organization as the
software will keep the track of employee’s needs in skills, abilities, benefits and compensation so
that they can retain their employees for a long time.
Human Resource Information System (HRIS) – Human Resources HR Primer - Helps store
all employee data in a database and facilitates employee profiles and employee information to
retrieve databases. This is considered an important part of the process and information that
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concerns Toyota employees. Employee personal information, reduction in income tax and
recognition of benefits are different aspects of core HR software.
Workday HCM – It is one of the best and most sophisticated programs that makes it easy for
you to plan, recruit, and develop talent. This application provides absolute insight into the
company's global workforce. This also makes the company's HRM more user-friendly,
empowers employees and allows them to grow better than before. The effectiveness of HCM
Workday software is to bring someone in touch with their favourite devices, quickly take action
and respond to changes made by Fly, make better business judgements based on contextual
information, and adopt version one Entering All Toyota Business Programs Through this system,
HRM manages the entire life cycle of employees, from employee recruitment, to compensation,
to satisfying career growth. They use this integrated HCM program, which gives them many
benefits. HCM is efficient and suitable for Toyota personnel management practices. This
software program brings many benefits to businesses, because it is very beneficial for business
growth. With this system, HR management manages all their work activities and enables them to
effectively fulfill their responsibilities.
The above software programs can be adopted by Toyota but the most beneficial software
to the organization will be HRIS as the recruitment process at Toyota is time consuming and it’s
very necessary for the company’s growth and success also. Therefore, with the use of this
software Toyota can digitized the recruitment process which will make easier for them to recruit
people in locality and across the world. There are many benefits of this software which will help
Toyota in managing HRM recruitment function such as optimizing HRIS recruitment, the
recruitment process becomes more comfortable and enjoyable for employees. Employers can
also get a better picture of the company so employees can determine whether they are happy with
the company for long time. Some HRIS recruitment functions make it possible to include
analysis based on various aspects of the recruitment process or different employee qualifications.
The data based on digital which helps to look on past employees, working data, and income
information, Toyota can get a better understanding of relationships that can help them to make
better hiring decisions.
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TASK 4
Characteristic of effective leader and models which will help to justify the analysis.
Toyota is having a issue in recruiting and selection process at it is taking too much time to
recruit qualified candidates within locality and all across the world and the common issue which
was discussed was motivation and retaining and employees. Therefore, HR managers leadership
must be strong and visionary so it can increase efficiency of recruitment process with the right
tools and motivation power must be good in order to influence its workforce to other level in the
marketplace. Effective HR managers are provocative and organized people who want to help
organizations achieve their goals, and employees to realize their potential which depends upon
the characteristics of leader which are as follows:
Attitude - A good employee manager must have a humane approach to human resources.
Regardless of the problems faced by employees, they must empathize when dealing with them.
Quick decision - It must show the ability to make quick decisions. HR managers must have
ability to make quick decision in recruiting qualified candidates.
Integrity - As the head of human resources, HR managers must prove integrity. Honesty and
wisdom are the hallmarks of a good HR manager. Employees can never question the integrity of
an HR manager.
Patience - They must be very patient, not someone who easily loses control. When dealing with
employees, it is important to be a good listener, especially if an employee expresses their
concerns.
In addition, employees who tend to talk to HR managers about their problems can
become angry and offend verbally (Jiang Chuang and Chiao, 2015). In such situations, it is very
important that human resource managers remain calm and control the situation.
Official Authority - It should only depend on formal authority. In fact, an effective HR manager
has an informal power to influence people through their interpersonal skills.
Good communication skills - Another important advantage of the HR manager is that they must
have good communication skills. Indeed, being a good communicator is a must, because most of
its roles involve interaction with employees, unions, and leaders. This can help the HR managers
to conduct interviews smoothly.
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Henry Foyal Theory - To justify this Henry Fayol explained key qualities of effective leader
HR managers must have more human skills than other management skills. The following are the
skills of HR managers into the following categories:
 Health based on physique, vitality, response and the ability to learn and understand with
focused mind, to assess and adapt
 The managers must have good energy of morale, will power in completing the work with
determination, dignity and loyalty.
 General knowledge and education about topics that are not exclusively owned by the
functions to be performed and experience from work.
According to above analysis the issue related to motivating and retaining the employees can
be critically understand or justify with the help of model named Maslow Hierarchical Model.
Maslow Hierarchical model - Toyota can enhance the motivation further by adopting proper
reward system which shows how employees receive compensation for their external or internal
work. This premium must be considered a payment system such as health insurance which will
lead to employee motivation and satisfaction. Toyota can also increase the motivation by
providing training which helps the employees increase in encouragement and boost their working
mood. There are many theories and motivational approaches that can be adopted by Toyota but
down there is there only one important theory i.e. Maslow hierarchy theory. This is a content
theory that focuses on needs and motives that cause behaviour and every time someone speaks
Motivation occurs in the minds of Maslow's hierarchy of needs. The psychologist named
Abraham Maslow wrote a book which explains the motivation and needs to be required by
human in a pyramid shape. This book can provide help in meeting the needs of workers within
the organization.
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Figure 1Maslow Hierarchy theory
Source: Maslow's Hierarchy of Needs, 2018.
CONCLUSION
After going through above report it has been summarized that organisation is using the
Guest model of HRM to manage the HRM in the organisation. This report also shows the HR
function of the Toyota which shows the recruitment, HRD and selection strategy of the
organisation is proving good for the firm in improving the performance of the business. These
report also shows the different type of software which are available for the business to use to
manage the work more properly and out of all the software the one which is more efficient is
HRIS software program. But after going through all the report it can be said that Toyota has
some problem which every company has but in the long run of the business Toyota is doing well
in the HRM of the organization.
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