Toyota's HRM: Strategic Analysis of Global Human Capital Mgmt

This report provides an in-depth analysis of Toyota's strategic human resource management (SHRM) policies, highlighting the company's approach to attracting, retaining, developing, and rewarding employees. It examines key elements such as setting ambitious goals, integrating HRM strategies with organizational objectives, and managing expatriation using Parent Country Nationals (PCNs), Host Country Nationals (HCNs), and Third Country Nationals (TCNs). The report also explores the influence of Toyota's company culture on integration, pre-training practices, and recruitment and selection processes for HCNs and TCNs. Furthermore, it discusses performance appraisal and compensation strategies, concluding with strategic recommendations for Toyota's SHRM practices. The analysis emphasizes Toyota's commitment to investing in its people, fostering teamwork, and adapting to diverse global environments while maintaining its core values and lean management principles. Find more solved assignments and study resources on Desklib.

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Table of Contents
Strategic Human Resource Management analysis of Toyota..........................................................3
Company Background..................................................................................................................3
Strategic HRM Analysis..................................................................................................................3
Setting Big Goals.............................................................................................................................4
Integration........................................................................................................................................4
Expatriation......................................................................................................................................5
Recruitment and Selection...............................................................................................................6
Influence of company culture on integration...................................................................................6
PCN from Toyota............................................................................................................................7
Pre-Training practices......................................................................................................................9
Recruitment and selection on HCN and TCN..............................................................................9
Training..........................................................................................................................................10
Performance appraisal...................................................................................................................11
Compensation................................................................................................................................11
Strategic recommendations and Conclusions................................................................................12
Reference List................................................................................................................................13

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Strategic Human Resource Management analysis of Toyota
This article will analyse the strategic human resource management policies of Toyota.
The conflict management strategies of the companies have been the success factor behind them
along with their production system. The human capital of Toyota has been the engine behind the
substance and growth of the organisation. The intrinsic web of relationships that have been
established by the successful human resource management of the organisation develops a nerve
system which facilitates Swift transmission of information across the vast organisation. This
nervous system helps the organisation to ensure that “everybody knows everything” and also
allows them to implement ideas from anywhere and everywhere. The strategic factors that have
accumulatively develop the human capital for the organisation, will be discussed and analysed in
depth, in this Research report.
Company Background
Toyota Corporation was established in the year 1926 by Sakichi Toyoda. Toyota is the
largest manufacturer of vehicles in the world. The Global Business of the company is spread
across 170 countries and their employ 320808 people. Toyota leads the world in terms of
environmental Technologies. There is a dynamic mix of employees in Toyota with huge
diversity in culture, age, sex, beliefs and religious. The global employees of Toyota are highly
tolerant towards each other (Toyotamanagement.wordpress.com, 2018).
Strategic HRM Analysis
Strategic Human Resource Management involves the practices like attracting, retaining
developing as well as rewarding the employees for the benefit they bring to the organisation. As
highlighted by Jo (2018), the Human Resource Department of the organisation is concerned for

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undertaking studies Human Resource Management. However, they do not work independently
like they could do within a silo.
Setting Big Goals
Toyota establishes nearly unattainable goals in order to raise the consciousness as well as self
worth of the human capital. One important human capital goal car is allowing the employees to
channel their energies in various directions as well as forcing the specialists from various genres
to collaborate across the rigid silos where they generally work. For evidence, Zenji Yasuda, one
of the ex managing directors of the company, identified the wisdom behind painting with broad
strokes. Strategic Human Resource Management covers a lot of unique aspects like internal and
external structure adaption, controlling the cultural differences and internal conflicts come on
maintaining coordination none of the employees and other as well (Noe et al., 2017). The first
aspect of strategic human resource management at Toyota is integration.
Integration
Integration is the process of involving the human resource management strategies in
formulating as well as implementing the basic organisational strategies in alignment to the
strategic management needs of the company. Since, Toyota operates with a multicultural
workforce, Global organisational performance management is a big challenge in this context,
which is compounded by differences in understanding, custom as well as tradition. This is why
the company maintains a policy of undertaking Human Resource Management by geographical
dispersion (Aoki, 2015). The integration roles of the HR department of the organisation is to co-
ordinate internal factors like management philosophy and preferences along with external factors

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like social tradition as well as trade policies for developing the human resource policies which
represents the core values of the employees.
Expatriation
The traditional focus of the HR department of Toyota is always on expatriation.
Expectation is a unique approach of strategic Human Resource Management for appointment of
staff in all 170 countries where the company operates (Marchington, 2015). For the purpose of
fulfilling this staffing need, the company uses three specific elements, namely, Parent Country
National, Host Country National as well as Third Country National. The employees in the key
positions are located in the headquarters as well as subsidiary operations of the company. In this
context, the parent country National or PCN strategy is the primary focus on the organisation.
With the growth in size of the company, the spoke of global staffing has also shifted.
Earlier, focus was concentrating on top management division of global site only but now wide
range of staffing related issues are needed to be addressed, in order to fulfil the organisational
strategy of the company (Shin, Jeong & Bae, 2018).
The Expatriation strategies employed by Toyota include pre training programs for the
expatriates before they are transferred to foreign locations, compensate for transfer of
expatriates, repatriation and most importantly, establish links and for smooth working between
the expatriates as well as the local workers. In fact Agrawal (2017), states that PCN might turn
out to be the best alternative fordiverse workforces like Toyota who handles overseas workforce
and is responsible for compliance of overseas branch workers with the Organisational policies
and procedures. However, Zirar, Radnor & Charlwood (2015), observes that in the way of
implementing a successful Expatriation strategy, the company ignores the personal fulfilment

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needs of employees like promotion and family reunion needs of the employees, in foreign local
work domains
Recruitment and Selection
Employee staffing is an essential SHRM practice which helps the company to co-ordinate
control the far-flung Global operations. Recruitment and selection are considered to be to be
significant parts of staffing. The staffing process in the diverse Global locations also depends on
the selection of employees by the local HR department. However, Paraschivescu and
COTÎRLEȚ (2015), informs that there is a concerned team of noble recruitment agents who
supervisors the employment of parents country employees, host country employees as well as
third party employees also. Toyota demands the employees to work hard, but significantly
compensate send as this is one of the core values of the policy that is shared with employees.
Influence of company culture on integration
Since the foundation of the company in the year 1920, Toyota Motor Corporation
believed that the key to their success is investing in the strength of the people. As highlighted by
Lee et al. (2018), Toyota adopts various means to advocate the trust on their employee and
develop strategy for continuous development of the work force.
In this context it can be mentioned that one of the key strengths of the company is
teamwork. Against, such a background, the Human Resource Department of the organisation
occupies a very special position since the members of higher management like manufacturing
director or Managing Director work in strong collaboration with the HR department (Nkomo,
2018). The upper management of Toyota believe that they can beat knowledge and experience
from other sectors my working with the HR department and thereby address the needs of the

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company, more appropriately. In fact the line of communication of the HR department with other
departments is very strong and hence, human resource constitutes a very critical and important
position in the organisation.
This condition greatly facilitates the process of integration in strategic Human Resource
Management, where by the HR managers gets the chance of being involved into to the discussion
regarding how to associate strategic human resource management practices with the organisation
objectives properly with the decision making style of the team members. In Toyota, the HR stuff
has the liberty of sharing their perception regarding cross culture and tradition, management and
custom from personal point of view if they feel the policy goal and requirement are not suitable
for the company.
Moreover, the ideology of respecting their employees combined with the need to open up
overseas market drives the organisation to implement such regulations which helps them to
become more suitable in the internal and external environment (Toyota Motor Corporation,
2019). Toyota America has retained significant part of the American style of working system,
considering their personalities as well as customs. Toyota, China operates in collaboration with
the automobile company owned by the Chinese state and thereby establishes joint ventures with
the Chinese government. This helps the company to develop native Enterprises as well as
restrain foreign capital.
PCN from Toyota
In order to resolve the challenges that the company has been facing in context to
expatriation has set a structure stringent policies for expatriations, particularly for the parent
country nationals. Firstly, the expectorants are not recruited openly. We are selected in ternary

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since this helps in guaranteeing that the selected candidates have a strong understanding of the
company's spirits. Secondly, the position promotion will become a convention for the expatriate
when he comes back and accomplish the task successfully. Every member of senior management
of the organisation has overseas working experience. This is how the company establishes a
strong difference from the Japanese traditional organisations who takes the expatriates away
from the core Management team. This promotional policy motivates the employees of the
Japanese Enterprises to get involved in the Expatriation (Kham, 2018). Thirdly, Toyota
encourages the expatriates to take their family members along with them to the host country and
also supplies financial support for initial settlement. Today also extends the care for individual
employees to the respective family of those employees, thereby winning over the loyalty of the
employees. In this context, it is worth mentioning that the organisation believe in the traditional
idea that the families are the driving force behind the performance of every employee of Toyota.
The strong bonding between the expatriates and the local employees lays the foundation of the
strong multicultural teams which can easily compete with major brands of automotive
manufacturing (Aoki, 2015).
There are some subtle qualities for an expatriate. The most essential requirement for
becoming an expatriate is to have strong communication ability including the ability to read
write and speak the language of the host community. The HR department of the organisation
believes that in order to establish good relation with the local employees, communication is the
only pathway, which help in achieving this goal.
However, most of the Global networks of Toyota in various countries perceive that
professional knowledge of the expatriate is essential for the advancement of the organisation.
However, the code management believes that communication is a biggest strength compared to

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professional knowledge. Without proper communication skills, any organisational member will
not be able to convey or implement their professional knowledge for making the work processes
smoother.
Pre-Training practices
As a lean management Enterprise home theatre implements reducing and eliminating
waste, as an aspect of Human Resource Management. Pre training has been considered to be the
process for elimination of unnecessary waste from the workforce. As informed by Shin, Jeong
and Bae (2018), in every country where the company operates, the maintained a vast training
content where significant attention is attached with the local working culture, tradition and other
factors so that potential cultural conflict can be avoided. Again, local employees are also
provided cultural training so that they can understand the Japanese working trends easily.
Another aspect of strategic human resource management of Toyota is mutual trust. This is basic
for the overseas branches, more so because the employees have to adopt with differences in
culture, presentation, attitude and working skills of their colleagues.
Recruitment and selection on HCN and TCN
Almost all employees of Toyota in the middle management position as well as the more
operative levels recruited from local areas, since there is no differentiation between International
and Domestic level of employees in such levels of the work force.
The standard of the selection process in is there Lean manufacturing strategy. This is why
the company employs highly skilled candidates only, who have other knowledge traits, excepting
the normal techniques required for their job role. It is highly expected that the candidates who
joined the organisation will have major strengths like teamwork collaboration and cooperation

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based on abilities of social communication, eagerness to learn new organisational aspects and
can deliver consistently in the decision making process by providing new ideas. The organisation
needs employees who can substantially exhibit flexibility and adaptability and can work for the
whole company not just becoming a part of a concerned department.
This is why Toyota maintains a strict recruitment process which is multilayered. This
calls for standardization of behaviour (Lee wt al. 2018). For evidence at the time of interview
during the recruitment process former the selectors would take ability, techniques as well as
characteristics into consideration as well. In the assessment part of the interview, interpersonal
interaction skills play a significant role in selection of the candidate.
So far as selection of potential candidates is concerned, Toyota is mostly interested in
hiring candidates who have significant work ethics. As per the HR lead of the organisation, it is
preferable to select people who have the culture of hard work within them and have the
necessary motivation to learn as well as perform. In terms of selecting people for the position of
Team Leader or group leader, that the desired Candidate should have good skills in providing
training to the subordinates. The team leader, should specifically basic knowledge of all the job
roles that they are managing and hence they should be able to provide training for all such jobs.
As stated by Kham (2018), this is an essential component of lean management technique of the
organisation where people in a particular area who knows the work are able to provide training to
others who joined the same domain.
Training
A popular phrase in the HR department of the company is: “we do not just build cars, we build
people”.

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The company believes that every developing program, every quality defect or kaizen
activity is an opportunity for the company to build People. This is the basic philosophy behind
training and development in the company.
In order to provide training, Toyota has been emphasising on opening 3 regional training
centres which will be known as Global production centres. The first one will be located in
Thailand for supporting the employee ways in the Far East (Toyotamanagement.wordpress.com,
2018). The next one will be opening in England to support Europe and the last in Kentucky for
their American operation. In every plant of Toyota there are satellite centres. However the
company had to face the challenge of insufficient number of skill trainers to teach the batches of
new people who have recently joined the company to develop a formal training program. For
tutor interactive learning systems as well as video tips showing the do's and don’ts, the right and
wrong in the company, are integral part of the training process.
Performance appraisal
Toyota adopts the model of Total system efficiency rather than personal efficiency. This enables
the organisation to look beyond the individual work efficiency during the process of evaluating
the standard of the workplace. However, in contrast the company values the isolation of variation
in the word processes. It has a structure in place for alluring the value adding team Associates to
exercise on their own task, not being distracted by other issues. This holds significant importance
in performance evaluation.
Compensation

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The secret behind the success of Toyota is lying in the fact that the highest only the best
performers. The Other extenuating circumstances allow the company to pay better salaries and
benefits which attracts and helps to retain exceptional number of employees.
Since Toyota employees the best people only, their attrition or separation rate is very low. They
do not believe in seasonal employment and that is why In hard times, they do not lay off any
individual. The either change the job domain or the work role of the concerned employee or
retains them.
Strategic recommendations and Conclusions
It is suggested that the process of interview should be made more comprehensive by
making a thorough check of the individuals before finalising them. Knowledge and skill
development are vital for Toyota and that is why the interview process is should be focusing
more on selecting candidates based on the nature of the job. Since the company focus more on
employee people who have skill regarding multiple job roles, it often fails to focus on the basic
talent of the employee regarding the job for which he or she is selected. Another suggestible
change for the company is that they should not pick up any candidate who suits the culture of
Toyota. In order to accommodate these changes the company should organised structured or
unstructured interview, behavioural directive interview as well as virtual and personal interview.
It is further recommended that in the finalisation of the candidates, reference check is needed to
be conducted for ensuring that criminal record, reason of leaving the previous job and examining
factors so forth.

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Reference List
Agrawal, A. (2017, March). HRM Effectiveness through E-HRM. In National Conference on
“Contemporary Issues in Management & Entrepreneurship” 04th March, 2017 Jointly
organized by The Confederation of Indian Industry (CII).
Aoki, K. (2015). Labour Relations and HRM in the Automotive Industry: Japanese Impacts. The
Global Automotive Industry, 83-94.
Jo, H. J. (2018). A Comparative Study of the HRM in Toyota and Hyundai.
Kham, L. 2018. AUSM. Retrieved on: 28th March 2019. Retrieved from
https://www.academia.edu/4400648/HRM
Lee, M. J., Paik, S. Y., Cave, A. H., & Jung, J. S. (2018). Comprehensive competitiveness for
auto companies from the USA, Germany, Japan, and Korea: empirical analysis through a
diamond model perspective. International Journal of Multinational Corporation Strategy,
2(2), 95-132.
Marchington, M. (2015). Human resource management (HRM): Too busy looking up to see
where it is going longer term?. Human Resource Management Review, 25(2), 176-187.
Nkomo, T. (2018). Analysis of Toyota Motor Corporation. Retrieved on 28th March 2019.
Retrieved from https://scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf
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management: Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Paraschivescu, A. O., & COTÎRLEȚ, P. C. (2015). Quality Continuous Improvement Strategies
Kaizen Strategy--Comparative Analysis. Economy Transdisciplinarity Cognition, 18(1).

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Shin, S. J., Jeong, I., & Bae, J. (2018). Do high-involvement HRM practices matter for worker
creativity? A cross-level approach. The International Journal of Human Resource
Management, 29(2), 260-285.
Shin, S. J., Jeong, I., & Bae, J. (2018). Do high-involvement HRM practices matter for worker
creativity? A cross-level approach. The International Journal of Human Resource
Management, 29(2), 260-285.
Toyota Motor Corporation, 2019. Sustainability Data Book. Retrieved on: 28th March 2019.
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Zirar, A. A., Radnor, Z., & Charlwood, A. (2015). The relevance of the human resource
management (HRM) to lean in the service sector: evidence from three exploratory case
studies.