TOYOTA MODEL OF HRM



Toyota is known for many world class products and quality initiatives that include famous Toyota production system that later became popular as JIT (just-in-time inventory). Toyota maintains high profile in its HRM policies and practices too. Ian Winfied of university of Derby, UK who conducted a detailed field study on Toyota’s HRM in 1994, strongly believes that human resource practices of this company can serve as a model, particularly in manufacturing and production oriented organizations. Toyota’s HRM framework broadly comprises of four goals as described below:

1) The goal of organizational integration. The integration of employees at individual and collective level with organization is seen as the primary goal of Toyota HRM strategy. This goal has been achieved through extensive use of teams that are subordinate to organizational goals. Welfare of employees also received wide attention as a part of this goal.

2) The goal of commitment. In order to achieve this goal, a two-pronged strategy was followed. Firstly, Toyota preferred semi-rural workforce for induction in their plants. They believe that people who are not contaminated by industrial culture and influences tend to retain with them a kind of feudal value of loyalty, which can be converted into organizational commitment. Secondly, measures such as suggestion schemes, quality circles and employee involvement methods are used to gain commitment.

3) The goal of flexibility and adaptability. Team authority in place of single individual holding all the powers had paved way for realizing flexibility in the organization. These teams are task-based and can be dismantled or restructured, depending upon the situation. The adaptability trait is institutionalized through the approach of multi-skilling and job rotations.

4) The goal of quality. Self, peer and teams surveillance techniques are used to ensure quality of products. Further, a series of measures employed, such as time and motion study, benchmarking, continuous process improvement and employee involvement contributed in the achievement of this goal.



Toyota has recomposed the aforementioned four HRM goals into 17 specific practices. These 17 practices are classified into production practices and employment practices. The production practices are: JIT, Kanban, Line stop, Level scheduling, Continuous flow and Processing. The employment practices are: Continuous improvement, Single status facilities, Performance appraisal, Daily team briefings, Temporary contracts, Performance related pay, Company council, Cross training and group decision-making.



Managerial Implication



This model has two prime practical implications. Firstly, it serves as an ideal model in terms of how an HRM strategy must be made. In other words, a sound HRM strategy should have super ordinate goals linked to organizational goals and these goals must be rendered to core HRM practices. Secondly, the mix of local ethos with international practices to obtain commitment and organizational integration of workforce serves as a great learning tool. For example, Toyota used local cultural/rural ethos to launch its production system of international origin and obtain loyalty.