Toyota Motor Corporation: Strategic Human Resource Planning and Strategic Recruitment

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Table of Contents

Introduction
Toyota HR Strategy
Human Resource Planning
Recruitment and Selection
Conclusion
References

Introduction

The business environment has been getting more complex and competition has been increasing everyday. Recent problems such as the economic crises and others have caused organization to find ways of staying ahead of competition.

Organizations are continuously looking for ways to gain a competitive edge over the other organizations. This mostly affects the multinational organizations because the international organizations face global environment which is more complex than the local environment.

One of the major areas of focus in trying to attain a competitive advantage is through the use of employees. Organizations have realized and embraced the fact that human resource is a strategic asset to an organization and if well used, it can make the organizations gain a competitive advantage (Kathy & McMackin, 2001).

Most organizations are now competing on how to attract, maintain and motivate employees. Focus on employees has thus become a big strategic move for most companies.

Strategic human resource management has been described as the process of linking the human resource function in an organization with the strategic objectives of the organization with the aim of improving performance.

Strategic resource management like any strategy has a mission, vision, analysis of the environment, formulation of the strategy, strategy implementation and strategy evaluation (Lundy & Cowling, 1996).

Toyota Motor Corporation has not been left out by this trend. The company has been able to use employees to gain strategic position in the global market. The main areas of focus on human resources for the company are strategic human resource planning and strategic recruitment and selection. These have helped Toyota Motor Corporation to gain a competitive edge in the market (Liker, 2004).

The ensuing discussion will show how strategic human resource management and strategic recruitment and selection have helped the company to achieve its business objectives.

Toyota Motor Corporation is one of the biggest companies in the automobile industry. It is based in Japan and it offers a wide range of products. The main products for the company include mini vehicles, buses, trucks and other models. The company has subsidiaries which have plants and manufacturing components in most parts of the world.

The core business of the company is automotive business which accounts for 90% of the sales for the company annually. Other business activities include telecommunications, manufacturing and selling of leisure boats and pre-fabricated housing. The nature of the operations of Toyota Motor Corporation is labor intensive and this requires a great focus on the human resource management in the company (Toyota Motor Corporation, 2011).

It is the policy of Toyota Motor Corporation to manufacture high quality products, satisfy fully the needs of the customer, provide quality service to the society and to maintain market leadership.

The company is also committed to improving the environment through reduction of environmental pollution, complying with legal provisions on environmental safety and assisting the general society to make the environment more friendly to the general public (Liker & Meier, 2007).

Toyota HR Strategy – How the Company Achieved Business Objectives

As discussed above, human resources could be used to gain a competitive advantage through achieving business objectives. Toyota Motor Corporation has been able to use its human resources to achieve its objectives. This has been achieved through strategic human resource management and strategic recruitment and selection. Toyota Motor Corporation has various business objectives.

One of the business objectives for the company is to improve on quality, enhance efficiency, minimize cost and increase productivity. The company has been striving to manufacture top quality vehicles which suit the needs of the customers (Schuler & Jackson, 2007).

The company has focused much on its human resource in order to achieve quality, minimize cost, achieve efficiency and attain the other business objectives. It is the belief of the company that the more its employees are satisfied, the more the company will succeed in attaining its objectives.

Toyota Motor Corporation uses the Kaizen method for continuous improvement in its production and this makes the focus of the company on human resource of great concern (Liker, 2004).

According to Liker (2004), Toyota Motor Corporation has therefore embraced a culture commonly known as the Toyota Way which enhances performance of employees through respect for people and continuous improvement of the employees.

The major assumption of Toyota Motor Corporation is that a carefully selected and properly developed workforce will help the company to achieve its business objectives (Liker & Meier, 2007).

It is important to note that the focus on human resource in Toyota Motor Corporation is engraved in the company’s overall vision and mission statements. The vision statement of the company is “to be the most respected and successful enterprise, delighting customers with a wide range of products and solutions in the automobile industry with the best people and the best technology” (Toyota Motor Corporation, 2011, p.1).

This is enough evidence that the company has put a lot of emphasis on the human resource as a strategic tool in its operations. A big question is whether that focus has helped the company to achieve its objectives or not. The major components of strategic human resource management are strategic human resource planning and strategic recruitment and selection.

Strategic Human Resource Planning of Toyota Company

Strategic human resource planning is described as the process of determining the job requirements and specifications and determining the right employees for the jobs. It also includes determining when to recruit, who to recruit, for what purpose to recruit and how to recruit. There are three major components of strategic human resource planning.

One of the components is human resource forecasting where an organization determines its future human resource needs. The other component is formulation of a human resource strategy and this involves the mission, vision, objectives and goals for the strategic human resource management.

The last component is human resource planning which is integration of the human resource forecasting and strategy formulation (Bandt & Haines, 2004).

The setting of goals and mission for the human resource management is an important component for strategic human resource management. It ensures that a company knows what it wants in its human resource management. The vision and mission provide a summary of the aspirations of an organization with regard to human resource management.

Environmental analysis is another major component of the strategic planning process. This component entails the evaluation of the internal factors as well as the external factors in the job market. This helps an organization to develop the strengths, weaknesses, opportunities and threats with regard to its workforce.

This would help the company to make a good plan to exploit the opportunities and to mitigate the threats. It will also help to lay down plans which ensures that the company strengthens it strengths and eliminated weakness on human resources in the organization.

The other component in strategic human resource planning is formulation of the strategy. This involves reviewing the mission and vision, factoring in the external and internal factors and then drawing a list of alternative strategies for human resource management.

The best strategy that results to the best outcome is selected and this completes the strategic human resource planning process. A good strategic plan is important since it helps an organization to reduce costs and align the human resource requirements and human resources (Holbeche, 2009).

Viewed from another perspective, the strategic human resource planning process entails assessment of the human resource capacity of an organization, forecasting the future human resource needs of the organization, conducting a gap analysis and then developing the strategy to ensure that the organization fills the gaps that exist between the current capacity and future human resource requirements.

Assessment of the current human resource capacity ensures that an organization understands what it already has in terms of skills, and abilities of the employees (Bandt & Haines, 2004).

Forecasting of the human resource requirements in the future is done on the basis of number of employees; the jobs that will emerge that will need to be filled, the sets of skills that will be required and the impact of the external environment on the organization’s human resource requirements.

Gap analysis ensures the organization understands what it needs in terms of new jobs, new skills, improvement in existing skills and the strengths of the employees in order to be able to meet the future human resource requirements. After development of the strategic human resource planning, the organization should document the human resource planning well.

This documentation outlines the assumptions in the strategic human resource planning and this helps the review of the plan according to changes in either the external or internal environment. The documentation also helps in setting timelines for implementation of various sections of the plan (Holbeche, 2009).

A strategic human resource plan ensures that an organization has the right employees who have the right and relevant skills at any time. It also ensures that an organization moves with the trends in technology, economy and legislation which have an impact on human resources.

It also ensures that an organization remains flexible to changes in the future that may be different from the expectations. The importance of strategic human resource planning can not be overemphasized (Holbeche, 2009).

The main rationale behind strategic human resource planning is to analyze the current position of an organization in terms of human resources, analyze the external factors that affect human resources and then predict the future human resource needs of the organization.

Some plans and strategies are fundamental to the success of a strategic human resource management and hey should be considered in developing the strategic human resource plan. These include the workforce planning issues, succession planning, employment equity issues and motivation and fair treatment of the employees.

Other important plans are on employee compensation, grading and employee performance review system and career development systems. In essence therefore, strategic human resource planning is the foundation of strategic human resource management and it should be approached with care. All other functions of strategic human resource management find their base in the strategic human resource planning.

Toyota Motor Corporation has used strategic human resource planning to a great extend to achieve its business objectives. It is worth noting that the company upholds strategic human resource planning and it appreciates its contributions to the success of the company.

The company continuously conducts an audit of its human resources to have a good understanding of the employees in terms of number, the skills of the employees and their values.

Furthermore, the company conducts an audit of the external environment in order to understand the trends in the labor market and the general business environment. This put Toyota Motor Corporation in a position to identify the gaps that exist between its current employees and future requirements (Liker, 2004).

Toyota Motor Corporation has a great focus on the future requirements in its human resources. This has helped the company to avoid surprises in the future which might affect it negatively in terms of productivity and strategic position. The strategic human resource plan for the organization is reviewed from time to time in order to reflect the changes in the market and also changes in the internal factors of the organization.

New plans are therefore developed as a follow up on the other plans for the previous periods. There is therefore continuous improvement in the strategic human resource management in the company (Liker & Meier, 2007).

Strategic human resource planning has helped Toyota Motor Corporation to achieve its business objectives. Through ensuring that the company has enough employees and adequate skills at all the times, the productivity of the company has been enhanced.

The good strategic human resource ensures that the company cuts costs in hiring and recruitment and other costs associated with shortage of labor. This has greatly helped the company to achieve the objective of cost minimization.

Through ensuring that the human resources have the relevant skills at all the time and that the employees are adequately motivated, the organization has been able to offer quality products to its customers. The company has also been able to achieve efficiency in production.

Toyota Motor Corporation has been able to achieve its business objectives through the use of strategic human resource management. Since strategic human resource planning is the foundation of strategic human resource management, it is a logical conclusion that strategic human resource planning has helped Toyota Motor Corporation to achieve its business objectives (Liker & Meier, 2007).

Toyota Strategic Recruitment and Selection

Strategic recruitment and selection of employees is defined as a process of attracting and identifying the best employees who will meet the objectives of a company and help it to achieve its overall business strategy. The basic features for strategic selection and recruitment are strategic integration of the recruitment with the overall business strategy, human resource planning and having in mind a long term perspective.

The other secondary requirement for strategic selection and recruitment is the use of rigorous evaluation, making a sophisticated selection and involving all stakeholders in the recruitment process (Nankerviss, Compton & Morrissey, 2007).

Strategic recruitment and selection thus ensures that the company attracts applications from the best potential employees and selects the best suited employees who will contribute towards the business objective of the organization.

The selection process must be free and fair, must involve all stakeholders, must have sophisticated selection criteria and it must be based on the strategic human resource planning. This would ensure that the company gets the best employees.

Strategic recruitment and selection has several dimensions or aspects. One dimension is that the recruitment and selection process must ensure that the process is well integrated with the strategic human resource strategy and the overall business strategy for the organization (Armstrong, 2000).

The other dimension is that the organization must ensure that the interests of all the stakeholders are considered. Customers, management, owners, compliance with government regulations and other stakeholder requirements should be considered in the strategic recruitment and selection.

The recruitment and selection process should also have a long term and short term strategic target. The process should be able to contribute to business transformation and management of change in the organization.

The employees recruited and selected should fit well into the organizational system and should be fit for the specific job in which they are being recruited for. They must possess core values and competencies that are desirable for their performance (Armstrong, 2000).

The other fundamental dimension of the strategic recruitment and selection is that the process must incorporate realistic job preview and great emphasis should be put into validation of the recruitment ad reliability models. The methods to be used for selection and recruitment should be based solely on fitness of the process for the purpose.

Lastly but not least, strategic selection and recruitment aims to ensure that an organization reduces post-recruitment costs which include costs of having to recruit again, retrain recruits and poor performance of recruited employees (Nankerviss, Compton & Morrissey, 2007).

In Toyota Motor Corporation, the company has adopted strategic recruitment and selection. The company provides its main reason for the recruitment and selection process being to attract applicants and select the best candidate for a given job. The company always makes advertisements with the aim of reaching all the potential labor markets across all the regions.

The company has put measure in place to ensure that there is no unlawful discrimination against any potential employee and applicant. The processes used for recruitment and selection are justifiable according to the job position for which the applicants are being recruited.

The recruitment and selection process in Toyota Motor Corporation incorporates all the stakeholders such as the governments, customers, trade unions and others. The company ensures that the tests and interviews administered to potential recruits do not favor or become a disadvantage to any candidate or groups of candidates (Liker, 2004).

Strategic recruitment and selection has helped Toyota Motor Corporation to achieve its business objectives. Through strategic recruitment and selection, the company has been able to attract qualified employees who are able to blend well with the values of the organization.

The company ensures that it employs people with a sense of quality and this has helped the company to provide top quality products to its customers. The employees of the company have positive values which blend well with the organizational values to enhance efficiency and productivity in the organization.

Strategic recruitment and selection has continuously ensured that the company employs qualified employees for the jobs in question. This has made the company to achieve its objective of cost minimization. This is because the company avoids costs of having to hire again, costs associated with poor performance of recruits and bad image of the company.

The strategic selection and recruitment method has also helped the company to increase its productivity. The process ensures that the company employs self-motivated employees who are qualified and who have knowledge for the job purpose. The employees selected have knowledge on the kaizen method of production which enhances productivity of the company (Liker & Meier, 2007).

Conclusion

Toyota Motor Corporation uses the Kaizen method of production which is commonly referred as the Toyota Way. This method focuses on increasing productivity and minimization of cost through continuous improvement. The business processes of Toyota Motor Corporation are labor intensive and this makes human resource a key factor in the organization.

The Kaizen system and the just in time production system that have been adopted by Toyota Motor Corporation require the organization to have a good human resource strategy. Employees in an organization which uses the Kaizen method of production should have relevant skills, they should be able to identify and solve problems and they should be well motivated (Schuler & Jackson, 2007).

The organization has been able to meet its business objects with the help of strategic human resource planning and strategic recruitment and selection which form core components of the overall strategic human resource management. The main business objectives for Toyota Motor Corporation are to minimize costs, increase productivity, enhance quality of its products and enhance efficiency in production.

These objectives have been attained by ensuring that the company has a good knowledge of employee requirements and that the recruitment process is aimed at filling the gaps that exist in the human resources of the company (Liker & Meier, 2004).

References

Armstrong, M. (2000). Strategic human resource management: A guide to action. London: Kogan Page Publishers.

Bandt, A. & Haines, S. (2004). Successful strategic human resource planning. San Diego, SD: Thinking Press.

Holbeche, L. (2009). Aligning human resources and business strategy. Oxford: Butterworth-Heinemann.

Kathy, M. & McMackin J. (2001). Designing and aligning an HR system. Human Resource Management Journal, 11(2), 57-72.

Liker, J. & Meier, D. (2007). Toyota talent: Developing people the Toyota way. New York, NY: McGraw-Hill.

Liker, J. (2004). The Toyota way. New York, NY: McGraw-Hill.

Lundy, O. & Cowling, A. (1996). Strategic human resource management. New York, NY: Routledge.

Nankervis, A., Compton, R. & Morrissey, B. (2007). Effective recruitment and selection practices. Victoria: CCH Australia Limited.

Schuler, R. & Jackson, S. (2007). Strategic human resource management. London: Wiley-Blackwell.

The Toyota Motor Company. (2011). Toyota. Retrieved from www.toyota.com

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