Human Resource Issues At Toyota: Essay And Recommendations.

Prepare a brief report in which you survey the arguments for and against the above statement, and then justify your own position. In your answer, provide examples of entrepreneurs and corporate managers, from your reading and your own experience, to illustrate the points you are making. When you refer to an example, provide enough details about the person so that a reader, who does not know about the person, can understand the points about that person that you are trying to make. You will have to provide a definition of entrepreneurship in the
introduction to your paper. 

Human Resource management is essential for the success of the business organization.  Any failure in the human resource mechanism leads to serious crises in the companies (Hendry, 2012). One such example is Toyota Motor Company.  The human resource crises in the organization have caused recent recalls.  The system gives reward for cost containment instead of managing product quality.  Another challenge faced by the company was due to the organizational culture. There was a communication gap in between the employees at the lower and the middle level causing serious issue. The company has failed to perform while implementing proper workforce planning. They were unable to judge the right number and type of personnel for the right position.  There Human resource department failed to perform the function of risk management. The report provides information related to human resource issues at Toyota and discusses how the current HRM issues are affecting the organization. Furthermore the report provides recommendations in order to implement solutions in order to earn efficiency (The Company.2017).

The mission of Toyota is to attract customers and to provide high value products and services in order to satisfy maximum consumers. The purpose of the organization is to attain significant result by managing the customers worldwide

The vision of the company is to become the most successful and respected car company (The Company.2017).

These objects can only be attained if a company develops a cohesive organizational structure. Formulation of an effective organizational structure is important for an organization so that the goals can be realized. The purpose is to meet the end results by developing the results effectively. The company can only attain the results if the employees in the organization are happy. It is most importantly necessary that they should understand responsibilities given to them (Armstrong and Taylor, 2014).

Toyota Motor Corporation was founded in the year 1937 by Kiichiro Toyota. The company is an automotive manufacturing company located in Toyota, Aichi, Japan.  The branches of Toyota are located in almost all the countries. Toyota provides employment to more than 3, 00,000 workers and manufactures 200 million vehicles. It is one of the largest companies in the world and earns a high amount of revenue when compared to other automotive companies. It is the first Automotive Company to produce 10 million units in a year (Pynes, 2008).

Toyota was known for the quality of vehicles it was previously manufacturing. This has helped the company in becoming the largest corporation in the world. The recall of vehicles led to serious issues in the company (Boxall and Purcell, 2011). The recalls has posed a question in the mind of people that the manufacturing executive are not following Toyota’s Quality. These types of recalls have led to many problems that caused damaged to the brand reputation.  The human resource failure has led to problem which manifested in the manufacturing defect. The reward system at Toyota is the main cause for failure of human resource. Another human resource issue at Toyota is due to proper risk management at work.  This issue was caused due to lack of people assigned for the work.

Background

The primary reason behind the failure of Toyota is due to the weak management of employees. The mechanical defects caused to the system were due to the ignorance of Toyota’s leader for a substantial time-period. The information regarding the recalls was known to the company’s leader and they also had time to correct the issue. The management of company tried to hide the situation with the mechanics of their vehicles. It is due to the reason that the reward system at the company gives reward for cost containment. The company instead of rewarding managers for maintaining the quality of vehicles provides rewards for their ability to contain the cost within the organization. The purpose of reward system for an organization is to encourage and promote right behavior and to discourage wrong activities. It is necessary for an organization to reward the employees for successful elimination of negative information.

It was estimated by the business week that the main reason behind the Toyota loss was due to management of human resources. The reward system led to serious issues in the organization which led to ethical breach.  The long term impact of the root causes has led to hundred of billion of loss. The mechanical failures happened to the organization were known to the leaders. They distorted the company in order to hide the situation. But hiding the situation has led to system failure. In order to manage the situation it was advised that the organization should have appropriately managed the issue in a better manner (Sullivan, 2010).

The recalls and manufacturing defects in the company were caused due to the cultural mismanagement. It is due to the fact that the lower level management has been complaining about the defects previously. There were gaps in proper communication in between the lower and middle level of management (How HR caused Toyota to crash.2010). The personnel were complaining about the deteriorating quality of the product. The upper level management was not taking complaints made by the lower level management. This is the dangerous corporate culture due to communication gap in between the teams. The upper level management has no serious concern about the lower level management. The lower level managers were hardly receiving any benefits for hitting the cost targets. It is however essential for the upper level management to take special care regarding the bonus and rewards for the lower level management (Bratton and Gold, 2012).

Human Resource issues

The necessity of ensuring leadership is to keep effective leaders at the right place so that the organization can take correct decisions on long run. It is seen that leadership development and promotion process failed at the stage of recall. The leaders were unable to communicate organizational goals with the subordinates. This has widened the gap in between the organizational objectives and decision making. Employees were losing faith in the leaders as they were hardly listening to their grievances.

The purpose of hiring is to bring the top performing individual with the high skills and capabilities. It will help them to handle complex situations. A poorly designed recruiting and assessment element can lead to complex issues within the organization.  Toyota has a poorly designed hiring process that is causing an issue in managing the overall organizational goals. It is the duty of the HRM department to hire the right person at the right place. Poor hiring in the organization can lead to breakdown of the internal machinery (Schuler and Jackson, 2008).

Performance management is essential for an organization to attain the sustainable results. The performance appraisal is essential in an organization. It is necessary to measure the performance related measurement system. The turmoil in Toyota was caused due to ineffective performance management process. It has lost trust in employees due to ineffective policies. The HR Manager at Toyota needs to give an alert to the management regarding the issue at an early stage so that the goals could be managed. Here is a need to monitor the issues effectively so that the mean can be attained on an early basis (Hamel, 2008).

Retention of employee is equally important as recruitment. It is important for an organization to retain those employees who are adding value to the company. Toyota ignored the fact that caused the imbalance in attaining efficiency. The organization was not efficiently utilizing the goals that were set before for attaining goals. However they were losing the faith of the employees working at the lower level. This has caused a serious problem in managing the organization for a long run (Price,2007).

The ongoing series of massive recalls at Toyota were caused due to improper training of the personnel. The rapid growth of the organization in the recent time has led to many changes in the organization. The employee training in the past was not appropriate in coordination with the current issue. It is the role of training and development department to provide effective training to the employees so that they can adopt internal and external environment. Training and development plays a major role in performing job functions at optimum level (Dessler, 2009).  The reason behind failure of human resource is to plan workforce planning. They are unable to train personnel in a proper manner in a rapid growth. Toyota is finding difficulty in supervising the staff due to fast growth. It is the duty of the human resource to employ the right person at the right place. The rapid growth in Toyota has led to breakdown in the overall mechanism. The most challenging human resource issue was to employ a right person at the right place.

Structure of Management

The human resource department is finding difficulty in managing the risk. This led to majority of problem and finally caused failure at Toyota. The major issue was regarding recognition of problem at an early stage and to draw plan accordingly. There was issue in managing the risk at an early stage so that it doesn’t affect the organization lately. The series of recalls has made it obvious that the company needs to maintain the quality of vehicles in this competitive environment (Harzing and Pinnington, 2010). It is however essential for an organization to implement a proper human resource risk management procedure. It is important for human resource personnel to manage the risks in the organization strategically. The strategic risk leads to breakdown in the overall culture of the organization. The human capital strategies need to be implemented carefully looking into the current scenario. In this case there were communication gap in between the teams that led to the system failure. The lower level management tried to communicate the issue to the middle level management. It was due to the fact that they ignored the continuous growing concern made by them(Liker and Hoseus, 2009).  There were certain operational risks in the organization as they were unable to meet the current requirement of the organization. There was a gap in between the fulfillment of the employment. The decision making was ineffective in the current context that led to the issue. It is the duty of the human resource department to recruit the employees quickly in order to meet the needs. It is there duty to access whether the hiring and recruitment procedure in the organization is happening in an effective manner. There duty is to meet the sustainable needs that are essential to be fulfilled looking at the current scenario (Sparrow, Brewster and Chung, 2016).

The human resource department at Toyota failed to make proper risk assessment that posed a serious risk to the company. The employees at Toyota are not given effective training tools so that they can meet the goal through mutual cooperation.

It is recommended that Toyota should maintain the quality standards by setting the objectives for the company.  It has to develop more effective policies so that the organization can manage the bonus and reward structure. The compensation to the manager needs to manage the cost cutting measures and to keep cost low so that the consequences can be attained (Werner and DeSimone, 2011). In this way the safety of the vehicles can be maintained. The safety of the vehicles can be managed if the managers are being rewarded on the basis of quality (Bamberger, Biron and Meshoulam, 2014).

Corporate culture

It is the job of the human resource management that ensures that a right person is hired at a right place. It is also the duty of the human resource department to ensure that the employees are given duty according to individual caliber.  Human resource department assess the hiring needs of the organization. The main reason behind the procedure of recall is due to the overall hiring procedure.  The hiring of employees did not match to the requirements. The lower level engineers were fulfilling the duty of the upper level managers(Collings and Mellahi,2009). The engineers did not have required knowledge to address the issue. Moreover these engineers did not have problem solving skills that led to the issue. Skills are equally important for an organization to meet the desired objectives. Therefore human resource department needs to develop a recruitment plan in order to implement the effectiveness. The human resource department needs to find out the key job that is associated with the employees. They should evaluate the appropriate result associated with a job. The human resource department is lacking the skills in order to implement the desired objectives. It is essential to draft the plan regarding the human resource requirement in order to fill the vital information. Therefore it is recommended that the organization needs to implement an effective training procedure so that organizational objectives can be attained.  The human resource department at Toyota needs to manage the organization in order to ensure that the employees receive right amount of skills(Dowling,2008).

In addition it is recommended that Toyota needs to focus on formulating an effective risk management by ensuring that the different risks associated with the organization can be managed. The overall corporate culture of the organization should not deter the lower level employees. In order to avoid the situation the human resource department needs to do proper risk assessment so that the goals can be attained (Schuler and Jackson, 2008).

Conclusion

The problem at Toyota didn’t happen due to a single person contribution but there were series of things that contributed towards the failure of overall organization. Toyota Corporation has been facing number of recalls in recent time due to manufacturing defects. The human resource failure can lead to overall failure in the organization. Toyota is been known for excellent services it is been providing in the past. It has maintained a high level of quality in the past that has helped the organization to attain significant recognition. In the recent time due to disturbance in the human resource system the organization is been facing failure in the internal mechanism. There are majority of issues that the company is facing due to reward system, training and development and risk management. The Toyota motor failed to perform the functions that have led to organizational disparities. The vehicles produced during that time period was full of flaws. Appropriate number of people should be recruited in order to put the right number of employees at the right position. An additional human resource issue has led to corporate failure. It is essential that the organization show a special concern to the lower level management while addressing issues. This will ensure optimum performance in the organization.  The key lesson learnt from the organization is that the HR department needs to conduct a regular audit in future so that the future loss can be avoided.

References

Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management practice. Kogan Page Publishers.

Bamberger, P.A., Biron, M. and Meshoulam, I., 2014. Human resource strategy: Formulation, implementation, and impact. Routledge.

Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.

Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave Macmillan.

Collings, D.G. and Mellahi, K., 2009. Strategic talent management: A review and research agenda. Human resource management review, 19(4), pp.304-313.

Dessler, G., 2009. A framework for human resource management. Pearson Education India.

Dowling, P., 2008. International human resource management: Managing people in a multinational context. Cengage Learning.

Hamel, G., 2008. The future of management. Human Resource Management International Digest, 16(6).

Harzing, A.W. and Pinnington, A. eds., 2010. International human resource management. Sage.

Hendry, C., 2012. Human resource management. Routledge.

How HR caused Toyota to crash.2010. Online. Available at: https://www.hcamag.com/opinion/how-hr-caused-toyota-to-crash-115650.aspx Accessed on: 23 March 2017

Hunter,P.2010. Root Cause of Toyota's Failure: Employee Engagement. Online. Available at: https://www.humanresourcesiq.com/hr-management/articles/root-cause-of-toyota-s-failure-employee-engagement Accessed on: 23 March 2017

Liker, J.K. and Hoseus, M., 2009. Human resource development in Toyota culture. International Journal of Human Resources Development and Management, 10(1), pp.34-50.

Price, A., 2007. Human resource management in a business context. Cengage Learning EMEA.

Pynes, J.E., 2008. Human resources management for public and nonprofit organizations: A strategic approach (Vol. 30). John Wiley & Sons.

Schuler, R.S. and Jackson, S.E., 2008. Strategic human resource management. John Wiley & Sons.

Sparrow, P., Brewster, C. and Chung, C., 2016. Globalizing human resource management. Routledge.

Sullivan,J.2010. A Think Piece: How HR Caused Toyota To Crash. Online. Available at: https://www.eremedia.com/ere/a-think-piece-how-hr-caused-toyota-to-crash/ Accessed on: 23 March 2017

Werner, J.M. and DeSimone, R.L., 2011. Human resource development. Cengage Learning.

The Company.2017. Online. Available at: https://www.toyota.com.au/toyota/company Accessed on: 23 March 2017