The Toyota WayAn insight into Toyota’s Reward System

Presentation by,V E R I F I E D D O M I N A N T U N I T ( V . D O . U . )

A brief about the company

• Toyota Motor Corporation is a Japanese automotive manufacturer headquartered in Toyota, Aichi, Japan.

• It was founded on August 28, 1937 by Kichiro Toyoda

• The current president and representative director is Akio Toyoda

• It ranks 9th in the Fortune Global 500 list of year 2015

Company’s VisionMost respected and admired company

We deliver outstanding automotive productsand services to our customers, and enrich our

community, partners and environment.

Company’s Mission

What is “The Toyota Way” ??

Apart from being the title of the #1 best selling book by author Jeffrey K. Liker,

Toyota Way is actually a set of 14 management principles that underlie the

Toyota Motor Corporation’s Managerial approach and production system

Ever wondered why some employees are

more motivated than other to achieve a

higher level of productivity?

The answer lies in the reward systems

What are rewards?

Reward are positive outcomes that are earned as a result of anemployees performance

Example

Personal

achievement,

proffesional growth,

sense of pleasure and

accomplishment

IntrinsicExample

Benefits like

reimbursement of

telephone bills and

monetary rewards to reach

target.

Extrinsic

Types of Reward System

Frederick Herzberg, who is one of the leading theorists of

workplace motivation, found intrinsic rewards to be much stronger than

financial rewards in increasing employee motivation

What caused Toyota’s biggest failure during 2009- 2010

• At the end of 2009 and beginning of 2010, Toyota had recalled 112,500 cars inthe US (in 3 different but related recalls)

• Numerous class action lawsuits filed by the consumers in US and Canadaalleging Toyota’s negligence

• Major complaints were about uncontrolledacceleration

• Noted industry analysts commented thatrecalled parts were not due to factory issue, butdue to the fault in design

• Ignorance of the customer complaints

Where does rewards system come into play??

• The flaws in the design were known to the managers

• The organization’s disproportionate reward to managers for cost containment versus sustaining product quality

• It created incentives for everyone involved to ignore facts and deny problem’s existence

Extrinsic Rewards

• Discounted vehicles and spare parts

• Overseas career development

• Parental leave

• Employee assistance program

• Superannuation

The present Reward System

W H A T M O T I V A T E S Y O U ? ? ?

• Mr. Li: "Accomplishment. My Supervisor trusts me to do my best. I have many ideas. Some ideas do not lead to profit for the

company but I want to try. If my supervisor doesn`t give me the flexibility to experiment, I have no chance to improve myself or

perform proper kaizen. Many problems occur on a day-to-day basis. When there is a problem, I want to solve it. My boss gives me

the opportunity to implement my kaizen suggestions."

• Mr. Hayakawa: "My job has a purpose."

• Mr. Uemae: "I enjoy my work. I have the chance to increase my abilities and learn new things. It`s exciting. I don`t mind putting in

extra hours when I have to."

• Mr Yoshioka: "Recognition. Rewards and salary are not the key point but they do reflect achievement. I want the opportunity to

challenge myself and gain experience. I want to be appreciated for my contribution. It`s the small things like compliments and

expressions of thanks that lift my spirits."

• Mr Minami: "When I make suggestions and they are accepted, I get really excited. Plus, I want to do my job efficiently so I can go

home to my family."

When asked from employees of Toyota,

Intrinsic Reward systems- Part of the “Toyota Way”

• Keeping employees aware all the time.

• Valuing diversity and constructive differences.

• Constant feedback and scheduled evaluation and assessment.

• Being able to ‘push back’ against executives.

• Using teamwork and collaboration as a guiding principle instead of

just a buzzword.

• Taking on a supportive, capability-building role for their employees.

• The office is structured without partitions.

Recommendations

Innovation Tuesdays

Think

Innovate

Recognize

Reward

Conclusion

AR I G A T O UG O Z A I M A S U

T H A N K Y O U

A N YQ U E S T I O N S

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