Toyota Motor Corporation’s Career Development & Education Programs

Abstract

Over the past decades, more and more employers began engaging in human resource development practices, seeking to promote lifelong employment. In this context, career development and education have become particularly important. The key problem identified as a result of the literature review is that scholarly literature lacks the discussion of specific practices that could be applied by companies. The present study seeks to fill this gap by analyzing Toyota Motor Corporation’s approach to career development and education. The findings provide strategies that can be applied by managers of various companies to facilitate employee growth and performance improvement.

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Introduction

Building a loyal and capable workforce is among the key goals for many organizations, as it assists in achieving and maintaining high performance levels. Employees who have excellent knowledge of the company and are willing to contribute their skills and abilities can lead positive change on various levels of the organization. Hence, more and more companies are now implementing career development and education programs for their employees. Toyota is among the key examples of successful human resource development because its management focuses on continuous improvement and lifelong employment. The present research will seek to explore the benefits of career development and education and discuss best practices using Toyota Motor Corporation as the case study.

Background

Research on human resource management and its value to organizations had a significant influence on management practice over the last decades. The results of studies on employee motivation, loyalty, and commitment showed the importance of these variables for achieving higher levels of performance, making managers more keen to engage in positive HRM practices (Hanaysha, 2016). These practices include a great variety of activities, policies, and programs, from rewards and recognition to intraorganizational talent management. Consequently, providing better working conditions made people want to stay in one company for longer.

However, if an employee stays in one position from graduation to retirement without learning new skills or making progress, their contribution to the organization will remain the same. Career development and education programs help companies to avoid this situation by making sure that employees learn new skills and get promoted, thus contributing more and more to the organization each year (Hameed & Waheed, 2011). In this context, the necessity of career development is evident. Nevertheless, it is also crucial to consider the effectiveness of such programs and activities. According to the article by Carucci (2018), American companies spend over $90 billion on employee training and development annually. If these investments do not result in improved performance, companies lose money.

Therefore, it is necessary to evaluate the benefits of career development and education and explore best practices that can be used in various companies. Research can help to achieve this goal by reviewing evidence on the topic and examining case studies of successful human resource development initiatives. There are a few key terms and concepts that will be used throughout this research report in relation to the topic:

  1. A career is defined as “a sequence of positions occupied by a person during the course of a lifetime” (Super, 1980, p. 283).
  2. Career development, in turn, means enhancing a person’s capacity for career progression, both through individual efforts and organizational programs.
  3. Human resource development reflects the set of activities and approaches used by a company to improve employees’ skills, knowledge, fit, and other factors resulting in increased performance.
  4. Education and training refer to organizational activities aimed at enhancing employees skills and knowledge through learning (McDowall & Saunders, 2010).

Literature Review

The present literature review explores the benefits of career development and education, as well as best practices in the area. Evidence for the review consists mainly of peer-reviewed scholarly publications found through Science Direct, ProQuest, and Taylor & Francis scholarly databases. The terms used for the search were “career development,” “human resource development,” “employee training,” and “employee education”. The search returned over 10,000 articles, which were filtered by relevance to the search term and the credibility of the publication. Articles published before 2000 as well as those from 2014 and onwards were used to review the topic in greater depth.

Benefits of Career Development and Education

Based on the research, the most critical concept involved in the study of career development benefits is the psychological contract. This term reflects the “unwritten contract employees have with employers” (Davis, 2015, p. 28). The psychological contract implies that employee commitment and loyalty cannot be achieved through salary alone, and requires an extended employment value proposition (Davis, 2015). When a company offers its employees a competitive salary and a generous benefits package, as well as excellent working conditions, employees will be more motivated to contribute their skills. Research indicates that education and career development are significant components of an organization’s employment value proposition, and thus, they help to establish a stable psychological contract.

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This phenomenon is crucial to the theoretical framework of the study because it mediates the relationship between career development and education and other workforce characteristics. For instance, a study by Hanaysha (2016) confirmed that employee training had a positive influence on organizational commitment. This characteristic of the workforce is vital for companies wishing to improve performance and culture because it causes increased levels of engagement and identification with corporate values (Fleisher, Khapova, & Jansen, 2014; Hanaysha, 2016). Committed employees are also less likely to quit their job, leading to a reduction in recruitment and induction expenses (Hanaysha, 2016). Hence, the psychological contract prompted by offering excellent career development and education opportunities helps to boost organizational culture and employee loyalty while also improving the stability of the workforce.

Furthermore, employee development was also found to increase performance because the psychological contract makes workers more motivated to contribute. Hameed and Waheed (2011) propose a model of the relationship between employee development and organizational performance. According to the researchers, employee development programs lead to improved skill mix, employee learning, autonomy, workers’ attitudes, and behaviors (Hameed & Waheed, 2011). These, in turn, help employees fulfill their tasks and duties more effectively, leading to a growth in organizational performance (Hameed & Waheed, 2011).

Other studies also explore the influence of career development on performance. McDowall and Saunders (2010) propose that the increase in performance comes at least partly from employees’ improved self-awareness. When workers undergo career development and training programs, they often receive feedback that draws their attention to individual strengths and weaknesses. As a result of working with those, the employee can become more productive, thus contributing to the overall organizational performance (McDowall & Saunders, 2010). Another explanation is proposed by Anitha (2014), who found that employee training and career progression impacted performance through positive engagement. Regardless of the mechanism and the factors involved, research confirms the positive influence of employee development on organizational performance.

Another significant influence of the identified programs is that they help companies build intellectual capital, thus contributing to organizational learning and innovation. In the contemporary business environment, innovation is among the most prominent characteristics distinguishing between a successful business and a failing company. In order to achieve high levels of innovation, organizations need to establish intellectual capital. This term identifies a company’s ability to create wealth by transforming intangible resources, such as ideas and knowledge, into financial prosperity (Yuan & Wang, 2018). Hence, developing employees’ skills and knowledge is essential for organizations willing to capitalize on innovation. Employee training and education proved to help enhance intellectual capital and foster innovation (Sung & Choi, 2014; Yuan & Wang, 2018). Moreover, it can improve organizational learning, or the transfer and use of knowledge in a company (Sung & Choi, 2014). As a result, education and training programs for employees can help businesses to achieve a more profitable position in the market.

Best Practices in Career Development and Education

Although there is a significant amount of research on the benefits of career development and education, the number of articles suggesting effective practices in this area is very low. Furthermore, the available studies focus mostly on specific aspects of career development instead of suggesting a comprehensive approach. For instance, Carucci (2018) explores the prerequisites of successful employee training. These include accountability for decision-making, distributed authority, measurable expectations, and excellent internal systems for knowledge transfer Research (Carucci, 2018). These features contribute to organizational learning and decision-making, thus supporting the effectiveness of education.

Another essential aspect that is discussed in connection with employee development is talent management. Talent management practices support organizations’ career development efforts because they seek to identify key positions and workers who could get promoted to fill them in (Claussen, Grohsjean, Luger, & Probst, 2014). Talent management often involves employee training and education, and thus uses similar methods to career development initiatives. Practices in talent management include appraising the workforce, evaluating staffing needs for critical positions, and implementing training programs to build skills needed to fill in these positions (Claussen et al., 2014). Once the identified employees have the skills, experience, and knowledge necessary, they are promoted, facilitating other workers’ career development by causing a sequence of position changes. The practices described here can also be applied in human resource development efforts that span beyond the key positions.

Mentoring is also a practice that is often discussed in relation to career development and education. According to Baugh and Sullivan (2005), mentoring involves a superior employee sharing their knowledge and experience with a younger worker in an effort to help them develop skills required for succession. Mentoring has a positive impact on the organization by improving knowledge-sharing and developing key employee skills, such as leadership (Ghosh, 2014). Moreover, mentoring has the potential to improve organizational climate and culture by enhancing relationships among workers, fostering social support, and increasing trust (Ghosh, 2014). Research shows that mentoring could be a useful tool not just for career development, but for the organization as a whole.

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Expected Contribution

All things considered, the literature review indicates that there are certain gaps in research on career development and education. To be more precise, scholarly articles often lack the description of specific practices and tools that organizations can incorporate to enhance employee skills and improve internal sourcing. The present research will seek to fill in this gap by discussing best practices in career development and education. Using a case study, it will be possible to outline the key tools, explain their effects, and describe what types of organizations would benefit from them. Therefore, while the research relates to prior scholarly work on the topic by discussing similar themes, it contributes to the study of career development by exploring best practices specifically.

Research Objectives

The primary research problem is that there is not enough research describing specific career development and education tools, methods, and strategies. Building knowledge of best practices in this area could help companies to avoid losing money on ineffective human resource development while also achieving more significant benefits. Based on these needs, the primary aims of the research are to explore best practices in career development and education based on a case study and provide recommendations. The objectives of the research are as follows:

  1. To identify best practices using Toyota’s case study
    1. To collect information on career development in Toyota
    2. To collect data on training and education in Toyota
  2. To explore how Toyota’s practices can be applied in other companies
    1. To identify if any practices are unique to the organization
    2. To suggest which companies would benefit from using the same methods.

Research Design and Methodology

The research was based on the content analysis of secondary data, and thus will follow a qualitative methodology. To explore the case of Toyota in detail, case study based research was chosen as the research method. To fulfill the objectives, information from scholarly articles and reports related to Toyota’s career development and education was gathered. The investigation involved four key phases: preparation, data collection, analysis, and report creation. At the beginning of the research, Toyota Motor Corporation’s website and Google Scholar were searched for human resource management and development strategies. The sample of resources was chosen based on their relevance to the topic and the credibility of the source. Then, the content of each source was analyzed to uncover common themes and ideas. The results of the analysis are presented in the next section.

Significance of the Research

As discussed above, more and more companies nowadays realize the importance of long-term employee commitment. When workers stay in one company for an extended period of time, they are more motivated to contribute their skills and knowledge, and can thus help to increase financial and operational performance. Leaders who had progressed through various organizational levels have better understanding of the company and the market, and can, therefore, enhance the results of decision-making. A stable workforce also influences organizational climate, leading to improved satisfaction with working conditions. However, achieving these benefits requires making employees want to stay in a company, and thus creates the necessity for career development and education initiatives. Current research on the topic often fails to discuss specific practices that could help organizations to develop human resources. Because this study aims to fill in this gap, it will be particularly useful for managers willing to apply career development in their workplaces. Researchers in organizational behavior, management, and related areas will also benefit from the study because it highlights the need for studying specific methods to obtain more evidence.

Results and Analysis

The information collected as part of secondary research indicates that lifelong employment is a significant focus of Toyota Motor Corporation (Liker & Hoseus, 2009). Hence, the company relies on career development and education to support workers in improving certain skills required to progress in the organization. Toyota’s approach fits into the concept of the psychological contract because, by investing in employees, the company receives their long-term commitment and motivation in return (Davis, 2015). There are several critical practices used by Toyota to achieve workforce development goals: career consulting, leadership training, supervision, evaluation, and feedback.

First of all, Toyota has implemented a Career Support Program for all of its employees. This program is based on continuous assessment and planning and involves employees, supervisors, and managers (Toyota, 2007). As part of the program, employees develop individual career development plans based on their abilities and interests (Toyota Industries, 2018). Then, supervisors and managers collaborate to identify training and education opportunities that could help the employee to achieve their goals (Toyota, 2007). With the help of this program, Toyota creates a strong partnership between the management and employees, which helps to increase commitment. Moreover, it allows employees to determine their desired path of development and pursue it within the company rather than searching for a new job. This approach can also be applied in other companies to help workers identify growth opportunities and create plans for achieving them.

Secondly, leadership training is available both as part of Career Support Program and independently. Gao and Low (2015) explain that Toyota’s human resource development model implies appointing top management from within the company. Thus, all employees participate in leadership training regularly to improve their managerial capacity should they be offered a higher level position. Supervision is a related practice used by Toyota, which involves appointing employees to overlook the progress of teams or individuals (Liker & Hoseus, 2009). Supervision in Toyota takes the form similar to mentoring, which distinguishes the company from its competitors. While usually, supervisors’ duties are to assign tasks and monitor completion, supervisors in Toyota also take into account individual development (Liker & Hoseus, 2009). For example, supervisors may assess their team and advise the types of training that would be beneficial to enhance teamwork, productivity, or leadership. Because supervisors are also involved in Career Support Program, this helps to make them an essential part of employees’ development. Toyota’s leadership training and supervision are also universal practices, which means that other companies can adapt them to support career development programs. Supervision will be particularly useful in large companies with a significant amount of teamwork required for daily operations.

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Evaluation and feedback are critical mechanisms in Toyota’s career development method. Because the organization relies heavily on the principle of kaizen, which means continuous improvement, employees’ performance is assessed all the time. According to Jo (2018), Toyota uses a job performance appraisal system that has a direct influence on employees’ compensations. The vast majority of tasks performed by employees can be assessed based on predetermined standards, and workers are expected to comply with these requirements to receive full compensation. However, there are also additional bonuses for exceeding expectations, as well as for improving productivity and job performance (Jo, 2018). This approach could be used in manufacturing and production companies where it is easy to assess the outcomes of completed tasks.

Furthermore, Toyota also uses performance evaluations and feedback to assist employees in career development and determine their training needs. This method of assessment is beneficial because it uses clear developmental criteria, and thus can be adapted to various types of employees. Figure 1 below shows what types of training are offered to technical employees based on their career stage and the respective career development targets.

Overview of training types by career stages
Figure 1. Overview of training types by career stages (Matsuo, 2015, p. 1198).

Toyota’s human resources management also understands the importance of providing feedback to employees. Matsuo (2015) states that informative feedback is offered to employees of the technical division on a regular basis, and employees are welcome to discuss it further with their superiors. In other divisions, feedback is provided by supervisors and involves the employee’s career development progress, job performance, skills improvement, and training needs (Toyota, 2007; Toyota Industries, 2018). This means that employees at all stages of their career development know their strengths and weaknesses and have a clear direction for improvement. This method can also be applied in other companies, regardless of their size, type, and the target industry.

Solutions

Studying the case of Toyota has shown that investing in the professional development of employees has a vastly positive effect on a company’s performance in a target industry and market. The analysis has shown how great an effect the focus on talent management produces on an organization’s performance in the global market. Therefore, to manage the challenges that the modern car manufacturing industry contains, other companies should follow the example of Toyota in the application of talent management as the central approach for advancing their performance. By providing staff members with opportunities to learn new skills and become more proficient in their field, companies will gain their loyalty and bring their motivation rates to a new level. The use of career building and education-focused programs in advancing the extent of employee engagement and motivation can be deemed as the essential lesson learned from Toyota’s case. The introduction of the practices that contribute to the increase in the levels of staff’s proficiency and allow them to manage new tasks and challenges more effectively.

When considering what organizations will benefit from using the same techniques associated with career building and talent management as the ones created by Toyota, one may need to go beyond the car manufacturing industry. While the proposed solutions will produce impressive results for any organization in the designated area, they are also likely to help firms operating in other domains. Therefore, the proposed approach toward increasing profitability and enhancing performance can be used in a vast range of other domains, from companies in the food industry to organizations in the healthcare sector. Indeed, employee-oriented methods of managing human resources are expected to affect the extent of a firm’s organizational performance.

However, when considering the ways in which companies could implement Toyota’s strategies for HRM and performance management successfully, one should consider changing the approach toward interdisciplinary communication. Specifically, the dialogue between staff members and managers should be improved so that the needs and requests of employees could be heard and taken into consideration by the company. For this purpose, the role of line managers in the context of an organization should be reconsidered.

The importance of line managers’ influence in the organizational environment should be increased so that the connection between employees and employers should remain uninterrupted. As a result, an organization can expect an increase in motivation and enthusiasm rates in employees due to more effective responses to their concerns. Moreover, the creation of a communication channel between managers and the staff will lead to vast improvements in the understanding of employees’ needs. Thus, managers will be able to create career growth opportunities and chances for gaining new skills that employees will appreciate and use in their professional growth.

Overall, the focus on learning as the foundation for improving staff engagement and performance can be seen as the crucial lesson learned from Toyota’s experience. By shaping the outcomes of the case study analysis, one will be able to modify the strategies used by Toyota to fit the context of a different company, while the core of the approaches in question will remain intact. The following rise in the extent of staff competency and workplace performance will prove the importance of investing in talent management and enhancing employee-manager communication.

Conclusion

All in all, career development and education programs are critical for all types of businesses because they help to build a committed, motivated, and productive workforce. Despite this advantage, the research on best practices in this area is scarce and fails to provide a discussion of specific tools and their application. This research aimed to fulfill this gap by focusing on human resource development strategies in Toyota Motor Corporation. The findings indicate that Toyota uses career consulting, leadership training, supervision, evaluation, and feedback to assist in employees’ personal and professional growth. The practices used by Toyota fit into the theoretical framework because they help to strengthen the psychological contract, increase performance and motivation, and help to grow intellectual capital through learning. The research also found that most of the strategies are universal and could be applied to any company. Hence, these results will be useful for managers seeking to improve career development and education in their teams.

References

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Carucci, R. (2011). When companies should invest in training their employees — And when they shouldn’t. Harvard Business Review. Web.

Claussen, J., Grohsjean, T., Luger, J., & Probst, G. (2014). Talent management and career development: What it takes to get promoted. Journal of World Business, 49(2), 236-244.

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