1. EPGDIM 12-14
Human Resources Project
Benchmarking on HR Practices
used by MNCs working in India
Submitted By:
Hitesh Bharti
2. Table of Contents
Automotive Industry: The changing skill sets
1
Volkswagen Group Human Resources Practices
2
Honda Motors Human Resources Practices
4
Toyota Human Resources Practices
7
Automotive Industry: Solutions to close the skills gap
10
References
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3. Automotive Industry
The changing skill sets
The auto industry was once a bastion for the unskilled worker with only a secondary-school education seeking a
decent salary and a stable, predictable (if routine and manually repetitive) job. Today, there is no such thing as
“predictability” or “unskilled labour” in the auto industry. Most repetitive tasks have been automated, the product
has become highly complex and manufacturing processes now require different skill sets.
The globalization of the industry has also put pressure on traditional workforce skills. Auto companies are
redistributing resources to high-growth, low-cost regions. They are also looking to emerging markets as significant
areas of sales growth. A full 32 percent of auto employment today is by international automakers, and it is
estimated that number will reach 43 percent by 2016.
New capabilities are required to succeed in this environment. Production workers, for example, need to work in
cross-cultural, autonomous global teams and must be capable of problem solving, working with computers and
making decisions on the front line. Engineers and technicians—two increasingly important groups that, taken
together, are becoming a larger proportion of the auto workforce as companies compete more on innovation—also
need more computer skills as the electronic components of vehicles become more complex. Even top leadership
needs a host of new skills to manage a more global and constantly changing technological environment.
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4. Volkswagen Group
Human Resources Practices
As of 31 December 2011, the Volkswagen Group employed around 500,000 people.
The company believes that in order to survive in the face of international competition, it must have a
top team, characterised by a high level of competence, dedication, inventiveness and fitness.
Basic Principles
Volkswagen Group hires employees who enthusiastically give their best. A good balance between
demands and ability (the so-called "flow channel") is the basic precondition for optimum performance
and results. For this reason, the company does not want its employees to be overstretched, but also
not under stretched, so that they are able to deliver top performance and advance the success of our
company.
Leading by example
The management assumes a decisive role in this entire process. The company’s principle is to be "Lead,
Demand and Promote". The Group believes that it will only be able to achieve its goals with exemplary
leadership and constructive cooperation between management and workforce. This includes both
targeted and continual personnel development and work organisation, which it continues to develop
with the so-called "Volkswagen Way".
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5. Volkswagen Group
Human Resources Practices
Active involvement
A standard survey of employees across the Group was introduced in the form of the so-called "mood barometer".
The "mood barometer" gave the employees the opportunity to anonymously voice their opinion and so to become
actively involved in the organisation of the company. The results form the basis for continually developing our
strengths and for exploiting potential that was brought to light. The high rate of participation showed that employees
had positively accepted this instrument as an expression of their esteem. In this way, they made a contribution to the
continued development of the company.
Promoting development potential
Volkswagen Group focuses to recognise and uphold the performance and learning potential of each and every
member of staff, and to promote all employees in line with the company strategy and in accordance with their
personal development potential. Personnel development measures range from technical seminars in automotive
engineering and automation technology, IT, quality management and productivity, through supervisor development
programmes for the Volkswagen Passenger Cars brand, to interdisciplinary training in subjects such as self
management and communication. In addition, the Volkswagen subsidiaries Volkswagen Coaching GmbH, the Audi
Akademie and the Volkswagen Bildungsinstitut GmbH are able to offer a broad and diverse range of seminars. These
include, for example, modules dealing with personnel management, leadership competence or international
development programmes. Volkswagen Coaching GmbH is one of the largest providers of vocational and advanced
professional training in Germany, and is active not only for the Volkswagen Group but also on the open market.
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6. Honda Motors
Human Resources Practices
An approach based on On-the-job training
Honda's approach to personnel education is based on On-the-job training is building specialized skills and
professional capabilities through direct experience. Honda has established on-the-job training programs for each
job description, setting qualitative and quantitative targets for the knowledge and skills to be acquired. These
programs provide with an opportunity for associates to acquire specialized skills and managerial capabilities while
helping supervisors assess and foster the aptitude of the associates they manage. To supplement these on-the-job
training programs, Honda also offers off-the-job training designed to provide associates an opportunity to enhance
their careers by developing new specialized skills or management capabilities. To support associates who wish to
take the initiative to learn new skills, acquire knowledge, and cultivate themselves in order to fully realize their own
potential, Honda offers opportunities for language learning, distance education, and inter-industry exchanges.
Principal off-the-job training programs
Honda provides a combination of on-the-job and off-the-job training to its associates' aptitudes and aspirations in
an effort to help them improve their abilities. Its off-the-job training program is divided into three main areas, with
separate training programs for each level.
Self-improvement training (career development)
Work performance training (skill development)
Management leadership training (management training)
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8. Honda Motors
Human Resources Practices
Associate development and evaluation through two-way communication
Reflecting Honda's emphasis on two-way communication with supervisors in associate development
and evaluation, all associates have at least three interviews with their supervisors each year. During the
first interview in April, associates describe the future in their own words (including aspirations,
personal objectives, etc.) and clarify their vision for the future and their direction going forward
through their supervisor's advice. They then work out their individual role based on the organization's
business goals for the fiscal year in question.
During interviews in June and December, supervisors evaluate associate performance during the
preceding six months, explain the reasoning behind their judgments, and share an assessment of each
associate's strengths and weaknesses. By facilitating a discussion of subjects such as future objectives
and career directions, the interviews pave the way for associates' skill improvement.
Improvement suggestion system
Honda has a system for encouraging all associates to
make proposals as to how the company's operations
could be improved, whether in large ways or small.
Launched in 1953, this initiative is one way Honda seeks
to encourage a spirit of independence and innovation,
fostering the growth and refinement of skills and
capabilities. Each year, some 170,000 suggestions are
received, of which about 90% are implemented.
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9. Toyota Motors
Human Resources Practices
Toyota seeks to develop human resources through the activity of making
things. Toyota believes that the development of human resources requires
the handing down of values and perspectives. The company is building both
tangible (a new learning facility) and intangible (course content) structures
relating to team member development that ensures a secure and steady
flow of qualified human resources to conduct its global business in the 21st
century.
Toyota conducts systematic company-wide and divisional training and
assignments for training purposes with an emphasis on On-the-job training
(OJT) to ensure that associates can fully utilize their abilities.
Toyota has defined the required qualifications of "professional staff"1 for
office and engineering positions, and "T shaped human resources"2 who are
able to perform day-to-day activities and expand their skills in technical
positions. Company-wide training is conducted based on employee
qualifications, as well as specialized training for individual divisions,
language training, and special knowledge and skill training.
In October 2002, Toyota created the booklet "Toyota — Developing People"
and distributed it to all associates to create a common understanding that
"the source of Toyota's competitiveness is human resources development"
and to promote the creation of workplaces where personnel development
takes place at all sites and at all levels.
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10. Toyota Motors
Human Resources Practices
A Shared Toyota Way
In April 2001, Toyota adopted the Toyota Way 2001, an expression of the values and conduct guidelines that all employees
should embrace. In order to promote the development of Global Toyota and the transfer of authority to local entities, Toyota's
management philosophies, values and business methods, that previously had been implicit in Toyota's tradition, were codified.
Based on the dual pillars of "Respect for People" and "Continuous Improvement," the following five key principles sum up the
Toyota employee conduct guidelines: Challenge, Kaizen (improvement), Genchi Genbutsu (go and see), Respect, and Teamwork.
In 2002, these policies were advanced further with the adoption of the Toyota Way for individual functions, including overseas
sales, domestic sales, human resources, accounting, procurement, etc.
Toyota Institute
In January 2002, the Toyota Institute was established as an internal human-resource development organization that aims to
reinforce the organic integration of global Toyota companies by way of sharing the Toyota Way as well as to promote selfsufficiency. The purpose behind the Toyota Institute's establishment is to promote the human resources development of global
Toyota in order to promote true globalization and to realize the advancement of Toyota's core values. TMC President Fujio Cho is
the Toyota Institute's first president, with 16 full-time associates managing the business.
Within the Toyota Institute, the Global Leadership and the Management Development Schools constitute the specific content of
the training programs.
In 2002, the Toyota Institute conducted training programs targeting global leadership candidates from TMC and overseas
companies and for middle management personnel to enhance understanding of the Toyota Way, enable best practice sharing
and drafting of action plans, as well as contribute to the creation of a global human network.
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11. Toyota Motors
Human Resources Practices
Toward Promotion of Women's Participation
In 2002, based on the principle of respecting diversity and with the aim of reforming
management throughout the company, Toyota set its sights on women's
participation, reviewing its arrangement with regard to female employees, and
taking steps to put a better environment in place. In order to promote the creation of
an environment more conducive to participation by motivated female employees,
Toyota has made a three-pronged effort to:
Help enable women to work and raise children at the same time
Assist in women's career building
Reform the working environment and employee awareness.
Toyota has also introduced flexible working arrangements and constructed child-care
facilities at business sites.
Outline of
Training
Programs
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12. Automotive Industry
Solutions to close the skills gap
Today’s economic realities demand that auto companies have a flexible workforce that can constantly learn
and refresh its skills. Here are some suggestions for how auto companies can improve their human capital
practices to create a workforce with the skills needed to support growth.
Create a more flexible workforce-planning process
Advanced analytical techniques, such as predictive modeling using both HR and business data, can be used to
help executives understand and predict the demand for critical skills today and in the future. Analytics can
also help managers make much quicker decisions about individual employees—focusing on high performers
and those with critical skills—enabling companies to more flexibly adjust available skills to marketplace
demand.
Leverage rapid learning design to retrain workers
In some cases, companies must train existing workers in new skill sets. For example, when AD&D Technology
—a powertrain testing and vehicle development supplier based in Ann Arbor, Michigan—decided to diversify
into batteries and more fuel-efficient electric motors as gas prices soared, the company had to retrain a full 40
percent of its workforce.
Redesign jobs
One of the big challenges in the industry today is achieving the flexibility needed to produce increasingly
complex products that draw on a portfolio of skills—skills that may not be simultaneously in use at any given
time. To meet that need, jobs can be broken apart in terms of tasks currently in demand and the skills needed
to complete them, and then those roles can be filled as needed.
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13. Automotive Industry
Solutions to close the skills gap (Cont’d)
Create an internal skills market
Organizations must improve their ability to compile data on their employees’ skill sets to determine what
aptitudes, interests and competencies each employee currently possesses. An internal skills-matching market
can then be created, enabling a company to move capabilities more swiftly to where they are needed. Having
better data and an inventory of skills, organizations can identify a new business need, identify workers with
capabilities or aptitudes related to that need and fill in the gap with learning for the rest.
In addition, knowing what skills your people possess means you don’t waste time and money training people
in things they already know how to do. Companies can improve the return on their investment in learning by
giving training only to those individuals who have a need, or who already have an aptitude or interest in
learning a new job or role.
Make learning new skills an ongoing process built into the work itself
Instead of taking employees away from their work environment for retraining, identify workers in your
organization who already have the required skills and encourage them to share their knowledge with others
through peer-to-peer learning vehicles like blogs, wikis or corporate social media platforms. Or pair them up
with others who can learn from them on the job—even people from other companies engaged through
worker exchange programs.
Learning can also be woven into work itself by offering bite-sized electronic learning components—short
videos, simulations, games, podcasts, web-based learning and more—that can be targeted to individuals
based on demand.
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