Environmental & Social Report 2005
Relations with Employees
Toyota Way 2001
Sharing the Toyota Way
Respect
We respect others, make every effort to
understand each other, take responsibility
and do our best to build mutual trust.
• Respect for stakeholders
• Mutual trust and mutual responsibility
• Sincere communication
Respect
for People
Continuous
Improvement
Number of Employees by Region on a
Consolidated Basis
Region
March 2002
March 2003
March 2004
March 2005
180,273
179,039
175,096
171,087
North
America
27,721
30,775
30,806
31,543
Europe
11,894
14,418
17,349
18,554
Other
26,814
39,864
41,159
44,569
Total
246,702
264,096
264,410
265,753
Japan
The Two Pillars of the Toyota Way
The Toyota Way is supported by two
main pillars.
They are “Continuous
Improvement” and “Respect for People.”
We are never satisfied with where we are
and always work to improve our business
by providing our ideas and best efforts. We
respect all Toyota stakeholders, and
believe the success of our business is
created by individual efforts and good
teamwork. All Toyota employees, at every
level, are expected to use these two values
in their daily work. Since 2002, Toyota has
adopted the Toyota Way for each individual
function, including human resources,
accounting, and overseas sales and
marketing, and has been working on
ensuring thorough implementation.
Toyota Institute
Toyota established the Toyota Institute
in January 2002 as an internal human
resources development organization that
aims to reinforce the organic integration of
global Toyota companies by way of sharing
the Toyota Way. From its establishment up
to the end of FY2004, more than 1,500
employees have received training at the
Institute, including approximately 600 from
overseas affiliates. In addition, since 2003,
overseas affiliates in North America, Europe,
Asia, and Africa have established their own
human resources training organizations to
promote a better understanding of the
Toyota Way.
Teamwork
We stimulate personal and professional
growth, share the opportunities of
development and maximize individual
and team performance.
Social
Aspects
The Toyota Way 2001 clarifies the values
and beliefs that all employees should
embrace in order to carry out the Guiding
Principles at Toyota throughout the
company’s global activities. Until the Toyota
Way was published, Toyota’s management
philosophies, values, and business methods
had been passed on as implicit knowledge.
However, the rapid growth, diversification
and globalization of Toyota in the past
decade have increased the scope of its
manufacturing and marketing presence
throughout the world. Toyota is preparing
to operate as a truly global company, guided
by a common corporate culture, and has
identified and defined the managerial
values and business methods that are
known collectively as the Toyota Way.
• Commitment to education and development
• Respect for the individual; realizing consolidated
power as a team
Challenge
Kaizen
Genchi Genbutsu
Labor-Management Relations
Based on Mutual Trust and Respect
Mutual trust and respect between labor
and management is a fundamental
principle of Toyota’s employee relations, as
stated in the Guiding Principles at Toyota.
Following a labor dispute in 1950, mutual
trust between labor and management was
adopted as the foundation of the LaborManagement Joint Declaration concluded
in 1962. Also, the Labor-Management
Resolve for the 21st Century signed by
labor and management representatives in
1996, indicates the basic principle of
mutual trust and respect. In order to
achieve this fundamental principle in labormanagement relations, Toyota has adopted
the Basic Principles of Human Resources
Management, and continuously works to
strengthen its labor-management relations.
Stable Employment
Stable employment that avoids layoffs
and terminations to the maximum extent
is a key pillar supporting the relationship
of mutual trust between labor and
management. In addition, the Toyota
management system is based largely on
maximizing employee abilities, reasoning
skills, and creativity, and human resources
are regarded as a key management asset.
The layoff and termination of human
Basic Principles of Human Resources
Management
(1) Creating a workplace environment where
employees can work with their trust in the
company
· Stable employment where layoffs and dismissals
are not readily made
· Steadily maintain and improve working conditions
from a medium- to long-term perspective
· Ensure fairness and consistency
(2) Creating a mechanism for promoting constant
and voluntary initiatives in continuous
improvements
· Share the management mindset and sense of
critical urgency through thorough communication
· Reflect business results in working conditions
(3) Fully committed and thorough human
resources development
· Promote personal growth through work
· Communication of the Toyota Way/role
(4) Promoting teamwork aimed at pursuit of
individual roles and optimization of the entire
team
· Thorough consensus building and achievement in
single thrust
· Team results and creating a sense of unity
resources, not only damages the relationship
of trust, but also hinders the maximization
of employees’ abilities. The fundamental
basis of Toyota’s management philosophy
is to always take a medium- to long-term
management perspective and to maintain
stable employment through all possible
measures.
53
Employees
0
Proud to work at Toyota
Satisfaction with working
conditions
’00
’02
’04
(FY)
Communication with Employees’ Families
Since FY2002, greeting cards from the
president have been sent to employees
and their families at the end of the year,
and since FY2003, various work sites have
held workplace visits for families to
facilitate communication between the
workplace and home. Toyota also created
the Toyota Fami-net, a family oriented
website, and is taking other measures to
enhance relations with employees’ families.
Greeting card from the president
54
Human Resources Development
Framework that Emphasizes Problem
Solving
The three main points of human
resources development for office and
engineering positions are: (1) Thorough
training in problem solving during the first
ten years, until promotion to the post of
assistant manager; (2) Training is an
opportunity to trigger development of
human resources; but stronger emphasis
should be placed on on-the-job training
(OJT); and (3) Selected employees act
concurrently as instructors and mentors.
Based on these points, Toyota conducts
training of younger employees with a focus
on original problem-solving techniques to
enhance practical problem-solving skills.
In addition, Toyota has systematically
developed and implements training to
improve the managerial skills (human
resources development capabilities) of
managers, and global training for employees
at overseas affiliates to strengthen practical
skills in implementation of the Toyota Way.
Toyota also conducts a variety of self
initiated development programs including
language training and business-related
courses to respond to the employees’
desire for additional learning, regardless of
grade.
Training
by grade level
Workplace
Orientation
training for
newly promoted
specialists
Advanced training
for specialists
Orientation training
for newly promoted
assistant managers
Advanced training
for assistant
managers
OJT Mentor System at the workplace
Advanced training
for administration
staff
OJT and practical training
Knowledge and skills that enhance employability
Induction training
for
newly joined staff
Skills and abilities necessary for working at Toyota
Newly-joined staff
Training target
Administration staff
“Making automobiles is about developing
people.” As these words indicate, Toyota
seeks to develop human resources through
the process of making things. Toyota
believes that the development of human
resources requires the communication of
values and principles. Toyota has defined
the required qualifications of “professional
staff” for office and engineering positions
— associates who can create added value
on their own and contribute to society, as
well as utilize their strengths and exercise
teamwork — and “T shaped human
resources” — team members with a broad
range of skills, such as foreign language
skills and operational knowledge (the
crossbar of the “T”) as well as highly
specialized knowledge and experience in a
particular field (the vertical bar of the
“T”) — who are able to perform day-to-day
activities and expand their skills in
technical positions. Company-wide training
is conducted based on employee grades,
as well as specialized training for individual
Groups, and language training.
Structural Diagram of Toyota’s Human
Resources Development
Career consultations with supervisors
Employee Morale
(Administrative and Technical)
(%)
100
90
80
70
60
50
40
Human Resources
Development
Specialists
Communication with Employees
Toyota sees good communication as
the basis for all activities. In addition to
communication in the workplace, Toyota has
created numerous other opportunities for
discussions between labor and management
including Labor-Management Councils,
Joint Labor-Management Round Table
Conferences, and various subcommittees.
Toyota has established a number of
hotlines for swift and appropriate resolution
of issues related to compliance, gender
harassment, mental health and working
conditions. Further, Toyota implements
employee morale surveys, and monitors
employee job satisfaction, etc. In a survey
conducted in FY2004, responses were
received from 83% of the approximately
19,000 employees that were surveyed.
Positive responses such as “I’m proud to
work at Toyota” and “I’m satisfied with my
working conditions” continue to be at high
levels.
Assistant managers
Social Aspects
Under consideration
Developing a Business Culture that
Emphasizes Technical Skills
Toyota established the TMC Skill
Development System to revitalize the joy of
making things and to stimulate the desire
to acquire specialized skills among
production employees. Three ranks (A to
C) are recognized according to the level of
skills acquired. Specialized training is
conducted at manufacturing sites in
various plants, and technical trainers
selected from each worksite also undergo
training to enhance their training skills. As
of March 2005, a total of approximately
600 trainers (including 240 full-time
trainers) are working at all plants.
Toyota also holds company-wide
specialized skill exchange meetings and
participates actively in the WorldSkills
Competition to foster a business culture
that emphasizes specialized skills. Toyota
does not limit specialized skills to expertise
in work processes, but defines them to
include the skills necessary for promoting
improvements in work methods and
processes with an awareness of workplace
issues and challenges.
Personnel Exchanges and Training on
a Global Scale
Toyota created a system for intercompany transfers (ICT) that allows
employees from overseas affiliates to work
at TMC for two years, to realize personnel
exchanges and training on a global scale.
Currently, approximately 300 employees are
working in Japan under the ICT program.
Environmental & Social Report 2005
Respect for Diversity and
Creating a Sense of Unity
(%)
40
Trends in Ratio of Female Employees
(Example of Administrative Positions)
35%
30
20
10
0
’00
’01
’02
’03
’04
(FY)
Childcare Centers and Number of
Staff Taking Childcare
As a measure to support employees
balancing work and childcare, a childcare
center was opened in FY2002, followed by
the addition of another facility in FY2003,
bringing the total capacity to 100 children.
The number of employees taking childcare
leave is also increasing. The number of
male employees who have taken childcare
leave since FY1999 reached a cumulative
Trends in Number of Employees Taking
Childcare Leave
216
(Number of people)
200
150
172
153
128
100
100
50
0
’00
’01
’02
’03
’04
(FY)
A childcare center
Increased Support for Balancing Work
with Childcare
With consideration to the implementation
of Policies and Measures to Support
Fostering Next-Generation Youth, Toyota has
conducted surveys and interviews with staff
as well as talks between labor and
management. An action plan based on the
results was formulated and submitted to the
Labor Bureau in April 2005. Toyota is
promoting further improvement in the work
environment, with three main action points:
support for production staff combining work
with childcare, career design support, and
raising of corporate awareness.
Long-term Contracts Offered to
Contract Employees
A revision of the law in 2004 extended
the maximum contract length for temporary
employees from one year to three years.
Many contract workers want to find work
that is more stable and offers a better
sense of achievement and fulfillment. In a
survey carried out in 2004, it was found
that 62% of respondents were interested in
acquiring specialized skills and knowledge.
Toyota is engaged in improving working
conditions, not only in order to secure
human resources who will serve as a
strategic force, but also to improve the
employment prospects for temporary staff
after the end of their contracts.
Employment of Disabled People
As of March 2005, Toyota employed
832 disabled people, and its disabled
employees ratio* reached 1.84%,
exceeding the 1.8% Legal Employment
Quota. Toyota believes in helping disabled
people achieve autonomy within society,
and makes it a basic rule to have them
work together with other employees.
Consequently, disabled employees can be
found in many kinds of positions at various
workplaces. At each business site, efforts
are made to create a workplace
environment that is safe and easy to work
in by devising various ways to adapt
facilities that accommodate the nature of
employees’ disabilities.
Employment of Elderly Workers
Regarding the best approach to work
arrangements and employment once staff
reach 60 years of age, labor and
management at Toyota have undertaken
repeated discussions and investigations
with the aim of taking active initiatives in
the interests of expanding employment
opportunities and securing livelihoods.
Communication that Involves
All Employees
In order to enhance communication that
involves all employees, Toyota is striving to
create a sense of unity and improve workrelated skills and work ethic.
One example is the utilization of “quality
control (QC) circles” to create a shared
awareness of problems, as well as to foster
collegiality and a desire for improvement.
QC circles involve not just TMC, but are
developed globally on a company-wide
basis to include suppliers, overseas
affiliates, and other relevant parties.
Moreover, the aim is not restricted to work
practice but extends to the creation of a
sense of unity, and the activities include a
range of events that take place during
employee leisure time. At the Ekiden longdistance relay race held for the 56th time in
2004, 292 teams, including seven from
overseas affiliates, participated in a closely
fought contest.
Social
Aspects
With the globalization of business, the
social advancement of women, and other
social changes, diversity in human
resources (nationality, gender and other
differences) can enhance a company’s
competitiveness. Aspiring to be a company
that is an attractive arena of self-realization
for a diverse range of human resources,
Toyota respects diversity and works to
create a sense of unity.
In FY2002, Toyota rolled out the
Diversity Project with particular emphasis
on promoting active roles for women, and
made a three-pronged effort to: (1) Help
enable women to work and raise children
at the same time; (2) Assist in women’s
career building, and (3) Reform the
working environment and employee
awareness.
total of 11 (two in FY2004). To support
return to the workplace after childcare
leave, the system has been enhanced by
adopting flexible working hours (e.g.
exemption of core time in flex system,
partial working at home, shortening of
working hours), resulting in an almost
100% return-to-work rate.
Examples of Quality Control Circle Activities
in FY2004
All-Toyota Total Quality Management Associate
Convention Held in September for 39th time
Attended by 1,500 participants from the Toyota
Group, Kyohokai, and Eihokai, with the aim of
creating a sense of unity throughout the entire
company
Toyota Global QC Circle Convention
Held in November for 17th time
Opportunity for exchange with 130 participants
from 33 overseas affiliates in 21 countries
Ekiden race held in December 2004
*In April 2004, the basis for calculating the
disabled employees ratio was altered
55
Social Aspects
Employees
Health and Safety
Safety, along with quality and the
environment, is an important topic that is
connected to the very foundation of a
corporation. Toyota is making an effort to
create a safe and energetic work
environment, based on the philosophy of
“Respect for people,” and the fundamental
policies that “Safety is management itself”
and that “Placing safety first is everyone’s
responsibility, from senior executives to
every employee at the workplace.”
5-Year Policy (2000 - 2004)
1. Zero STOP6-type accidents and designated
occupational diseases by reinforcing a
proactive prevention system and structure
2. Building a workplace environment that is
healthy for the mind and body
Health and Safety
Main Actions Taken in FY2004
1. Notification and thorough enforcement of safety
regulations and workplace management items
2. Thorough countermeasures against frequent machine
stoppages (breakdowns where repair time is limited
to a number of minutes)
3. Further expansion of measures against ergonomic
(musculoskeletal) disorders
4. Promotion of measures against noise and dust
5. Management and guidance for construction work
by contracted companies on Toyota’s premises
Beginning
with
the
thorough
implementation and development of Full
Observation Activities to reduce the risk of
workplace accidents, Toyota has developed
a range of voluntary activities to prevent
accidents. As a result, the number of
STOP6-type accidents1 and designated
occupational diseases2 in 2004 was the
fewest to date. Unfortunately, however, one
fatal accident did occur. As a measure to
prevent the recurrence of such an
accident, a so-called Lockout System3 was
introduced covering all company machines
and equipment (see photos on the right).
Additionally, improved levels of health and
safety are being targeted by implementing
the P (plan), D (do), C (check) and A (act)
management cycle as part of the daily
routine.
1. STOP6-type accidents:
Six types of accidents that may cause death or
disability (being caught in a machine, contact with
a heavy object, contact with a vehicle, falls,
electric shocks, and contact with a heated object)
2. Designated occupational diseases:
Occupational diseases resulting from dust and
noise, or musculoskeletal disorders
3. Lockout System:
A system to protect the safety of workers whereby
a blocking mechanism is locked in place when the
power supply is turned off, for the purpose of the
maintenance or repair of machines and
equipment, so that the power will not be
mistakenly switched back on at the
machine/equipment involved
56
Industrial Accident Frequency
(Frequency of Lost Workday Cases)
2
All industries
1.5
Manufacturing industries
1
Automobile
manufacturing industry
0.5
0
’00
’01
Toyota
’02
’04 (Year)
’03
*The figures for all industries, manufacturing industries and the
automobile manufacturing industry for 2004 are preliminary
Building Good Health
When health checks are conducted,
verification items independently selected by
Toyota are added to those prescribed by
law. In 2004, the ratio of completely healthy
employees4 showed no change and fell
short of the target of 70%, but the number
of employees aiming to improve their health
by regularly exercising or taking part in
health seminars is steadily on the rise. In the
future, through developing BIP2 activities5
centered on the approach of behavioral
change (BMI, smoking), the aim is to
strengthen workplace activities that target
practical achievements in building health
and to continue activities designed to improve
the health awareness of every employee.
4. Completely healthy employees:
Employees with an A ranking for health
management (no health problems found during
health checks and not receiving medical treatment)
5. BIP2 activity:
Behavior Change Innovation Program, a lifestyle
improvement campaign with targets set for body
mass index (BMI) and smoking rate
Trend in Percentage of Completely Healthy
Employees
(%)
60
50
40
30
’00
’01
’02
’03
’04 (Year)
Lockout System
(Old system)
Warning Tag:
DO NOT SWITCH
ON!
Portable plug
(New system)
Padlock used to
lock equipment
into off mode
Mental Health Care
Regarding mental health at the
workplace, all of the newly appointed
managers and supervisors participate in
active listening courses6 that are effective
for the prevention and early detection of
mental problems. In FY2004, this system
was extended to include newly appointed
division general managers, and training
sessions were given to include department
general managers, group managers, etc.
Also, as part of a self-care approach,
mental health care measures for individual
employees were enhanced through selfcare training, stress management methods,
and other measures.
Through these activities, Toyota aims to
create a workplace environment with better
communication in the future.
6. Active listening courses:
Experiential training in methods of building
good communication through understanding
and sympathy for others’ feelings and
emotions; a technique of active listening
Global Health and Safety Initiatives
With the aim of achieving the highest
levels of health and safety at Toyota’s 45
production-related overseas affiliates,
relevant divisions at TMC and mother
plants are collaborating based on action
items proposed in Japan to implement
health and safety activities geared to
conditions in each country and region.
In addition, employees who are assigned
overseas and families accompanying them
undergo physical examinations before,
during, and after their overseas stays.
Doctors and other specialist personnel
conduct surveys of local medical facilities,
and consult with employees and their
families to alleviate concerns about living
overseas.
In FY2004, with the aim of enhancing
self-reliance and increasing the level of
health and safety at overseas affiliates,
44 health and safety staff from 31
overseas manufacturing companies were
invited to spend four days in September or
November to reaffirm their knowledge of
the Toyota Way in Safety, to share
information, and to
exchange views on
a range of other
issues.
Environmental & Social Report 2005
Examples of Initiatives
Asia
Toyota Motor Thailand Uses Improvement as
Foundation for Growth during Baht Crisis
(TMT, Thailand)
Rice milling plant that provided jobs to employees
during the baht crisis
slowdown in the economy, the number of
units produced fell sharply, with the daily
operating time cut to just four hours.
Employment Maintained through
Deep Cost Cutting
Against this background, TMT showed a
strong commitment to uniting with the whole
workforce as well as suppliers and dealers
to ride out the crisis. This commitment was
shared with the labor union, and the entire
company together with the Toyota Group
implemented thorough measures to make
operations more lean, utilizing the resulting
excess labor to implement improvement
initiatives as well as additional education of
employees and suppliers.
For example, based on the concept of
“just in time,” energy was supplied to each
process when it was needed and in just the
right amount; personal wastebaskets were
reduced to one-quarter of their original size
to encourage less paper usage; and
localization was promoted by extending local
procurement to Tier 2 and Tier 3 suppliers.
Under these circumstances, TMT
presented a Soluna to His Majesty the King
of Thailand. This action inspired great
confidence in employees, dealers, suppliers
and all other stakeholders. From His
Majesty, TMT received a sum equivalent to
the price of the Soluna and it was
suggested that the money be used as the
TMT manufactures and exports IMV Project vehicles
basis for building a rice milling plant with
the cooperation of the Toyota Group. With
the support of the different group companies,
TMT built a rice milling plant near the
Gateway Plant. This contributed to the
local community and provided temporary
employment for employees who would
otherwise have been laid off.
Meanwhile, TMT also directed energy
into the education and training of
employees. As a result of these efforts,
without having dismissed a single full-time
employee, inventories were cleared in
January 1998 and production began to rise
again. In 2004, TMT produced 273,980
vehicles. By gritting its teeth during a
tough period and cultivating fundamental
stamina, TMT paved the way for the strides
forward it is making today.
Social
Aspects
Today, Toyota Motor Thailand Co., Ltd.
(TMT) is a pivotal point within Toyota’s
global strategy serving as a production and
export base for finished vehicles and parts,
with emphasis on the IMV* Project.
Looking back, Vice Presidents Apichai
Sidrattakul and Wichien Emprasertsuk note
that the company’s current growth is
thanks to systematic improvements taken
during the baht crisis.
The crisis started suddenly on July 1,
1997. Over the next several months, the
baht plunged from 25 to the dollar to 50 to
the dollar, and the Thai economy took an
abrupt downturn. At that time, the reputation
of the Soluna, a model designed exclusively
for the Thai market, was extremely high, and
TMT received orders for 30,000 vehicles,
requiring its plant to operate two shifts and
take a variety of other measures to increase
production. However, reflecting the sudden
*IMV:
Innovative International Multi-purpose Vehicle
Africa
TSAM Supports AIDS Countermeasures for Workers
(TSAM, South Africa)
In South Africa, AIDS is a serious social
problem. At Toyota South Africa Motors
(Pty.) Ltd. (TSAM), its effect on employees,
their families, and local communities is also
a great problem. In response, the company
is implementing an HIV/AIDS Support
Program.
Based on a policy of providing all
employees with a safe and healthy
workplace and working consistently to
improve employee health, TSAM supports
health management by its employees by
providing information on AIDS and offering
counseling and treatment by specialist
doctors. As a measure against AIDS, it is
important for employees to be aware of the
state of their own health and to take steps
to avoid infection. To this end, in FY2004,
10,000 copies were published of the
information booklet Toyota vs HIV/AIDS
and distributed to all employees. The booklet
gives concrete and clear information on
routes of AIDS infection, what to do if one
becomes infected, and what action to take
in the face of the serious problem of AIDS
directly present in everyday life.
In addition to AIDS prevention, TSAM is
investing time and energy in education to
eliminate the discrimination from families
and friends, which is one of the hardest
things that people with HIV face, and also
in training 200 employees to become
specialists in AIDS education, known as
peer educators. These are two areas
where TSAM is working to raise awareness
among employees. Additionally, TSAM has
set up an anonymous telephone advice line.
Peer educators on World AIDS Day
57