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toyota compensation

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toyota lean compensation, compensation plan of toyota,salary

toyota lean compensation, compensation plan of toyota,salary

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  • 1. COMPENSATION
  • 2. TOYOTA OVERVIEW HQ  Toyota, Japan Industry  Auto Manufacturing Size  5000+ Employees, $204B+ Revenue NYSE  TM Competitors  Ford Motor, General Motors, Honda Website  www.toyota.co.jp
  • 3. AIM IS TO IMPLEMENT LEAN – COMPENSATION Have a well defined group compensation system in place before implementation. Pay system has to achieve behavioral changes that impact bottom line business results. Manage new pay system. Include indirects in your compensation scheme. Set non-monetary reward systems as well.
  • 4. Toyota Integrated Medical Management Toyota’s Health/ Wellness Vision: Integration, Occupational Health & BenefitOld Vision Occupational Health Personal Health *Safety/Medical *Benefits Group GroupNew Vision Total Health/Wellness Care *Health/Wellness Group
  • 5. IT’S OLD SYSTEM - THE PRODUCTIVITY BONUS BASED ON GROUP LEVEL Under toyota’s wage system, productivity bonuses constitute half of a worker’s monthly salary, and although it is called a “bonus” it is in reality part of the standard wages. This bonus thus reflects an assessment of the worker’s performance. Toyota calculates the productivity of each section every month, and this becomes the raw data for the bonuses. The calculation are so complicated that even the managers don’t understand these figures This system was very effective in forcing each other group to compete against other An employee pay is depended on productivity of his section
  • 6. HOW DID THEY CALCULATE PRODUCTIVITY OF WHITE COLLAR WORKERS? The productivity rate is broken down all the way to the shop-floor level. i.e. each team is forced into competition to raise its rate. That’s the secret of toyota’s rising productivity. The important factor in rising productivity is:  two separate teams share one assemblyline, one during the day & other at night. Productivity of these 2 groups differ despite fact they use the same equipment.this reflects an assessment of work supervisors. The manager with a high rate can show these numbers to supervisors,who then condemn the
  • 7. CHANGING TO NEW PAY SYSTEM…….. INDIVIDUAL LEVEL Toyota changed its wage deal:earlier the productivity bonus traditionally accounted for 50% to 60% of total salary, thenIt reduced to 40% in 1990.Again reduced to 20% in 1992.As a result competition has begun to occur on individual rather than group level. Its new personal merit system served to widen the gaps between the individuals.
  • 8. CHANGING TOYOTA’S OLD SYSTEM TO NEW WAGE SYSTEM
  • 9. HOW TOYOTA MOTIVATES ITS WORKERS i. Agreed to guarantee lifetime employment for employees ii. Developed a system of internal promotion  1. enabled workers to rise within the hierarchy  a. casual workers could receive permanent contracts  b. could go on to become team leaders, foremen and even managers.  2. worker can become a sort of minor manager iii. Provides a pay scale based on three components of company profitability  1. One bonus based on seniority - not job classification  2. Another bonus payment related to team’s performance  3. Additional bonus payment allocated to worker’s merit  4. Wage would increase from 85% to 115% from amount allocated In return, Toyota employees are constantly committed to making improvements rather than just responding to problem
  • 10.  Good relationship and team work resulted in increased efficiency and a higher level of production a. Many employees hung out after hours contributing ideas  about reorganizing and improving production  Of 860,000 ideas, 94% adopted
  • 11. BY END OF 2006, TOYOTO WON ON GM BCOZ.. GM had:  Excessive wage costs for its unionized workers.  Pension crisis with salaried and unionized retirees.  Uncompetitive factories with low-quality products. Toyota had:  Lower compensation costs due to young work force.  A weak currency in Japan.  A lucky break from high oil prices in those years. As a result:  Toyota won.
  • 12. LET’S CHECK OUT PAY OF TOYOTA CANADA INC.
  • 13. PAY SCALE BY CITY
  • 14. SALARY VARIES BY STATE
  • 15. SALARY BY BENEFIT/PERK
  • 16. SALARY CHANGES WITHYEARS OF EXPERIENCE
  • 17. HOURLY RATE BY JOB
  • 18. SALARY BY GENDER
  • 19. SALARY VARIATION BY SALES TERRITORY
  • 20. AUTOMOTIVE ENGINEERS STATISTICS ONOVERALL INDUSTRYEND YEAR BONUS RECVD JOB SATISFACTION
  • 21. AUTOMOTIVE ENGINEERS OVERALL
  • 22. PUBLIC MOTOR TRANSPORT- Andhrapradesh Minimum Wages and VDA payable from 01-10-2010 to 31-03-2011 VDA payableSl.No. Category of Employment Basic Wage Total Wage for 298 points 1 Accountant 4822.00 1564.50 6386.50 2 Heavy Vehicle Driver 4319.00 1564.50 5883.50 3 Checking Inspector 4160.00 1564.50 5724.50 4 Typist/ Contractor/ Clerk 3829.00 1564.50 5393.50 5 Time Keeper 3658.00 1564.50 5222.50 6 Light Vehicle Driver 3435.00 1564.50 4999.50 7 Conductor 3435.00 1564.50 4999.50 8 Computer Operator 3168.00 1564.50 4732.50 9 Cleaner/Security Guard 2645.00 1564.50 4209.50 10 Mazdoor 2645.00 1564.50 4209.50
  • 23. COMPENSATION CAN FOLLOW…. “Best Practices” •Incentives not too large. •pay based on individual performance. • reduce seniority pay 9-23
  • 24. OUR SUGGESTED STRUCTURE TO PAY EMPLOYEES Common to all types of jobs Basic pay- depend on the class/grade where a employee is positioned.  Should be based on:nature of work  Physical work involved.  Mental work involved.  Knowledge & technical skills involved.  Volume of Duties & responsibilities.  Nature & no of Task/activities contained.  Level of Skills to be exhibited in the work  Burden on employee & complexity of job to do it.  on par with other Similar org’s pay structure for same job.  On par with cost of living/money value in that area/country.  As per latest pay commissions/govt guidelines.

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