The Toyota redundancies: an HR botch-job?

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Some 300 plant workers at Toyota were made redundant yesterday, and a further 50 are expected today. While redundancies are a necessary reality of restructuring, the car manufacturer has come under fire from workers who say the method of the process was needlessly cruel and humiliating.

According to reports, workers who were sacked will receive four weeks' redundancy pay for every year of service, and the cap was increased from 75 to 90 weeks – by all accounts an offering far in excess of its legal requirements. Yet this was lost amid reports of an overbearing security presence, and workers having already endured months in limbo after the redundancies were flagged in January.

A Toyota spokeswoman said the offers made to redundant workers had been agreed with the union last week, and the entire workforce was assessed – those with the lowest scores in behaviour, skills and knowledge were let go. Toyota said it was “a very difficult day” for the company and it wanted to make sure that its employees were treated with respect by providing one-on-one meetings. It says services, including counselling and a free job centre, have been organised to provide assistance.

However speaking to media last night Workplace Relations Minister Bill Shorten said he had concerns over the way the workers were sacked. “You can do these things in a dignified fashion,” he commented.

The Toyota spokeswoman confirmed the assessments related to workplace behaviour, skills and knowledge, including their adherence to the company's values. “It's things like respect for people, continuous improvement and teamwork. It's about whether they show these values at work,” the spokesperson said. Workers were also assessed on whether they attended work on time, their standard of uniform, their communication skills and their adherence to safety protocols. Minister Shorten said workers were clearly made to feel they were let go for being a slacker, and that is not the case.

Dr Hilary Armstrong from the Institute of Executive Coaching said a vital ingredient of effective redundancies is assuring the employee that it was not about their skills and capabilities in the job, and essentially that it’s not personal. She added it is paramount that the support package on offer is effectively communicated.

Picture: Hobsons Bay Leader

 

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  • Helen on 17/04/2012 2:43:47 PM

    Why do we have to use the work "sacked?" The workers have been made redundant due to production losses? The word sacked is used so liberally no wonder the workers feel humiliated, the meaning of both words conjure up a completely different message one of being a victim of the climate and one of being a poor employee. What has happened is workers have been the scapegoat of poor management, union and media hype – let’s put all this negative energy into the Yarra and help support a return to work and re training program for these people – using the word “sacked” is not doing any favours for re employment is it?

  • Sarah on 17/04/2012 2:58:15 PM

    I fail to see why your headline was HR botch job.... They are being paid redundancy entitlements, they had on site counselling and outplacement, they has one on one conversations....where is the botch up exactly? Mist redundancy processes take a few months - particularly of the company is open about it with their employees and cost cutting measures haven't provided the necessary business savings. They did have security which perhaps in most industries wouldn't be required but this is a manufacturing plant with predominantly blue collar workforce and they may have felt the need to prepare for the worst.
    I agree with the prior comment - the use of the word 'sacked' as opposed to made redundant, retrenched, laid off etc has a bad connotation. But HC, enough with the HR bashing that we see all too frequently in your headlines. In this unfortunate circumstance, by all accounts HR has done their job.

  • Tony on 17/04/2012 3:08:46 PM

    "The Toyota spokeswoman confirmed the assessments related to workplace behaviour, skills and knowledge, including their adherence to the company's values. “It's things like respect for people, continuous improvement and teamwork. It's about whether they show these values at work,” the spokesperson said." And having security people brought in to escort people off the premises is showing respect for people at work? I wonder how the apparent breach of Toyota's values will affect those still with jobs?

  • Graham on 17/04/2012 3:31:03 PM

    Surely, if a company is going to scale back, it is the smart thing to make sure they retain the most efficient and productive staff. Why is this an issue? We want Toyota to let go of the best performers? Why would any business do that? And the level of redundancy (not sackings!) being offed is far greater than what people are entitled to.

  • Michael on 17/04/2012 3:37:28 PM

    @ Sarah, in my view this was partially botched. The HR leaders in that company need to take into account the reputation of the company when implementing redundancies. Yes the HR team have ticked all the boxes with regard to the transaction activities, but they have missed the boat in a big way with regard to protection of the company brand which is far more important strategically to the company in the long run. HR practitioners need to look outside their little bubble and take account for the broader impacts of their decisions.

  • Shelley on 17/04/2012 4:34:49 PM

    Michael - how exactly have HR missed the boat in regard to protecting branding? The fact that they offered one on one conversations, onsite counselling, outplacement and healthy severance offerings is absolutely thinking of the company's interests in the long run. Also remember its not just HR that make these decisions but the senior management as a whole. HR in this matter did more than required within their remit...

  • Shelley on 17/04/2012 4:42:18 PM

    Michael - Easy to generalise. Its not HR alone that make these company impacting decisions but senior management as a whole. Trust me, the board of Toyota didn't say "HR go for your life do what you will"... All areas of management should be responsible for looking outside their bubbles and self interests... not just HR..

  • Rachel on 17/04/2012 4:49:44 PM

    Isn't this a botched job given the "positions" are meant to be made redundant, not the people in them (i.e. people with the low test scores)?

  • Peter on 17/04/2012 4:57:51 PM

    Actually they have been sacked. Redundancies only occur when the actual POSITION has been abolished. In this case the employees were assessed and then let go on the basis of performance.

  • David on 17/04/2012 6:19:51 PM

    The roles were redundant, and the most appropriate people were retained for the business to be successful by meeting the skills and performance profile needed.

    The redundancy payments are well beyond what most employees are entitled to, there is outplacement support.

    Looking at the process I’m unsure what Michael thinks should have been done differently? There was an assessment / selection process, but to do anything other than retain the best performing and suitable employees would have been ridiculous.

  • Charles on 18/04/2012 12:26:54 AM

    Why was this botched? It is the position not the person that is made redundant. If the process means a reduction in the number of positions why is it wrong that the worse performing occupants are offered severance payments because their productivity was inferior to their peers. Isn't it fair that the better performing occupfants be preferred to the others. It's a case of worst on first off. My only concern is I hope that the criteria was set before the decision.

  • Mark L Brisbane on 18/04/2012 7:36:54 AM

    Let this be a lesson to us all..Toyota & all other companies need to be viable, profitable and adapt to the ever changing market. Sacking or making redundant is just a play on words - companies should have the right to keep the best workers to get the best efficiencies and related cost benefits. I've been layed off twice ...a shock at the time but get over it, bank the money & if you want a job you will find one ! The alternative to this ? maybe could be Toyota closing Australian manufacturing totally as Mitsubishi did... who are the loosers then. Wake up Australia.

  • Tim on 18/04/2012 9:48:09 AM

    Actually, they haven't been sacked on the basis of poor performance. A number of roles were identified as redundant and to select the individuals to be retrenched as a result performance was used as a deciding factor.

    I'd suggest these redunancies were well executed. The company lost the PR war with the unions and the Government (ie. Shorten) added to the group think.

  • Callum on 18/04/2012 2:33:49 PM

    @Peter I don't agree with your commence that workers have been 'sacked'. Their positions have been deemed to be surplus to requirements and as a result of that, these particular workers have been retrenched. I think the assertion that HR 'botched' the job is a bit unfair. I agree with some comments that many levels of Management are involved in determining the process and I'm sure this reached Board level for ultimate sign off. I think what they could have done better is to be clearer on the selection criteria that was used to target specific roles. The criteria Toyota used seem to make the decisions personal to an extent. If the criteria was set to ensure it was clear what skills, knowledge and experience is required for the remaining roles, workers could have been assessed fairly and transparently against this criteria and it would ensure Toyota retained the appropriate people who matched their capability requirements. Secondly it would ensure all workers were treated fairly and equitably and ultimately creates less uncertainty regarding how individuals are selected. Finally, Toyota failed to adequately 'sell' the redundancy entitlements offered to the media because I have not seen one general media article which mentions how generous the entitlement actually is.

  • Michael C on 19/04/2012 2:04:07 PM

    Sacking or othewise is academic, in HR we all know the definitions used before the FWA. This is really a no win given the profile, political dabbling, and extensive media coverage. The unfortunate thing arising is that the identification method, perfectly defensible (you never let your best go and keep the other!) but because of the exposure the people who were asked to leave will now have a real problem in getting another role. These days we have largely overcome the stigma of redundancy in the job market, but this turns it back 20 years. To say nothing of the reputation of Toyota - no chance of an employer of choice award for them for a while!

    You can never do downsizing well, only less badly.

  • Carol on 20/04/2012 2:00:08 PM

    Tony, I completely agree in terms of Toyota living the values they are measuring people against. So often the values get wheeled out when it suits Executives .. provided they don't have to live them!

  • Jon on 21/04/2012 9:27:53 AM

    The poor understanding represented in this blog of what happened at Toyota this week and the alternatives is surprising. Toyota management made it clear from the start they would not offer voluntary redundancies as part of shedding 350 workers due to reduction in production. This confused many because, contrary to the misinformed in this blog and others, companies still get to choose from those who putbtheir hand up who they offer the VR to. Handled properly, they could have offered VRs in March and assessed who they needed and they didn't and if there were less than 350 from this process, make targeted redundancies. The experience of others using this approach is that you get get close to all required retrenchments this way and limit the need for mass targeted redundancies. This also treats the employees with greater dignitybthan the process we witnessed this week. The only reason Toyota management took their path is they knew who they wanted out from theget-go and didn't want to leave it to chance.

  • Kate Connellan on 21/04/2012 5:52:23 PM

    Some interesting discussion here. I guess 'sacked' to a layman means 'losing your job (for any reason)' to some, and 'losing your job because you were poor' to others.

    Time will tell whether Toyota's HR people botched the job when they are tested at Fair Work Australia.

    What the media reports do show us is that there is danger in over emphasising the legal/ company perspective, and a need to balance that with employee needs and a humanistic approach.

    I think there is one key thing I would have done differently - giving the scorecards to employees was ill advised.

    They have done it to pre-emp FWA appearances and try to demonstrate that they have followed a clear and fair process, but in doing this they have given the union and their legal representatives something to grab hold off and an insight into a process that they can now pick apart. They would have been better advised to raise this at conciliation or arbitration when they could carefully control the message and ensure that it hadn't been publicly debated prior. It was poor from a legal strategy standpoint.

    In giving out the scorecard, they have also complicated the emotional part of a redundancy for employees. It sends a confusing message. On the one hand the message should be 'not enough positions for everyone - just a numbers game' but the scorecard has made it a lot more personal and sent the message 'you're not good enough'. Employees will feel hard done by regardless, but you want them to focus on the anger at losing their job and a sense that they are not the only one. Instead it has become about losing your job because you were poorer than everyone else. It has reframed the focus of the anger and the impetus to fight back. It was poor from a humanistic approach.

    Another important factor that seems to have been overlooked in the media is a need to ensure remaining employees are engaged. The military style operation is likely to have undermined this.

    http://workzenibytes.blogspot.com.au/

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