A COMPARISON BETWEEN VOLKSWAGEN

AND TOYOTA
ANNA STOYCHEVA|IRINA JUMAMURADOVA
AMERICAN UNIVERSITY IN BULGARIA | BUS 450: Human
Resource Management

Branding: HRM as a Strategic Ad

Contents
Overview of the companies...........................................................................................3
Volkswagen AG...........................................................................................................3
Toyota Motor Corporation...........................................................................................3
HRM Philosophy.............................................................................................................3
Volkswagen.................................................................................................................3
Toyota.........................................................................................................................4
Job Design......................................................................................................................4
Chassis Designer in Toyota.........................................................................................4
Chassis Developer in Volkswagen..............................................................................5
Conclusion..................................................................................................................6
Recruitment practices....................................................................................................6
Recruitment at Volkswagen........................................................................................6
Recruitment at Toyota................................................................................................7
Selection process...........................................................................................................7
Selection in Toyota......................................................................................................7
Selection in Volkswagen.............................................................................................7
Performance appraisal systems.....................................................................................8
Toyota.........................................................................................................................8
Volkswagen.................................................................................................................8
Training..........................................................................................................................9
Toyota.........................................................................................................................9
Volkswagen.................................................................................................................9
Formal educational opportunities................................................................................10
Volkswagen...............................................................................................................10
Toyota.......................................................................................................................10
Compensation..............................................................................................................10
Volkswagen...............................................................................................................10
Toyota.......................................................................................................................11
Benefits........................................................................................................................12
Toyota.......................................................................................................................12
Volkswagen...............................................................................................................12
Special HRM challenges related to the industry..........................................................13
Best HRM practices......................................................................................................13
Volkswagen...............................................................................................................13
1

Toyota.......................................................................................................................13
Comparison of HRM practices in the two companies..................................................14
Opportunities for improvement...................................................................................15
Volkswagen...............................................................................................................15
Toyota.......................................................................................................................15
Summary.....................................................................................................................15
References................................................................................................................17

Overview of the companies

Volkswagen AG
The Volkswagen Group with its headquarters in Wolfsburg is one of the worlds
leading automobile manufacturers and the largest carmaker in Europe. The share
of the world passenger car market amounts to 12.9 percent.
The Volkswagen Group is one of the leading car manufacturers in the world, and
the largest one in Europe. The headquarters of the company are in Wolfsburg,
Germany. The market share of the company is 12.9%. The Volkswagen Group
owns not only Volkswagen, but also twelve other different brands in different
European countries, including Audi, Bentley, Porsche, etc. The product spectrum
covers all kinds of vehicles, ranging from motorcycles to luxury vehicles. The
Volkswagen Group operates in 20 European countries as well as 11 countries in
Africa, Asia and the Americas. It employs 592 586 people worldwide and sells its
vehicles in 153 countries.1

Toyota Motor Corporation

Toyota Motor Corporation (TM) is a Japan-based company that is famous for its
cars. It operates in three segments: automobile, finance, and other segments.
Automobile segment concentrates on the production and sales of all types of
cars: from passenger cars to trucks, from low class cars to luxury ones. Other
segment include information, communication, and biotechnological business as
well as design, construction and sales of housing 2.
The company operates in 27 countries and regions and has well established
worldwide sales network that include 170 countries. TMs capital is 397.05 billion
yen and the staff consists of 338.875 employees, as was stated in the report from
May 20143. TM is a group of 54 companies that operate in different fields and
different countries. Toyota had 12.47 percent of market shares in 2013 in the
worldwide car production industry. It produces 13 percent of cars that are
produced globally4. The point of differentiation for the company is the hybrid
environmentally friendly cars that are becoming more and more popular as
people increase their concern about environment.

1 "Goals and Strategies." Volkswagen AG. Web. 1 May 2015.

2 "Company Profile." Toyota. N.p., n.d. Web. 29 Apr. 2015.
3 "Toyota Motor Corp. (TM)." Stock Analysis on Net. N.p., n.d. Web. 29 Apr. 2015.
4 "Toyota's Share of Global Car Production from 2003 to 2013." The Statistics Portal. N.p., n.d. Web.
29 Apr. 2015.

HRM Philosophy
Volkswagen
The main focus of the HR strategy of Volkswagen is to stimulate outstanding
performance and the success that comes from it. Volkswagen knows that the
excellence needed for the company to become the best in international car
manufacturing can only be delivered by a top team. This policy maxim applies in
all of the brands that the Volkswagen Group owns. 5

Toyota
Toyotas philosophy regarding its employees has been systematically organized
as the Personnel and Labor Toyota Way. The main purpose of the Toyota Way is
the recognition of a management that shows respect to the employees. Their
main principle is to establish a relationship of trust and respect between the
workers and the management. This philosophy is shared by Toyota affiliates
around the world. 6

Job Design
The job design practically answers the question of who performs the job and how
they perform it. It describes the responsibilities on the job, makes the job look
attractive and helps appeal to the right applicants. The work scope and job depth
are some of the important features to be included in a job design. A good job
design informs the candidate for the job about the variety of skills the job
requires, the significance of the task, the freedom it allows for, and the feedback
the applicant will be getting. The ultimate goal of the job design is to increase the
engagement of employees on the job, as well as their motivation, and to
minimalize the dissatisfaction.

Chassis Designer in Toyota

Job Description
The chassis area in the vehicle contains the suspension, electric power steering
and driver-control.
TME Chassis Engineering Divisions responsibility is :
1) Local development of Chassis parts for vehicles built in one of Toyotas
European assembly plants. This activity is done in close cooperation with our
local suppliers and our mother divisions in Toyota Motor Corporation (TMC) in

5 "Volkswagen Konzern - AR 2013 - Employees." Employees. Web. 1 May 2015.

6 "TOYOTA | Employees." Www.toyota.co.jp. Web. 1 May 2015.
4

Japan. TMC relies on us to make sure the design is adapted to European

customers expectations and European suppliers production methods.
2) Investigation of new European technologies.
After investigation and benefit clarification we propose them to TMC for
application in future vehicle projects.

Your challenge
As engineer in Chassis Design 1, your main responsibility will be the successful
completion of Chassis parts development. This is achieved by the following
activities :
During the prototype phase, you will drive the development process of locallydeveloped parts. Continuously you need your engineering skills to support the
suppliers in their development. You make sure the development is finished on
time and meets all Toyotas requirements. For parts developed in Japan, you are
the liaison between our mother divisions in TMC and other European parties
(assembly plants, suppliers)
During the production-preparation phase, the formal design responsibility is
handed over to you. You make sure production parts achieve expected
performance levels and solve any workability issues in the assembly plants.
During each step of the development, you will focus on cost-reduction and
remain vigilant that the parts performance is matching European customers
expectations.
Your additional responsibility will be to investigate new European technologies in
your responsible area. In case a promising technology is found and the benefit for
customer and Toyota is confirmed, you set-up a pre-development study. If
successfully concluded, you propose it to TMC for application in a future vehicle.
In this position you will report to the team leader and Senior Manager of the
department.

Your Profile
-

Master in (Electro-) Mechanical Engineering or Automotive Engineering.

- 2 to 5 years relevant experience in the design & development of complex
mechanical parts. (Preferably but not mandatory, in the area of vehicle
chassis parts (suspension, steering, brakes, tire).
- Extensive mechanical engineering knowledge
- Project management competence
- Good knowledge of the general vehicle design
- Competence with windows tools : MS Excel, Powerpoint, Word
- A basic know-how of business case making (cost planning, scenario, etc)
is an asset
- Fluent in English. Japanese, German and French are an asset (in reducing
order of importance).
- Experience with CATIA v5 and FE analysis are an asset
- Willing to travel up to 20% of time in Europe and Japan
5

Place of Employment

Place of Employment: TME Technical Centre, Zaventem, Belgium 7

Chassis Developer in Volkswagen

Role Summary
Responsible for a responsive support of R&D in Chattanooga. Liaison between
the process partners Production, Pilot Hall, Logistic, Quality Assurance and R&D
Center in Chattanooga or other different brands/departments/plants

Role Responsibilities
Establish, launch and maintain measuring systems and devices and test facilities;
Components and parts disassembly; Collecting of data and comparison with the
desired value; Function trial and durability analysis; Built up of production
reference vehicle frontend and component updates; Vehicle updates; Problem
analysis; Supporting special tests on site; Software updating / flashing of cars;
Materials procurement;

Work flexibility (travel requirements, work schedule, etc.)

Readiness for domestic and international business trips
Readiness for professional trainings in Wolfsburg/Germany

Qualifications
Required

At least 5 years in automotive industry

Special training in automotive industry
Relevant automobile engineering knowledge like: Interface to Production, Quality
Assurance, Pilot Hall and Logistics and Customer Service; Support for analysis at
customer complaints; Knowledge about production process; Permanent
production checks in close collaboration with Quality Assurance; Special
automotive knowledge

Preferred

Automotive apprenticeship
Experience in the co-operation with VW development departments
German skills, written and verbal

Conclusion
Both job designs cover the basics summary of the job, requirements and skills
needed, as well as tasks the employee is supposed to do on the job. 8

7 "Toyota Motor Europe Jobsite - Toyota's Job Offers." Toyota Motor Europe Jobsite Toyota's Job Offers. Web. 1 May 2015.
8 "VW | Drive Your Career." VW | Drive Your Career. Web. 1 May 2015.
6

Recruitment practices
Recruitment at Volkswagen
Internal
Volkswagen uses the usual means for spreading information about new job
openings within the company internal postings. In addition, the company keeps
the assessment tests each employee goes through during selection, and in case
of on opening they inform the current employees that are eligible for the job.

External
Much like internal recruitment, in external recruitment Volkswagen uses a lot of
the typical ways of sharing information websites, advertisements, LinkedIn.
There are two interesting things to be noted, however. The first one is that VW
uses the so called undercover recruitment. They sent recruiters to different car
service companies to get their car fixed. Whats interesting is that they put job
ads for mechanics in VW on the undercarriage of the cars, and try to win the
mechanics over. Another interesting practice VW has is to keep track of the
students that come to do internships in the company. They have the so called
Student Talent Database, which keeps information about all the undergraduates
who have already completed internships in VW and their performance with the
company, as well as their performance in school. The Database provides VW with
a pool of students who are already aware of the company values and are ready to
jump in and fill vacancies.

Recruitment at Toyota
Internal
Toyota uses the same ways of informing people about job openings as
Volkswagen, when it comes to internal positions. What is more important here,
however, is that Toyota supports the idea of growing internally. They have the socalled in-house grooming, according to which employees in the company
should grow as the company grows. Thats why Toyota pays more attention to
internal recruitment than other companies.

External
As one of Toyotas main focuses is for their employees to grow with the company,
much of their external recruitment policy concentrates on recruiting students
fresh out of college. Thats why Toyota concentrates on using educational
institutions for external recruitment. Toyota is in contact with career centers in
many school. It works together with the schools to organize career exhibitions for
students, which are usually attended by representatives from Toyota, who talk
about the company. This way, Toyota gets to meet personally with
undergraduates and win them over while they are still in school.

Selection process
Selection in Toyota

The selection process in Toyota has a 6 steps, however only 4 of them are directly
connected to the selection, with the last 2 being induction and orientation for the
already selected new employee. One of the important things to know about the
selection in Toyota is that the future manager of the applicant is present during
the interviews, as well as representatives of the senior management. The
assessment part of the selection process makes sure that the applicant fits the
Toyota Way. At the end of the process, the newly hired employee is offered the
so called New Hire package which includes a short 3-day orientation. In
addition every new hire is assigned to an HR representative, who acts as their
person of trust.

Selection in Volkswagen
Compared to Toyota, Volkswagens selection process is smaller and a bit more
simplified, but still similar. It starts with application and screening of applications.
After screening, the shortlisted applicants are invited for assessment. Depending
on the position the applicant is applying for, the assessment is different for
administrative jobs it tests mainly cooperation and communication skills while
candidates for production jobs perform agility exercises and measurement tests.
After the assessment, applicants go through an interview with their immediate
supervisor and they are later informed on the final decision.

Selection process
Toyta
Step
#1

Phone Interview

Step
#2

Testing/Assessment

Volkswagen
Application
Application Selection

Step
#3

Final Interview

Assessment Center

Step
#4

Contract Proposal

Interview

Step
#5

New Hire Welcome Induction

Decision

Step
#6

New Hire Orientation Days

Table 1: Selection process

Performance appraisal systems

Toyota

When it comes to performance management, Toyota focuses more on the

efficiency of the entire system, rather than the efficiency of the individual. For
Toyota the whole picture in the workplace matters more than the individual
contribution. There are two steps to the appraisal system of Toyota. The first one
is a self-appraisal assessment, in which the employees themselves give feedback
on their own performance, with the help of a special form. The employees rate
their achievements during the year and talk about their weaknesses, strengths
and accomplishments. The second type of assessment is the Head of Department
assessment. Every head of department is responsible for checking if his/her
employees are performing well on their job, and to rate their efficiency. In
addition to assessments, Toyota also surveys its employees to find out about
employee satisfaction and then analyzes the results in order to provide a better
working environment and overall more satisfaction for the employees.

Volkswagen
The assessment in Volkswagen is also done in two steps, but they are both
conducted by the manager, and it is all a part of a performance-related pay
component. The first part assesses the performance of the employees and gives
them feedback on how they are doing with their tasks, while the second part
consists of planning the personal development of that employee for the future.
The employee is provided with the opportunity to grow in the company and given
guidance on how to perform better or to achieve more in the company. In
addition, Volkswagens appraisal system is designed to identify whether
employees need more training in order to help them perform their jobs better.

Appraisal
Toyta
Self - assessment
Head of Department
Assessment

Volkswagen
Annual appraisal with
manager
Perforamnce Developmen
assessment t planning

Table 2: Appraisal

Training
Toyota

Toyota Motor Corporation has extensive training program for new employees as
well as for the employees who are already in the company professional
development. Training program for newbies is mostly for the foreigners that is
designed to help new employees to adjust their already existing knowledge to the
new language and culture9.
Toyota does not neglect the fact that in order for the new employees to be
productive from the beginning, they have to be aware of companys policies,
mission and vision statements. For these purposes Toyota has orientation, the so
called assimilation program, which lasts for four days. The first day starts at
6:30 am, with the welcoming speech of the vice president for human resources.
During this day he explains the role of the companys departments; talks about
the history and culture of the company. He tries to explain all the policies
including benefits and quality policies. The first half of the second day is
dedicated to the communication training, and concentrated on the importance of
the mutual respect and teamwork. During the second part of the day vice
president for HR clarifies how the production systems works with the stress on
the safety. The third day starts with a short communication training that educates
new employees how to solve problems and conflicts if there are any. Then the
training continues with the explanation of the policies for hazard of all kinds. The
fourth day is all about teamwork and the system of suggestions in the company.
This type of the orientation helps new employees to get to know each other and
understand the policies and the practices in the organization 10.

Volkswagen
Unlike Toyota, Volkswagen Group company has training for all new employees,
nt only foreigners. It is called vocational training and in December 2013, 17.703
new employees were trained. This program works mostly in Germany, however,
the company tries to organize this type of trainings in other countries, like India
and Russia. Every year Volkswagen management group present awards to the
best trainees. This type of training helps the company to develop Volkswagens
outstanding team, which is familiar with the values of the company and
represents a great contribution for the company. Especially talented trainees can
be employed for the positions of specialists in various fields. Other talented
trainees can decide to participate in the Years Abroad program that allows
them to work 12 months in the one of the companys international locations.
Volkswagen has different approach to the university students. Once an
undergraduate student participated in the companys internship program and
showed an outstanding performance, he is placed in the Student Talented Bank.
Volkswagen Company support those former interns in their studies and invite
9 "Vocational Training to Help Trainees Find Employment." Toyota. N.p., n.d. Web. 29 Apr. 2015
10 "Recruitment." Slideshare. N.p., n.d. Web. 1 May 2015.
10

them to the seminars and presentations. Right before the graduation, those
students are added to the Academic Talent Pool, where they are traced and can
be invited to work for the company if there are suitable positions for those
people11.

Formal educational opportunities

Volkswagen

Both Toyota Motors and Volkswagen Group provide internal trainings for the
professional development of their employees. Not so long ago, Volkswagen
founded the Volkswagen Group Academy that provides trainings for all
employees, directed by the head of the personnel development. Dr. Horst
Neumann, the head of the human resources department in Volkswagen Group
says: "The specialist expertise of our employees is a prerequisite for excellent
cars, customer satisfaction and competitiveness, and therefore lays ground for
the success of the Volkswagen Group. The Volkswagen Group Academy will
ensure that joint learning and training is taught and practiced throughout the
various groups of vocations."

Toyota
Toyota also has a training for employees for professional development. Managers
in TM believe that it is very hard to become a true expert without professional
assistant. This is an idea behind their training program. They provide personal
consultation, trainings, and assistance for each employee, who asked for it.
However, neither Toyota Motor nor Volkswagen Group has external degree
program or reimbursement practice.

Compensation
Volkswagen

The objectives of our compensation structure are to attract and retain valuable
employees, assure fair and internally equitable pay levels and provide a mix of
base salary and variable bonuses that provides motivation and awards
performance. At the same time, we seek to optimize performance and manage
compensation costs. stated in the Volkswagen report from 22nd of March,
2010.
The compensation in Volkswagen include (taken from the Volkswagen report
VLKAY DEF 14A filed 21st Dec., 2009):

Competitive Compensation. The Company needs to hire, retain and

motivate executives with the requisite skills and experience to develop, expand
and execute upon the Companys business initiatives, as this is essential to the
Companys success in providing value to shareholders.
11 "Vocational Training at Volkswagen." Volkswagen. N.p., n.d. Web. 1 May 2015.
11


Performance-Based Compensation. Variable compensation tied to
Company and individual performance should represent a significant portion of
total compensation for the Companys executives.

Reward Both Company Performance and Individual Achievement. In

determining annual incentive and long-term equity-based incentive awards, the
Company considers both Company performance and individual achievement.
Merit increases to base salaries are weighted towards recognition of individual
performance and achievement.

Long Term Incentive. The Company believes that long term equitybased incentives are a valuable tool to align the interests of executives and other
senior managers with those of shareholders. These incentives can be
accomplished through awards made under the Companys Long-Term Incentive
Plan, which was approved by shareholders in2006 12.
The company pays only in cash, not equity, because it is Limited Liability
Company.

Toyota

Compensation system is completely different in Toyota Motor. Compensation is a

part of the salary for every employee, just the amount of it depends on the
employee productivity. It is designed that way so employees try to increase
personal productivity and do not compete with each other. It is very attractive for
the perspective employees because these bonuses can increase wage from 85%
to 115% from the amount allocated13.
Toyota employed unusual compensation practice for the Japan-based company.
They reduced compensation based on the seniority. It is considered to be the
move towards global culture, where not everything is based on seniority. Instead
they pay more based on the individual performance. Volkswagen, on the other
hand, pays higher compensation to the employees who have more years of
experience working in the company. By doing this, Volkswagen is trying to
increase retention rate. Taking into consideration that the people with the most
years of experience in one company most of the time are elder people (seniority),
and hence has the lower performance rate than the younger employee, one can
understand the difference in bonuses for employees with 20 years of experience
in these two companies (figure 1a, 1b)14 15. However, Toyota has Years of
Service recognition program that allows employees with many years of working
experience in Toyota choose presents they want from the online catalog. This
12 "Volkswagen. Compensation Philosophy and Objectives." Wikinvest. N.p., n.d. Web. 1 May 2015
13 "Toyota. Compensation." Slideshare. N.p., n.d. Web. 1 May 2015.
14 "Average Bonus for Volkswagen Group." PayScale. N.p., n.d. Web. 1 May 2015.
15 "Average Bonus for Toyota Motors Manufacturing Employees." PayScale. N.p., n.d. Web. 1 May
2015.

12

program is designed to reward dedicated employees who have worked for the
company for more than 10 years.

Figure 1a

Figure 1b

Benefits
Toyota
Toyota has various benefits to attract and retain employees. Those benefits
include health and dental package, covering employees spending on health and
dental services; health and wellness program, which gives employees discount in
local fitness centers. Another benefit in TM called team member purchase plan
that provides employees with discounts for new cars, for service and repair.
Tickets for some concerts and events are provided for free; when it is not
possible, employees get the opportunity for early purchase of the tickets. Other
benefits include free parking; free turkey during the winter holidays; three annual
scholarship for employees children for post-secondary school education; and
annual paid 4 week vacation16.

16 "Benefits and Compensation. Competitive Benefits Package." Toyota Brichwood. N.p., n.d. Web.
1 May 2015

13

Volkswagen

In Volkswagen Group all benefits vary depending on the location. However, all
employees of the Volkswagen Automobile Group are insured against accidents
that result in employees death or disability. Other benefits include
transportation, monthly childcare allowances, affordable housing, as well as aids
for the selected leisure activities. Occupational pension systems and healthcare
services depend on the location. In most of the locations pension system consists
of basic pension and additional benefits of two contributory pension system. The
first contributory system is funded by the employer, while the second gives the
employees opportunity to fund their own retirement income through deferred
compensation. Benefits also include paid health and dental care 17.

Special HRM challenges related to the

industry
The problems most of the car manufacturers nowadays face are that it is hard
find younger people who want to work in the manufacturing field. In addition, the
constantly changing new technologies make it even harder to hire people who
are aware of all technological trends the industry calls for. One of the challenges
Toyota had to go through recently was 5 years ago when they had to recall nine
million vehicles worldwide. This was a huge challenge to HRM because when
there are problems in production that means there is a problem with employees,
and a problem with employees means a problem in HR. One of the questions that
was asked most is whether Toyotas focus on trust between management and
employees is really working the way it should be, as well as whether their hiring
and training processes are well thought through. However, Toyota managed to
recover and 5 years later they are again on the top of all car manufacturers
worldwide.

Best HRM practices

Volkswagen
Wanderjahre(Years abroad) Employees can move to any VW office
around the world for around 12 months. This is an amazing opportunity for
development for new employees or recent university graduates.

Work/Life balance
Volkswagen offers a variety of part time and shift models, as well as creative
solutions with flexible, individual working time are available for employees to
choose from. Some factories even offer child- care facilities, so that it is easier for
families with kids to go to work and still be able to pay attention to their kids.
17 "Social Benefits." Volkswagen. N.p., n.d. Web. 1 May 2015.
14

Toyota
Toyota Clubs
Toyota has more than 35 sport clubs, both competitive and non-competitive.
Their main goal is to promote the teamwork in the company, to increase to
motivation in employees and to increase the solidarity among employees. In
addition to the sport clubs, there are also cultural clubs. 18

Comparison of HRM practices in the two

companies
When it comes to job design, both companies are very explicit in what they are
looking for, what the skills of the perfect applicant would be like, and what he/she
will be expected to do as part of the company. However, Toyota provides much
more information on the benefits and compensations offered, especially higherlevel jobs that require more experience, which makes it more attractive for
potential candidates for the job.
The internal recruitment practices in Toyota are better developed, as the
company is focused on internal growing and development for employees within
the company. Even though many of the ways for spreading information about
openings internally are the same, Toyota puts more effort in finding people
internally than Volkswagen. When it comes to external recruitment, what we can
see is that Toyota tries harder on employing students. Both companies offer a lot
of internship to students, but Toyota goes the extra mile and leads the
conversation with universities and career centers in order to find the perfect fits,
instead of just offering internship positions. On the other hand, Volkswagen has a
really good practice of keeping track of all the students that worked for them with
the Student Talent Database, which they use to offer vacant positions to students
who are good fits for the job.
Despite being very similar, the selection process between the two companies
differs greatly during the induction process of the new employees. Toyota pays
very special attention to new hires when they first come to the company and
provides them with a special package that includes a three-day orientation. This
is a key point in winning the employee over, because the company
demonstrates a special personal treatment to the employee from the moment
they are hired in the company.
Performance management is also similar, however Toyota provides opportunity
for self-assessment, in comparison with Volkswagen, where assessment is
conducted by managers only. Another thing about Toyota is the employee
satisfaction surveys, which provide feedback to the company when it comes to
working environment and general well-being of all the workers in the company.
18 "Human Relations Activities: Toyota Clubs." TOYOTA MOTOR CORPORATION
GLOBAL WEBSITE | 75 Years of TOYOTA | Employee Welfare | Human Relations
Activities: Toyota Clubs. Web. 1 May 2015.
15

On the other hand, Volkswagen offers the so-called Idea Management, where
employees submit ideas and suggestions to the company.
Overall Toyota Motor and Volkswagen Group has vocational trainings for new
employees, and TM has good and effective orientation program that allows
newbies to understand the culture and the policies of the company. However, the
training program in Volkswagen Group is more intense and includes orientation
for the new employees. The program provided by Volkswagen is more attractive
to employees because it is not only for foreigners, it is designed for all new
employees at all levels.
Educational opportunities in both Volkswagen and Toyota does not include
internal or external college degrees or reimbursement practices. Both of them
give employees opportunity for the professional development by participating in
the training programs.
Both of the companies have compensation programs for their employees.
Volkswagen provides wider variety of compensations allowing employees to fit at
least one of them. However, TM have the policy to give compensations to all the
employees, just the amount of it depends on the employees performance. On
the other hand, Volkswagen has competitive compensation that is both good
and bad. It is good because it motivates employees to perform better and bad
because sometimes employees can be over competitive. It is hard to judge
which compensation system is better, but by just looking at the numbers
employees can prefer Volkswagen to Toyota, because the numbers are
considerably bigger. Also the way the Volkswagens compensation system is built
around employees that worked for the company for a long time can be very
attractive for the employees because it shows that the company values loyalty
and it cares about employees retention.
As for the benefits, both companies have almost the same policies. But Toyota
gives more attractive benefits with a team member purchase plan, and
scholarship for childrens education. If an employee thing in a long term, those
benefits may attract him to work for Toyota. On the other hand, retirement plan
in Volkswagen Group can attract people who think further in the future.

Opportunities for improvement

Volkswagen

Volkswagen can make use of Toyotas practices for internal recruitment, as well
as their ways for performance management more precisely the employee
satisfaction surveys. Both companies have their ways of getting feedback from
the employees, and they are both good, however the Idea Management of
Volkswagen is a great way to get new suggestions of improvement for the
company.
Volkswagen needs to work on the recruitment and selection process because
compared to Toyota it looks a bit too simplified, and maybe not thorough enough.
Another addition they can include is the welcoming package that Toyota
16

employees get this kind of special treatment will definitely lead to higher
employee satisfaction.
Volkswagen has a very family-friendly HR system, which is not exactly the case in
Toyota. What Toyota can do is work on improving the work/life balance of its
employees, because currently its lacking, compared to VW.

Toyota

The first thing that can be improved in Toyota Motor is its vocational training
program. It should give opportunity for locals to participate in training. For both of
the companies it would be a good practice to give employees an opportunity to
get a degree in internal or external academies. The companies are big and they
can afford to sponsor some employees further development and education. It
will be attractive for people to work there and at the same time it will help to
develop specialists.

Summary
After looking closely at the HRM practices in the two companies, we can conclude
that they are very similar, because both companies work a lot on providing the
best for their employees. One of the things both companies pay the most
attention to is training and personal development of the employees. From the
moment the employees start working in the companies, both Volkswagen and
Toyota try to provide them with good benefits, a lot of out-of-work activities to
keep them entertained, and they both work hard on improving the work/life
balance of the employees.
In order to choose which company wins in terms of Employer branding, we
should first come up with some sort of a rating system or points distribution. If we
look at their practices and try to rate them separately, then we can say they are
probably on the same level. However, when it comes to employer branding, one
of the most important things is recognizing and promoting the company culture
on every level, which Toyota undoubtedly does in all of its HRM practices. Starting
from designing the particular job, then going through the so-called assimilation
process and then finish with all the benefits an employee gets, it is easy to see
what makes the company so attractive. The role of the HR in Toyota is not only to
build a company that people would love to work at, but also to make sure they
keep loving it while they are there. In addition, Toyotas website provides plenty
of information on their HR policies, as well as the structure and implementation of
the Toyota Way. The main reason Toyota is doing it so much better than other
companies is that they know exactly what they are looking for when they hire
employees, they have defined all the qualities that they are looking for (work
ethic, teamwork, integrity, motivation, etc.), and they take only people who
clearly show these qualities a policy that will never leave them disappointed
with the choice they have made when hiring. Once hired, all of the employees are
taking great care of with all the compensation, benefits and rewards the company

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has to offer. Even a recent survey proved that 75% of employees love working
for the company.19
There is a lot one can learn from both companies Volkswagen is a great
example of German straight-forwardness, where everything is exactly as it has
been stated, and everyone knows exactly what they will get, and what they need
to do in order to get it. On the other hand, Toyota offers the gentle approach to
building a company culture and teaching employees to respect it and slowly
become a part of it. Both companies not only allow, but stimulate employees to
grow within and through the company, while at the same time are keen on
getting feedback on how the company can grow through its employees.
Acknowledging employee feedback is a very important thing in every
organization, and in order for a company to do well, it should definitely try to get
as much feedback from the employees as possible. Another thing companies can
learn from both Volkswagen and Toyota is promoting freedom whether its the
VW way of spending Years abroad or the Toyota way of praising individuality on
the job, freedom should be something companies strive for, because it definitely
increases the satisfaction of employees. These among other things will definitely
help companies gain competitive advantage and help them build a successful
employer brand.

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