San Beda University

College of Arts and Sciences

Department of Legal Management

A Case Study Business Journal

on the topics relating to

Human Resource Management

Submitted by:

Bianca Therese C. Borromeo

1CLM

Submitted to:

Prof. Julio O. Castillo

November 27, 2018

1. Predicament of HR Dept in selection and hiring of employees

A Think Piece: How HR Caused Toyota to Crash By Dr. John Sullivan (February 15, 2010)

Unless you have been living off the planet Earth, you have probably already read or heard

about several mechanical failures in Toyota automobiles that led the auto maker famous for quality

to recall nearly nine million cars worldwide. In addition, poor handling of the issue in the public

eye has damaged the automaker’s brand reputation and caused sales to decline to their lowest point

in more than a decade.

This think piece wasn’t written to inform you further about the mechanical failures, but rather to

reflect on the following premise:

Toyota’s current predicament is a result of poorly designed practices and weak execution on the

part of the human resource department!

To Find the Root Cause, You Must Look Beyond Gas Pedals

The mechanical issues plaguing eight Toyota models are not the result of human resource

professionals assuming product design roles and producing faulty accelerator pedals and onboard

computers, but anyone who has studied failure analysis knows that the breaking point of a product

or service is seldom the underlying or root cause of the failure. Using the sinking of the Titanic as

an example, the damage caused by the hull colliding with the iceberg ultimately sank the ship, but

the collision was the result of a series of poor decisions to travel too fast given weather conditions.

While hull design flaw contributed to catastrophe, the root cause of the problem was human error.
 In any situation where employees fail to perform as expected, investigators must determine

if the human error could have been caused by factors beyond the employee’s control. Such external

factors might include actions by senior management, lack of adequate information or job training,

faulty inputs to the process, or rewards that incent actions not in line with documented goals.

If you believe in accountability, you have to accept that human errors that lead to corporate

catastrophes could be the result of faulty HR processes, most notably those related to acquiring,

developing, motivating, and managing labor. Returning to the Titanic example, had the owners of

the Titanic implemented rewards for safety as well as speed or hired a captain more detail-oriented,

there would have been no crash that dreaded night.

Weak HR Has Been a Major Contributor to Other Notable Failures

Weak people-management practices have been attributed as the primary causes of failure

in a number of notable cases. At Enron and Bear Stearns for example, reward systems that incented

dangerous behaviors easily overpowered the effect of control systems designed to prevent fraud

and ethical breaches. The mass killings at Fort Hood would not have occurred if the Army had

better linkage between performance management and critical incident reporting systems.

Employee Errors Were the Root Cause

BusinessWeek estimates that Toyota is losing $155 million per week as a result of their

recent recall and in the weeks leading up to this article Toyota had lost nearly $30 billion in stock
valuation. The long-term impacts of the root causes that led to Toyota’s current situation could

cost the company hundreds of billions of dollars.

The mechanical failures were known to Toyota leaders long before corrective action was

taken, and many close to the issue are indicating that the company took decisive action to hide the

facts and distort the scope of the problem. The underlying problem of failing to act on this critical

information in a manner consistent with Toyota’s brand is again a rewards issue similar to that at

Enron. When the organization disproportionately rewarded managers for cost-containment versus

sustaining product quality, it created the incentive for everyone involved to ignore the facts and to

deny that a problem existed. Employees who are well-trained and subject to balanced rewards and

performance monitoring systems would not have allowed the situation to grow as it did.

The Eight HR Processes That Contributed to Toyota’s Downfall

If the root cause of the problems Toyota is facing are failure by employees to make good

decisions, confront negative news, and make a convincing business case for immediate action,

then the HR processes that may have influenced those decisions must be examined. The HR

processes that must at least be considered as suspect include rewards processes, training processes,

performance management processes, and the hiring process.

Rewards and recognition — The purpose of any corporate reward process is to encourage and

incent the right behaviors and to discourage the negative ones. It’s important for the reward process

to incent the gathering of information about problems. It’s equally important to reward employees

who are successful in getting executives to take immediate action on negative information. Key
questions — Were rapid growth (sales have nearly doubled recently) and “lean” cost-cutting

recognized and rewarded so heavily that no one was willing to put the brakes on growth in order

to focus on safety? Were the rewards for demonstrating error-free results so high that obvious

errors were swept under the table?

Training — The purpose of training is to make sure that employees have the right skills and

capabilities to identify and handle all situations they may encounter. Toyota is famous for its four-

step cycle — plan/do/check/act — but clearly the training among managers now needs to focus

more on the last two. In addition, in an environment where safety is paramount, everyone should

have been trained on the symptoms of “groupthink” and how to avoid the excess discounting or

ignoring of negative external safety information. Key question — If Toyota’s training was more

effective, would the managers involved have been more successful in convincing executives to act

on the negative information received?

Hiring — The purpose of great hiring is to bring on board top-performing individuals with the

high level of skills and capabilities that are required to handle the most complex problems. Poorly

designed recruiting and assessment elements can result in the hiring of individuals who sweep

problems under the rug and who are not willing to stand up to management. Key questions — Did

Toyota have a poorly designed hiring process that allowed it to hire individuals who were not

experienced in the required constructive confrontation technique? Were their hires poor learners

that did not change as a result of company training?

The performance management process — The purpose of a performance management process is

to periodically monitor or appraise performance, in order to identify problem behaviors before

they get out of hand. If the performance measurement system included performance factors to
measure responsiveness to negative information, Toyota wouldn’t be in turmoil today. Key

questions — Was the performance appraisal and performance monitoring process so poorly

designed that they did not identify and report groupthink type errors? Did Toyota’s famous high

level of trust of its employees go too far without reasonable metrics, checks, and balances? Did

HR develop sophisticated metrics that produced alerts to warn senior managers before minor

problems got out of control?

The corporate culture — The role of a corporate culture is to informally drive employee behaviors

so that it closely adheres to the company’s core values. Because these errors occurred under

difficult driving conditions, it’s hard to blame the production group, which has a well-known

reputation for Six Sigma quality in its construction. The negative reports came to functions like

government, risk analysis, corporate and customer satisfaction. As a result, it is the culture within

the corporate offices that need to be more closely monitored rather than assuming that the culture

was aligned. It appears that the corporate culture created leaders so concerned with “saving face”

and so adverse to negative publicity, that they for years postponed making the announcement of a

massive recall. Key questions — Did HR’s failure to measure or monitor the corporate culture

contribute to its misalignment? Was the corporate culture (the Toyota Way) so biased toward

positive information that employees learned not to make waves, in spite of their professional

responsibility to be heard on safety issues?

Leadership development and succession — The purpose of leadership development and succession

planning processes are to ensure that a sufficient number of leaders with the right skills and

decision-making ability are placed into key leadership positions. It is likely that the leadership

development and the promotion process both failed to create and promote leaders who were
capable of confronting problems and making difficult decisions. Key question — Was the

leadership process at Toyota so outdated that it produced the wrong kind of leaders with outdated

competencies, who could not successfully operate in the rapidly changing automotive industry?

Retention — The purpose of a retention program is to identify and keep top performers and

individuals with mission-critical skills. Key question — Did the retention program ignore people

that brought up problems and as a result, did these whistleblowers often leave out of frustration?

Risk assessment — Most HR departments don’t even have a risk assessment team whose purpose

is to both identify and calculate risks caused by weak employee processes. Clearly HR should have

worked with corporate risk management at Toyota in order to ensure that employees were capable

of calculating the long-term actual costs of ignoring product failure information. Key question —

Should HR work with risk-assessment experts and build the capability of identifying and

quantifying the revenue impacts of major HR errors, including a high hiring failure rate, a high

turnover rate among top performers, and the cost of keeping a bad manager or employee?

Final Thoughts

Toyota’s problems are not the result of a single individual making an isolated mistake, but rather

due to a companywide series of mistakes that are all related to each other. So many corporate

functions were involved, including customer service, government relations, vendor management

and PR, that one cannot help but attribute the crash of Toyota to systemic management failure.

Unfortunately, in this case, the famous Japanese saying is true. “The nail that stands out” was not

encouraged to be different, but instead it was “pounded down” to conform.

test or audit each of the processes that could allow this type of billion-dollar error to occur.

Note: I invite comments about what other human resource factors may have contributed to

Toyota’s downfall.

2. Forecasting for employee turnover or movement

A case study in employee turnover By Chloe Hava (28 May, 2018)

Concerned about the high levels of turnover in academia, HR lecturer Amna Yousaf set

out to discover the reasons.

Amna Yousaf is a prolific human resources academic and researcher. The Swinburne

University lecturer teaches organisational behaviour at a postgraduate level, innovation at an

undergraduate level, publishes works in peer-reviewed journals, is a volunteer reviewer of other

people’s journal articles, and is a supervisor and examiner of PhD theses.

Given her total immersion in the study and teaching of human resources, it’s no wonder she was

the first academic to undergo the new AHRI certification academic pathway.

“I want to earn a good name in HR a few years down the road,” says Yousaf.

Fairly new to the human resources landscape in Australia, Yousaf only migrated from

Pakistan in 2017. “In Pakistan the systems and the HR processes aren’t really developed yet,” she

says. “Many organisations don’t have HR operations, and if they do they aren’t very sophisticated.

Performance management and Learning and Development, for example, are very rudimentary.”
This kind of of cross-cultural analysis is an area of particular interest for Yousaf.

Out the door

For her portfolio towards achieving an AHRI academic certification in HR, Yousaf included the

work she had done on analysing turnover rates of academics in universities across Pakistan and

the Netherlands. While culturally and socially the two locales might appear to be very different,

they were both experiencing an inability to hold on to academic staff long term.

Yousaf examined turnover by measuring employee satisfaction with HR practices at

universities, and the factors that influenced them, looking in particular at the role line managers

were playing.

“I found that line managers were having a very strong impact on employee satisfaction.

As opposed to senior managers, the line manager is directly involved in carrying out HR practices

such as performance appraisal and providing feedback,” she says.

Yousaf’s research showed that the problem lay in line managers’ lack of experience in

carrying out these tasks. “If employees are dissatisfied with the HR practices being implemented,

their perception of the organisation will be poor. The level of fairness, trust and loyalty will suffer.”

The way forward

The responsibility for improving the delivery of these services lies squarely with HR, she

says.

“Employee satisfaction can be improved through training line managers in a more professional

way around HR functions. Then the higher retention rates will be.”
 Universities in Pakistan and the Netherlands, were very interested in the research and “were

committed to new interventions and programs which could help develop the managers”.

Yousaf is grateful to AHRI for the opportunity afforded her through certification. “The

AHRI academic certification program is a professional opportunity that I never would have had

working in Pakistan,” she says.

“As a researcher, continued professional development is important to me. It’s a great marker of

your abilities as an HR academic, and I see it only becoming more important.”

3. Integration of information technology in HR operations

Technology Is Changing Human Resource Management – But Where Will It Go?

Human Resource is one of those industries which does not quite make its way into science

fiction books, and no kid grows up thinking of revolutionizing the technology inside this particular

market. Traditionally, HR was always viewed as a paper-intensive, non-innovative area, where

salary decisions are made, people get hired or fired and where team building sessions are

organized. But behind the scenes, the industry is changing and incorporating technology at a rapid

pace, even if it wasn’t designed for HR to start with.

In its 2015 report in collaboration with Globoforce, The Society for Human Resource

Management identified employee engagement, talent retention, competitive compensation, and

developing the organizational leaders for tomorrow as major human capital challenges.

These challenges have sparked innovation inside HR departments across the world. It is

already known that social media is used in recruitment, and it seems 92% of recruiters turn to these
channels to identify and validate candidates. But what is maybe less visible and more relevant to

the human resource innovation conversation, is the 3% of recruiters, which moved beyond

LinkedIn, Facebook and Twitter and are piloting Snapchat as a recruitment tool. Instead of asking

themselves if it’s worth pursuing this channel,, they engaged the upcoming working generations

on their own “ground”.

Therefore, a good question might be: what are the technological innovations that will drive human

resource technology trends in the future?

Virtual and augmented reality

While virtual reality has been around for a few years, consumer applications are barely

making strides in the market. Meanwhile, virtual and augmented reality will continue to mature

and find its way into the workplace environment. For example, Microsoft is preparing the launch

of the Hololens headset which will likely be embraced by human resource professionals in the not-

so-distant future.

This type of technology is primed for disrupting talent management and productivity. We

can envision the potential of virtual reality in enterprise training and learning, where employees

can use it for anything ranging from off-site assignments to corporate training.

Furthermore, in industries looking to enhance tasks on the job, this will become the new

normal, as digital information will be superimposed on the physical reality. Onboarding and

training in industrial environments can be transformed by adding virtual instructions on top of

machinery and tools, as employees engage with the environment.

Advanced Machine Learning

analytical models. Using algorithms, machine learning programs iteratively learn from large

sources of data-building patterns and identify insights without being explicitly instructed and

programmed to look for answers, only tot learn to identify data sets.It basically allows for machines

to not only collect information from corporate environments, but also learn from it.

This technology can improve the efficiency of the initial analysis that humans can do,

allowing people to look at higher level results and focus on more complex analysis as a result.

To date, machine learning applications in the human resource space are mainly focused on

predictive analysis and talent relationship, mostly in the recruitment process.

One instance of such an application is PhenomPeople.com, which takes marketing

personalization practices and data analysis, and uses them in the recruitment process. Employee

engagement is also being targeted, with KPMG apparently developing a proprietary model for

enterprise engagement, which is rooted in machine learning algorithms.

Only the future will tell about the advancements of these initiatives

Autonomous Agents and Things

Robotics continues to grow in terms of task diversity and capacity, as well as autonomy.

One of the most advertised examples is the autonomous driving car, but the essential thing about

it that often goes unnoticed is the move beyond controlled environments and the expansion into

uncontrolled spaces. What this means for human resource management, in the short term, is the

need to train and build new skills into existing workforces.

from Space Odyssey. These agents have the potential to become an internal information nexus,

streamlining communication and increasing efficiency of organizations through access to the right

data, at the right time. Applications can vary from recruitment to employee engagement, and they

can be used for anything, from organizational transparency to boardroom meetings.

The Internet of Things

Gartner studies show that Internet of Things platforms suffer from fragmentation, leading

to inefficiencies in terms of data access. Even so, these platforms will follow a trend of integration

throughout the next 5 years, which will lead to more data being available and accessible throughout

enterprise environments.

Companies will continue to adopt cloud computing and HR is actually ahead of the curve,

with more time being spent on using cloud solutions to efficiently increase workforce productivity

than other industries. The increase in use of these tools comes with availability of information,

which will push HR expertise into middle management ranks freeing up human resource

departments from training middle tier leadership. Part of HR’s functions will be taken over by line

managers, while the role of HR will shift to business performance and execution.

We can already see that time-consuming tasks such as keeping track of employees’ time,

preferences and work patterns are being automated, freeing up HR to focus on engagement

challenges, increasing productivity and aligning the human side of the organization with business

goals. HR managers gain more strength at a boardroom level, as their departments move away

from cost centers to revenue centers. As systems and objects become more connected, it falls on

HR to manage performance.
Wearables

In 2016 we will see more companies turning to the wearables industry, and as consumer

markets start to take off, new entrants will look at enterprises for business models. Wearable

devices, outfitted with sensors focused mainly on applications in health and fitness, will gain a

foothold in the enterprise market.

The enterprise wearables market is expected to reach 18Bn by 2019, visibly impacting the

human resources department. While tracking workplace wellness through wearables is most likely

the simplest and most straightforward use, applications can vary. Stress management and

monitoring can become the norm, especially in environments where it impacts retention. But

moving besides health, wearable devices are also enhancing other areas of productivity and

employee management.

Virtual reality can also have an impact on employee communication and collaboration.

Notifications sequences can be improved based on someone’s focus patterns or scheduled to be

sent in idle times, when productivity is not affected. Bittium, for example, created a use case for

smart watches in the retail sector, where employees can be notified of required actions based on

real-time needs: alert cashiers when to switch turns, customer-facing personnel on where help is

needed, etc.

In these cases and more, human resource managers and their departments will transition to

being strategic data managers, guiding and managing the information flow to ensure that

employees have access to the right data at the right time, and that disturbance is minimal.

While it may be a scary vision of the future for some, and privacy of data will surely be

under scrutiny, the role human resources plays in organizations is changing. Driven by data,
technology and new interaction models, it is shifting from managing bureaucracy to managing

business assets and talent management, and information is the key resource inside this New Age

HR.

Last but not least, while reading through technological trends and how they could impact the role

of human resources teams across organizations, I came across a field which may not have a direct

impact but will surely play a part in the future.

Self-charging phones and wireless electricity

While self-charging technology will not be affecting the way HR operates per se, it can

influence work patterns and work modus. As this technology evolves, it has the ability to transform

the workplace environment which is still evolving around the need to be connected to electricity.

Anyone who has ever been involved in the design and planning of a new office, knows that

decisions are taken based on access to electricity and electric cables. The disposition of desks,

meeting rooms and work areas is dependent on the availability of electric plugs.

It is only a matter of time before self-charging phones are widely available and this

technology reaches laptops, projectors and televisions. Cota, build by Ossia, promises to

automatically recharge mobile phones based on perimeter proximity, in a way that’s similar to

WiFi internet. Such technology will allow devices to charge even without having them placed on

pads.

These developments will free office spaces from the cable stigma, and will allow

organizations to redesign the workplace experience, improving the employee experience and thus

retention and engagement rates.

and challenging it offers rooms for innovators inside and outside the industry to adapt new

developments to create and redesign the workplace and employee experience. I believe the future

will showcase that HR can take a role in the science fiction novels, and innovation in the field will

continue to grow as human resource professionals will find new ways to embrace and model the

technological development. What will be next?

4. Crafting of policy procedures

This company, which shall remain anonymous, was formed in 2007 and has successfully

expanded such that they now employ 14 members of staff.

The Challenge

Like many companies though the Managing Director and senior managers had been

focusing their efforts on business development and whilst doing so, the business had reached that

point in growth where clear, compliant policies and procedures which were non existent had now

become a necessity.

The Solution

The company took advantage of aspire cambridge's free HR health check to establish firstly

if they were currently complying with employment law and secondly what actions they might need

to take.

A comprehensive report was produced which identified several areas where the company

were inadvertently not complying with employment law such as not ensuring all employees
were issued with contracts of employment within the specified timeframe, and not being sure

that the contracts complied with legal requirements.

The Outcome

Their employment contracts were update, re-issued and their employees were provided

with a handbook which included all the necessary policies and procedures. One of our specialist

consultants also met with senior managers and provided HR advice on a number of existing

employee relations issues.

5. Harassment and discrimination in the workplace

Case Study: Sexual Harassment & Bullying In The Workplace

How Martin Searle Solicitors secured a £40,000 Settlement Agreement for a teacher who

was sexually harassed and victimised.

The situation

Joanne had worked for a school since qualifying as a teacher and had experienced a number

of problems with other members of staff. This included sexual harassment and bullying by other

teachers. Her initial problems were with her line manager who grabbed all of the easier teaching

groups, leaving her with the disruptive classes. When Joanne pointed out that this was not fair and

very difficult for a newly qualified teacher to deal with, her manager took against her and sought

to undermine her in front of her classes. This culminated in an argument whereby her line manager

stepped down as Head of Department.

He regularly leered at her in the corridor and touched her shoulder. He spoke to her in an overly

familiar way and made a number of indecent jokes. On several occasions he sent inappropriate

emails to Joanne and a number of the other teachers, which contained sexualised images of

children.

Joanne made written complaints about both teachers and was told by the Headmaster that she did

not have the right to do so.

Her situation deteriorated further when her original Head of Department did not support

her admonishment of a pupil and sided with their parents. This led to Joanne becoming extremely

upset and leaving the school to go and see her doctor. She informed her Head of Year before

leaving, but was later threatened with disciplinary proceedings for taking “unauthorised absence”

because the Head of Year had failed to inform the Headmaster that Joanne had explained where

she was going.

Joanne’s GP signed her off work for one month with workplace stress but Joanne could not face

going back to work – or indeed to teaching at all.

What Martin Searle Solicitors did

Joanne contacted us at our Gatwick & Crawley solicitor’s office. We advised her that she had a

potential claim for sexual harassment and victimisation. Due to the urgent time limits in relation

to her complaints of sexual harassment, her discrimination claim had to be issued immediately

against both the school and the Local Authority. We were able to issue the claim within just a few

days of first meeting Joanne.

of Department, current Head of Department, and Headmaster.

The result

The grievance was heard and prior to any decision being made by the Board of Governors,

a Settlement Agreement was offered by the Local Authority.

We advised Joanne on the tax implications of Settlement Agreements and negotiated a tax free

payment of £40,000. £30,000 was a termination payment, and £10,000 was attributed to Joanne’s

injury to feelings arising from the discrimination.

We managed to ensure that the financial contribution under the Settlement Agreement covered a

large part of her legal fees, as she had been funding her case herself

Joanne drafted a work reference which we were able to include as part of her settlement. Along

with the compensation, this allowed Joanne to move into a new career and rebuild her life.
CASE STUDY ANALYSIS:

Predicament of HR Dept in selection and hiring of employees

A Think Piece: How HR Caused Toyota to Crash By Dr. John Sullivan

In the given case study in relation to the process of selection and hiring in the Human

Resources Department. An example of this is is given on the case of how the human resources

department of Toyota applied these processes in their company.

SUMMARY

In the article the situation of Toyota, there has been several mechanical failures in the

company despite the success of releasing quality products of the company itself. This has been the

effect of the poor handling of the human resource of the company. Despite having the best and

quality products that they offer, what is found wrong in the company is how they operate or

facilitate these products and at the end the conclusion of this effect is because of the employee’s

human error in handling the products.

There are external factors on how human error happens in a company, such as lack of

adequate information or job training, faulty inputs to the process, or rewards that incent actions

not in line with documented goals and these external factors should be containing the

characteristics of having the employees in good condition through acquiring, developing,

motivating, and managing labor. But in Toyota, these factors are managed poorly and wrongly.

There has been weak management in the HR department of Toyota causing it to fail on the

company’s goals. Mentioned in the article “ BusinessWeek estimates that Toyota is losing $155

million per week as a result of their recent recall and in the weeks leading up to this article Toyota
had lost nearly $30 billion in stock valuation. The long-term impacts of the root causes that led to

Toyota’s current situation could cost the company hundreds of billions of dollars.” In this case,

internal management in the company is to be improved.

The mechanical failures of the Toyota were led by poor decisions by the management. The

organization only focused on rewarding managers rather than sustaining product quality.

Employees who are well-trained and subject to balanced rewards and performance monitoring

systems would not have allowed the situation to grow as it did.

In the said article it enumerated eight Human Resource Processes that causes Toyota’s

Downfall. Which are the following: rewards and recognition, training, hiring, the performance

management process, the corporate culture, leadership development and succession, retention, and

risk assessment. All these eight causes are to reflected on by the company for its improvement.

And shoud be addressed to make the company in a better state.

REACTION/ REFLECTION

In my opinion the case study has sufficient grounds on how the company has failed due

to the causes given by the case. Human error is very inevitable at any situation. But there is a

way to avoid it. Also in a company there must be competent member that should be leading the

HR department so that it would work efficiently. In this case, there has been bad judgement in

between the management of the HR. The company should, again improve on promulgating

training and development on employees to be efficient.

At the very least it is a good thing that Toyota and their management has figured the

problem to be fixed among the company, without having faults, the company would have less
means of improving, internally and externally. Toyota is a great and big company and must

maintain the sustainablitiy f their products through well trained employees that are capable of

sustaining the good quality products and services that Toyota offers.