Extreme Toyota: Radical Contradictions That Drive Success at the World's Best Manufacturer

8.5. Learning-Based Evaluation

Toyota has developed a unique set of criteria for evaluating managers. Remuneration below the level of kacho or section chief is based 50 percent on seniority and 50 percent on performance. For those at the kacho level and above, salary is based 100 percent on performance related to results as well as process. To evaluate process performance, the company looks at how goals are achieved; how issues are handled and resolved; how organizational skills are fostered; and how people are developed, motivated, and empowered. More specifically, they are evaluated in five categories on the following points:

1. Creative handling of issues:

   Innovative way of thinking not bound by custom.

   Development and presentation of plans based on a mid-to long-term perspective.

2. Resolution of issues:

   Appropriate situational judgment.

   Decision making.

   Persistence (resilience, tenacity).

3. Organizational management skills:

   Prioritized commitment of resources and reengineering of business.

   Establishment of a framework/system for completing work.

4. Utilization of human resources:

   Fair evaluation (of individuals) and feedback.

   Preplanned mentoring and nurturing (of subordinates).

5. Personal magnetism:

   Trust from and empowerment of (organizational) members.

Like the salary structure, evaluation criteria also differ according to the level of position. For general staff, more weight is given to creative handling and resolution of issues, with the emphasis on developing the tacit skills needed to identify ...