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

Chapter 8. Up-and-In Human Resource Management

The third integrative force that holds the expanding global enterprise together is up-and-in human resource management. The phrase up-and-in is derived from the opposite practice of up-or-out that is common in most professional firms—from consulting companies to investment banks. In the up-or-out system, a professional employee is either successively promoted up the ladder or gradually forced out of the company. Toyota rarely forces out so-called under-performers, focusing instead on upgrading their capabilities inside the company through various on-the-job training (OJT) and evaluation schemes.

To understand where the up-and-in approach comes from, we return to The Toyota Way 2001. We have explained how the beliefs and values espoused in this 13-page document had been circulating around the company in corridors, meeting rooms, and cafeterias for years, passed on from one generation to the next. These values are also articulated in the two pillars of organizational behavior at Toyota, "continuous improvement" and "respect for people." The underlying assumption is that every human being can make a contribution given the chance. The pillar of "respect for people" is reflected in Toyota human resources practices that aim to cultivate the following abilities in employees:

• To be able to think independently and from multiple perspectives, keeping an open mind and a long-term view

• To discover one's own capabilities through challenge

• To be ...