Working Toward the Mobility Society of the Future

Message from the President The Source of Our Value Creation: What Makes Us Toyota Value Creation Story: Working toward the Mobility Society of the Future Business Foundations for Value Creation Corporate Data >Message from the CSO > Roundtable Discussion with the Outside Directors > Dialogue with Institutional Investors on Corporate Governance > Corporate Governance Message from the CFO > Capital Strategy > The Environment > Vehicle Safety > Quality and Information Security > Intellectual Property and Privacy > Value Chain Collaboration >Human Rights Diversity and Inclusion Human Resource Development >Health and Safety and Social Contribution Activities Risk Management and Compliance Human Resource Development Employees Fundamental Approach Toward achieving transformation into a mobility company, Toyota is committed to both "realizing advanced monozukuri (manufacturing) with higher quality and efficiency based on the Toyota Production System (TPS)" and "taking on chal- lenges in new areas." To this end, Toyota encour- ages its employees to reexamine their workstyles and hone their individual abilities, thereby enhanc- ing the workplace structures. Toyota also seeks employees equipped with both the ability to act and empathy,* and recruits, trains, and evaluates employees based on these abilities. In this process, Toyota identifies the roles and abilities of each individual, ensuring the place- ment of the right person in the right position regardless of their nationality, gender, year of join- ing Toyota, form of recruitment, academic back- ground, job type, or other such factors, with the aim of enhancing the competitiveness of the Company and its organizations. *Empathy in this context is defined as the capacity to make efforts for others, such as customers and teammates, and the capacity to learn respectfully from others and keep improving Recruitment To recruit ideal candidates, Toyota has revised its conventional recruitment practices as follows: 1 Recruitment criteria • To accelerate the introduction of workstyles based on teamwork and alliances in preparation for the launch of mobility services, recruit more people who are attractive for other employees to work with. • Place greater emphasis in recruitment on empathy and the passion to realize dreams at Toyota. 2 Enhancing mid-career recruitment To introduce external knowledge and promote the reexamination of work processes and work- styles, increase mid-career recruits from 10% to 39% (FY2022 result). The medium-term target is to increase mid-career recruits to 50% (adminis- trative and engineering positions). • Introduce referrals (introduction by Toyota employees) and other new means of recruitment. 3 Hiring new graduates with diverse backgrounds • To ensure diversity in our employees, hire per- sons with empathy who passionately want to work at Toyota, regardless of their school or academic background. • Promote the recruitment of diverse people from universities from which no graduates have previ- ously been hired by Toyota, technical colleges, vocational schools, and high schools. 4 Course-specific recruitment of new graduates To accelerate the development of professional human resources, hire students who have a concrete vision of what they want to do at Toyota and determine the course they will be assigned to at the time of recruitment, thereby ensuring the recruitment of diverse human resources suited to the characteristics of specif- ic workplaces, such as with IT-related personnel. Evaluation of and Feedback to Employees The work roles of Toyota employees and the main focus of their work are to be fulfilled and defined in accordance with policies. Evaluation and feed- back are based on close communication between subordinates and superiors. Specifically, employees' roles and main focus are determined at the beginning of each fiscal year and employees consult with their supervisors periodically. Through these consultations, supervi- sors assess the employees' self-evaluations and provide feedback. Repeating this cycle leads to employees' capacity development. In addition, we carry out 360-degree feedback for the purpose of employee growth. By giving employees feedback on their strengths and weaknesses from people working with them, we help them reflect on their own actions and make improvements. In 2019, our personnel system was revised to better reward hard workers regardless of age or qualifications. Furthermore, in 2020, we intro- duced a system for centrally managing employee information, including employee evaluations, the results of consultations with their supervisors, and questionnaire results regarding workplace man- agement. This system has made it possible to refer to each employee's previous evaluations, personnel information, and stated intent, thereby enhancing the development and allocation of employees with consistency through job assign- ment based on a better understanding of employ- ee aptitude and intent. Results for each half year are reflected in bonuses and performance abilities demonstrated over the past year are reflected in salary raises for the following year. Global Employee Development To develop employees capable of implementing the Toyota Philosophy globally, Toyota is providing training through global executive development, along with human resource development under- taken by Toyota Motor Corporation in Japan and human resource development undertaken by affili- ates in other regions. Global Executive Human Resource Development The Global 21 Program aims to provide skilled employees around the world with knowledge suit- able for global Toyota executives and enable them to exercise their strengths to the fullest in their respective areas of responsibility. The program comprises the following three pillars. 1 Indication of management philosophy and expectations of executives Disseminating the Toyota Philosophy and incorpo- rating it into global personnel system and training. 2 Human resource management Applying appropriate personnel evaluation stan- dards and processes in each region based on Toyota's common values Assignment deployment and training programs Carrying out global assignments and executive training. Shifting Resources to Transform into a Mobility Company To transform into a mobility company, Toyota must promptly shift resources from existing car manufacturing and sales businesses to new areas, such as CASE and the value chain. To that end, we are proactively advancing recruitment, reskilling, and redeployment with an eye to enhancing the potential of employees and carefully examining the roles and abilities of each individual in order to ensure the placement of the right person in the right position. By doing so, we aim to enhance the competitiveness of the Company and its organizations. In addition, Toyota is leveraging its strength in promoting innovation rallying all employees and management to transform into a mobility company. To enhance the effectiveness of this comprehen- sive effort, we are striving to enhance communica- tion, including holding labor-management talks throughout the year, and fostering a culture in which diverse human resources actively participate. Hone fundamental skills, flexibility, and agility to enhance the workforce's potential Recruitment Redeployment Reskilling Fostering a culture that promotes the active participation of diverse human resources with the right person in the right position Toyota believes that a diverse workforce is what drives innovation. One initiative in securing diverse human resources is the push to acquire new soft- ware talent for CASE businesses. We are building a software development struc- ture of around 3,000 people at Toyota, Woven Planet, and Toyota Connected, and around 18,000 people across the entire Group, to advance software development globally. To meet these targets, we are stepping up the hiring of software talent. Specifically, we are expanding the rate of mid-career hiring and aim to increase the proportion of software professionals among all mid-career hires from 22% in FY2019 to 50% in FY2023. In addition, we are working to create an in-house development environment encompass- ing the dispatch of personnel to different indus- tries and parts of the supply chain. As of 2021, we had dispatched more than 400 people to Woven Planet and other software development entities. We plan to increase the number of partic- ipants in reskilling education to 9,000 by 2025. TOYOTA MOTOR CORPORATION 52 INTEGRATED REPORT