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Toyota to Pay for Kaizen OT in Japan
June 10, 2008

asahi.com article - ENGLISH

Interesting article from Japan...

Toyota's 40,000 factory workers in Japan are all engaged in kaizen, or continuous improvement, as a core part of the quality control (QC) activities.

No surprise there... Lean and kaizen are tightly linked concepts, they go hand in hand. But...

Prompted by a ruling over a death from overwork, Toyota Motor Corp. will pay full overtime to factory workers engaged in after-hour kaizen activities designed to improve efficiency and product quality, sources said.

Japan's top automaker now pays compensation only for up to two extra hours a month because it considers employees are engaged voluntarily in kaizen activities.

But the company decided Wednesday to regard kaizen as part of the workers' job requirements and start paying allowances on June 1 to cover all activities done after hours, the sources said.

It's kind of hard to reconcile Toyota's "respect for people" concept with the idea of not paying employees overtime for working on kaizen activity. I certainly can't claim to be an expert on Japanese business culture, so maybe somebody can enlighten us a bit on how this had been an accepted practice?

Toyota considered it "voluntary," however:

Some employees and their families have said the workers are effectively forced to engage in QC activities because the results and achievements from the activities are included in their evaluations.

The article continues:

Toyota plans to encourage workers to review and simplify QC activities so that overtime work will not exceed two hours a month.

A senior Toyota official said the revision will inevitably push up labor costs.

So is Toyota asking employees to limit kaizen activity or to be more efficient in how they conduct it? Of course labor costs will go up, but I thought the point of kaizen was that the improvements should pay for themselves through quality improvement and cost savings... plus it develops the workforce. Does it seem a bit short-term focused to want to be limiting kaizen?

What do you think?

Posted by Mark Graban on June 10, 2008 | Comments (0)