Toyota’s Secret to Kaizen Success: Unpaid OT?

There was an interesting development at Toyota last week. Articles reported titles such as Toyota to raise overtime pay for ‘voluntary’ work. Titles included terms of interest, not often combined: kaizen, voluntary, overwork and death.

In a puzzling way, much of the focus was on quality circles and kaizen activities which are conducted after hours on a voluntary basis in Japan. The pressure to put in overtime work on a voluntary basis, presumably for the good of the company and therefore the employee, is an abhorrent aspect of the work culture of many Japanese companies, including Toyota. One 30-year old employee died from overwork after 106 hours of such unpaid overtime. Yet what does it have to do with kaizen? Did this 30-year old spend 106 hours of overtime doing kaizen, or is that a diversion from the fact that this sort of overtime exists more broadly within the work culture?

The gist of this news is that thanks to the efforts of a new and more activist labor union’s lobbying efforts, Toyota has agreed to pay overtime for hours workers spend in QC circle and kaizen activities, beyond the limit of 2 hours per month beyond which was considered voluntary. Within traditional Japanese culture, participation in group activities is almost never voluntary, whether it is going out drinking with co-workers or quality improvement activities. Almost as much as the Western mind expects to have personal time and time with their family, the Japanese have valued group harmony and solidarity. Leaving promptly after 8 hours of work or declining excessive overtime is a career-limiter, to say the least.

The BBC reports that Toyota acts on overwork culture:

Toyota is taking steps to deal with Japan’s corporate culture that has been criticised for being workaholic.

It is to pay workers more overtime for attending out-of-hours meetings to discuss manufacturing methods.

While the title attracts attention, it is questionable whether Toyota’s compliance with the request to pay for overtime work that they considered voluntary will do anything to ease overwork at that company. Toyota is not easing the pressure to take part in overtime activity or to put in long-hours, merely paying for these hours.

Titles such as “Toyota to pay overtime allowances for ‘kaizen’ activities” cloud the issue. It falsely implies that Toyota does not pay for kaizen activities, which in many ways it does. This decision is in response to a ruling on a case of death by overwork of one of its employees. However, to the skeptic it may seem like smoke and mirrors: it costs Toyota much less to pay for overtime pay than to actually cut back on overtime, thereby increasing the number of equivalent employees needed to get the job done, at a higher total burden

No small part of the responsibility for this case of death from overwork rests with Japanese labor unions looking after the overall best interest of their members in the long-term, at the short term expense of individual members. While overall Toyota has provided tremendous stability of employment for their unionized workforce because for better and worse the labor unions in Japan are truly collaborators with industry rather than challengers. Japanese labor unions are mice compared to the lions of the UAW. But the ultimate responsibility rests with the leadership at Toyota, and how they choose to address this issue in the future.

At this moment Toyota is understandably in midst of controlling the message to spin this issue in its best favor. One particular quote from Google news struck me as smacking of cynical PR horse hockey:

“Many times quality control circles meetings are held in the company’s facilities,” said Toyota spokesman Paul Nolasco.

“We decided that if it is an official meeting in a company building, and if the meeting is officially recorded, then we will pay for all the time.”

and

“We looked at the importance of the activity and we realised it played a big role in improving our overall quality. We want to continue encouraging the participation,” said the spokesman.

It is simply not credible that Toyota looked at their QC circle activities and just lately “realised it played a bit role in improving our overall quality” to conclude that continued promotion of it was necessary, or that it had never occurred to anyone at Toyota that official recorded business in a company building was anything other than important work done by valued employees who deserved to get paid. The real issue has very little to do with kaizen, but with the other pillar of the Toyota business philosophy: respect for people.

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