Best Practices in Employee Selection:How Toyota Created a World Class Workforce

August 8, 2006

Karen Rencurrel-Andrews Kevin KlinvexHuman Resources Executive Vice President/Co-founder

Panel Introduction

Karen Rencurrel-Andrews

• Human Resources, Toyota MotorEngineering & Manufacturing North

America, Inc.

• More than 15 years of Human Resourcesexperience

• Lead selection system for production andskilled team member through group

leader for North America

• Most recently served as project lead,TMMTX start-up in San Antonio, TX

• Member of American Society for Training& Development (ASTD), Society for

Human Resource Management (SHRM),and Toyota’s Women’s Leadership Forum

Kevin Klinvex

• Executive Vice President, Co-founder of SelectInternational

• Pioneer in assessment and developmenttechnology

• Co-authored the book, Hiring Great People

• Member of the Society ofIndustrial/Organizational Psychologists (SIOP),the American Compensation Association (ACA)and the Society for Human Resource

Management (SHRM)

• M.A. in Industrial/Organizational Psychologyfrom the University of Akron and B.A. inPsychology from South Eastern University

T

TEMA History

• 1987 - First US production facility in Georgetown, KY

• Brought standardized selection system used globally• 2001 - Start-up in Tijuana, Mexico

- Realized they had to make significant changes in theirapproach to hiring

• 2003 - Next Biggest Challenge was opening a facility in ametropolitan area (San Antonio, TX)

• April 1, 2006 - Manufacturing and Engineering became onecompany

Detailed Application Process

Call EZ App 800 Line Apply Over the Web

Short Pre-Screen

PASS FAIL

Self-Schedule for Day 1 Send Rejection• Best Time

• Closest Location

Attend Day 1Assessment

Detailed Application Process

Orientation Video Day 2 Overview Video

Assessment Production Simulation

Personal Preferences QuestionnaireGroup Exercise

On-line Application

Schedule Final Interview

Schedule Day 2

Start-up Process

What TEMA Needed• New generation assessment process

• Ability to handle mass volume applications• Automated application entry; paperless

- IVR - Interactive Voice Recognition

- On-line

• Automated Scheduling and Scoring• 1 Production Simulation Package

• Consolidated Multi-Skilled Trades assessments

• Reduction to manpower to run the system• Ability to simulate the work environment to allow candidates toself-select out

Virtual Job Audition Process

Virtual Job Application

• Pre-screen -

- Automated, interactive application process allowingcandidates to apply via phone or internet

- Entire process lasts 10 minutes

- Screened out unqualified candidates, cutting costs inthe next phase of the process

- Automatically schedules candidates for next step in theprocess if they pass

Virtual Job Audition Process

Virtual Job Assessment

• Web Based Assessment

- Measured basic competencies necessary for specificToyota positions

- Computer game graphics provided a virtual simulationof job relevant tasks

• Production Exercise

- Candidates physically perform work related tasks in aproctored environment

- Able to see how candidates interact with others in teamsetting, handle daily tasks & deal with stressfulsituations

Virtual Job Audition Process

Virtual Job Interview

• Realistic Job Fit Questions

- Behavioral interview that allowed Toyota to identify thethree main types of employee behaviors:

1) Builder - Proactive, high energy, positive attitude,committed

2) Cutter - Cynical, negative attitude, does the minimumrequired to get by, gossiper, makes excuses, takescredit for others’ work

3) Maintainer - Steadfast, dependable, very taskfocused, comfortable with status quo, not looking forpromotion

Hiring Process MetricsUpdated 09/28/2005

Production Team Member Selection Process Summary Report

Overall Pass Rate - 3.7%

Total Passed Scheduled Completed Passed Scheduled Completed Passed Interviewed PassedApplicants EzApp "Day One" "Day One" "Day One" "Day Two" "Day Two" "Day Two" Interview

Pass Rates 69% 85% 90% 28% 90% 94% 54% 97% 67%

Day ONE Testing

5%2%24%

69%

Passed Ez App

Failed Ez App

In Progress

Withdrew

"Day TWO" Testing

28%

72%

Passed "Day 1"

Failed "Day 1"

Day ONE PassRate28%

46%

"Day TWO" Pass Rate

INTERVIEWS54%

Passed 67%

Failed 33%Passed "Day 2"

Failed "Day 2"

54%

Hiring Process Metrics

• Quality Candidates

• Time-to-Hire

• Cost-per-Hire

• Turnover

• Safety Incident Reporting

• Keeping to the Project Plan

Hiring Process Metrics

PTM - PASS RATESExpected vs Actual

Updated 09/28/2005120%

Current

Expected100%

100%

90%

80% 90%80%

69%

60%

40%

20%

0%

EzApp D-1 show-up

92%

90%

54%

35% 50%

28%

Day 1 D-2 show- Day 2up

96% 95% 100%98% 95%

95%91%

70%

67%

Final Background Job Offers MedicalCJOInterview

Sharing Successes

• Implementing the hiring process to other facilitiesthroughout North America

• Expanding the hiring process globally into facilities inthe United Kingdom and beyond

Discussion Points

• Top 4 Red Flags for Recruitment Teams to be Aware of:

1. It will take longer than you expect -START PLANNING EARLY

2. Understand the Local Market & Demographics

3. DO YOUR RESEARCH

4. Make sure hiring managers are trained in structuredbehavioral interviewing

Discussion Points

• Top 4 Characteristics of a Best-in-Class Partner

1. Strong Technology

• I/O Psychology Assessment Content

• IT Infrastructure

2. Integrity

3. Proper Project Management

4. Flexibility

Q & A

• Brief question & answer session

Thank you for attending!

For more information, please call Select International at1-800-786-8595 or visit www.selectinternational.com