Best Practices in Employee Selection:

How Toyota Created a World Class Workforce

August 8, 2006

Karen Rencurrel-Andrews Human Resources

Kevin Klinvex Executive Vice President/Co-founder

Panel Introduction

Karen RencurrelAndrews
Human Resources, Toyota Motor Engineering & Manufacturing North America, Inc. More than 15 years of Human Resources experience Lead selection system for production and skilled 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 Toyotas Womens Leadership Forum

Kevin Klinvex
Executive Vice President, Co-founder of Select International Pioneer in assessment and development technology Co-authored the book, Hiring Great People Member of the Society of Industrial/Organizational Psychologists (SIOP), the American Compensation Association (ACA) and the Society for Human Resource Management (SHRM) M.A. in Industrial/Organizational Psychology from the University of Akron and B.A. in Psychology from South Eastern University

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 their approach to hiring 2003 - Next Biggest Challenge was opening a facility in a metropolitan area (San Antonio, TX) April 1, 2006 - Manufacturing and Engineering became one company

Detailed Application Process

Call EZ App 800 Line Apply Over the Web

Short Pre-Screen

PASS

FAIL

Self-Schedule for Day 1 Best Time Closest Location

Send Rejection

Attend Day 1 Assessment

Detailed Application Process

Orientation Video Day 2 Overview Video

Assessment

Production Simulation

Personal Preferences Questionnaire

Group 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 to self-select out

Virtual Job Audition Process

Virtual Job Application
Pre-screen - Automated, interactive application process allowing candidates to apply via phone or internet - Entire process lasts 10 minutes - Screened out unqualified candidates, cutting costs in the next phase of the process - Automatically schedules candidates for next step in the process if they pass

Virtual Job Audition Process

Virtual Job Assessment
Web Based Assessment - Measured basic competencies necessary for specific Toyota positions - Computer game graphics provided a virtual simulation of job relevant tasks Production Exercise - Candidates physically perform work related tasks in a proctored environment

- Able to see how candidates interact with others in team setting, handle daily tasks & deal with stressful situations

Virtual Job Audition Process

Virtual Job Interview
Realistic Job Fit Questions
- Behavioral interview that allowed Toyota to identify the three main types of employee behaviors: 1) Builder - Proactive, high energy, positive attitude, committed

2) Cutter - Cynical, negative attitude, does the minimum required to get by, gossiper, makes excuses, takes credit for others work 3) Maintainer - Steadfast, dependable, very task focused, comfortable with status quo, not looking for promotion

Hiring Process Metrics

Updated 09/28/2005

Production Team Member Selection Process Summary Report

Overall Pass Rate - 3.7%
Total Applicants Passed EzApp Scheduled "Day One" Completed "Day One" Passed "Day One" Scheduled "Day Two" Completed "Day Two" Passed "Day Two" Interviewed Passed Interview

Pass Rates 69%

85%

90%

28%

90%

94%

54%

97%

67%

Day ONE Testing

24%

5%2%

28%
69%
Passed Ez App Failed Ez App In Progress Withdrew

72%
Passed "Day 1" Failed "Day 1"

Day ONE PassRate

28%

"Day TWO" Testing

46%

54%

INTERVIEWS
Passed Failed
Passed "Day 2" Failed "Day 2"

67% 33%

"Day TWO" Pass Rate

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 RATES
Expected vs Actual
Updated 09/28/2005

120%

Current Expected
100%
100%

90%
80% 90%

92%
90%

96%
95%

98%

95%

100%

95%

91%

80%

69%
60%

70%

54%
35% 50%

67%

40%

28%
20%

0%

EzApp

D-1 showup

Day 1

D-2 showup

Day 2

Final Interview

Background Job Offers

Medical

CJO

Sharing Successes
Implementing the hiring process to other facilities throughout North America
Expanding the hiring process globally into facilities in the 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 structured behavioral 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 at 1-800-786-8595 or visit www.selectinternational.com