Human Resource Development and

Management Chapter 5

Introduction• Total quality management (TQM) has far-reaching

implications for the management of human resources. • It emphasizes self-control, autonomy, and creativity among

employees and calls for greater active cooperation rather than just compliance.

Involvement: A Central Idea Of HumanResource Utilization

• Employee involvement is a process for empowering members of an organization to make decisions and to solve problems appropriate to their levels in the organization.

• The logic is that the people closest to a problem or opportunity are in the best position to make decisions for improvement if they have ownership of the improvement process.

• Empowerment is equally effective in service industries, where most frequently the customer’s perception of quality stands or falls based on the action of the employee in a one-on-one relationship with the customer.

• For e.g. Quality in an airline is represented not by CEOs and pilots, but by counter personnel and flight attendants.

Involvement: A Central Idea Of HumanResource Utilization

• In the past, the focus in achieving such improvement was frequently the system — traditional techniques and methods of quality control.

• Such a focus may overlook the fact that operation of the system depends on people, and no system will work with disinterested or poorly trained employees.

• The solution is simple: Coordinate the system and the people.

Training and Development• Increased involvement means more responsibility, which in turn requires

a greater level of skill. This must be achieved through training. • Baldrige Award winners place a great deal of emphasis on training and

support it with appropriate provision of resources.• Motorola allocates $120 million annually to training, 40% of which goes

to quality training. • Additional benefits include: (1) improved communications, (2) change in corporate culture, and (3) demonstration of management’s commitment to quality.

Training and Development (Continued)

• Although the type of training depends on the needs of the particular company and may or may not extend to technical areas, the one area that should be common to all organization training programs is problem-solving.

• Problem solving should be institutionalized and internalized in many, if not most, companies. This would be a prerequisite to widespread empowerment.

Training Categories(1) reinforcement of the quality message and basic skill remediation, (2) job skill requirements, and(3) knowledge about principles of TQM (i.e. the latter typically covers problem-solving techniques, problem analysis, statistical process control, and quality measurement)

Selection• Selection is choosing from a group of potential employees

(or placement from existing employees) the specific person to perform a given job.

• Decide what the job involves and what abilities are necessary, and then use established selection techniques (ability tests, personality tests, interviews, assessment centers) as indicators of how the candidate will perform.

Selection (Continued)• The process is not so simple, however, when TQM enters the picture. • The job requirements for a typist, a machinist, or even a manager can

be determined by job analysis, and the qualifications of a candidate can be compared to these requirements.

• When a company commits to TQM, an entirely new dimension is introduced.

• The skills and abilities required for a specific job can usually easily be identified and then matched with an individual. People well suited for operating in a quality climate may require additional characteristics, such as attitude, values, personality type, and analytical ability.

Selection (Continued)• Persons working in a quality environment need sharp problem-

solving ability in order to perform the quantitative work demanded by statistical process control, Pareto analysis, etc.

• Because of the emphasis on teams and group process, personnel must function well in group settings.

• Motorola shows applicants videotapes of problem-solving groups in action and asks them how they would respond to a particular quality issue. Presumably this technique encourages self-selection.

Performance Appraisal• Appraisals are used to determine reward levels, validate tests, aid career

development, improve communication, and facilitate understanding of job duties.• Deming cites traditional employee evaluation systems as one of seven deadly

diseases confronting U.S. industry. • He states that individual performance evaluations encourage short-term goals

rather than long-term planning. • They undermine teamwork and encourage competition among people for the same

rewards. • Moreover, the overwhelming cause of non-quality is not the employee but the

system; by focusing on individuals, attention is diverted from the root cause of poor quality: the system.

Performance Appraisal (Continued)

• Many TQM proponents, like Deming, argue that traditional performance appraisal methods are attempts by management to pin the blame for poor organization performance on lower level employees, rather than focusing attention on the system, for which upper management is primarily responsible.

• Performance appraisals are most effective when they focus on the objectives of the company and therefore of the individual or group.

• Because the eventual outcome of all work is quality and customer satisfaction, it follows that appraisal should somehow relate to this outcome to the objectives of the company, the group, and the individual.

• In other words, a performance appraisal system should be aligned with the principle of shared responsibility for quality. This can be accomplished by focusing on development of the skills and abilities necessary to perform well and, as such, directly support collective responsibility.

Performance Appraisal (Continued)

• In a model used by the Hay Group (a consulting organization), individuals are evaluated for base pay on such variables as:

• ability to communicate, customer focus, and ability to work as a team.

• Managers are rated on employee development, group productivity, and leadership.

• Variable pay for both is based on what is accomplished.

Compensation Systems• Both training and performance appraisal are desirable

components of a TQM implementation strategy, but compensation is an equally necessary dimension.

• Employees may perceive the system as a reflection of the company’s commitment to quality.

Individual or Team Compensation?

• A company’s infrastructure, specifically its reward and compensation systems, provides an accurate picture of its strategic goals.

• If compensation criteria are focused exclusively on individual performance, a company will find that initiatives promoting teamwork may fail.

• A TQM vision and the principles supporting it are unlikely to take hold unless the values on which they are based are built into the underlying structure.

• There are several compensation plans in U.S. industry, including gain sharing, profit sharing, and stock ownership.

• These are among the systems designed to create a financial incentive for employees to be involved in performance improvements.

Gain Sharing• Gain sharing is one of the most rapidly growing compensation and

involvement systems in U.S. industry. • It is a system of management in which an organization seeks higher

levels of performance through the involvement and participation of its people.

• Employees share financially in the gain when performance improves. • The approach is a team effort in which employees are eligible for

bonuses at regular intervals on an operational basis. • Gain sharing reinforces TQM, partially because it contains common

components, such as involvement and commitment.

Individual or Team Compensation? (Continued)

• Although a compensation system supportive of TQM is not the only remedy, combined with other human resource management systems it will go a long way toward improvement of performance and development among individuals, groups, and the organization.

Total Quality Oriented Human Resource Management

• Human resource executives are faced with both a challenge and an opportunity.

• This department can play a critical role in the implementation of a holistic quality environment in support of a strategic initiative.

• To accomplish this role, the function should not only be designed to support TQM throughout the organization, but should make sure that good quality management practices are followed within the processes of the function itself.

• This means continuous improvement as a way of department life.

Bowen and Lawler Principles of TQM

1. Quality work2. Focus on the customer3. Strategic holistic approach to improvement4. Continuous improvement as a way of life5. Mutual respect and teamwork• It is possible with the modification of the traditional human

resource management practices.

Modified Human Resource Plans

• Mechanisms for promoting cooperation such as internal customer/supplier techniques or other internal partnerships;

• initiatives to promote labor–management cooperation, such as partnerships with unions; creation and/or modification of recognition systems;

• mechanisms for increasing or broadening employee responsibilities;

• creating opportunities for employees to learn and use skills that go beyond current job assignments through redesign of processes;

Modified Human Resource Plans

• creation of high performance work teams; and

• education and training initiatives.

• Plans might also include forming partnerships with educational institutions to develop employees or to help ensure the future supply of well-prepared employees.