Eight Principles of TQM: Customer Focus

Eight Principles of TQM:
Involvement of People
by Antra Trukšāne
RBS, 18.06.2003
“People at all levels are the
essence of an organization and
their full involvement enables
their abilities to be used for the
organization’s benefit.”
(Principle Involvement of People, “Quality
Management Principles and Guidelines for their
“Most managers would agree that the
effectiveness of their organizations
would be at least doubled if they could
discover how to tap the unrealized
potential present in their human
(Douglas McGregor)
“The greater waste in America is failure
to use the abilities of people.”
The total quality management approach
offers a substantial potential for
improvement if accompanied by an
appropriate human resources effort. It
is becoming a maxim of good
management that human factors are the
most important dimension in quality
and productivity improvement. People
really do make quality happen
Importance of people
involvement has been recognized
by all the nowadays popular
quality management and business
The European Excellence Model:
Enablers (or Approach)
Policy and
and Resources
People Results
Innovation and Learning
What’s behind the People part of
the EFQM Excellence model:
• People cover the following five criterion parts
that should be addressed:
– 3a. How people resources are planned, managed
and improved
– 3b How people’s knowledge and competencies are
identified, developed and sustained
– 3c How people are involved and empowered
– 3d How people and the organisation have a
– 3e How people are rewarded, recognised and
cared for
The Malcolm Baldrige Model in the
• People cover the following criterion parts that
should be addressed:
– How the company enables employees to develop and
utilize their full potential, alligned with the company’s
– What are the company’s efforts to build and maintain
a work environment and work climate conductive to
performance excellence, full participation, and
personal and organizational growth
– Subcategories include work systems, employee
education, training, and development, as well as
employee well-being and satisfaction
ISO 9001:2000 approach with
regards to people is limited to:
• Clear definition of responsibilities and
• Competence required to accomplish the tasks
given and training required to ensure the
minimum competence level stated
• Very little of communication (top – down
• Very little of work environment (focus on
products rather than people)
Some HR approaches are in place
in every organization. What are
the main pitfalls then?
• Lack of clear communication regarding people’s
responsibilities, but especially authorities and
• Responsibilities and authorities not balanced
• People made accountable for and dependant on
things that they have no or little influence on. Pay
poorly related with the individual’s performance
• Lack of empowerment. Too centralized decision
Some HR approaches are in place in
every organization. What are the
main pitfalls then?
• Poorly established communication regarding
what’s going on and what are the results
• Lack of consistency in HR related activities
(suggestion schemes, climate surveys etc.).
Slogans that are controversial to daily practices
• Lack of training, or often overestimation of the
importance of technical training
Recall W.Edwards Deming’s 14
Points for Transformation:
• Institute training on the job
• Break down barriers between departments to build
• Drive fear out in the workplace
• Eliminate quotas on the shop floor
• Create conditions that allow employees to have pride
in their workmanship and abolish annual reviews and
merit ratings
• Institute a program of education and self-improvement
14 Points for Management
Drive out fear
No one can put in his best performance
unless he feels secure (it means without
fear, not afraid to express ideas, not afraid to
ask questions). Management by numbers
is also a form of management by fear.
Fear definitely influences financial
performance of the company: every “red
bead” has a name on it, employees know the
names, but they often do not tell, because
they are afraid.
14 Points for Management
Break down barriers between staff areas
Organizations manage people and work through
functional departments. The manager and people
within these departments are dedicated to their own
objectives that are usually divisive. Departments are
competing, rather than collaborating, with each other.
The traditional system creates “departmental
fortresses” – barriers to communication across the
organization, but teamwork is sorely needed
throughout the company. It allows to compensate
one’s weakness with someone else’s strength, but it’s
a risky business if annual ratings are important.
Ratings defeat teamwork.
14 Points for Management
#10 Eliminate slogans and exhortations
Posters and slogans never helped anyone to do
a better job, as they are directed at the wrong
people. They arise from management’s
supposition that the production workers could,
by putting their backs into the job, accomplish
zero defects, improve quality, productivity
and all else that is desirable. Management
must stop requesting productivity without
providing such methods to achieve it.
14 Points for Management
Eliminate targets for the work force.
Substitute leadership
By elimination of numerical quotas for the work
force are meant quotas like “to handle certain
amount of phone calls per hour”, “sort 15,000 pieces
of mail per day” etc. The argument for it is that rates
for production are often set to accommodate the
average worker. Naturally, half of them are above
average, and half below. What happens is that peer
pressure holds the upper part to the rate, no more,
but people below the average can not make the rate.
The result is loss, dissatisfaction, and turnover.
14 Points for Management
Internal goals set in the management of a
company, without a method, are also useless. The
argument is that in a stable system there is no use to
specify a goal. You will get whatever the system will
deliver. A goal beyond the capability of the system
will not be reached. If you have not a stable system,
then there is again no point in setting a goal. There is
no way to know what the system will produce.
Management by numerical goal is an attempt to
manage without knowledge of what to do, and in fact
is usually management by fear.
14 Points for Management
Remove barriers that rob people of pride of
These barriers must be removed from two groups of
people: management or people on salary, where the
barrier is the annual rating of performance, and
hourly workers, where are many barriers like: being
under pressure to meet a daily quota of numbers, not
quality, having no chance to influence the system,
not knowing what’s going on. Barriers against
realization of pride of workmanship may in fact
be one of the most important obstacles to
reduction of cost and improvement of quality.
14 Points for Management
Encourage education and self-improvement
for everyone
There is no shortage of good people. Shortage exists
at the high levels of knowledge, and tis is true in
every field. People require in their careers, more than
money, ever-broadening opportunities to add
something to society, materially and otherwise.
Company has to provide opportunities, but
people – care for continual education and selfimprovement (#6 referred to the foundations of
training for the management and for new
Some important issues to overcome
the problems mentioned
• People are motivated not only by monetary
rewards, but also by involvement in decision
making. The people closest to a problem are in
the best position to make decisions (or to propose
ideas) for improvement. It is equally or even
more important in service industries
• Decision making and other authorities have to be
clearly defined and communicated. Many
companies do not pay enough attention to this
Some important issues to overcome
the problems mentioned
• No system will work with disinterested or poorly trained
people. Training is not always expensive. Importance of
on-the-job training is often underestimated. Effectiveness
of the training from company perspective has to be
• Also increased involvement means more responsibility,
which in turn requires a greater level of skill. One area that
should be common to most, if not all training programs is
problem solving, which is a prerequisite to widespread
• Quality training for management and employees is needed,
covering process management, customer focus and other
main principles; also leadership training for managers
Some important issues to overcome
the problems mentioned
• It is better to start a few initiatives and
consistently implement them than try to grab all
at once. Management initiatives started, but
quickly forgotten demoralize the workforce. So
does inconsistency in requirements
Some important issues to overcome
the problems mentioned
• Performance appraisal may be the Achilles’ heel of
TQM because neither performance appraisal supporters
nor TQM gurus have invented a methodology for
completely installing performance appraisal that meets
TQM requirements:
– Old measurement, reward and appraisal systems do not work
for TQM. Deming states that individual performance
evaluations encourage short term goals, undermine teamwork
and call for competition among people for the same rewards.
Should individual performance appraisals be eliminated, as
Deming suggests?
– The integration of total quality and performance appraisal is
necessary, alligned with the principle of shared responsibility
for quality, but how?
Some ideas on principles for
modification of the existing
performance appraisal systems
• Customer expectations, not the job description,
generate the individual’s job expectation
• Results expectations meet different criteria than
management-by-objectives statements
• Performance expectations include behavioral skills that
make the real difference in achieving quality
performance and total customer satisfaction
• Employees are active participants in the process
Some important issues to overcome
the problems mentioned
• Compensation systems should also be reviewed to support
TQM. Historically, compensation systems have been
based on:
– Pay for performance
– Pay for responsibility (a job description)
Each of these is based on individual performance, which
creates a competitive atmosphere among employees. In
contrast, the TQM philosophy emphasizes flexibility,
lateral communication, group effectiveness, and
responsibility for an entire process
• Individual or team compensation? Gain sharing, profit
sharing, and stock ownership are among the systems
designed to create a financial incentive for employees to
be involved in performance improvement...
Some important issues to overcome
the problems mentioned
• HR department should play a critical role in the
implementation of a holistic quality environment in
support of a strategic quality initiative. To accomplish this
– HR initiatives should be designed to support TQM philosophy
throughout the organization
– TQM principles should be followed within the processes of the
function itself (quality work the first time, focus on the customer,
strategic holistic approach to improvement, mutual respect and
teamwork, continuous improvement as a way of life)
– Maybe joining the quality and HR functions is a good idea?
Finally, some thoughts by some top
• “The whole employee involvement process
springs from asking your workers the simple
question, “What do you think?””
(D.Peterson, Ford)
• “The teams at Goodyear are now telling the
boss how to run things. And I must say, I’m not
doing a half-bad job because of it.”
(S.Gault, Goodyear)