The TQM & HR: How Business Functions and Works

Over the past few decades, Total Quality Management (TQM) has become a business wide concept. One important aspect often overlooked is the relationship between TQM and Human Resources (HR). Both of these aspects play a significant role in how ones business functions and works. Even though they are both equally recognized as key components of any prospering productive business, there is limited current research that discusses the link between the two. The purpose of this study is to present the current data on the subject as well as offer new information that may help business use these aspects of their businesses more effectively. As is inevitable for any idea that enjoys wide popularity in managerial and scholarly circles, total quality management has come to mean different things to different people. There is now such a diversity of things done under the name â€Å"total quality† that it has become unclear whether TQM still has an identifiable conceptual core, if it ever did. We begin with a close examination of what the movement's founders had to say about what TQM was supposed to be, and then we assess how TQM as currently practiced stacks up against the founders) values and prescriptions. (Hackman & Wageman, 1995) Virtually everything that has been written about TQM explicitly draws on the works of W. Edwards Deming, Joseph Juran, and Kaoru Ishikawa, the primary authorities of the TQM movement. Rather than studying the precise writing, this research simply draws on the main concepts presented by them. TQM has become something of a social movement in the United States. Hackman & Wageman (1995) identify a number of gaps in what is known about TQM processes and outcomes and explore the congruence between TQM practices and behavioral science knowledge about motivation, learning, and change in social systems. It has now been a decade since the core ideas of TQM set forth by W. Edwards Deming, Joseph Juran, and Kaoru Ishikawa gained significant acceptance in the U. S. management community. In that decade, TQM has become something of a social movement. It has spread from its industrial origins to health care organizations, public bureaucracies, nonprofit organizations, and educational institutions. There are particular assumptions set in place regarding TQM. The first assumption is about quality, which is assumed to be less costly to an organization than is poor workmanship. A fundamental premise of TQM is that the costs of poor quality (such as inspection, rework, lost customers, and so on) are far greater than the costs of developing processes that produce high-quality products and services. Although the organizational purposes espoused by the TQM authorities do not explicitly address traditional economic and accounting criteria of organizational effectiveness, their view is that organizations that produce quality goods will eventually do better even on traditional measures such as profitability than will organizations that attempt to keep costs low by compromising quality. The strong version of this assumption, implicit in Juran and Ishikawa but explicit and prominent in Deming's writing, is that producing quality products and services is not merely less costly but, in fact, is absolutely essential to long-term organizational survival. (Hackman & Wageman, 1995) The second assumption is about people. Employees naturally care about the quality of work they do and will take initiatives to improve it–so long as they are provided with the tools and training that are needed for quality improvement, and management pays attention to their ideas. As stated by Juran (1974: 4. 54), â€Å"The human being exhibits an instinctive drive for precision, beauty, and perfection. When unrestrained by economics, this drive has created the art treasures of the ages. † Deming and Ishikawa add that an organization must remove ail organizational systems that create fear–such as punishment for poor performance, appraisal systems that involve the comparative evaluation of employees, and merit pay. The third assumption is that organizations are systems of interdependent parts, and the central problems they face invariably cross-traditional functional lines. To produce high-quality products efficiently, for example, product designers must address manufacturing challenges and trade-offs as part of the design process. Deming and Juran are insistent that cross-functional problems must be addressed collectively by representatives of all relevant functions (Juran, 1969: 80-85; Deming, 1993: 50-93). Ishikawa, by contrast, is much less system-oriented: He states that cross-functional teams should not set overall directions; rather, each line division should set its own goals using local objective-setting procedures. (Hackman & Wageman, 1995) The final assumption concerns senior management. Quality is viewed as ultimately and inescapably the responsibility of top management. Because senior managers create the organizational systems that determine how products and services are designed and produced, the quality-improvement process must begin with management's own commitment to total quality. Employees' work effectiveness is viewed as a direct function of the quality of the systems that managers create. Some writers have asserted that TQM provides a historically unique approach to improving organizational effectiveness, one that has a solid conceptual foundation and, at the same time, offers a strategy for improving performance that takes account of how people and organizations actually operate. In the early 1980s, a new concept entered managerial discourse: Total Quality Management (TQM). Later called â€Å"Total Quality† (TQ), TQM was heralded by governments, major corporations and the business media as the most effective and elegant way out of the economic crisis and into the global market. It should be noted, however, that the preoccupation with quality is by no means new. In the 1980s, TQM became a product in itself, nearly a billion-dollar industry (Giroux & Landry, 1998). Human Resources has been seen as an ineffective business component by some researchers, one in which only gave reason the everyday paperwork and employee relations (Jones, 1996). Globalization in the business theater is driving companies toward a new view of quality as a necessary tool to compete successfully in worldwide markets. A direct outcome of this new emphasis is the philosophy of TQM. In essence, TQM is a company-wide perspective that strives for customer satisfaction by seeking zero defects in products and services. (Clinton, Williamson & Bethke, 1994) TQM is an encompassing management approach whose principal tenets are to satisfy (internal and external) customer needs through strategies of employee empowerment and performance measurement. Customer needs are addressed through the multi-faceted concept of quality,' which includes such elements as performance, conformance, accuracy, reliability, and timeliness. In many instances, these elements are quantifiable and, hence, subject to evaluation, assessment, and continuous improvement. Employee empowerment is used because it allows employees to address customer problems in a timely and often tailored way (Berman & West, 1995) A common problem with the implementation of productivity improvement innovations such as TQM is that many organizations implement them at a token level rather than fully committing themselves to success (Downs and Mohr, 1980; Miller, 1993). Token implementation, or paying lip service, occurs because organizations and individuals receive recognition and other benefits from being or appearing to be in line with current thinking, while avoiding the risks of actual innovation. Such behavior is reinforced by perceptions of meager rewards for success or often severe, punitive consequences of failure. Token implementation also occurs as the result of a flawed implementation plan, inadequate commitment, and follow-through by those mandating the implementation of innovation, a lack of training in applying the innovation, incongruent organizational policies, and other factors (Radin and Coffee, 1993). TQM provides a paradigm shift in management philosophy for improving organizational effectiveness. TQM focuses the efforts of all members of the organization to continuously improve all organizational processes and increase value to customers, while relying upon a clear vision of the organization's purpose. This depends on the removal of barriers both within the organization and between the organization and its various stakeholders. TQM has been embraced by thousands of organizations as an important, approach to management. The key reason human resources was not effective in the past was the structure, which was hierarchical and functional. Another deterrent to human resource effectiveness is the lack of collaborative relationships with the business units. Human resources had historically managed from a position of control, so there was hot a real sense of partnership with the units. Human resource strategy and planning has changed and grown significantly during the last 25 years. We can track these developments from functional strategies in the 1980s to capabilities strategies in the 1990s to results strategies today. Strategic shifts in HR mirror the business and labor market conditions of the times and follow influential breakthroughs in business thinking, from the 7-S model to competing on core competencies to the current rise of operating models and execution. Longer-term changes in the employment relationship, from relational to transactional employment, and the current emerging three-part workforce of elites, profit makers, and costs, provide another important context for HR strategy and a way to view the future. Looking ahead, we can see differentiated, results-based strategies and plans for different workforce segments. We can also envision the need for more vital contributions from HR in HR and business strategy and ethical and cultural leadership. (Gunman, 2004) As Conner (1997) reported in the research, Working, people care desperately about the meaning of their work and its significance. This conclusion is a fundamental principle of organization theory and behavior, human resources management, and public personnel management. It rests on a nearly unshakable empirical foundation. Employees who â€Å"experience meaningfulness† from their work are more likely to enjoy high internal work motivation and high job satisfaction, to exhibit less absenteeism and turnover, and to do high-quality work. In addition to reminding us that people want to experience meaning in and from their work, the quality movement emphasizes the notion of â€Å"empowerment. † Unfortunately, what this term means is not exactly clear, perhaps because it means different things to different people. The idea seems to be that people are empowered† to the degree that they understand what is expected of them; they are given the ability to meet those expectations; and they are given an incentive, either intrinsic or extrinsic, to do so. It follows, then, that they are empowered to translate their understanding into goal-accomplishing behavior. Some organization theorists describe empowerment as a â€Å"psychological mindset,† which comprises several dimensions: the fit between one's job and personal values; the belief that one has the necessary knowledge, skills, and so forth, to perform a job or task well; and the belief that one can make a difference with respect to organizational outcomes. Making quality improvements was once thought to be the sole responsibility of specialists (quality engineers, product designers, and process engineers). Today, developing quality across the entire firm can be an important function of the HRM department. A failure on HRM's part to recognize this opportunity and act on it may result in the loss of TQM implementation responsibilities to other departments with less expertise in training and development. The ultimate consequence of this loss is an ineffective piece-mealing of the TQM strategy. Thus, HRM should act as the pivotal change agent necessary for the successful implementation of TQM. (Clinton, Williamson & Bethke, 1994) HRM can act as senior management's tool in implementing TQM in two fundamental ways. First, by modeling the TQM philosophy and principles within its departmental operations, the HR department can serve as a beachhead for the TQM process throughout the company. Second, the HR department, with senior management's support, can take the TQM process company-wide by developing and delivering the long-term training and development necessary for the major organizational culture shift required by TQM. The HR department also has major strengths in terms of recruitment, selection, appraisal, and reward system development to institutionalize a quality-first orientation. An appreciation of the capabilities of HRM to model and institutionalize TQM begins with an understanding of the TQM philosophy. HRM can jumpstart the TQM process by becoming a role model. (Clinton, Williamson & Bethke, 1994) This means that HRM has two specific tasks: â€Å"Serving our customers, and making a significant contribution to running the business. † This emphasis on customer-oriented service means that the HR department must see other departments in the firm as their customer groups for whom making-continuing improvements in service becomes a way of life. In their efforts to achieve total quality management, HRM can demonstrate commitment to TQM principles by soliciting feedback from its internal customer groups on current HR services. HRM should include suggestions from its customers in setting objective performance standards and measures. In other words, there are a number of specific TQM principles that the HR department can model. The current emphasis on quality as a competitive strategy has produced many views regarding the actions necessary to achieve it. A number of approaches have been created that have been considered as effective. There are five basic principles, which flow throughout the different themes. Focus on customers' needs; Focus on problem prevention, not correction; make continuous improvements: seek to meet customers' requirements on time, the first time, every time; Train employees in ways to improve quality; and, apply the team approach to problem solving. To institute total quality management as a philosophy within an organization, all employees must come to realize that satisfying customers is essential to the long-run well-being of the firm and their jobs. No longer is the customer-driven focus exclusive to the marketing department. However, customer satisfaction can only be achieved after first defining the customer groups. The new perspective here is that all employees exist to serve their customer groups, some internal and some external to the firm. The human resources department has internal customers to satisfy, which indirectly provides ultimate satisfaction to external customers. In addition to identifying customer groups, there are other essential TQM customer issues. Clarifying what products and services will provide maximum customer satisfaction, measuring satisfaction, and continually monitoring and improving the level of customer satisfaction are all fundamental to the TQM philosophy. For the HR department, applying these TQM issues would translate into identifying the expectations of senior management, their principal internal customer, regarding TQM, and spearheading the TQM program's implementation based on those expectations. TQM in practice for HRM might also mean periodic surveys, both formal and face-to-face, to monitor senior management's levels of satisfaction as the TQM process unfolds. Giroux & Landry, 1998). The TQM approach entails identifying the wants and needs of customer groups and then propelling the entire organization toward fulfilling these needs. A customer's concerns must be taken seriously, and organizations should make certain that its employees are empowered to make decisions that will ensure a high level of customer satisfaction. This can be achieved by promoting an environment of self-initiative and by not creating a quagmire of standard operating procedures and company policies. Flexibility is the key, especially in a business environment that is diverse and constantly changing, as most are today. In modeling these aspects of the TQM process, the HR department would need to identify human resource concerns of other departments and undertake to continually improve its performance, especially in any trouble areas that become known. Based on this â€Å"customer first† orientation, organizational members are constantly seeking to improve products or services. Employees are encouraged to work together across organizational boundaries. Underlying these cooperative efforts are two crucial ideas. One is that the initial contact with the customer is critical and influences all future association with that customer. The other idea is that it is more costly to acquire new customers than to keep the customers you already have. Exemplifying TQM here would mean that the HR department would need to train itself, focusing on being customer-driven toward other departments. Quality improvement programs typically involve the directed efforts of quality improvement (QI) teams. Using teams and empowering employees to solve quality-related issues using such tools as statistical process control. (SPC) represent fundamental changes in how many businesses operate. The Focus of SPC, also known as statistical quality control (SQC), is defect prevention as opposed to defect correction. Defect prevention results from continuously monitoring and improving the process. In this context, â€Å"process† refers to service delivery as well as manufacturing. To ensure that output meets quality specifications, monitoring is performed by periodically inspecting small samples of the product. SPC alone will not ensure quality improvement; rather, it is a tool for monitoring and identifying quality problems. (Giroux & Landry, 1998). The effective use of quality improvement teams, and the TQM system as a whole, can be reinforced by applying basic principles of motivation. In particular, the recognition of team accomplishments as opposed to those of individuals, and the effective use of goal setting for group efforts, are important in driving the TQM system. The HR department is in a position to help institutionalize team approaches to TQM by designing appraisal and reward systems that focus on team performance. After 25 years of progress, we can look at HR strategy and planning to see where it has been, where it is, and where it may go. Keep in mind three intertwining elements: change, continuity, and context. In HR strategy and planning, the overriding changes are big ones: From little strategic thinking before 1980 to functional strategies throughout the 1980s and early 1990s to capability strategies in the 1990s to results strategies, which are emerging today. (Gubman, 2004) Functional strategies describe HR processes that usually are synonymous with parts of the HR department. Therefore, we have training strategies or compensation and benefit strategies, depending on which HR programs most need attention or answer some particular organizational issue. Capability strategies address the culture, competencies, and commitments the business needs to succeed and how HR can secure them. If the business strategy is to become a leader in a new technology, this means organizing and recruiting a new generation of engineers and scientists to launch a research and development group. Alternatively, if the company needs to improve customer service in its call center, it means becoming a leader in work/life programs to attract and retain highly skilled customer service representatives who get more flexible work arrangements. Gubman, (2004) reported that results strategies are comprised of the HR-related business outcomes that are part of companies' overall business strategies. For a mega discount retailer, an HR results strategy is a specific level of speed and cost in recruiting and hiring, designed to provide people at the right time, volumes, and prices. For an insurance company, it's the timely development of a particular number of agents to grow the business. Often these strategies are part of a balanced portfolio of performance measures. Continuity refers to the three challenges always in front of HR: Attract, develop, and retain talent; Align, engage, and measure and reward performance; and continually control or reduce HR program and people spending. These challenges are timeless, and every HR function can be arranged under one of them. You might even say these are why HR exists: It fulfills these tasks for the organization. Because of this, HR leaders have to handle all three challenges well; HR strategists need to pay attention to all of them, not something they always do. Truly, how much strategy is directed at cost control? Usually it is not even seen as a strategic issue. Yet it is easy to argue now that the biggest HR trend of the last 10 years, at least as measured in program dollars, has been outsourcing key HR processes. In addition, this trend is likely to continue until the last dollar of excess costs has been saved. Particularly intriguing is how these challenges wax and wane depending on the economy. All three are always present, but which one dominates depends largely on the robustness of the economy and the job market. When jobs are plentiful and talent is in shorter supply, attracting, developing, and retaining moves to the forefront and somewhat less attention is paid to the other two. When there are more people than jobs, and there are pressures on profits, increasing productivity through measurement and reward and cost controls/reductions take the main stage. This argues for a high level of economic knowledge and awareness among HR leaders and strategists. They should be able to make a nimble reading of the economic situation–macro, industry, company, and division–to know what to emphasize. We could argue about how many are knowledgeable and can react to changing economic conditions, but it is easy to agree few writings on HR strategy even broach the topic. The economy and the job market are part of the context in which HR operates. The last 20 years have seen dramatic shifts in technology, globalization, and workforce demographics and values. Each of these affects HR strategy and planning significantly. Some impacts can only be seen over a long period of time and appear quite gradual. Others appear in the blink of an eye. How many among us were talking about the permanent loss of high-knowledge jobs to developing countries as little as 12 months ago? If we are truly strategic thinkers, keep in mind how all of these elements–the changes from functional to capability to results strategies, the three constant challenges or tasks of HR, and the power of contextual influences (the economy, technology, globalization, and the changing workforce)–interact as we survey past, present, and future in HR strategy and planning. We probably will fall short in drawing all the connections and implications of these powerful variables. After all, as Jim Walker pointed out in 1980, strategic thinking is hard work. (Gubman, 2004) For many companies, the philosophy of TQM represents a major culture shift away from a traditional production-driven atmosphere. In the face of such radical operational makeovers, a determined implementation effort is vital to prevent TQM from becoming simply latitudinal and the team approaches just another management fad. Senior management must take the lead in overt support of TQM. Human resource management can plan a vital role in implementing and maintaining a total quality management process. HR managers are responsible for recruiting high-quality employees, the continual training and development of those employees, and the creation and maintenance of reward systems. Thus, TQM controls processes that are central to achieving the dramatic cultural changes often required for TQM to succeed. Tailoring the TQM cultural development program to the firm's circumstances is essential in overcoming resistance to change and moving beyond simple compliance toward a total commitment to TQM. Holding a major liaison role between top management and employees, HRM has many opportunities to establish communication channels between top management and other members of the organization. Using these channels, HR personnel can ensure that employees know they are the organization's number one priority in implementing TQM. Building trust through an open exchange of ideas can help allay fears regarding the work-role changes that TQM requires. This can provide the foundation for all employees to be trained to consider their peers in other departments as internal customers. Here again, HRM has the opportunity to emphasize this new outlook by example. By exemplifying a customer-first orientation, HRM can help establish a departmental view of service throughout the entire organization. Part of HRM's functional expertise is its ability to monitor and survey employee attitudes. This expertise can be particularly important for a TQM program, since getting off to a good start means having information about current performance. Thus, a preparatory step is to administer an employee survey targeting two primary concerns. One involves identifying troublesome areas in current operations, where improvements in quality can have the most impact on company performance. The other focuses on determining existing employee perceptions and attitudes toward quality as a necessary goal, so that the implementation program itself can be fine-tuned for effectiveness. In general, HRM is responsible for providing training and development. With their background, HR departments are well positioned to take the leading role in providing such programs consistent with the TQM philosophy. HR managers have an important opportunity to communicate a history of their organization's TQM program and its champions. Equally important, HRM can tell stories of employees who are currently inspiring the TQM philosophy. As corporate historian, the HR department should be primarily responsible for relaying the TQM culture to members of the organization in employee orientation training. Beyond communicating the TQM philosophy, the specific training and development needs for making TQM a practical reality must be assessed. Basically, HR professionals must decide the following: What knowledge and skills must be taught? How? What performance (behaviors) will be recognized, and how will we reward them? HRM has faced these questions before and can best confront them in the TQM process. Training and development that does not fit within the realm of these questions will more than likely encounter heavy resistance. However, training and development does fall within the realm of these questions probably will be accepted more readily. Quality can no longer be viewed as the responsibility for one department. It is a company-wide activity that permeates all departments, at all levels. The key element of any quality and productivity improvement program is the employee. Consequently, employee commitment to a TQM program is essential. Because of its fundamental employee orientation, HRM should seek the responsibility for implementing TQM programs rather than risk losing their influence over the key element of TQM — the employee. Organizations with a solid reputation for providing high customer satisfaction have a common viewpoint: consistently taking care of the smaller duties is just as important as the larger concerns. Just as they attempt to instill an overall quality philosophy across the company, HRM can emphasize consistent quality in its own operations. The day-to-day delivery of basic HR services can be just as important as developing strategic programs that may have higher visibility and supposedly greater long-term consequences. As a guardian of such functions as recruitment and selection, training and development, performance evaluation and reward systems, the HRM professional is best able to take charge of these important functions as they relate to a TQM strategy. The full potential of the entire work force must be realized by encouraging commitment, participation, teamwork, and learning. HRM is best suited to accomplishing this by modeling these qualities. Leading by example, the HR department could then sustain the long-term TQM process company-wide. A by-product of setting a TQM example can be the improved standing of the HR department in the eyes of other, traditionally more influential departments. (10) But, the primary end result can be total quality management as a successful competitive strategy for organizational survival. (Clinton, Williamson & Bethke, 1994) Not only has the presented data shown the significance of TQM and HRM, it has also supported the idea that there is a strong correlation between the two, and it is necessary to have a balance and understanding of the importance of each aspect of business. Therefore, when discussing the relation between the two it is easy to state that they go hand in hand. It is also evident that they enhance one another. As stated earlier, both concepts separately were see as positive aspects with faults and difficulties, however, those problems and difficulties seem to diminish substantially when the two concepts are intermingled and utilized to their fullest extent.