Employee involvement and empowerment are central to total quality management. TQM emphasizes self-control, autonomy, and creativity among employees through greater cooperation. To effectively implement TQM, human resource practices like training, performance appraisal, compensation, and selection must be modified. Traditional practices that focus on individuals over systems or short-term goals must be replaced with those that develop skills for problem-solving and support shared responsibility for quality and continuous improvement.

1. Human Resource Development
and Management
Chapter 5

2. 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.

3. Involvement: A Central Idea Of Human
Resource 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.

4. Involvement: A Central Idea Of Human
Resource 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.

5. 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.

6. 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.

7. 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)

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. Bowen and Lawler Principles of TQM
1. Quality work
2. Focus on the customer
3. Strategic holistic approach to improvement
4. Continuous improvement as a way of life
5. Mutual respect and teamwork
• It is possible with the modification of the traditional human resource
management practices.

20. 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;

21. 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.