Quality circles are small, voluntary groups of 8-10 employees from the same department who meet regularly to identify, analyze, and solve quality-related issues. They were developed in Japan in the 1960s as a way to improve quality and involve employees in problem solving. Examples show they can increase productivity and savings, such as reducing sick leave at United Airlines which saved $18.2 million. Quality circles provide benefits like improved quality, communication, problem solving, and job involvement.