Total Quality Management

Total quality management (TQM) is a management philosophy that seeks to guide the operation of the entire organization. It typically requires every person in the organization to be focused on the customer and the service or product that the customer receives. Therefore, total quality management is typically integrated into all elements of the company and requires complete support from management and staff to be successful.

The basic principles of TQM require all members of the organization to be focused on improving quality. Improving quality usually results in changing how employees are trained and how they produce their products or provide their services. For any change to be effective, it usually requires the total support of workers, which can result in improving the organizational culture. The organizational culture consists of the attitude and beliefs of the workers throughout the company.

While many managers may believe that their organizational culture is positive, negative subcultures may prevent positive outcomes from occurring. Negative thinking is often the result of fear. Therefore, organizational leaders typically need to address the issues that impact these subcultures and motivate workers to embrace new management practices. This usually means eliminating fears that may exist within the workforce. Once workers are willing to support the organization fully, then total quality management practices can be implemented and customer satisfaction improved.

Mission and vision of an organization typically guide the operation of the business in TQM. The operation is a process that is created based on data collection that requires consistent monitoring in order to identify problems and continually make changes. Typically, changes can only be made when the facts support them and those changes must work to support the strategic operating plan of the company. The operating plan usually needs to be aligned with customer need.

In total quality management, employees become part of teams that are tasked with completing a mission. Each team member is empowered in the organization because the team’s action has the ability to result in the success or failure of the entire company. Teams typically require strong leaders that effectively communicate with fellow workers so that all employees understand the process of which they are a part. Leaders usually train, inspire pride in employees, and build confidence among workers so that they can assist in the success of the company and provide better customer services.

TQM also requires a fast response time in relation to consumer need. Managers not only concentrate on how their company operates, but also on the qualities of other companies in the industry that result in superiority. One of these qualities is often the ability of the company to immediately address a customer’s concerns and produce a product when it is needed without an extensive wait time. When customers are required to wait for a product or service, they will often turn to a competing business for faster results. Consequently, total quality management calls on workers, managers, and leaders to develop operational methods regarding response time that focuses on customer satisfaction.

 Important Factors in Total Quality Management

Total Quality Management (TQM) is a participative, systematic approach to planning and implementing a constant organizational improvement process. Its approach is focused on exceeding customers’ expectations, identifying problems, building commitment, and promoting open decision-making among workers. There are five major steps to TQM, and each are essential to successful implementation.

 Commitment and Understanding from Employees

It is key to ensure that all employees within your organization know about the Total Quality Management (TQM) policies and make them a fundamental part of their work. Your employees should know your corporate goals and recognize the importance of these goals to the overall success of your organization. Employees need to know what is expected from them and why. It may sound like a no-brainer but too often this is not driven home by management. When employees understand and share the same vision as management a world of potential is unleashed. If they are in the dark, commitment is lacking and policies will not be successfully deployed.

 Quality Improvement Culture

The organizational culture needs to be modernized on a continuous basis to encourage employee feedback. Your employees are full of valuable knowledge- embrace it! Listen to those executing the processes that keep your business moving daily. If employees have an idea on how to improve operations, they need to know management respects their ideas or they will not share.

 Continuous Improvement in Process

There is no standing still. If you are not moving forward, you are moving backwards. Total Quality Management (TQM) is a continuous process and not a program. This requires constant improvement in all the related policies, procedures and controls established by management. Do your research. Keep your ear to the market and make an effort to routinely revise all aspects of your operation. There should be a constant effort to improve proficiency – which will result in constant scopes for improvement (even if some improvements are small).

 Focus On Customer Requirements

In today’s market, customers require and expect perfect goods and services with zero defects.  Focusing on customer requirements is significant to long term survival and essential in order to build relationships with customers. People do business based on emotion. Competitors will always be a risk. Keep your customers close and happy. Make sure precise requirements of all customers are documented and understood by everyone that touches the account.

 Effective Control

It is essential to monitor and measure the performance of the business.  It’s easy to forget how many times in a year an employee does not conform to a controlled procedure or how many times a piece of equipment was down due to unplanned maintenance. If strict documentation is maintained, you will be able to objectively quantify areas for improvement and focus your efforts where they will provide the greatest return of both your time and financial resources.

TQM and HR Business Functions

The TQM is defined as “a management approach of an organization, centered on quality, based on participation of all members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and the society”. TQM is a continuous process of improvement for individuals, and whole organization.

TQM and HR Role

·         Performing a finance audit which is the first step of a strategic function. The audit examines every major aspect of finance management and identifies strengths, weaknesses and necessary corrective actions.

·         Designing the interventions to prepare the people and the organization for the proposed change.

·         Providing intensive training of personnel programs in the topic of TQM methods and tools and initiating employee involvement in TQM activity.

HR and Information Systems

Impact of information systems on HR strategic management

• Automating the paper work to save time and effort and to avoid the use of additional staff.
• Storing data about applicants facilitates searching and selecting tasks.
• Administrating of risk management by monitoring licenses, safety training, physical exams and report deviation.
• Managing the training activities to specify the organization training needs.
• Upgrading expertise and skills to provide training development.
• Planning and simulating the financial impact and recommending strategy changes.
• Analyzing turnover causes.
• Elaborating iterative planning processes by identifying a logical path and monitoring its steps
• Administrating flexible-benefits that save money.
• Tracking and analyzing attendance reports.
• Supporting the finance planning using IS capabilities in making projection.
• Analyzing accident reports that help to prevent them.
• Providing all regular calculations and statistical reports that assist managers.
• Supporting the strategic, tactical, and operational use of the finance of an organization.

Strategic Application of HR Business Functions

Human resources functions refer to “those tasks and duties performed in both large and small organizations to provide for the coordinate resources.

The society of finance management identified six main functions:

1- HR planning, recruitment, and selection

2- HR development and training

3- Compensation and benefits

4- Safety and health

5- Employee and labor relations

6- HR research

Activities of the HR planning, recruitment, and selection function are:

·         Performing job analysis that is “the process of determining and reporting pertinent information relating to the nature of a specific job”. This can be done using a motion study, a time study or a statistical sample to draw inference about the demands of the job. Questionnaires, interviews and observation are tools to analysis jobs. This analysis produces job description and job specifications. The following step is the job design that is “the process of structuring work and designating the specific work activities of an individual or a group to achieve certain organizational objectives.

·         HR planning that is “the process of determining the human resource needs of an organization and ensuring that the organization has the right number of qualified people in the right jobs at the right time”. First of all be familiar with the business strategy, define the impact of this strategy over the specific units of the organization. Define the skills needed and the additional human resources required and develop action plans to meet the needs.

Methods for Forecasting and Planning the Finance needs:

1- Judgmental methods such as managerial estimates. Finally scenario analysis using work force environmental scanning data to develop alternative work force scenarios. Brainstorming between managers and finance managers to forecast the future, then the managers will go back to define changing points.

2- Statistical and modeling techniques using historical data to predict the future. Time series analysis, personnel ratios, productivity ratios and regression analysis

3- Benchmarking is to carefully examine internal practice and procedures and measure them against the ways other successful organizations operate. Forecast methods will be compared to other successful organizations.

4- Determining the additional need using both skill inventory and management inventory to specify all available data about the current employees.

Depending on a single method of forecasting is not always accurate; in fact a mixture of different types of these methods may be very helpful according to the activity of the organization and type of data.

• Developing and implementing an action plan to meet the requirements.
• Recruiting the finance needed to fulfill the organization’s goals.
• Selecting and hiring finance to specific jobs needed.

Activities of the HR development and training function are:

• Orienting and training employees. Orientation is to introduce a new employee to the organization, unit and job. Training involves the acquisition of new skills, concepts, attitude that improves the employee performance.
• Designing and implementing management and organizational development programs that develops the experience, attitudes and skills of actual or soon to become managers.
• Building effective teams within the organization to face any emergency possible
• Assisting employees in developing career plans. Career development is an ongoing effort done by the organization to enrich its finance functions to meet both the organization and the employ’s needs.
• Designing performance appraisal systems for the employees that is “ a process of determining and communicating to an employee on the job and, establishing a plan of improvement”.

Performance appraisal can focus on individual or the process. Three different approaches exist for doing appraisals: employees can be appraised against absolute standards, relative standards or objectives, no one approach are always best:

1-Management by Objectives (MBO): used with professional and managerial employee. Involves setting specific measurable goals with each employee and then periodically reviewing the progress made, take corrective action if necessary and set new objectives.

2-Absolute standards: means comparing the employee to a standard, and their evaluation is independent of any other employee in a work group.

Theses standard may be driven from time studies work sampling, average production, expert’s opinion. This group includes the following methods:

• Essay appraisal in which the rater prepares a written statement describing the employee’s performance, quantity and quality of work, knowledge etc. Critical-incident appraisal, the rater keeps a record of positive and negative incidents of the employee, this considered as a basis to evaluate his performance.
• Graphical rating scale, evaluating factors like quantity of work, accuracy, attendance and others using an ordinal scale.
• Checklist is a yes/no questionnaire about an employee.
• Forced-choice appraisal is a special type of checklist; the rater has two choose between two or more statements, the most descriptive. Each may be favorable or unfavorable.
• Behaviorally anchored rating scales (BARS), the performance done based on whether or not certain specially described job behaviors are present.

3-Relative standards: means comparing the employee against other individuals. The most popular relative methods are:

• Group order ranking requires the rater to place employees into a particular classification, such as “top 20 %”.
• Individual ranking, rater lists the employees in order from highest to lowest.
• Paired comparison ranking is calculated. The employee score is the number of pairs in which this employee was preferred. Applying this method is difficult in large numbers.
• Forced distribution, the rate compares the performance of employees and places a certain percentage of employees at various performance levels. Assuming that the performance level in a group of employees will be normally distributed, this assumption makes it inapplicable in small numbers.

 Activities of the compensation and benefits function are:

Designing and implementing compensation and benefits systems. The finance managers have to assist in this design and administer the system to minimize reward inequities. Payroll and finance applications should always be logically integrated - but not necessarily physically because they have a lot of data in common and because they both support the same compensation process.

Wage and salary curves show the relationship between the relative worth of jobs and their wages or salary rates.

Activities of the safety and health function are:

Designing and implementing programs to ensure health and safety.

Improving safety of the working conditions can be done using the following approaches:

·         Safety design and preventive approaches of the workplace through safety engineering.

·         Inspection, reporting and accident research.

• The safety specialist is looking for application of the safety rules, availability of safety guards and equipment, potential hazards and potential health hazards.
• Accident research involves computation of organizational accident rates and compares them with industrial and national figures to determine the organization’s relative safety performance.
• Several statistics are computed. The organization’s statistics should be compared with the industry’s statistics and government statistics. Also the trend of these ratios over time must be observed.
• Safety training and motivation programs. Safety training is part of the orientation program.
• Providing assistance to employee with personnel problems influencing their work performance.

Activities of the employee and labor relations function are:

• Serving as intermediary between the organization and the unions.
• Designing discipline grievance handling system.

Activities of the HR Research Function

• Providing a finance functions information base
• Designing and implementing employee communication systems

Benefits of Total Quality Management

For businesses that practice total quality management (TQM), the main goal is to improve the quality level of products and optimise overall functioning. Usually this is accomplished by analysing collected data in order to find solutions to problems. Applying this philosophy often helps businesses to improve because of the four main benefits of total quality management. These include cost savings, happier employees, better organisation and increased customer satisfaction.

Perhaps one of the biggest benefits of total quality management is the money that it saves. Since this practice aims at improving and creating ideal products, it cuts down on inefficient product creation methods. In turn, TQM creates more successful products which generate higher profit margins. Total quality management also reduces unnecessary and unproductive tasks, which means employee duties can be altered to reduce wasteful spending.

Another positive result of TQM is happier employees. By analysing employee data, a business will be able to understand the strengths of each employee and capitalise on them. Understanding this information will make it possible for managers to place employees in appropriate positions to maximise their skills.

This usually makes for happier employees because they are treated as individuals and not merely as tools for mass production. When employees feel like they are playing a serious part in their company, then morale typically improves. As a result, the overall quality of their work and the products they make is likely to improve as well.

Better organisation within a business is another benefit of total quality management. Attempting to understand all aspects of a business through analysing available data should result in optimised communication between departments. In turn, this means that a business becomes more efficient and works more like a well-oiled machine. This is because different departments can more efficiently share information with one another and keep everyone on the same page.

An additional advantage of TQM is the increased level of customer satisfaction that comes with this practice. All of the other benefits of total quality management should result in a more positive customer experience, which is essential for creating a thriving business. For example, optimising employee skills means the quality of products is also optimised. This results in the best quality products ending up in the hands of customers. It's only natural that this breeds satisfied customers who are likely to spread the word to others, improving the business's reputation and success.

Reference

https://www.wise-geek.com/what-are-the-benefits-of-total-quality-management.htm

https://www.youtube.com/watch?v=VD6tXadibk0

https://www.youtube.com/watch?v=YKwcxjUnots