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Lesson#37
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Employee Involvement-1
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Employee Involvement
Quality Circles:
Quality circles or “employee involvement teams” as they are
often called in the United States, were at one
time the most popular parallel structure approach to EI.
Originally developed in Japan in the mid-1950s,
quality circles consist of small groups of employees who meet
voluntarily to identify and solve productivity
problems. The group method of problem solving and the
participative management philosophy associated
with it are natural outgrowths of Japanese managerial practices.
The Japanese emphasize decentralized
decision making and use the small group as the organization unit
to promote collective decision making
and responsibility. Various estimates once put the total circle
membership at as many as ten million
Japanese workers.
Quality circles were introduced in the United States in the
mid-1970s.
Their growth through the early I
980s was nothing short of astounding, with some four thousand
companies adopting some version of the
circles approach. The popularity of quality circles can be
attributed in part to the widespread drive to
emulate Japanese management practices and to achieve the quality
improvements and cost savings
associated with those methods. What may be overlooked, however,
is the Japanese philosophy of
decentralized, collective decision making, which supports and
nurtures the circles approach. Thus, quality
circles may be more difficult to implement in the more
autocratic, individualistic situations that characterize
many American companies.
Although quality circles are implemented in different ways, a
typical program is illustrated in Figure 49.
Circle programs generally are implemented with a parallel
structure consisting of several circles, each having
three to fifteen members Membership is voluntary, and members of
a circle share a common job or work
area. Circles meet once each week for about one hour on company
tune, several consulting companies have
developed training packages as part of standardized programs for
implementing quality circles. Members
are trained in different prob1cm identification and analysis
techniques and they apply their training to
identify, analyze, and recommend solutions to work-related
problems. When possible, they implement
solutions that affect only their work area and do not require
higher management approval.
Each circle has a leader, who is typically the supervisor of the
work area represented by circle membership.
The leader trains circle members and guides the weekly meetings,
setting the agenda and facilitating the
problem-solving process.
Facilitators can be a key part of a quality circles program.
They coordinate the activities of several circles
and may attend the meetings, especially during the early
development stages. Facilitators train circle leaders
and help them start the circles. They also help circles obtain
needed inputs from support groups and keep
upper management apprised of progress. Because facilitators are
the most active promoters of the program,
their role may he full time.
A steering committee is the central coordinator of the quality
circles program. Generally, it is composed of
the facilitators and representatives of the major functional
departments in the organization. The steering
committee determines the policies and procedures of the program
and the issues that tall outside of circle
attention, such as wages, fringe benefits, and other topics
normally covered in union contracts. The
committee also coordinates training programs and guides program
expansion. Large quality circles
programs might have several steering committees operating at
different levels.
Figure 49
Application 8 presents a classic example of a quality circles
program in the warehouse department of the
HEB Grocery Company. The study reports mixed results but
identifies the organizational conditions
needed to implement effective quality circles.
Application 8: Quality Circles at H.E.B Grocery Company
A quality circles program was implemented as a pilot project at
a large warehouse of the HE-B Grocery
Company in Texas. Department management of this eighty-person,
two- shift warehousing operation
volunteered to adopt the program, which was part of a larger
corporate strategy to increase employee
involvement. This choice emerged from a survey in which
employees indicated a desire to be better
informed about department events and to have greater involvement
in problem solving. All but four
workers volunteered to be part of the pilot circles.
The program consisted of four circles, each composed of ten
people representing a cross section of
workers familiar with the warehousing operation. The circles met
for two hours at two-week intervals.
Because of the large number of workers who wished to participate
in the program, management held
periodic rotations, replacing some circle members with new
volunteers. One rotation occurred after five
months: twelve workers dropped out, several more left the
department, and twenty-nine employees joined
the circles.
Each circle had a worker-leader trained in communication
techniques, group process, and problem-solving
skills. The leaders also formed a leader circle that met
regularly to exchange ideas, concerns, and
information and to coordinate the four circles. Supervisors were
trained and served as resources to the
circles. Similarly, members of the corporate human resources
department served as facilitators. They helped
the leaders train circle members, attended the meetings, and
provided process facilitation. The department
head and several top managers formed the steering committee to
guide the project. Circle suggestions were
reported to department management, which worked closely with
employees to implement the suggestions.
Researchers conducted a thorough evaluation of the quality
circles program. They compared the warehouse
department with a similar control group that had not
participated in the program. Comparison measures
included survey data at three points in time: five months before
the program, three months after its
beginning, and ten months after the program started, Also
included were unobtrusive measures of
productivity, absenteeism, and accidents collected at four- week
intervals beginning one year before the
program.
The researches also conducted formal, open-ended
interviews with selected warehouse managers
and circle members and observed the circles in action once a
month. All documentation that emerged from
the circles was examined.
In contrast to the control group, the warehouse department
showed slightly more positive trends in
productivity during the course of the circles program.
Specifically, the quantity of production increased
slightly, and small decreases were shown in costs, absenteeism,
labor expense, overtime, and accidents. The
survey data showed that the attitudes of warehouse employees
changed little during the program but,
unexpectedly, the attitudes of members of the control group
suffered in regard to feeling informed, being
involved in decision making, and receiving feedback from
super4sors. The researchers attributed this
deterioration in morale to the disruption caused by a rapid
expansion in the workload of the comparison
unit. Because the expansion affected both the warehouse and the
control group, the researchers concluded
that the circles program might have buffered warehouse employees
during this disruption, accounting for
the stability of attitudes during the program.
Examination of the interview and observational data revealed a
more negative assessment of the circles
program. Its initial months were marked by a flurry of activity
and improvement suggestions. Among the
outcomes were efforts to improve equipment maintenance
procedures, reduce warehouse congestion, and
prevent damage.
After several months, attendance at the meetings
began to wane, and the circle members
found it increasingly difficult to identify significant issues
within their sphere of expertise and influence.
Supervisors also started to admit that the circles were draining
time and energy from the department.
A second flurry of activity and enthusiasm for the program took
place soon after the voluntary rotation of
members into and out of the program. With time, this energy also
subsided as members became frustrated
with the difficulty of systematic problem solving, the slowness
of any implementation of ideas, and the
failure of the program to affect their jobs. As the workload of
the warehouse increased, management
allowed the circles to become inactive by neglecting the
project.
Interview data showed that participants in the program felt they
had accomplished something worthwhile,
had learned a lot, and had enjoyed the circles. Non-participants
or those who dropped out of the circles felt
that the program never really dealt with significant issues, it
is interesting that those who didn’t participate
or dropped out showed a marked worsening of attitudes during the
program, compared with active
participants. This unexpected downturn was attributed to
disillusionment with the program and to feelings
that some participants were wasting time. Supervisors felt that
the payback was not worth the time spent in
the meetings. The human resources personnel judged the program a
successful step toward employee
involvement in H.E.B.
Observations and interviews suggested several reasons why the
program gradually died. The level of group
functioning did not noticeably improve during the program, and
there was
no indication that systematic
problem-solving techniques were followed. implementation of
several ideas was unduly delayed in
bureaucratic channels, resulting in member perceptions of low
management commitment to the program-
Although many circle members reported satisfaction with the
program, little indication was evident that
their enthusiasm translated into greater motivation on the job.
Indeed, many of the most active participants
became disenchanted with their jobs and sought ways to enter the
supervisory ranks. Some members also
felt that they were being inadequately compensated for
generating moneysaving ideas for the company.
The researchers concluded that, as a pilot project, the quality
circles program was successful. The company
learned about the level of commitment and energy required to
sustain such programs and continued to
experiment with other approaches to employee involvement,
holding more realistic expectations. The
rigorous and contradictory nature of the assessment measures
strongly suggests that research on quality
circles must go beyond glowing testimonials and superficial
reports of worker enthusiasm to include
whether such programs effect valued individual and organization
outcomes.
High-Involvement Organizations:
Over the past several years, an increasing number of employee
involvement projects have been aimed at
creating high-involvement organizations (HIOs). These
interventions create organizational conditions that
support high levels of employee participation. What makes HIOs
unique is the comprehensive nature of
their design process. Unlike parallel structures that do not
alter the formal organization, in HIOs almost all
organization features are designed jointly by management and
workers to promote high levels of
involvement and performance including structure, work design,
information and control systems, physical
layout, personnel policies, and reward systems.
Features of High Involvement Organizations:
High-involvement organizations are designed with features
congruent with one another. For example, in
HIOs employees have considerable influence over decisions. To
support such a decentralized philosophy,
members receive extensive training in problem-solving
techniques, plant operation, and organizational
policies; in addition, both operational and issue-oriented
information is shared widely and is obtained easily
by employees. Finally, rewards are tied closely to unit
performance, as well as to knowledge and skill levels.
These disparate aspects of the organization are mutually
reinforcing and form a coherent pattern that
contributes to employee involvement. Table 18 presents a list of
compatible design elements characterizing
HIOs and most such organizations include several if not all of
the following features:
Flat, lean organization structures
contribute to involvement by pushing the
scheduling, planning, and
controlling functions typically performed by management and
stall groups toward the shop floor. Similarly,
mini-enterprise, team-based structures that is oriented to a
common purpose or Outcome help focus
employee participation on a shared objective. Participative
structures, such as work councils and union—
management Committees, create conditions in which workers can
influence the direction and policies of
the organization.
Table 18
Design Features for a participative System
Organization Structure Job Design Information System
Flat
Lean
Minienterprise-oriented
Team-based
Participative council or structure
Individually enriched
Self-managing teams
Open
Inclusive
Tied to jobs
Decentralized; team-based
Anticipatively set goals and
standards
Career System Selection Training
Tracks and counseling available
Open job posting
Realistic job preview
Team-based
Potential and process-skill
oriented
Heavy commitment
Peer training
Economic education
Interpersonal skills
Reward System Personnel Policies Physical Layout
Open
Skill-based
Gain sharing or ownership
Flexible benefits
All salaried workforce
Egalitarian perquisites
Stability of employment
Anticipatively established through
representative group
Around organizational structure
Egalitarian
Safe and pleasant
Job designs
that
provide employees with high levels of discretion, task variety, and meaningful
feedback
can enhance evolvement. They enable workers to influence
day-to-day workplace decisions and to receive
intrinsic satisfaction by performing work under enriched
conditions. Self-managed trains encourage
employee responsibility by providing cross-training and job
rotation, which give people a chance to learn
about the different functions contributing to organizational
performance.
Open information systems
that are tied to jobs or work teams provide the
necessary information tar
employees to participate meaningfully in decision making. Goals
and standards of performance that are set
participatively can provide employees with a sense of commitment
arid motivation for achieving those
objectives.
Career systems
that
provide different tracks for advancement and counseling to help people choose
appropriate paths can help employees plan and prepare for
long-term development in the organization.
Open job posting, for example, makes employees aware of jobs
that can further their development.
Selection
of employees
for high-involvement organizations can be improved through a realistic job
preview providing information about what it will be like to work
in such situations. Team member
involvement in a selection process oriented to potential and
process skills of recruits can facilitate a
participative climate.
Training
employees for
the necessary knowledge and skills to participate effectively in decision making
is a
heavy commitment in HIOs. This effort includes education on the
economic side of the enterprise, as well
as interpersonal skill development. Peer training is emphasized
as a valuable adjunct to formal, expert
training.
Reward systems
can
contribute to employee involvement when information about them is open and the
rewards are based on acquiring new skills, as well as sharing
gains from improved performance. Similarly,
participation is enhanced when people can choose among different
fringe benefits and when reward
distinctions among people from different hierarchical levels are
minimized.
Personnel
policies
that are participatively set and encourage stability of employment provide
employees
with a strong sense of commitment to the organization. People
feel that the policies are reasonable and that
the firm is committed to their long-term development.
Physical layouts
of
organizations also can enhance employee involvement. Physical designs that
support
team structures and reduce status differences among employees
can reinforce the egalitarian climate needed
for employee participation. Safe and pleasant working conditions
provide a physical environment
conducive to participation.
These HIO design features are mutually reinforcing. “They all
send a message to people in the organization
that says they are important, respected, valued, capable of
growing, and trusted and that their understanding
of and involvement in the total organization is desirable and
expected.” Moreover, these design
components tend to motivate and focus organizational behavior in
a strategic direction, and thus can lead
to superior effectiveness and competitive advantage,
particularly in contrast to inure traditionally designed
organizations.
Total Quality Management:
Total quality management (TQM) is the most recent and, along
with high-involvement organizations the
most comprehensive approach to employee involvement. Also known
as “Continuous process
improvement” and “continuous quality,” TQM grew out of a
manufacturing emphasis on quality control
and represents a long- term effort to orient all of an
organization’s activities around the concept of quality.
Quality is achieved when organizational processes reliably
produce products and services that meet or
exceed customer expectations.
Like high-involvement designs, TQM increases workers’ knowledge
and skills through extensive training,
provides relevant information to employees, pushes
decision-making power downward in the organization
and ties rewards to performance. When implemented successfully.
TQM also is aligned closely with a firm’s
overall business strategy and attempts to change the entire
organization toward continuous quality
improvement.
Characteristics of TQM:
TQM is a philosophy and a set of guiding principles for
continuous improvement based on customer
satisfaction, teamwork, and empowerment of individuals. TQM
applies human resources and analytical
tools to focus on meeting or exceeding customer’s current and
future needs. There are a series of planned
improvements that will ultimately influence the quality and
productivity of the organization.
Like high-involvement designs, TQM increases workers’ knowledge
and skills through extensive training,
provides relevant information to employees, pushes
decision-making power downward in the organization
and ties rewards to performance.
When implemented successfully TQM also is aligned closely with a
firm’s overall business strategy and
attempts to change the entire organization toward continuous
quality improvement.
TQM usually have several principles or components in common:
TQM is organization-wide
.
The production line is natural and obvious place to improve quality, but
TQM also takes place in the accounting, human resource
management, house-keeping, marketing, sales,
and in other service and staff areas of an organization.
The CEO and other top managers support it
.
Everyone, from top managers to hourly employees,
operates under TQM. There is a reward system in place that
ensures continual support.
Organization wide TQM generally takes three or more years. So
allocation of significant resources for
training is a crucial aspect. Motorola company has developed a
University, a training organization, that
teaches in twenty-seven languages. It allocates at least 1.5
percent of its budget to education, and every
employee must take a minimum of forty hours of training a year.
This effort supports the Company’s goals
of “six sigma” quality -a statistical measure of product quality
that implies 99.9997 % perfection. Having a
work-force that is able to read, write, solve problems, and do
math at the seventh-grade level or above.
TQM is an ingrained value in the corporate culture
.
Continuous improvement penetrates the culture
and values of the organization. Quality is seen as “how we do
things around here.”
Partnership with customers and suppliers
.
The organization encourages partnerships with suppliers and
customers. The product or service must meet or exceed the
customer’s expectations. Results – not slogans
– represent quality.
For example, a leading garments company found that the retailers
were out of stock on 30 percent of their
items 100 percent of the time. In response, the company revamped
its systems to fill orders within twentyfour
hours 95 percent of the time.
Everyone in an organization has a customer
.
The customer may be internal or external. The next
person on the production line, another department, and someone
outside the organization who purchases
the product are all seen as customers.
Reduced cycle time
.
Cycle times for products, services, as well as support functions, focus on doing
the
job faster.
Techniques range in scope.
The techniques used in TQM include statistical
quality control, job design,
empowerment, and self-managed work teams.
Do it right the first time
.
Quality is not obtained by rejecting a product at the end of a production line;
rather it is built in at every stage of the production process.
Organization values and respects everyone.
This includes customers, suppliers, employees,
owners,
community, and the environment. These parties are often called
stakeholders.
No single formula works fit everyone.
Every organization is unique, and off-the-shelf
programs tend not
to work. “What was successful at one company may not work in
another.”
Application 8: Total Quality Management at L.L. Bean
Customers of L.LBean know that they are the boss. They can order
hunting equipment twenty-four hours a
day. They can request fishing poles to arrive, via Federal
Express, within two days—at no extra charge. And
they can return broken car racks after years of use. To say that
the Maine-based mail- order company has a
reputation for superior customer service is an understatement.
The company’s history is replete with stories
of employees who went out of their way for a customer. L.L.Bean
has a reputation that dates back to 1912,
when founder Leon Leonwood Bean made good on nearly an entire
shipment of hunting shoes that came
back to him with defective stitching.
That reputation prompted Leon Gorman, the grandson of Bean and
current chairman of L.L.Bean, to
apply for the Malcolm Baldridge National Quality Award in the
service category in 1988, the first year the
award came out. Despite its reputation, L.L.Bean won no award
that year, although it was one of two
companies that qualified for a site Visit. No award was given
that year in the service category.
At the time, German noted that L.L.Bean “will be under a great
deal of pressure to renew and enhance our
quality improvement efforts to make sure we live up to our
reputation.” Consequently, the company used
feedback from the Baldridge committee as diagnostic information
to carry out Gorman’s desire to renew
and enhance the company’s quality improvement efforts. This
resulted in a change program that focused
first on employee involvement and then on process improvement.
The Baldridge feedback prompted Bean to take a hard look at its
quality culture, Although members of the
award committee had been impressed with Bean’s customer service
and cited it as “world class,” they
thought that the firm was not achieving customer satisfaction in
a productive way. Bean had been satisfying
customers through a guarantee-based approach to quality; in
fact, they pioneered the “no-questions asked”
guarantee. The Baldridge committee members thought that Bean
should not rely on a guarantee but should
ensure that things happen right the first time. A favorite
company story illustrates the situation: A customer
service representative in Freeport, Maine, once strapped a canoe
on his car and drove it to a customer in
New York, who was leaving the next morning for a hunting trip.
Although this certainly demonstrated
exemplary customer service, the award committee noted that it
also served as a sign that something was
wrong. The canoe had been ordered in plenty of time to be
shipped; had the order been processed properly
in the first place, there would have been no need for heroics.
The diagnostic information also revealed that Bean needed to
have more employee involvement. This came
as a surprise to management because the firm prided itself on a
participative culture. L.L.Bean had been
one of the first organizations in the United States to implement
quality circles ten years earlier. Certainly,
managers argued, the employee who delivered the canoe was
involved. What members of L.L.Bean had
trouble understanding was the practice of letting people take
responsibility for their work and the work
quality. In fact, decision making at L.L.Bean had usually taken
place at a high level.
Based on the diagnostic feedback, the organization first
developed a definition for what was referred to as
“total quality” (TQ). It proposed that “total quality involves
managing an enterprise to maximize customer
satisfaction in the most efficient and effective way possible by
totally involving people in improving the way
work is done.” In short, the company defined TQ as the way to
involve its people and to improve
customer-service processes.
Next, L.L.Bean focused on training. It spent approximately ten
months familiarizing its three thousand
employees with TQ methods and what quality means to the firm.
First, all salaried employees in the
organization received three days of TQ training, and then all
hourly workers received one day. Senior
executives were trained first so that each level within the
company was capable of supporting total quality
as the next level down learned about it.
During this training period, Bean’s human resources department
explored ways to change the infrastructure
of the company to support greater employee involvement in
decisions that affect quality. It concluded that
because L.L.Bean is a service organization, decisions that
influence quality occur every time a customer calls
one of its phone centers and talks to a customer service
representative. Thus, frontline, customer-contact
employees needed to be knowledgeable and empowered. This would
require a new managerial role aimed at
involving employees and helping them develop the necessary
expertise.
Soon after the training, Bean enlisted seventy members to devise
ways to put the knowledge into action and
to challenge the status quo. They formed seven cross-functional
teams composed of both managers and
workers. One team defined the manager’s role in a
quality-oriented organization as that of coach and
developer, and created a program to help managers acquire the
knowledge and skills to fill this new role.
Another team constructed a feedback instrument as part of a
management development process. The tool
eventually became part of a performance management process that
linked managers’ compensation to
improvements in such behaviors as being “aspiring and focused,
ethical and compassionate, customer
focused and aligned, effective and efficient, challenging and
empowering, open and innovating, and
rewarding and developing.”
Employee involvement also paid big dividends in L.L.Bean’s
process improvement efforts. At the
manufacturing division, a manager of footwear production shut
down an entire work line, despite
tremendous productivity pressures, and spent the morning
teaching workers how a shoe is costed out. He
explained each of the operations involved in making a shoe and
described the cost of each task and of the
materials involved. He then took employees back to the
production line and asked them to discover ways
that they could save money based on what they had learned in the
morning. Employees found enough
savings that day to pay for all the training conducted in the
department for the entire year. In another case,
stockers who replenish shelves in Bean’s retail store swapped
jobs temporarily with pickers who gather
store orders from inventory in the distribution center. They
applied TQ methods, such as work-flow
mapping, to understand the work relationship between the store
and the distribution center. In the old
process, retail workers placed orders with the distribution
center for items running low in the store. Pickers
at the distribution center gathered those items on rolling
carts, packed them in boxes, and loaded them
onto trucks. ‘When the items arrived at the store, stockers
unloaded and unwrapped them and put them on
rolling carts for transportation to the shelves. When the
employees saw both sides of the work process,
they realized that there was no reason for packaging the items.
Now, the pickers simply roll the carts
holding items directly on to trucks so that stockers can roll
them right off.
To support these process improvements, L.L.Bean’s staff groups
also changed. The human resources
department, for example, expanded its role to help employees
understand and manage the TQ process. The
department reengineered itself from a functional structure to a
customer-oriented organization. Now,
service teams made up of human resources specialists support
each of LL.Bean’s major divisions with
process improvement techniques, health and safety advice,
employee relations help, and training.
Most gratifying to L.L.Bean is that through all the changes,
customer satisfaction remained high and job
satisfaction among the workforce increased more than 12 percent.
Although L.L.Bean is only halfway
through its TQ intervention, it has experienced increased
profitability, return on sales, and return on equity.
TQM and OD have Similar Values:
TQM & OD share certain values. Both are system-wide, depend on
planned change, believe in
empowerment and involvement, are self-renewing and continuous,
base decision-making on data-based
activities, and view people as having inherent desire to
contribute in meaningful ways.
There are differences, however, between OD and TQM. Some OD
practitioners argue that their core
values differ, and they caution against OD practitioners
assuming the role of “quality management expert.”
The OD practitioner has to enter the organization as a neutral
party and resists advocating any particular
method of change. OD practitioners view organization problems as
having a variety of causes with no
predefined solutions. TQM consultant, on the other hand, views
organization problems as having TQM
solutions.
TQM can be applied as one change methodology along with an
accompanying array of other interventions.
TQM is more likely to be successful when combined with employee
involvement. The two are
complementary, and the impact of either is diminished by the
absence of the other.
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