Total Quality and Human Resource Management

J. N. Bradley Central Washington University ABSTRACT Total Quality Management (TQM) has been defined as a system designed to satisfy customer’s requirements, a philosophy that stresses a team approach to achieving quality and continuous improvement and a total change in organizational culture. Unfortunately, most Human Resource Management (HRM) systems/activities generate, or at least allow for, inconsistencies in the quality of outcomes.

Consequently, an important question that should be considered is whether using a systems engineering approach would be beneficial in the integration of the two activities? INTRODUCTION Total Quality Management (TQM) has been defined as a system designed to satisfy customer’s requirements (Sashkin & Kiser, 1991), a philosophy that stresses a team approach to achieving quality and continuous improvement (Lawler, 1994b), and a total change in organizational culture (Ross, 1993).

If management accepts these definitions and attempts to implement TQM within an organization, the success of the program relies heavily on the strategic application of human resources in the organization’s quality transformation process while attending to its own transformation of quality.

(Hart & Schlesinger, 1991). Unfortunately, most Human Resource Management (HRM) systems/activities generate, or at least allow for, inconsistencies in the quality of outcomes.

Consider the following selection of personnel is typically based on individual job requirements and not organizational values (Barrett, 1995; Blackburn & Rosen, 1993); job analysis is a static (or consistent) process that takes place within a dynamic environment (Cardy & Dobbins, 1992; Hamstead, 1995); performance appraisals usually compare individuals to one another instead of the system; and the typical pay system rewards individual performances not organizational goals (Dobbins, Cardy, & Carson, 1991).

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Furthermore, Deming (1986) claims that performance appraisals (P/A’s) are one of management’s deadliest sins and that their use should be totally eliminated. Given the above perspectives, important questions that should be analyzed and answered are whether TQM and HRM can combine in a synergistic manner that results in a positive contribution to organizational improvement and achievement of objectives? And, whether using a Systems engineering approach would be beneficial in the integration of the two activities?

Problems with HRM Processes Selection Cascio (1991) states that the typical objective in traditional personnel selection processes is that of capitalizing on individual differences in order to select those persons who possess the greatest number of key attributes judged necessary for job success. Dobbins, Cardy, & Carson (1991) further state that the objective of the traditional selection process is the differentiation of applicants on one or more dimensions such as knowledge, skill, ability, or motivation.

However, they state that a problem arises, from a system perspective, when employees are selected based on individualistic or differentiated characteristics, but are evaluated on system-related criteria and measures. Thus, HRM departments may be reinforcing counterproductive processes when they select (or recommend for selection) personnel based on individualized job analyses and then attempt to evaluate them under a TQM or system-wide performance structure or criteria. According to Blackburn and Rosen (1993), some past winners of the Baldrige quality award are still engaging in traditional selection practices.

These companies admit to hiring the best candidates for a position based on individual job specifications, and that they hope these individuals can be socialized into the TQM environment at some later point in their tenure. However Blackburn and Rosen feel that, because of the changing culture within organizations towards continuous quality, the selection process must allow for the candidate to show skills in customer satisfaction, self-direction, self-development and team-development.

Accordingly, the selection process must enable management to assess (or predict) the aptitudes and abilities that will allow an employee to adapt to an environment of constantly changing customer requirements, and to look for a successful assimilation within the existing organizational culture. According to Bowen, Ledford, and Nathan (1991), the use of selection based on organizational fit Rill increase due to a new selection model that is emerging. This model is based on considering the “whole person” in relation to the specific organization culture.

The benefits of employing this process are greater job satisfaction, organizational commitment, team spirit, better job performance, reduced absenteeism, and greater support for the organization as a system and culture. The issue of organization-person fit does raise some interesting questions. For instance, what types of people fit within what types of organizational culture, and is there any truly measurable benefit to the organization or employee? Research conducted by O’Reilly, Chaiman, and Caldwell (1991) attempted to answer these questions.

Although they acknowledge that quantifying cultural attributes is extremely difficult, they did find that individuals with high achievement needs prefer more aggressive, outcome oriented culture. Individuals with high needs for autonomy show distinct preferences for innovative cultures and negativity towards organizational support and teamwork. Additionally, while they were not able to generate specific measurement criteria, they were able to identify that when a strong organization/person fit is achieved, there was a significant improvement in commitment, job satisfaction, and retention.

Job Analysis According to prominent authors in the HR field (Cascio, 1991; Schneider & Schmidt, 1992: Heneman & Heneman, 1994, and Mathis & Jackson, 1994) job analysis is the process of studying jobs in order to gather and analyze information about the content of a job, the human requirement, and the conditions within which the job is performed. Furthermore, by breaking the job down into task and sub-task components the knowledge, skills, and abilities required to successfully perform the tasks can be identified.

Job analysis also links to performance appraisal and compensation by defining the performance standards and outcomes measured in the evaluation process (Cascio, 1991). However, as stated by Dobbins et al. (1991), the primary focus of traditional job analyses is on an individual employee level and, therefore, individuals are viewed as isolated units within the organization, each with individually defined responsibilities. By extending this perspective, one can see that selection and evaluation of employees is based on individual criteria.

This, then, would tend to pit one employee against another in an attempt to highlight individual performance during the competition for raises and promotions. It is this process that Deming argues is counterproductive to a team and system approach to quality output. Deming suggests that job descriptions should establish limits on performance variations instead of detailing specific tasks and duties. If an organization is dissatisfied with the level of an employee’s performance, management should then change the system to allow for increased performance.

Waldman (1994) suggests that organizations consider organizational citizenship behaviors (OCBs) as flexible job content for evaluation. In this context, OCBs are pro-social role behavior that enhance the group and organizational processes. Blackburn and Rosen (1993) continue this recommendation by citing how some Baldrige Award winning organizations have elements of job descriptions which include innovation, creativity problem solving, customer service competencies, and cross-functional work teams striving for quality, not quantity.

Finally, Cardy and Dobbins (1992) suggest that a job analysis should focus on a person’s ability to match (or fit within) the organization’s overall need for flexibility, change, innovation, and job cross-functionalism. Key questions concerning generic and flexible job descriptions need to be addressed. For instance, what types of industries, organizations, and jobs lend themselves to generic job descriptions? Would descriptions for routine, lower-level, line and staff positions need to very broad? And finally, can generic job descriptions work in a unionized environment?

Although no specific answers currently exist, there have been some encouraging signs recently. For example, Blackburn and Rosen (1993) report that union- management teams work together at Cadillac Motor Division, a Baldrige Award winning company, to determine efficient areas of cross-training for their employees. Performance Appraisal The traditional process of reviewing individual performance differences is conducted via the performance appraisal, with the usual assumption that a large percentage of variance in actual performance is due to person variables instead of system variables (Dobbins, Cardy, & Carson, 1991).

This approach assumes that employees differ in contributions to the organization and that these differences are due to the individuality of employees (Dobbins et al. , 1991). Most of Deming’s (1986) arguments against performance appraisals are directed at the assessment of performance variance based on individual criteria/ characteristics and not on those of the system. According to Deming (1986), approximately 90% of an individual’s performance variation is due to system defects, not employee variables.

System defects would include such items as defective machinery, management planning, lack of adequate resources, inconsistent working conditions, and faulty or inconsistent measuring criteria (Bannister & Balkin, 1990). Since these factors fluctuate randomly over time, Deming (1986) stated that measuring an individual’s performance at any moment in time is akin to a lottery based on random events. Deming further states that raters are typically incapable or unwilling to distinguish between person-caused versus system-caused performance variances.

Waldman (1994) states that current research in quality theory does attempt to show how system variables such as leadership, processes, job design, person/system fit, and situational constraints can affect an individual’s performance rating. Dobbins, Cardy, & PlatzVieno’s (1990) found that organizational variables moderate the relationship between appraisal characteristics and satisfaction. Additionally, Judge and Ferris (1993) found that subjective social factors such as the demographic similarity and the relationship between the supervisor and subordinate effect the performance rating.

These studies appear to lend support for Deming’s assertions that, not only are system factors involved in the performance appraisal process, but raters are either incapable or unwilling to acknowledge the influence of system factors, opting instead to manage by their feelings instead of by the facts (Blackburn & Rosen, 1991). Due to the lack of recognition of system factors, Bowen and Lawler (1992) state that performance appraisal represents the most significant area of conflict between current traditional HRM practices and the recommended practices of TQM proponents.

The conflicts between the two areas arise when HR practitioners attempt to merge TQM elements with traditional performance appraisal practices. For although quality measures can be a part of performance appraisal factors, the assignment of system defects as individual areas of correction violate TQM principles. Dobbins et al. (1991) point to Deming’s assertion that this false assignment of variance responsibility causes damage by encouraging managers to focus on correcting individual behavior instead of isolating and correcting problems within the system.

Dobbins et al. (1991) maintain that both the feedback and goal setting elements of typical performance appraisals focus on the worker as the source of performance variance. Although they note that higher degrees of feedback specificity and goal difficulty can produce higher demonstrated performance, the degree of measured performance increase relative to an individual would be nominal when compared to the possible increase in system performance, given an equal amount of management attention and energy.

Lawler (1994a) agrees with Deming’s assertions regarding the flaws of traditional performance appraisal, but is reluctant to discard them altogether. Instead he suggests that current practices can be modified to: 1) separate job performance appraisal from skill development and tie compensation to skill based pay, 2) eliminate merit, incentive, or pay-for-performance plans, and focus performance appraisals on performance only and 3) create fully or semi-autonomous teams responsible for selection, skill development, discipline and pay administration with supervisory oversight. Compensation and Reward Systems

Organizations typically design and implement compensation and reward programs as a means of focusing employee attention on specific behaviors that the Organization considers necessary to achieve its desired outcome or objective (Henderson, 1994). Accordingly, employees then receive compensation based on their individual Performance in comparison to some Preestablished objective. As previously discussed the assessment of individual performance to objectives is usually flawed. In response to this problem, Deming (1986) states that work standards, management by objectives, and numerical goals should be eliminated.

Since most individualized objective/incentive programs are based on expectance and/or reward theory, the assumption is that motivation to achieve the objectives increases when rewards and incentives are associated or linked with their achievement (Henderson, 1994). However, if the objective is the reduction of errors and the increase of quality, the consideration of system variance factors becomes an essential consideration in order to correctly reward individual performance. For according to Deming (1986), no amount of employee motivation, hard work, or objective setting can change the variance of system performance.

Given this reality, rewards are then distributed through a generally random process in which employees who just happened to function near a system component that function positively received a positive reward. Group gain-sharing is an attempt to create a compensation and reward system which can overcome some of the problems cited above and encourage teamwork (Osterman, 1994). In gain-sharing, group incentives encourage employees to be concerned about the group’s performance and to search for means of reducing cost while improving productivity.

For many organizations, gain-sharing can be coupled with a profit-sharing plan to create a sense of unity throughout the entire organization (Lawler, 1987). Pay-for-knowledge is also an attempt to recognize the limitations of pay-for-performance programs that review performance strictly within traditional job descriptions (Osterman, 1994). The pay-for-knowledge approach tends to encourage employees to gain a broader range of knowledge, skills, and abilities by the utilization of formal/informal training and cross-training.

By so doing, the employees typically gain a better undemanding of the overall organizational objectives. However, Bowen and Lawler (1992) warn that any compensation or reward system must encourage both team and group work in addition to quality improvements. SYSTEMS ENGINEERING APPROACH TO HRM Most HR professionals have no prior education or experience in systems analysis or engineering. Consequently, the concept of using a systems engineering approach in the implementation of TQM within HRM processes is, based on an information survey of over fifty HR professionals, generally considered to be foreign.

In a traditional systems design or analysis process, the recognition of three key areas is essential: a set of elements; a set of interactions; and a set of boundary conditions. In an HRM/TQM setting, the elements that would need to be recognized would be those activities, functions or people that were involved with both TQM and HRM programs. The interactions can be of any type and should not be considered as being restricted to a physical interaction (e. g. sharing information telephonically/electronically, project or department meeting minutes shared by mail).

The boundary conditions are the interactions between the elements and all other objects (internal or external to the organization) that produce some effect on the elements (singly or in combination). The boundary conditions can also be divided into subsets in order to recognize a specific influence or contribution (e. g. input/output, environmental conditions, etc. ) (Aslaksen & Belcher, 1994). The utilization of a systems engineering process drives the overt recognition and consideration of these three areas (Reilly, 1993).

The ultimate benefit of this process would be where HRM and TQM professionals are better equipped to address differing demands on their combined systems, policies, and processes and where efforts to improve the integration of TQM and HRM lead to greater efficiency, productivity, and employee satisfaction (Sage, 1992). The most significant drawback to utilizing a systems engineering approach to process improvement and management is the additional education and training necessary to equip participants and decision makers with sufficient knowledge, skill, and ability to utilize and manage a systems engineering process.

However, the downstream benefits of utilizing a systems approach should certainly outweigh the initial training costs. CONCLUSION The information reviewed for this paper strongly suggests that a broader approach be used when attempting to integrate TQM into HRM processes. And in order to achieve any reasonable degree of success. a systems perspective should be utilized. HR Managers are usually well aware of the importance of accurate job analysis. employee selection, performance assessment, and compensation management.

However, the relationship of these processes to achieving TQM objectives quickly becomes discordant when individualized job analyzes and evaluations are integrated with TQM measures and processes. The strength of current HRM process lies in their potential for modification and adaptation within a TQM framework. With the adoption and utilization of a systems perspective, performance criteria can be developed that will accurately reflect both individual and system performance variances.

Then, the distribution of financial (or non- financial) rewards will be more reflective of actual individual employee performance and less representative of a company lottery system. Additional research is needed in order to determine the if HRM/TQM program can demonstrate real benefits (e. g. reduction in activity cost, system or implementation errors, &/or time; and improved cooperation & understanding) by the use of a systems engineering approach.