INTEGRATING HR PRACTICES IN A TQM ENVIRONMENT

Author

K. Sharath Babu
Associate Professor, Dept. of Management Sciences,
Balaji Institute of Technology & Science (BITS), Warangal, Andhra Pradesh.

Guduru Naresh
Assistant Professor, Dept. of Management Sciences,
Balaji Institute of Engineering & Science (BIES), Warangal, Andhra Pradesh.

B. Raj Kumar
Assistant Professor, Dept. of Management Sciences,
Balaji Institute of Technology & Science (BITS), Warangal, Andhra Pradesh.

ABSTRACT

The global focus on quality, combined with increasing costs of materials, equipment,
labour and training, are driving the implementation of TQM as a competitive strategy in all
types of organizations. These forces for change also provide an opportunity for an expanded
role of human resource management in making TQM succeed. Quality can no longer be
viewed as the responsibility for one department. It is a company-wide activity that permeates
all departments, at all levels. The key element of any quality and productivity improvement
program is the employee. Consequently, employee commitment to a TQM program is
essential. Because of its fundamental employee orientation, HRM should seek the
responsibility for implementing TQM programs rather than risk losing their influence over
the key element of TQM -- the employee. This paper is a modest attempt to discuss the
concept of TQM in HR practices in integrating the same for the sighted benefits of the
organizations.

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1. INTRODUCTION

Total Quality Management (TQM) is an approach to the art of management that

originated in Japanese industry in the 1950‟s and has become steadily more popular in the
west since the early 1980‟s. Total Quality is a description of the culture, attitude and
organization of a company that aims to provide, and continue to provide, its customers with
products and services that satisfy their needs. The culture requires quality in all aspects of
the company‟s operations, with the things being done right first time, and defect less
operations. TQM is an effective system for integrating the quality development, quality
maintenance and quality improvement efforts of various groups in an organization so as to
enable marketing, production and service at the most economical levels that allow for full
customer satisfaction. TQM also guides the coordinated actions of people, machines and
information to identify and fulfill customer quality requirements.

The role of human or employees at work place is changing as business and

technology have changed over the years. Prior to the Industrial revolution, skilled people
had a major stake in the quality of the products produced and they were motivated by pride
in their work as well as the need for survival. Later in the era of scientific management
productivity is achieved by focusing on work methods design, the establishment of
standards for daily work, selection and training of workers.

There are many ways to improve productivity either by proper use of resources or by
effective utilization of systems or process such as Automation, Motivating work force,
Effective control of processes, Implementing MIS, Better work methods, On job training,
Improved working conditions, Quality circles, Supply chain management, Updating
technology, Total Quality Management, Business process Re-engineering, ISO series
certification etc., Hence, according to Taylor‟s system philosophy, people are part of the
process, the process needs to be controlled externally to be productive and Managers have
to control carefully what people do.

2. STEPS FOR EFFECTIVE MANAGEMENT OF QUALITY

For any organization there are many key elements that affect quality. Effective
managers must be able to identify these elements such as people, facilities and materials
and seek to understand how they affect quality in their firm. So the managers have realized
and started understanding about the present Human Resource Practices through a new
dimensional thinking and observed that people and design can improve the processes, so
the workers who run the process must control it and mangers must obtain the commitment
of people to design, control and improve processes so that they will be productive that
which leads to higher quality, lower costs, less wastage, increased capacity, reduced
employee turnover and absenteeism, faster implementation of change, greater human skills
development and better individual self esteem. In this context the Total Quality
Management has caused business to concentrate more closely at the human side of work.
As per the Deming‟s philosophy, “No organization can survive without good people i.e.
people who are improving and businesses are beginning to learn that customer satisfaction
can be achieved only by satisfying employees”. Hence, the organizations are supposed to
initiate on the following steps for effective management of „Quality‟ they are:

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  The managers must first determine how quality fits into the overall
organizational strategy.
 He or she must determine the role that quality will play in the manufacturing
strategy.
 The approach used in production or operation should complement the overall
strategy of the organization.
 The quality theme must be clarified, it is essential that individuals at all levels
with in the organization comprehend quality goods.

3. HRM and TQM

The Human Resource is a resource that competitors cannot copy and the only one
that can synergize the abilities of any organization. TQM is a system approach to quality
management and refers to complete commitment to quality of all spheres of the
organization. In total, TQM stands for an overall integrated approach to all aspects of
quality, all domains of system including organization, people, resources, time,
hardware/software and even management commitments. In the process of TQM all the
managers are responsible for quality even though their organizations may have quality
professional and all managers are responsible for human resources, even if the organization
has HR manager. Developing skills through training and coaching, promoting team work
and participation, motivating and recognizing employees and providing meaningful
communication are eight important HR skills that all managers embrace for total quality to
succeed. Therefore understanding HRM practices is a must for a total quality environment
and a critical task for all managers.

In Traditional organizations, HRM functions were limited to identify, prepare, direct

and reward employees as where in TQ organizations HRM units develop policies and
procedures to ensure that employees can perform multiple roles, improvise when necessary
and direct themselves towards continuous improvement of both product quality and
customer service. A successful TQM environment requires a committed and well-trained
work force that participates fully in quality improvement activities. Such participation is
reinforced by reward and recognition systems, which emphasize the achievement of quality
objectives. On-going education and training of all employees supports the drive for quality.
Employees are encouraged to take more responsibility, communicate more effectively, act
creatively, and innovate. As people behave the way they are measured and remunerated,
TQM links remuneration to customer satisfaction metrics.

TQM is a way of life for a company. It has to be introduced and led by top
management in all spheres of management. Attempts to implement TQM often fail because
top management doesn„t lead and get committed – instead it delegates and pays lip service.
Commitment and personal involvement is required from top management in creating and
deploying clear quality values and goals consistent with the objectives of the company, and
in creating and deploying well defined systems, methods and performance measures for
achieving those goals. These systems and methods guide all quality activities and
encourage participation by all employees. The development and use of performance
indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to
management and employee remuneration. Thus, the HR function of an organization should
be integrated with quality aspects to ensure a greater level of human productivity, in turn
the organizational effectiveness.
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4. TQM BASED HRM PRACTICES IN AN ORGANIZATION

The HR department, while applying the TQM issues would identify the expectations
of senior management, principal internal customer and spearheading the TQM program's
implementation on the basis of those expectations. TQM in practice for HRM might also
mean periodic surveys, both formal and face-to-face, to monitor senior management's levels
of satisfaction as the TQM process unfolds. The effective use of quality improvement teams,
and the TQM system as a whole, can be reinforced by applying basic principles of
motivation. In particular, the recognition of team accomplishments as opposed to those of
individuals, and the effective use of goal setting for group efforts, are important in driving the
TQM system. The HR department should be in a position to help institutionalize team
approaches to TQM by designing appraisal and reward systems that focus on team
performance.

Human resource management can play its role very easily in implementing and
maintaining a total quality management process. HR managers are responsible for recruiting
high-quality employees, the continual training and development of those employees, and the
creation and maintenance of reward systems. Thus, TQM controls processes that are central
to achieving the dramatic cultural changes often required for TQM to succeed. Tailoring the
TQM cultural development program to the firm's circumstances is essential in overcoming
resistance to change and moving beyond simple compliance toward a total commitment to
TQM.

In developing TQM training programs, efforts should be aimed at an integrated

approach to the instruction process. Training objectives should be directed at helping
employees reach the goals set forth for their individual jobs and the overall goals of the
organization. Many companies have difficulties in implementing TQM. The Surveys
conducted by consulting firms have found that only 20-36% of companies that have
undertaken TQM have achieved either significant or even tangible improvements in quality,
productivity, competitiveness or financial return. However, when we look at successful
companies we find a much higher percentage of successful TQM implementation in HR
that strongly focuses on process measurement and controls as a means of continuous
improvement in the organization to gain competitive advantage in today‟s business world.
Some of the HRM practices based on TQM perspective are given in the following lines for
better understanding.

 Communicating the importance of each employee‟s contribution to Total Quality.

 Stressing quality related synergies available through team work.
 Empowering employees to “make a difference”.
 Reinforcing individual and team commitment to quality with a wide range of reward
and reinforcements.
 Integrating HR plans with overall quality and operational performance.
 Using suggestions and recognition systems to promote involvement and motivate
employees.
 Involving all employees at all levels in the organization.
 Empowering individual and team to make decisions that affect quality and customer
satisfaction.
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  Making extensive investment in training and education.
 Maintaining a work environment conductive to the well being and growth of all
employees.
 Monitoring the extent and effectiveness of human resource practices and measure
employee satisfaction as a means of continuous improvement.
 Breaking down barriers between department and individuals.
 Eliminating work standards and numerical quotas.
 Defining top management‟s permanent commitment to ever improving quality and
productivity.
 Focusing on customers' needs.
 Making continuous improvements: seek to meet customers' requirements on time, the
first time and every time.
 Applying the team approach to problem solving.

5. A CASE STUDY – TQM AND HRM AT THE MERCADONA

From a struggle for survival to a position of leadership, TQM road taken by

Mercadona, the leader in Spain‟s supermarket sector and the country‟s second-fastest
growing food distribution chain (Wal-Mart is first) is discussed in this case. In 1990s, through
its president‟s decision as an approach that has differentiated Mercadona from other
companies and provided it with a competitive advantage. This approach can help companies
confront the turbulent, rapidly changing environment that all organizations are facing,

TQM involve that enable management to take a multidimensional approach and look
for excellence along the company‟s entire chain of value creation. Companies do that by
maintaining a clear focus on the market and the customer, and by emphasizing total service
quality.

Introducing TQM is the direct responsibility of senior management. The fundamental

components of TQM are “an orientation toward the external customer and stakeholders;
internal cooperation and teamwork; leadership; commitment by management; management
by processes and systems; information-based management; orientation toward people and to
the internal client; apprenticeship; innovation and continuous improvement; developing
partnerships; external cooperation; and a focus on ethical behavior.

Mercadona is an outstanding example of TQM because the company has developed

the model with a series of characteristics that are practically unique. Applying the model, the
company has met a profound transformation and TQM has capitalized the company into an
elite position in the marketplace, one in which Mercadona, an integrated family-owned chain
provider of food and personal hygiene products, operates large supermarkets ranging from
1,000 to 1,200 square meters. Before Mercadona implemented TQM, it went through some
hard times.

5.1 THE TRANSFORMATION PROCESS

In 1981, Juan Roig, son of the company‟s founder, took control of the company,
transforming it from a small chain with several stores in and around Valencia, Spain, into a
larger company active in other parts of the country. This expansion coincided with the overall
growth of the supermarket sector in Spain. The growth was propelled by urbanization of the
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population and the incorporation of women into the labor markets. Growth, in turn, inspired
other competitors from elsewhere in Europe to enter Spain.

During the 1990s, ownership of the Spanish supermarket sector became concentrated
in the hands of chains run by foreign multinationals, and the industry matured. Competition
increased and margins narrowed. It was a period of turbulence and change. To address this
situation, Mercadona began to adjust the prices it paid suppliers and to undertake aggressive
advertising campaigns aimed at promoting the products in its supply chain. However, this
approach did not lead to the expected results. Mercadona was selling more, but it was making
less and less money.

In an effort to change the entire dynamics of the sector, Roig decided to enact the
Total Quality Management model in 1993. Mercadona‟s business strategy was summed up in
the motto: “always low prices.” Mercadona cut its advertising expenses, canceled all of its
offers to consumers and committed itself to always selling at the same low price. It began to
change its relationship with suppliers, moving from being a tough negotiator to a company
that was loyal to its suppliers and paid them stable prices over a period of years. Mercadona‟s
main goal was to protect itself against so much turbulence by setting up a model that was
different, original, and novel within the sector. The model involved achieving stability, not
only in its pricing but in its relationships with suppliers and with its workforce -- all in an
effort to achieve a permanent customer base.

It took a long time to get results. Although Mercadona practically doubled its sales
within four years, profits continued to fall. Despite everything, Roig was resolute in his
strategy, and in 1995, people began to see a clear improvement. The company hurtled itself
forward in a spectacular process of change that was fundamentally organic. It spread like
wildfire and [Mercadona] became one of the leading supermarket chains in terms of market
share and profits. Now Mercadona has more than 60,000 employees in more than 1,100
supermarkets scattered almost everywhere around Spain. In 2007 Mercadona earned net
profits of €336 million and achieved an annual growth rate of 25.2 percent.

Hence Mercadona‟s management believed that the TQM model has been the key to
these growth figures so that company wanted to extend the TQM toward satisfying the needs
of all of its stakeholders: customers, employees, suppliers, society, and capital. Amidst of all,
the company found that the employees are the very important source to see the success of
their TQM strategy.

5.2 COMMITMENT TO ITS WORKERS

Mercadona‟s workforce is another pillar of the TQM model, which involves getting
workers to adjust to a working environment where quality, ranks highest as a priority. The
company does this by requiring a minimum of an eighth-grade education. Workers have to
take exams that test their cultural knowledge. They must undergo testing that involves
psychological response tests, interviews and group dynamics. Before they can even begin to
work, they receive nine weeks of training about the TQM model, and they are trained in the
culture of Mercadona. The training continues throughout their career with the company,
continuing to develop their skills. All this is complemented by an internal promotion policy
that makes it easier for workers to identify with Mercadona.

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 The average salary at Mercadona is a lot higher than the average in the sector. In
addition, when it comes to Human Resources policy, TQM involves making a strong effort to
accommodate workers‟ personal and family lives to their careers as workers. As a result,
Mercadona has achieved a significant reduction in its rates of absenteeism and employee
turnover, which are usually very high in that sector. The company has also made noticeable
improvements in the productivity of its workforce.

However each worker learns a half hour beforehand about the function that he or she
must perform each day. This decision is based on such variables as the number of customers;
needs for [product] replacement; and the personnel currently available in that store. Workers
also know, a full month beforehand, what their work schedules are going to be. This makes it
easier for them to organize their private lives.

On the other hand, in a sector where temporary work relationships usually

predominate, the entire staff at Mercadona enjoys a stable work contract of indefinite
duration. Company policy also assigns each worker to the supermarket closest to his or her
home; provides workers with payments worth 100% of their salaries if they become
physically disabled; and provides support for families in those cases where an employee has
died.

TQM model‟s main challenges are to introduce programs and develop tools that make
it possible for everyone involved (customers, workers, and so forth) to satisfy their needs. For
all that the model has enabled Mercadona to achieve competitive advantages over its
competition; globalize the orientation of its strategy and business culture; and deploy a
coherent tool for decision making. Every decision taken within corporate headquarters needs
to reflect the TQM model clearly, companies in other sectors need to make adjustments when
they try to implement the TQM model. However, there are valid reasons to think that TQM is
a viable approach.

Despite the strengths of the TQM model, Mercadona will continue to face challenges.
One of these challenges will be how to get started outside Spain. The company is currently
considering plans for expanding in international markets, but the details have yet to be
spelled out. Beyond that challenge, because Mercadona is a family-owned company, it will
have to deal with the problem of succession and how the company will continue [to be
owned] in future generations.

At the end it can be concluded that the company‟s main strength, the human resource
could mingle with the process of TQM and yielded standardization and ensured the lower
level of work-life-balance to the work force that led the company a greater success.

6. CONCLUSION

Organizations with a solid reputation for providing high customer satisfaction have to
consistently take care of the smaller duties as important as in the larger concerns. So they
need to attempt to instill an overall quality philosophy across the company, including HRM
that can emphasize consistent quality in all operations. Not only that, the day-to-day delivery
of basic HR services can be just as important as developing strategic programs that may have
higher visibility and supposedly greater long-term consequences. As a guardian of such
functions in terms of recruitment and selection, training and development, performance
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evaluation and reward systems, the HR professional strive hard to take charge of the
important functions related to TQM strategy. The full potential of the entire work force must
be realized by encouraging commitment, participation, teamwork, and learning. HRM is best
suited to accomplish this by modeling the qualities. Hence, the HR departments should try
to sustain the long-term TQM process company-wide to improve state of the HR department
in the eyes of others that are traditionally more influential departments on the bottom-line of
the organizations.

REFERENCES

1. Crosby, P.B. Quality is Free, New York: McGrawHill, 1975.

2. Juran, J.M. Juran‟s Quality Control Handbook, 4 th Edition (NewYork; McGrawHill,
1988).
3. Elwood. S.Buffa, Rakesh K.Sarin, “Modern Production & Operations
Management”, Willey, 2002.
4. J.N. Kelada, 1996, “Integrating Reengineering with Total Quality”, quality press,
Wisconsin.
5. Shailendra Nigam, “Total Quality Management an Integrated Approach”, Excel
Books, New Delhi.
6. Singh Gangaram, Nandagopal R, Priyadarshini R.G., “Strategic Human Resource
Management in a Global Economy”, Excel Books, New Delhi.
7. Thomas Packard, “TQM & Organizational Change & Development”, DSW

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