The European

Quality Award

Dr. Maricel Correa Galang

The aim of including a section about the European Quality Award is
to give companies an operational tool. This tool can be applied in
the education of internal management as well as in the internal
auditing process. Many companies, of course, already have a
management education programme, but it is only rarely that such a
programme builds on a joint description (model) of what signifies
good management.
Such a model is included in the assessment material for the
European Quality Award which thus gives an obvious opportunity of
creating an educational programme in a balanced way which is also
internationally recognized. This way of approaching education has
gradually become more recognized, e.g. Renault, the large European
car manufacturer, built its management education systematically
upon the model of the American Quality Award (Malcolm
Baldridge) and at the University of Kaiserslautern they have
consistently built their two-year master programme in TQM upon
the model for the European Quality Award.
 The Background To The
European Quality Award

The European Foundation for Quality Management (EFQM) awards the

European
Quality Award to an applicant who:
has demonstrated that their effort in the TQM area has contributed
considerably to satisfy customers’ and employees’ expectations and also
those of others with interest in the company in recent years. An award
winner is a company who enlightens the European market place. It can be
of any size or type, but its excellence through quality is a model to any
other companies which can measure their own quality results and their own
effort to obtain current improvements.
 The Model
The model for the European Quality Award is given in Figure 6.1.
It appears that the model consists of nine elements grouped in two halves, one of
which comprises the enablers of the company and the other the results.
The interesting thing about the model is the fact that it comprises both the enablers and
the results. Through ISO 9000 many European companies have gradually become
acquainted with the assessment of parts of the enablers of quality management and of
course they are also familiar with the assessment of parts of the results (the business
results). However, there is no tradition that the two areas are assessed as a whole and in
the same detail as shown here. Furthermore, it is interesting that an exact weight is stated
for each single element of the model. These weights can of course be discussed and may
be changed as time goes by. The assessment reflects the general perception of what
characterizes leading TQM companies. In the following section each single element of
the model is explained including also the detailed areas of every element which will later
form the basis of the actual assessment.
 Criterion 1 : Leadership

How the behaviour and actions of the executive team and all other leaders
inspire,
support and promote a culture of Total Quality Management.
Criterion parts:
1a. How leaders visibly demonstrate their commitment to a culture of Total
Quality Management.
1b. How leaders support improvement and involvement by providing
appropriate resources and
assistance.
1c. How leaders are involved with customers, suppliers and other external
organizations.
1d. How leaders recognize and appreciate people’s efforts and achievements.
 Criterion 2: Policy and strategy

How the organization formulates, deploys, reviews and turns

policy and strategy into
plans and actions.
Criterion parts:
2a. How policy and strategy are based on information which is
relevant and comprehensive.
2b. How policy and strategy are developed.
2c. How policy and strategy are communicated and implemented.
2d. How policy and strategy are regularly updated and improved.
 Criterion 3: People management

How the organization releases the full potential of its

people. Criterion parts:
3a. How people resources are planned and improved.
3b. How people capabilities are sustained and developed.
3c. How people agree targets and continuously review
performance.
3d. How people are involved, empowered and recognized.
3e. How people and the organization have an effective
dialogue.
 Criterion 4: Resources

How the organization manages resources effectively and

efficiently.
Criterion parts:
4a. How financial resources are managed.
4b. How information resources are managed.
4c. How supplier relationships and materials are managed.
4d. How buildings, equipment and other assets are managed.
4e. How technology and intellectual property are managed.
 Criterion 5: Processes

How the organization identifies, manages, reviews and improves its

processes.
Criterion parts:
5a. How processes key to the success of the business are identified.
5b. How processes are systematically managed.
5c. How processes are reviewed and targets are set for
improvements.
5d. How processes are improved using innovation and creativity.
5e. How processes are changed and the benefits evaluated.
 Criterion 6: Customer satisfaction

What the organization is achieving in relation to the

satisfaction of its external customers.
Criterion parts:
6a. The customers’ perception of the organization’s
products, services and customer relationships.
6b. Additional measurements relating to the
satisfaction of the organisation’s customers.
 Criterion 7: People satisfaction

What the organization is achieving in relation to the

satisfaction of its people. 7a. The people’s perception
of the organization.
7b. Additional measurements relating to people
satisfaction.
 Criterion 8: Impact on society

What the organization is achieving in satisfying the needs and the expectations of
the
local, national and international community at large (as appropriate). This includes
the
perception of the organization’s approach to quality of life, the environment and the
preservation of global resources, and the organization’s own internal measures of
effectiveness. It will include its relations with authorities and bodies which affect
and
regulate its business.
Criterion parts:
8a. Society’s perception of the organization.
8b. Additional measurements of the organization’s impact on society.
 Criterion 9: Business results

What the organization is achieving in relation to its planned

business objectives and in
satisfying the needs and expectations of everyone with a
financial interest or other stake
in the organization.
Criterion parts:
9a. Financial measurements of the organization’s performance.
9b.Additional measurements of the organization’s performance.
 ASSESSMENT CRITERIA

Generally speaking, assessment of the above elements is

made in the same way as at a
skating competition: scores are given both for artistic
impression and for technical
performance. The principle is illustrated in Figure 6.2.
The exact assessment is carried through as indicated below
as the score given within
each part area as an average of the artistic impression and
the technical performance.
 ENABLERS

Scores are given in each part of the enablers criteria on the

basis of the combination of two
factors:
1. the approach chosen;
2. the deployment and extent of approach.
 RESULTS

Scores are given for each of the results criteria on the basis
of the combination of two
factors (Table 6.2):
1. the degree of excellence of the results;
2. the scope of the results.
 EXPERIENCES OF THE
EUROPEAN QUALITY AWARD

The European Quality Award was awarded for the first time in
1992.The Award was applied for by approximately 150 companies
which were evaluated by a specially trained assessment committee
according to the above principles. The result of this assessment made
as average scores for all applicants is shown in Figure 6.3. It appears
from Figure 6.3 that there are three areas which were assessed
relatively high, namely people management, the management of
resources and business results, while three other areas are assessed
rather low, namely people satisfaction, customer satisfaction and
impact on society. The average scores lie in the area from around 425
to 510.
Whether the scores found are good or bad, we cannot say,
as we have no basis for
comparison. However, we can raise the question whether
the companies have adapted
themselves to the weights in the model. If an area of the
model is considered to have a
high weight, we must expect that high scores are also
obtained in this area. To what
degree this is the case is shown in Figure 6.4.
From Figure 6.4 it appears that by and large there is no
relation between the scores obtained and the weights of the
areas. This can be expounded in two ways. Either the
companies disagree on the weights expressed by the model.
In that case there will be some auditing work ahead.
Another exposition is that the companies in Europe are
very far from the ideal situation expressed by the model.
No matter whether one or the other of these expositions is
correct, it gives food for thought that customer satisfaction,
which is the area valued highest in the model, scores so
relatively poorly as is the case here. No doubt this shows
that European companies have a long way to go before the
TQM vision becomes a reality.