MMZG 522 Total Quality

Management
Rajiv Gupta
BITS Pilani
August 2014
Lecture 7

Session 7
Module 1
Recap of Lecture 6

Module 2
Employee Involvement

Module 3
Motivation

Module 4
Performance Appraisals, Reward and Punishment

Module 5
Summary

Session 7
Begin Module 1
Recap of Lecture 6

Recap of Lecture 6
In lecture 6 we discussed
Improvement can be small, incremental,
breakthrough, or somewhere in-between
Companies need to be on the lookout to find ways to
improve, otherwise they risk being overtaken by
competition
Process charting is a useful technique to bring about
mid-level improvements in processes
Managing change is not easy
Managers need to understand that coercion and
appealing to logic alone is not enough to bring about
change

Recap of Lecture 6
In lecture 6 we discussed
Managers need to develop a critical mass of
influential people who believe in the change to
convince those who are neutral, to support the
change
Performance measures need to be carefully selected
so that they may be used to improve performance
Quality costs are appraisal costs, prevention costs,
internal, and external failure costs
Management needs to clearly understand the costs of
quality so that an appropriate value of quality may be
achieved
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Session 7
End of module 1

Session 7
Begin Module 2
Employee Involvement

Employee Involvement
In order to bring about any meaningful change,
and to sustain the change, employee
involvement is essential
There are several ways for getting employees
involved
Employee empowerment
Small group activities Quality Circles
Suggestion schemes

Employee Empowerment
Empowerment both of individuals as well
as teams is not well understood
Empowerment is not the same thing as
letting people do things by themselves
Empowerment is not delegation
Empowerment is a very powerful tool to
achieve high degrees of customer
satisfaction
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Employee Empowerment
Empowerment both of individuals as well
as teams is not well understood
Empowerment is not the same thing as
letting people do things by themselves
Empowerment is not delegation
Empowerment is a very powerful tool to
achieve high degrees of customer
satisfaction
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Empowerment
Empowerment cannot happen as a first step
Employees need to be handheld and
demonstrate that they have the professional
maturity to handle a variety of situations without
seeking supervisory or managerial intervention
Empowerment has to be within the context of the
mission, vision and value system of the
organization

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 Examples of empowerment
Employees can give customers a tank of gas
or an extra day of car rental if the customer
feels dissatisfied with the rental
Several hotels allow employees to offer
compensation in the form of special
amenities, room upgrades etc. in case of lack
of satisfaction with current service

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Empowerment
However, true empowerment cannot be
delegated. It has to come from within.
It happens when an employee feels that
he/she can assume personal responsibility
to accomplish a certain task.
It happens when managers stop
micromanaging and allow people to do
their jobs to the best of their abilities
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Small Group Activity

Small group activity grew out of the Japanese Quality
Circles that were introduced in Japan in 1960 by Kaoru
Ishikawa
It involves a small group of workers that meets during
working hours to solve a problem (or make
improvements) in their work area
Initially they may require training, especially in the use of
Quality Tools such as the fishbone diagram, Pareto
Chart, etc.
Later they may be able to work more independently after
they have learned the techniques and matured
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Suggestion Schemes
Suggestion schemes involve soliciting
suggestions from employees for solving
problems or making improvements
Although the manner in which suggestion
schemes are implemented vary, they
typically involve the suggestion being
reviewed by a team/committee and one or
a few of the suggestions being taken up
for implementation.
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Problems With Suggestion

Schemes
Several suggestion schemes have died an early
death because of lack of worker participation
Workers may not give suggestions because
They feel management does not care
Management may take too long to decide on which
projects will be taken up for implementation
Management may place too much emphasis on
quantified financial saving. Only suggestions with
large savings may be singled out for implementation.
Workers who have valuable ideas but which cannot
be monetized, may not participate
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Problems With Suggestion

Schemes
Workers may not give suggestions because
Individual workers may not offer suggestions covering
a group because the reward may have to be shared.
Monetary rewards for suggestions sometimes act as
deterrents to larger numbers of suggestions

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Overall Problems With

Employee Involvement
Management not understanding what is at stake or how
to go about involving employees
Management intentions are not entirely above board.
Some managers may use this to get workers to work
harder or longer
Monetary rewards often tend to kill any internal desire to
participate
Singling out individuals for rewards often kills any team
spirit or co-operation among workers
Management does not understand that it is quantity that
matters not savings when it comes to participation.
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Overall Problems With

Employee Involvement
Workers are expected to participate in group and
improvement activities on their own time, not on
company time.
Inadequate training is provided
Management does not understand how to motivate
employees Motivation will be covered in the next
module

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Session 7
End of module 2

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Session 7
Begin Module 3
Motivation

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Motivation
Although several managers seem to think they
know how to motivate employees, most
managers dont really understand what
motivates people
Most people seem to think that money, perks,
promotion, etc. are appropriate motivators
However, one has to dig a little deeper to really
understand what constitutes motivation

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Maslows Hierarchy of Needs

Self-actualization

Esteem

Social

Security

Survival
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Maslows Hierarchy of Needs

The hierarchy of needs illustrates what motivates a
person in a progressively increasing fashion
So, for a person, who does not have the basics of food
and shelter, his first need is survival. When that need is
met he looks for security. After that he looks to be
accepted as part of a social group, etc.
Once a person moves to a certain level of need, the
needs/inducements below those will stop being
motivators
So a person who is comfortable with his social
circumstances, will look for ways to get status, not
necessarily increase his social circle
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Maslows Hierarchy of Needs

In a work environment
Survival may mean a job that is reasonably well paying
Security may mean job security
Social may mean that he feels he is accepted as a part of the
social structure of the organization and the work groups
Esteem may mean status which may come from position or title
Self-actualization may come from being able to fully use ones
abilities to create something new or to make a difference to the
organization

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McGregors Theory X and

Theory Y
Managers are of 2 types
One type (Type X) believes that
The average human being has an inherent dislike of
work and will avoid it if he or she can
Because of the characteristic of dislike of work, most
people must be coerced, controlled, directed, or
threatened with punishment to get them to put forth
adequate effort toward the achievement of
organizational objectives
The average human being prefers to be directed,
wishes to avoid responsibilities, has relatively little
ambition, and wants security above all
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McGregors Theory X and

Theory Y
Type Y Manager believes that
The expenditure of physical and mental effort in work is
as natural as play or rest
External control and the threat of punishment are not
the only means for bringing about effort toward
organizational objectives. People will exercise selfdirection and self-control in the service of objectives to
which they are committed
Commitment to objectives is a function of the rewards
associated with their achievement. The most significant
of such rewards, the satisfaction of ego and selfactualization needs, can be direct products of effort
directed toward organizational objectives
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McGregors Theory X and

Theory Y
Type Y Manager believes that (contd.)
The average human being learns, under proper
conditions, not only to accept but to seek responsibility.
Avoidance of responsibility and lack of ambition are
generally the consequence of experience, not inherent
human characteristics.
The capacity to exercise a relatively high degree of
imagination, ingenuity, and creativity in the solution of
organization problems is widely, not narrowly,
distributed in the population
Under the conditions of modern industrial life, the
intellectual potentialities of the average human being
are only partially utilized
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McGregors Theory X and

Theory Y
A Type X Manager will typically use a carrot and stick
approach to motivate his people. The general results
of this is greater mistrust on the part of the people
which tends to further strengthen the belief of the
manager and the vicious cycle continues.
A Type Y Manager believes in the positive side of
workers and is better able to create a climate of trust
in which workers can develop to their potential. This
further reinforces the belief of the Type Y manager
and the virtuous cycle continues.

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Herzbergs Hygiene and

Motivator Factors
Frederick Herzberg postulated that job
satisfaction and job dissatisfaction are not
opposite sides of the same coin
Factors that cause dissatisfaction are not
such that their absence will cause job
satisfaction
Also factors that cause satisfaction are not
such that their absence will lead to job
dissatisfaction
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Herzbergs Hygiene and

Motivator Factors
Hygiene Factors
Company policy and
administration
Relationship with
supervisor
Work conditions
Salary
Relationship with peers
Personal life
Relationship with subordinates
Status
Security

Motivator Factors

Achievement
Recognition
Work itself
Responsibility
Advancement
Growth

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Herzbergs Hygiene and

Motivator Factors
The Hygiene factors are extrinsic to the
job and relate to the job environment
Herzberg refers to these factors as the
KITA factors (both positive and negative)
The Motivator factors are intrinsic to the
job itself

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Extrinsic and Intrinsic Motivation

Deming talks about intrinsic motivation as
being truly motivational
Extrinsic factors are important, but only to
the extent they do not cause
dissatisfaction
Story about the old man and the children

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Session 7
End of module 3

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Session 7
Begin Module 4
Performance Appraisals, Reward and
Punishment

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Performance Appraisals
Most companies have an annual performance
appraisal. Some may have semi-annual or
quarterly appraisals as well.
What is the purpose of the appraisal?

To determine merit pay raises

To determine who gets promoted/laid off
To give feedback
To determine training needs

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Performance Appraisals
Most appraisals do not work because
The focus is usually not on feedback in order to improve the
system
The main reason is to determine who gets a merit increase and
promotion
Most appraisals are not based on data, but recent memory of
performance, and tend to be biased
Most of the organizational performance is not caused by an
individual, but depends on the system, policies, and teamwork
Management is unable to differentiate between common cause
and special cause variation in performance

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Performance Appraisals
The focus is usually not on feedback in order to
improve the system
Appraisals are more about assigning blame or giving credit.
Very little attention is paid to systemic feedback
An annual, or even a quarterly cycle is too late for feedback.
A manager ought to be able to provide feedback as and
when required, not wait for an appraisal

The main reason is to determine who gets a merit

increase and promotion
Managers use appraisals to reward or punish employees
There are few winners and many losers. Morale suffers.
Most appraisers force fit people into an imaginary Normal
curve
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Performance Appraisals
Most appraisals are not based on data, but recent
memory of performance, and tend to be biased
Although people have annual/quarterly goals to meet,
consistent over- or under-performance is not evaluated over
a period of time
Generally the most recent performance prior to the appraisal
influences the decision
There is no uniform, calibrated method of appraisal. It
depends on the mood and disposition of the appraiser

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Performance Appraisals
Most of the organizational performance is not caused
by an individual, but depends on the system, policies,
and teamwork
There is a reason why organizations have functions,
departments and teams to accomplish the tasks
However appraisals are individual. Even appraisals of teams
are inappropriate as individual teams cannot function by
themselves
The ability to succeed is to a great extent influenced by the
system and policies. How can the organization blame an
individual for not being able to perform in the face of
company policies?

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Performance Appraisals
Management is unable to differentiate between
common cause and special cause variation in
performance
Most management does not adequately understand variation
and common cause and special cause of variation
Since data over time generally is not used, luck plays a
significant role in who gets evaluated as outstanding versus
unacceptable
Outstanding has a very different meaning from a statistical
perspective

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Variation
x Outstanding
point
x

Upper
Control
Limit

X bar
x

Lower
Control
Limit
x

Time

Outstanding
point

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Performance Appraisals
Demings 12th Point
Remove barriers that rob people in
management and in engineering of their right
to pride of workmanship. This means, inter
alia, abolishment of the annual or merit rating
and of management by objective.

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Session 7
End of module 4

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Session 7
Begin Module 5
Summary

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Summary of Lecture 7
Employee involvement is necessary to bring
about continued and consistent improvement in
performance
Some of the ways to involve employees include
empowerment, small group activities, and
suggestion schemes
Any method for employee involvement requires
clarity and sincerity on the part of management
Most management have misconceptions about
how employees can be motivated
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Summary of Lecture 7
Intrinsic motivation is more powerful and
sustainable as compared to extrinsic motivation
Performance appraisals are commonly done in
most organizations, but are quite ineffective
Management needs to change the entire
approach to performance appraisals and focus
on providing systemic feedback to improve
performance

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Session 7
End of module 5

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