CARCOM: THE TQM INITIATIVE

'Carcom' is a supplier of automotive safety components employing around 700 staff

which is located on two sites in Northern Ireland. The company was originally American
owned but after a joint venture with Japanese partner in the late 1980s, it was eventually
bought out by the latter.
The quality initiative began in 1988-89 with a five-year plan based on the Kaizen
philosophy, this concept having been picked up from the Japanese partner. This was
driven by senior management in response to what they saw as increasing customer
demand and operating considerations. The achievement of ISO 9001 registration in 1990
brought together processes carried out by departments which had previously been
undertaken in isolation. The company is now focusing on Kaizen with the principles of
improvement, customer delight, systems focus and participation. A range of quality
management tools and techniques are used. A TQM steering committee is responsible for
overall direction but there is also a further steering committee to oversee implementation
of the Quality Improvement Teams (QITs) as well as a full time coordinator. There are
teams of shop floor operators based on natural workgroups, and these tend to focus on
product problems and environmental issues (such as working conditions). In contrast,
Kaizen teams focus on process improvements (for example, die change) and problem-
solving workgroups are established in response to specific customer concerns (for
example, warranty claims).
Senior managers stress that a long-term approach is now being taken which is in contrast
to some of the programmers in the early 1980s. These former piecemeal initiatives
included quality circles which had been characterized by considerable changes in
personnel , with a number of champions having moved on leaving behind a flagging
initiative in contrast, the company is now taking time to get the processes right and
providing a central focus through quality for change. Cultural change is the aim but it is
recognized that only incremental progress can be achieved and that a supportive attitude
is required from management Thus, QIT members are given extensive training and are
encouraged to tackle problems which give early success and build teamwork, rather than
put pressure on teams to deliver immediately on big issues.

The Impact of the TQM Initiative

While it is still early days, the initiative is already felt to have had a major impact. The
management structure has been reduced by one layer, shop floor layout has been
improved, and scrap rates, stock, work-in-progress and inspection times have been
reduced, so too have the numbers of inspectors, whose role is now seen as one of
analysts. Employee response to these changes has generally been positive, and the
company as spent considerable effort in relating 'quality' directly to employees' work,
particularly through the use of measures which are displayed adjacent to the workstation
and maintained by staff themselves. The unions were assured that there would not be job
losses as a result of Kaizen, although they continue to have concerns about this and also
raise the issue of payment for changes in job roles - particulate in relation to SpC. The
company has adopted an open information policy to foster greater trust at the workplace,
and business-related issues are given greater prominence at the joint works committee
meetings. Management also believe that the quality initiative has led to a reduction in
union influences although this was not an original objective.

The Strategic Nature of the Human Resource Function

The human resource function has emerged from a welfare to a more strategic role in
recent years. This has been assisted by an MD who is regarded as a 'people' s person'
claiming that 'you can't divorce people from quality,' and by the appointment of a
personnel director to the boated together with a new industrial relations manager. This
has broadened the role of human resources and enhanced its status The appointment of a
training manager was significant, since under the previous regime little off-the-job
training was conducted. Training budgets have actually increased in volume and
monetary terms despite the company's recently recorded trading losses. Recruitment and
selection are becoming more sophisticated as the company wish to identify team workers.
The links between human resources and quality were made explicitly by the MD : "We
cannot separate HR from TQM, and without HR the QIP will not work effectively." In
addition to the issues mentioned above, the function was also seen as being important in
building the people aspect into the strategic quality planning process. Addressing the
problem of absenteeism, and supporting line management by helping to change employee
attitudes/organizational culture. In addition, the function has provided appropriate
training programmers for quality, in which there has been considerable investment in
time and resources, it has counseled the mentors to the QIT, and ensured that managers
communicate with staff by providing advice on the best means of doing this. Quality
principles are also being developed in relation to the human resource function, with
specific targets being set (for example, for absenteeism) as well as more general aims (for
example, on training).

Questions :
(a) Analyze the links between TQM and HRM with reference both to this case study and
more generally.
(b) What does the case study demonstrate about the contribution a personnel/HRM
function can make to the development of TQM in an organization ?
(c) How might the principles of TQM be applied to a personnel function ?
(d) What general implications does TQM have for industrial relation?
Question # 01

Analyze the links between TQM and HRM with reference both to this case
study and more generally.

Answer.

Total Quality Management (TQM) is now widely recognised as one of the major
innovations in management practice over the last decade. For the most part, however, the
principal contributions to the analysis of TQM and its operation have come from people
in the Operations Management area (for example, Oakland, 1989, Dale & Plunkett, 1990,
Dale, 1994). Arguably, this has led to a preoccupation with the so-called “hard”
production-orientated aspects of TQM as opposed to its “softer” Human Resource
Management (HRM) characteristics. This means that less attention has been focused on
people-management issues such as appropriate supervisory styles, compensation/payment
systems, teamwork, industrial relations and the implications for different managerial
functions.

The Economist Intelligence. Furthermore many of the problems arising appear to have
been those relating to Human Resource (HR) issues such as management style, attitudes
and culture. One possible explanation for this is that TQM has developed from a quality
assurance ideology and consequently focuses on the “hard” measurable aspects such as
costs and production/operation performance to the relative neglect of the so- called “soft”
aspects. Thus the limitations of TQM can be at least partially attributed to the neglect of
human resource policies in the organisation and a failure to align the HR policies with
TQM to ensure integration. These critical “soft” issues are apparent from most reports
and research yet remain relatively unexplored in comparison with the use of quality
management tools and techniques and quality systems.

TQM has been taken up by a number of HR writers who have seen it as an opportunity
for the function to play a strategic role. Until recently the personnel profession appears to
have been slow to see the implications for the function. This may have been because they
saw it as refashioned quality circles (with which they had negative experience) or more
likely because it was seen as essentially quality control/assurance and consequently
regarded as a job for operations managers (Wilkinson, Marchington, Ackers &
Goodman).

The past few years has seen both a shift in emphasis to human resource issues within the
quality area and the growing interest of personnel specialists. The former reflects two
factors. First, a shift from quality assurance to TQM with a consequent greater emphasis
being placed on issues such as employee involvement. Second, growing evidence which
suggests that TQM has major problems in the so-called soft areas and in particular
culture, involvement and communication. According to Cruise O’Brien and Voss:
Quality depends on broad based employee involvement and commitment. New
and innovative human resource policies were reported by managers in a number
of organisations, but these were not often related to quality. . . . Divorce of human
resources from quality, except in name, could seriously retard the spread of
quality through the firm.
This would appear to present the personnel function with a window of opportunity, even
if it has little involvement from the start of TQM. In this sense, the shift of focus to
human resource issues may not have come about at the behest of the personnel people but
because others have recognised a need for their involvement, albeit at a late stage. Thus, a
number of writers have begun to identify the opportunities which TQM might offer for
the function. Giles and Williams argue that “Quality has a high personnel content. It
gives strategic importance to policies and processes that personnel managers have
traditionally considered to be their own patch” and thus “quality management is pure
strategy on a plate waiting for some personnel input”.

In this case we generalized it as, The achievement of ISO 9001 registration in 1990
brought together processes carried out by departments which had previously been
undertaken in isolation. The company is now focusing on Kaizen with the principles of
improvement, customer delight, systems focus and participation. A range of quality
management tools and techniques are used. A TQM steering committee is responsible for
overall direction but there is also a further steering committee to oversee implementation
of the Quality Improvement Teams (QITs) as well as a full time coordinator. There are
teams of shopfloor operators based on natural workgroups, and these tend to focus on
product problems and environmental issues (such as working conditions). In contrast,
Kaizen teams focus on process improvements and problem-solving workgroups are
established in response to specific customer concerns. The links between human
resources and quality were made explicitly by tbe MD Training budgets have actually
increased in volume and monetary terms despite the company's recently recorded trading
losses. Recruitment and selection are becoming more sophisticated as the company wish
to idenfify teamworkers.

We cannot separate HR from TQM, and without HR the QIP will not work effectively.
Question # 02
What does the case study demonstrate about the contribution a
personnel/HRM function can make to the development of TQM in an
organization ?

Answer.

The case studies demonstrate about the contribution a personnel/HRM function makes
development of TQM in an organization or different sectors, size bands of employer and
regions throughout the world. These organizations were chosen so as to provide a diverse
mix of experiences, and not just those cases which were known as exemplars in the
quality field.
A variety of research methods were employed in order to obtain data from each
organization. This included the collection of documentary information both from
published and internal reports, and interviews with a range of staff from different
functions, including the Chief Executive/General Manager in most cases, as well as line
managers, personnel practitioners and (as appropriate) trade union representatives. We
interviewed around ten people in each organization of whom the vast majority were not
personnel practitioners. In the next section we draw upon the research findings from three
cases to illustrate the issues relating to TQM and the management of human resources.
These cases are drawn from manufacturing which is appropriate since this is seen both as
the best tested for TQM initiatives and also in so far as manufacturing companies are
usually regarded as the ‘mainstream’ companies for HRM. Hence manufacturing
provides a good basis to examine the interrelationship between TQM and HRM and our
three cases are chosen to reflect quite different patterns of existing HRM within
manufacturing — namely those of the automotive components supplier industry,
electronics and chemical industries. This therefore provides quite different starting points
and contexts for the development of TQM. A visit by the MD to a number of suppliers
convinced him that TQM was required as a vehicle for organizational change. From an
early stage, HR aspects were identified as central to the development of TQM
experienced over the years a number of short-lived initiatives (including quality circles)
introduced by a number of different managers. To show his commitment the MD
interviewed all staff (then over 300) on a one-to-one basis, with meetings ranging from
half an hour to over two hours. It was at this stage that the MD decided to appoint the HR
Director to champion TQM. This was for three main reasons. First, given that the
company was stressing communication, it made sense to place responsibility within the
HR function. Second, it was necessary that TQM should be seen as a much broader issue
than simply quality assurance, and it was felt that the wrong message would be given if
the Quality Department was given the responsibility for introduction. Third, given some
conflict and friction between different departments, it was important to have ‘Quality’
steered by what was perceived to be a neutral body — Human Resources.
Question # 03

How might the principles of TQM be applied to a personnel function ?

Answer.

The principles of TQM be applied to a personnel function can take a wide variety of
forms, ranging from direct downward communication from managers to other employees
or the seeking of employee opinions V via problem-solving groups through to high-level
meetings between directors and trade union representatives on Works Councils or
Company Boards. The subject matter equally can vary from the mundane to the strategic,
focusing on social and sports items through to high-level financial and commercial
information. The differentiates between employee involvements defined as:
Education, communications, customer care, as in all the case organizations.
Amended job responsibilities, hierarchically and at the same skill level, as at
Photochem.
Problem solving and the tapping of employee opinion, as at Electron.
Even though these are not radical in orientation, their successful operation depends to. A
large extent on the climate within which they are introduced, the motives and abilities of
managers to make them work, and their primacy in relation to other organizational goals
and objectives.

These former piecemeal initiatives included quality circles which had been characterized
by considerable changes in personnel , with a number of champions having moved on
leaving behind a flagging initiative in contrast, the company is now taking time to get the
processes right and providing a central focus through quality for change. Cultural change
is the aim but it is recognized that only incremental progress can be achieved and that a
supportive attitude is required from management Thus, QIT members are given extensive
training and are encouraged to tackle problems which give early success and build
teamwork, rather than put pressure on teams to deliver immediately on big issues.

Question # 04

What gereral implications does TQM have for industrial relation?

Answer.

Industrial Relations TQM seems to require wholesale organizational changes and a re-
examination of production/operations methods and working practices and this has
implications for industrial relations. The literature suggests that persuading workers to
take responsibility for quality assurance and improvement and adjusting traditional job
roles requires little more than a dose of motivation and training. However, these are
issues which (certainly in the manufacturing sector) involve questions of job control and
working practices and possibly compensation as well. At Photochem, for example, a
decision was made to ‘work with’ the stewards in introducing change rather than ignoring
or passing them. Industrial relations considerations may also be important where TQM is
associated with a programmed of job losses and work intensification. Furthermore, trade
unions may be concerned that TQM would marginalize the union as a communications
channel, Carom, at the same time strengthening the sense of commitment to what might
be seen as ‘managerial’ objectives.
All this raises the question of the role of the Personnel Department. Recognition of the
significance of HR issues in principle is by itself inadequate. In her classic work Legged
pointed out that:
Non-specialists, while formally recognizing the importance of effectively utilizing
human resources, lacking as they did the expertise to develop a systematic view of
what this entailed in terms of personnel strategies and actions, in practice tended
to underestimate the importance of the human resource variable in decision
making on issues that were not explicitly personnel management.
Hence, a personnel contribution is crucial to all full consideration of HR issues. Thus,
Giles and Williams suggest that TQM could either be a heaven sent opportunity for the
Personnel Functions (because of the human resource implications of TQM) or
alternatively actually lead to a diminishment of the function since such issues are deemed
to be too important to be left to Personnel! Yet as they rightly point out Personnel people
have much to offer quality management. They are guardians of key processes such as
selection, appraisal, training and reward systems, which get right to the heart of achieving
strategic change. Given conflict and friction between different departments as at Electron,
Personnel. also has the advantage of being seen as a ‘neutral’ function and has a better
chance of driving change forward in a less divisive way with fewer political wrangling.
The Personnel Function played a central role in all three case studies by helping to
develop and shape TQM. At Electron and Photochem the Personnel Function held most
responsibility for driving TQM, whilst at Carcom it played more of a facilitating role.