Sustaining quality in the UK public sector. public sector

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1 The research register for this journal is available at The current issue and full text archive of this journal is available at Quality measurement frameworks Rodney McAdam, Renee Reid and Robbie Saulters University of Ulster, Belfast, UK 581 Keywords Quality, Public sector, Performance measurement Abstract The principles of TQM are becoming increasingly important in the due to demands for increased levels of stakeholder satisfaction and government cost reduction and performance programmes. The aim of this paper is to investigate how the principles of total quality management (TQM) are being sustained in the UK by contributing to improved performance levels. Six quality frameworks, which incorporate to various degrees the principles of TQM and which are applied in organisations, were chosen for the study. The research methodology involved focus groups, a survey questionnaire and semi-structured interviews. The questionnaire response rate was 62 per cent, involving 163 organisational responses. The results indicate that quality frameworks play a key role in improving organisational performance over time. Furthermore, the business excellence model (BEM) and Investors in People (IiP) model were seen as providing a suitable range of improvement mechanisms and performance measures which were relevant to the. Introduction There is a continuing emphasis on cost reduction and improved customer service within the UK, as successive governments seek to control public expenditure and improve value for money (Sanderson, 1996). The resultant large scale changes and demanding performance targets raise a number of questions: What improvement methodologies can organisations use to address these changes? What performance measures need to be identified and used, with suitable targets and comparison with best practice. In seeking to address some of these issues this paper investigates the use of quality frameworks in the, and their role in organisational improvement and performance measurement. The frameworks covered were those currently in use, namely the business excellence model (BEM), Investors in People, ISO 9000, benchmarking, charter mark and the balanced scorecard. The overall aim of this paper is to investigate how the principles of total quality management (TQM) are being sustained in the by contributing to improved performance levels through the use of quality frameworks. The initial part of the paper briefly summarises the role of quality frameworks and performance measures in the. This section is followed by the research methodology and results and discussion relating to International Journal of Quality & Reliability Management, Vol. 19 No. 5, 2002, pp # MCB UP Limited, X DOI /

2 IJQRM 19,5 582 quality frameworks in the ; finally some conclusions are drawn in regard to the aims of the research and the paper. Quality in the performance measures One of the key determinants of any improvement effort or development of a related performance measurement system is that of the interests of voters/ taxpayers (Jackson, 1995). This factor distinguishes the from the private sector, which is driven more by shareholders and customers. Recent changes have increased the s accountability to both parliament and the public. The establishment of performance targets has been a key factor in the drive to improve the quality of service and value for the taxpayer. Effectiveness is the extent to which customer requirements are met, while efficiency is the measure of how the organisation s resources have been used in providing customer satisifaction (Neely, 1998). The range of measures used in the must include financial and non-financial (Johnson and Kaplan, 1991). These categories of measures must be aligned. However, problems exist as suggested by Meekings (1995), who stated that managers: ``don t know what they don t know. This lack of knowledge coupled with pressure for change has led Jenkins et al. (1988) to suggest that there is still considerable resistance to performance measurement based change in the. Neathy and Suff (1997) suggest that an incorporated performance measurement system must focus on all stakeholders within the. The Federal Government in the USA use this approach where benefits include alignment of improvement efforts and dissemination of best practice (Lowery, 1998). There has been a series of performance measurement initiatives to improve the quality of provision (e.g. HMSO, 1982; Jenkins et al., 1988; Massey, 1995; David, 1991). Inherent integrated performance measures based on qualitative and quantitative measures are used in these approaches. The more recent emergence and development of ``best value (DETR, 1998) is an overarching framework for performance measurement in the. Within the concept of ``best value, and wider performance improvement, quality frameworks are seen as crucial to implementing and sustaining improvement (Lewis, 1998; Halachmi and Bovaird, 1997). The government white paper coupled with continued commitment to improving public services have explicitly highlighted the importance of service quality as a key success factor in relation to government thinking in regard to the public sector. The white paper makes it clear that this all embracing concept provides a framework for all management change within a total quality philosophy involving people, processes, structures and culture. Thus, in many respects, quality is an ``umbrella programme for improving performance. In the following section some of the key quality frameworks used in the public sector are identified and briefly critiqued.

3 Quality frameworks in the UK Prelimary focus group findings, consultation with managers and personal experience indicated that some of the key quality frameworks in the are: the business excellence model (BEM), Investors in People (IiP), charter mark, ISO 9000, the balanced scorecard and benchmarking. This list is highly abbreviated for research resource purposes. For example, reengineering has not been included as it has been studied before in this context. The business excellence model The BEM has successfully been been applied in the as long ago as 1996 when it was identified in the cabinet office benchmarking project (now excellence project). The model shows causal links between enabling and result based activity. It also has an integrated set of performance measures, both qualitative and quantitative, financial and non-financial. Use of the BEM, adapted for use in the, continues to increase with over 60 per cent of agencies, 120 local authorities and over 2,000 schools using the framework. Investors in People (IiP) Key benefits of using the Investors in People framework within the public sector as listed by the Cabinet Office (1999) includes: increased empowerment, planning and innovation. Within the framework there is a performance measurement framework, linking people performance to organisational outputs (Taylor and Parkinson, 1998). Charter mark The aim of the charter mark framework is to encourage and reward improvement in public services. The key focus is on the customer and the quality of service that the customer receives. There is a ten point performance measurement system. Key claimed benefits (HMSO, 1999) are improving quality, dissseminating good practice and improving measurement of customer related activities. ISO 9000 Lowery (1998) in a study of ISO 9000 in the US Federal Government concluded that ISO 9000 had a significant role to play in the US National Productivity Review by giving certification to improvement efforts. Claimed benefits of ISO 9000 in the (Moreland and Clark, 1998) also include more rigorous systems and operational measurement, while critics argue that increased bureaucracy and decreased flexibility are harmful effects resulting from ISO Benchmarking The has used benchmarking frameworks, formally and informally, for some time. However, there is a paucity of in-depth benchmarking studies in 583

4 IJQRM 19,5 584 the which demonstrate the full potential of benchmarking. Zairi and Wymark (2000) and Camp (1989) indicate that business process based benchmarking and more generic benchmarking can benefit process performance and key performance targets. Specifically, the Cabinet Office benchmarking project has now been renamed the Cabinet Office excellence project. This project promotes the excellence model and the intrinsisc benchmarking within the through comparisons of enabler and result scores and practices. Ultimately, the aim of this project is to close gaps in performance measurement. The balanced scorecard The balanced scorecard is essentially a strategic measuring framework including customer, internal process, innovation and learning and financial perspectives. Although applied successfully, mainly in the private sector, the potential for benefit in the is considered to be even greater (Kaplan and Norton, 1996). Feedback from US Federal Performance Measurement Action Teams (PMAT, 1994) indicates that benefits of the scorecard include: ``focuses on high impact measures... easy to use, it is balanced and puts the emphasis on prevention rather than detection. Research methodology The key research questions, as derived from the aims of the paper, are: Are quality frameworks, as applied in the, leading to improved longitudinal performance? How are the frameworks perceived in terms of usefullness when compared with each other? Is there a distinctive preferred approach? An exploratory research approach (Remenyi et al., 1999) has been adopted because of the paucity of research in this area. The research methodology involved three aspects. First, focus groups (Easterby-Smith et al., 1991) were used with representative focus groups, composed of senior managers representing a cross-section of the as shown in Table I. The data from these groups enabled tentative conclusions to be drawn in regard to the research questions and also helped in developing the survey questionnaire. Sector Sample size Table I. Breakdown of postal survey sample Non departmental public bodies 74 Agencies 39 Government departments 25 National health service 51 Education 41 Local authority 36 Total 266

5 Secondly, a questionnaire was developed in relation to quality framework longitudinal performance and intra-framework performance comparison. The sample comprised 266 managers from each of the sources as presented in Table I. There was a 62 per cent (n = 163) response rate when compared to the guide suggested by Denscombe (1998) that typically 20 per cent of questionnaires are returned. Thirdly, semi-structured interviews were used to explore, in more depth, the findings from the focus groups and questionnare analysis and to achieve triangulation (Eisenhardt, 1989). Two representatives from organisations in each of the six respondent sectors (Table I) were interviewed. Results and discussion Quality measurement frameworks The overall responses from the organisations in regard to usage of the six quality frameworks considered are shown in Table II. These usage rates are, in general, as expected considering the length of time that some of the quality frameworks have been introduced in organisations. Investors in People Figures 1 and 2 show the breakdown of time of use and perceived improvement from IiP. Across all sectors 86 (80 per cent) respondents who indicated they were participating in IiP said that performance had improved either slightly (45 per cent) or significantly (35 per cent) due to IiP. The majority, 77 (72 per cent) respondents, seeking accreditation have done so for more than one year, of which only 16 (15 per cent) have been involved in IiP for more than three years. The interviews supported the findings of the literature review (e.g. Taylor and Parkinson, 1998) in that organisations have improved their training and development procedures to focus on the needs of the business. This has led to increased motivation and job satisfaction for employees. Other benefits reported included a greater focus on employees and IiP s ability to improve the self assessment scores for the excellence model in the people management category. IiP Chi squared tests and cross-tabulations Chi squared tests were carried out on the IiP results in regard to time of application and level of improvement. Although not significant (À 2 = 3.41, 585 Framework Numbers using Percentage using EFQM excellence model Investors in People Charter mark ISO Balanced scorecard 12 8 Benchmarking Table II. Utilisation of quality frameworks

6 IJQRM 19,5 586 df = 1, p = 0.06) cross-tabulations show that those companies which had used IiP for less than one year (n = 14); four (29 per cent) felt performance was unchanged whilst ten companies (71 per cent) reported that performance was ``better. Of those companies using IiP for more than one year (n = 85); nine (11 per cent) reported performance unchanged whilst 76 (89 per cent) reported performance was ``better. Thus, the results indicate that IiP is an effective quality framework for improving performance over time. A cross-tabulation was also performed on those companies using IiP for more than one year and also which had reported ``better performance to see how they ranked IiP (Table III). The results indicate that IiP, closely followed by the BEM, are key quality improvement frameworks in the category of improved performance over time, consistent with the earlier results. The close link with the BEM is also shown Figure 1. All sectors number of years using IiP Figure 2. All sectors performance improvements from IiP Intervention Ranked 1st Table III. IiP group BEM (n = 44) 22 IiP (n = 65) 28 Charter mark (n = 43) 12 ISO 9000 (n = 26) 2 Balanced scorecard (n = 9) 1 Benchmarking (n = 30) 1

7 by the significantly higher numbers than expected (À 2 = 5.44, 1df, p = 0.02) of those organisations which had process performance measures (a BEM trait) and those that have employee performance measures (an IiP trait). Furthermore, significantly greater numbers (À 2 = 4.63, df = 1, p = 0.03) of those companies which reported that their organisation had process performance measures reported using IiP. Charter mark Figures 3 and 4 show the breakdown of time of use and perceived improvement from charter mark. Of the organisations participating in the charter mark scheme, 63 (89 per cent) indicated that performance had improved either slightly (32 per cent) or a lot (56 per cent). The charter mark scheme has been used for three or more years by 42 (59 per cent) of the respondents. Given the reported improvements, it is perhaps surprising that only 71 (45 per cent) of those replying to the survey are involved in the scheme. However, the semistructured interviews revealed that not all of the organisations surveyed have customers who are members of the public. It was also suggested that some of the organisations have had to prioritise the time spent on the various quality schemes. Therefore, they have chosen to use the excellence model in the first instance as a quality measurement framework to identify where their efforts should be concentrated and have not as yet decided to adopt the charter mark scheme. 587 Figure 3. All sectors number of years involved in charter mark Figure 4. All sectors performance improvements from charter mark

8 IJQRM 19,5 588 Charter mark Chi squared tests and cross-tabulations Chi squared tests were carried out on the charter mark results in regard to time of application and level of improvement. Although not significant (À 2 = 5.73, df = 2, p = 0.06), interestingly, cross-tabulations show that of those companies which had been using the charter mark (n = 7) for less than one year, two (29 per cent) reported no change whereas five (71 per cent) reported performance was ``better. Of those companies using charter mark for more than one year (n = 62), five (8 per cent) reported no change in performance whereas 57 (92 per cent) reported performance was ``better. These results are consistent with the charter mark s incorporation of performance measures, showing improving performance over time by effective deployment. A cross-tabulation was also performed on those companies which had been using charter mark for more than one year and also which had reported ``better performance to see how they ranked charter mark (Table IV). The results in Table IV show that charter mark is clearly ranked first by most organisations, with the BEM and IiP some way behind in second and third place respectively. These results are consistent with the semi-structured interviews, which confirmed that many organisations which use charter mark do so primarily, with other frameworks being used more incidentally. Business excellence model Figures 5 and 6 show the breakdown of time of use and perceived improvement from the business excellence model. As many as 44 (64 per cent) respondents across the indicated that performance had improved either slightly (48 per cent) or a lot (16 per cent) resulting from their experience of using the EFQM excellence model. Of those that use the model only 12 per cent have been using it for more than three years. This finding supports the view (from semi-structured interviews) that an effective use of the excellence model produces relatively quick results. The interviewees reported that the use of the model has produced improvements in how they develop their strategy, business plans and key measures; and how they operate their processes and identify areas for improvement to achieve business excellence. They stated that the use of the BEM has also increased employee involvement in how they improve the business and relate to their customers. BEM Chi squared tests and cross-tabulations Chi squared tests were carried out on the BEM results in regard to time of application and level of improvement. Although significant differences were Intervention Ranked 1st Table IV. Charter mark BEM (n = 29) 13 IiP (n = 42) 10 Charter mark (n = 50) 22 ISO 9000 (n = 27) 3

9 reported (À 2 = 40.32, df = 4, p = 0.00), caution should be used in intrepretating the results as cell counts were rather low. Interestingly, however, crosstabulations report that of those organisations using the BEM for less than one year (n = 19), eight (42 per cent) reported performance ``unchanged whilst 11 companies (58 per cent) reported performance was ``better. Of those companies using BEM for longer than one year (n = 48), eight (17 per cent) report that performance was ``unchanged whereas 40 (83 per cent) reported performance was ``better. Thus the BEM over the longer term would appear to be closely linked with performance improvement, as found in the semi-structured interviews. A cross-tabulation was also performed examining those companies which had been using the BEM for more than one year and also which had reported ``better performance to see how they ranked the BEM (Table V). The results show that the BEM is clearly ranked first by most organisations, with IiP second. Thus, consistent with the earlier results, the BEM is seen to be a key effective quality improvement framework. The development of measures within the BEM is shown by the significantly higher numbers than expected (À 2 = 19.85, df = 1, p = 0.00) of those organisations which had process performance measures (BEM, criterion 5, EFQM, 2000) and those that had measures of business results (BEM, criterion 9, EFQM, 2000). Also, significantly higher numbers than expected (À 2 = 45.70, df = 1, p = 0.00) of the organisations which had quality performance measures also had process performance measures, consistent with the BEM rationale. 589 Figure 5. All sectors number of years using the excellence model Figure 6. All sectors performance improvements from the excellence model

10 IJQRM 19,5 590 ISO 9000 Figures 7 and 8 show the breakdown of time of use and perceived improvement from ISO Across all sectors 33 (78 per cent) respondents who indicated that they were using ISO 9000 indicated that performance had improved either slightly (36 per cent) or a lot (42 per cent) due to their involvement with this framework. ISO has been in use in a majority of the respondents organisations (63 per cent) for more than two years and this is reflected in the nature of the improvements to processes and documentation reported. ISO 9000 s origins in the manufacturing industry possibly accounts for the smaller number of organisations in the that have similar processes and procedures. However, the small number of interviewees that used ISO 9000 indicated that the discipline of sound documentation demanded by ISO 9000 meant that they were better placed to succeed when preparing for the business excellence model and charter mark awards. Intervention Ranked 1st Table V. BEM group BEM (n = 38) 20 IiP (n = 38) 12 Charter mark (n = 25) 3 ISO 9000 (n = 18) 3 Balanced scorecard (n = 5) 0 Benchmarking (n = 23) 1 Figure 7. All sectors number of years using ISO 9000 Figure 8. All sectors performance improvements from ISO 9000

11 ISO 9000 Chi squared tests and cross-tabulations Chi squared tests were carried out on the BEM results in regard to time of application and level of improvement. Although results were not significant cross-tabulations reported that of those companies using the ISO 9000 (n = 7) for less than one year, two (29 per cent) reported no change whereas five (71 per cent) reported performance was ``better. Of those companies using ISO 9000 for more than one year (n = 34), six (18 per cent) reported no change in performance whereas 28 (82 per cent) reported performance was ``better. A cross-tabulation was also performed on those companies using ISO 9000 for more than one year and also which had reported ``better performance to see how they ranked the ISO 9000 (Table VI). Taken together with the semi-structured interview results, it can be seen that those organisations using ISO 9000 also have a strong preference for concurrently using ISO 9000 and the BEM, as both are strongly linked. Therefore, the level of improvement indicated in Table VI is more likely to come from the BEM than from ISO Benchmarking Figures 9 and 10 show the breakdown of time of use and percieved improvement from benchmarking. Only 40 (25 per cent) of the respondents indicated that they used benchmarking. The majority of respondents come from the agency, non departmental government bodies and the national health sectors (80 per cent). The perceived improvement in performance generated by benchmarking did not prove to be as good as in the previous frameworks. Over half the respondents stated that performance had only improved slightly with a further nine saying performance was a lot better. The follow-up interviews reinforced the view that benchmarking was mainly of the comparison of data type as opposed to generic benchmarking. Benchmarking Chi squared tests and cross-tabulations Chi squared tests were carried out on the benchmarking results in regard to time of application and level of improvement. Athough results were not significant cross-tabulations reported that of those companies using benchmarking (n = 9) for less than one year, three (33 per cent) reported no change whereas six (67 per cent) reported performance was ``better. Of those 591 Intervention Ranked 1st BEM (n = 16) 8 IiP (n = 23) 4 Charter mark (n = 20) 6 ISO 9000 (n = 26) 6 Balanced scorecard (n = 2) 1 Benchmarking (n = 16) 1 Table VI. ISO 9000

12 IJQRM 19,5 592 companies using benchmarking for more than one year (n = 26), seven (27 per cent) reported no change in performance whereas 18 (69 per cent) reported performance was ``better. These results, taken with the semi-structured interviews, indicate that the relative constant positive effect of benchmarking over time is possibly due to benchmarking being mainly introduced after the improvements achieved through the BEM have taken place. Table VII confirms this point, showing that those who effectively use benchmarking see the BEM as their main improvement framework. Balanced scorecard Figures 11 and 12 show the breakdown of time of use and percieved improvement from the balanced scorecard. The balanced scorecard as a performance management tool is only found in a small number of organisations. Both the results of the survey and the follow-up Figure 9. All sectors number of years using benchmarking Figure 10. All sectors performance improvements from benchmarking Intervention Ranked 1st Table VII. Benchmarking BEM (n = 13) 6 IiP (n = 17) 3 Charter mark (n = 14) 5 ISO 9000 (n = 12) 2 Balanced scorecard (n = 3) 1 Benchmarking (n = 18) 1

13 interviews provided little information to make any significant judgment on whether the balanced scorecard can contribute more effectively to the overall performance of business results. Balanced scorecard Chi squared tests and cross-tabulations Chi squared tests were carried out on the balanced scorecard results in regard to time of application and level of improvement. Although not significant crosstabulations report that those companies using the balanced scorecard (n = 2) for less than one year reported no change. Of those companies using balanced scorecard for more than one year (n = 7), one (14 per cent) reported performance had worsened, three (43 per cent) reported no change in performance and three (43 per cent) reported performance was ``better. These results are inconclusive as the semi-structured interviews, with those organisations using the balanced scorecard, indicated that it was used at measurement level, rather than as a quality improvement framework. Conclusion and recommendations From the results of the triangulated research study, i.e. focus groups, survey and semi-structured interviews a number of conclusions can be drawn in regard to the aims and research questions posed in the paper. First, are quality frameworks, as applied in the, leading to improved longitudinal performance? Within the limitations of the survey scope the conclusion is that the organisations demonstrated improved levels of performance when quality frameworks were applied within the 593 Figure 11. All sectors number of years using the scorecard Figure 12. All sectors performance improvements from the scorecard

14 IJQRM 19,5 594 organisations. In general, this effect was more noticeable beyond the one year implementation period. Thus, the principles of TQM as embodied in the quality frameworks can be sustained in organisations by leading to improved performance. Second, how are the frameworks perceived in terms of usefulness when compared with each other. The analysis of results, in particular the crossanalysis, shows a clear preference amongst the organisations surveyed for the BEM and IiP. The other quality frameworks were also considered to be important in regard to improved performance, but in a lesser and more supportive role. In particular, the BEM was found to be an overall integrative quality framework. This type of framework was found to be attractive in the context as it integrates the many, and sometimes disparate, improvement initiatives within the. Furthermore, both the BEM and IiP incorporate a comprehensive set of performance measures, beyond simply that of financial measures; such a scope in performance measurement helps in representing the role and purpose of organisations. Thirdly, is there a distinctive preferred approach to using the quality frameworks to achieve performance improvement? The results, like the findings of Lewis (1998) indicate a wide range of approaches in applying the quality frameworks. Also the longitudinal order in which they were applied varied from organisation to organisation. However, an overall pattern was found to be emerging where a combined use of the BEM and IiP was identified as the main vehicles for sustaining and carrying forward quality improvement efforts. Futhermore, this combined approach established a set of key measures relevant to the (Meekings, 1995), from which the organisations could measure improvement. The other frameworks were seen as adding to this approach. For example, charter mark was considered as specifically helping to improve the customer related measures. Benchmarking was found to relate to the key process measures, ISO 9000 to the operational measures and charter mark to the strategic level measures. Thus, while there are a variety of approaches, a discernable method is emerging with associated key performance measures (Neathy and Suff, 1997). Overall, it is concluded that TQM, as embodied in quality frameworks can be sustained in organisations, within the limitations of the survey, by leading to improved performance over time, as measured by a comprehensive range of performance measures. References Cabinet Office (1999), White Paper: Modernising Government, Cm 4310, HMSO, London. Camp, R. (1989), Benchmarking the Search for Industry Best Practices, ASQC Quality Press, Milwaukee, WI. David, F.R. (1991), Strategic Management, Macmillan, London. Denscombe, M. (1998), The Good Research Guide: For Small-scale Social Research Projects, Open University Press, Buckingham. DETR (1998), Modernising Local Government: Improving Local Services through Best Value, Green Paper, DETR, London.

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