Human Resource Focus in TQM Awards

Journal of US-China Public Administration, ISSN 1548-6591 March 2012, Vol. 9, No. 3, 338-345 D DAVID PUBLISHING Human Resource Focus in TQM Awards Gurhan Uysal Ondokuz Mayıs University, Samsun, Turkey The aim of this study is to discuss human resource focus in total quality management awards (TQM Awards). TQM Awards are Malcolm Baldrige National Quality Award, European Quality Award (EFQM), Deming Prize of Japan, and ISO9000 Series. The Baldrige emphasizes performance excellence. Deming Prize aims to achieve organizational quality. ISO9000 is to set up quality management system in organizations, and EFQM targets to obtain business excellence for organizations. TQM Awards have human resource focus due to employee involvement and process management in TQM. Firstly, human resources implement in organizational processes such as production, supply, marketing, and after-sale. Secondly, employees participate to solve quality problems in organizations through TQM practices. This is employee involvement. Employee involvement is that employees join to decision-making process, and they participate to solve quality problems to obtain quality assurance, i.e., employee involvement is that human resources participate to TQM practices in organizations such as brainstorming, quality circle, quality function deployment, Poke-Yoke, managerial boards to improve quality; therefore, TQM awards contain human resource variation in prize nomination. Keywords: human resource focus, TQM Awards, employee involvement, process management One objective of Total Quality Management (TQM) is to produce customer satisfaction. Therefore, TQM is a quality management that starts with supply, and continues to after-sale. Each employee and business unit is responsible for TQM achievements from supply department to customer-relation department. Professor Deming determined the 14-principle in TQM. Those principles are: continuous improvement, employee involvement, use of statistical technics, on-the-job training, abolish of departmental barriers, resistance against only adoption of financial targets, importance of customer satisfaction in business performance and employee satisfaction. American scientists developed the philosophy of quality such as statistical quality control by Walter Shewart, total quality control by Armand Feigenbaum, continuous improvement and Plan-Do-Control-Act (PDCA) cycle and 14-principle by Edward Deming, and zero defect by Philiph Crosby. Japanese upgraded total quality control to total quality management. Total quality control (TQC) is involvement of each business unit in quality from supply to sales. Therefore, TQC is to achieve quality assurance in processes from design to sales. Japanese added employee involvement and continuous improvement dimension to TQC. They also contributed TQM by developing quality methods and technics such as fish-bone technic by Kaoru Ishikawa, quality function deployment (quality house) by Yoji Akao, Kaizen (continuous improvement) by Masaoki Imai and Poke-Yoke by Shigeo Shingo. Corresponding author: Gurhan Uysal, Ph.D., associate professor, School of Business, Ondokuz Mayıs University; research fields: human resource management, SME business, EU studies. E-mail: uysal_g@omu.edu.tr; gurhanuysal@yahoo.com.

HUMAN RESOURCE FOCUS IN TQM AWARDS 339 Therefore, TQM has eight principles: customer focus, leadership, employee involvement, process approach, system approach, continuous improvement, decision-making process and supplier relationship. TQM Awards have human resource focus on award nomination due to employee involvement and process principles in TQM. Human resources implement and achieve whole processes from supply to after-sale. Therefore, this study aims to discuss human resource focus on TQM Awards. Theoretical Framework TQM Awards are Malcolm Baldrige National Quality Award of USA, European Quality Award (EFQM), Deming Prize of Japan and ISO9000 Series by International Organization for Standardization (ISO). Baldrige Award is a guide for companies to obtain performance excellence through an integrated framework of management practices. Those management practices are leadership, strategic planning, customer and market focus, information analysis, human resource focus, process management and business results. The integrated framework of Baldrige Award demonstrates interrelationship between management practices. The Award considers that firms use those interrelated management practices to link their structure, operations, and strategies in order to achieve business outcomes such as firm performance, market share. EFQM develops a model that sets up relationship between enablers and business results. The enablers are leadership, human resources, policy and strategy, resources and processes. Business results are employee satisfaction, customer satisfaction, impact on society and results. EFQM Award considers that firms achieve business results through implementation of enablers. Organizations use enablers to achieve the results. Therefore, EFQM aims to obtain business excellence. Both the Baldrige model and the EFQM model are similar in business-result orientation. They use management practices to obtain business results. However, their models, which are interrelationship between management practices, are different. The Baldrige sets up an integrated framework between management practices, while EFQM sets up relationship between enablers and the results. Deming Prize aims to improve organizational quality for quality assurance. The Prize has 10 categories and all have equal weight in award distribution. They are policies, organization, information, standardization, human resources, quality assurance, maintenance, improvement, effects and future plans. Those criteria are designed to achieve quality assurance in organizations. ISO received organizational feedback from 1,120 institutions worldwide to develop ISO9000 series. ISO9000 has eight quality management principles: customer focus, leadership, employees, process approach, system approach, continuous improvement, rational decision-making and relation with suppliers. At the beginning, ISO9000 adopted a target to achieve quality assurance in organizations. But, in 2000, ISO9000: 2000 targeted to develop a quality management system in organizations. Quality management system is related to employees, customers, suppliers and processes. Discussion: Human Resource Focus in TQM Awards The logic behind TQM Awards is: the Baldrige Award recommends performance excellence for firms; EFQM aims to achieve business excellence for firms; Deming Prize aims to improve organizational quality in organizations; and ISO9000 develops quality management system for organizations. Those TQM Awards have human resource focus due to employee involvement and process thinking in TQM. Employee involvement is defined as employee participation to decision-making and problem-solving

340 HUMAN RESOURCE FOCUS IN TQM AWARDS process. In TQM, employees participate to solve the quality-related problems. In addition, employees implement quality methods and technics in organizations such as quality circle, continuous improvement, Poke-Yoke, fishbone technic, brainstorming, Pareto analysis. In conclusion, TQM Awards recognize that human resource of organizations is the key to implement TQM in organizations due to employee involvement and process approaches. Why HR? Organizational Outcomes Are the Reason for Being Exist HR (human resource) practices such as staffing, selection, training, job design, participative management, performance evaluation, promotion and pay have a positive impact on organizational outcomes (Huselid, 1995, p. 640). The most important outcome is organizational performance (Delaney & Huselid, 1996). The other outcomes are financial performance (Huselid, 1995; Batt, 2002), organizational commitment (Colvin et al., 2001; Batt, 2002), employee performance, organizational behavior (Batt, 2002), efficiency (Becker & Gerhart, 1996), employee efforts, productivity, retention, capability, competitive advantage (Huselid, 1995), work effort (Arthur, 1994), motivation (Colvin et al., 2001), skill usage, job design and rewards (Batt, 2002, p. 587). How does HR achieve organizational outcomes? Firstly, HRM (human resource management) aims to increase employee performance and organizational attitudes and behaviors: individual performance, job satisfaction, job motivation and employee commitment, and organizational citizenship. Therefore, HRM has three major goals: to increase employee performance, to achieve organizational attitudes and behaviours, and to strengthen employee-business relationship. For example, result-oriented performance evaluation leads to high financial performance (Batt, 2002, p. 588). Staffing selects employees that their skills and abilities best fit to organizational needs. So, the fit makes employees successfully implement the job. Training program may improve employees skills and abilities to reach performance targets. Increased performance leads to some results of performance evaluation such as promotion, wage up and job security. In addition, those employees are given some rewards for their efforts and performance at work. All these provide employees of achieving their individual goals. Secondly, HR establishes exchange relationship between employee and organization. Exchange relationship creates expected attitudes and behavior among employees, and it is a relationship between employee and organization (Whitener, 2001, p. 517). It emerges from reward/input rate (Robbins, 1989). Employees may increase their contribution (input) to organizational goals via HR practices. More contribution results in obtaining organizational rewards that mean achieving individual goals. Employees show expected behaviors at work that an organization strictly demands, and they demonstrate high performance, efforts, motivation and satisfaction in organizational setting to achieve career rewards. HR makes investment to employees to differentiate them from the other employees (Batt, 2002; Huselid, 1995). Both exchange relationship and investment help employees to perceive organizational support. Employees reach their goals via organizational support. Employees show high satisfaction when the firm supports them to achieve their career goals (Maier & Brunstein, 2001, p. 1034). Those who perceive high organizational support have more job performance than those who are not perceive organizational support (Bishop et al., 2000, p. 1117). Because perceived organizational support means that organization supports employees in their social and work life. Amount of organizational support generates an outcome of HR practices, which is organizational commitment (Allen et al., 2003, p. 99). Huselid (1995) explained the kind of investments: recruitment process attracts high-ability candidates to

HUMAN RESOURCE FOCUS IN TQM AWARDS 341 organization, and staffing hires best employees within candidates who effectively fit to organizational needs. Training develops employee skills. Performance evaluation and promotion increase motivation, and encourage employees to show higher work efforts. Investment programs continuously develop employees (Batt, 2002, p. 587). So, that motivates employees to demonstrate high performance (Colvin et al., 2001, p. 903). Because HR devises firm-specific employees that possess needed skills and abilities to effectively establish customer relations (Batt, 2002, p. 588). Workers who know firm-specific knowledge increase competitive edge of firms (Batt, 2002, p. 589). Therefore, HR practices that enhance capability and maximize efficiency have more returns than their costs (Huselid, 1995, p. 637). HR function contributes to organizational performance by performance-based pay system (Colvin et al., 2001, p. 2). In addition, HR has impact on organizational behavior (Batt, 2002), work effort (Arthur, 1994), skill usage, job design, and reward (Batt, 2002, p. 587). HR practices encourage people to show high efforts (Huselid, 1995), and increase individual performance by developing organizational commitment and improving employee s firm-specific knowledge (Batt, 2002, p. 588). That shows that organizations should invest in training, staffing and pay system to improve individual capability of their employees. Such practices provide employees of reaching their expectations; and so, reduce the idea of looking for another job (Huselid, 1995, p. 638). Efficiency in staffing, training, performance evaluation and pay system increases productivity and returns (Huselid, 1995). Firms that generate social relations and collaboration in organization have high productivity. Social relations decrease grievances, and enhance job attendance. Quality policies, quality circle, teamwork and training programs improve productivity. Effective recruiting and training and development positively contribute to productivity. Higher quit rates reduce productivity. Participative management, group training, socialization attract high-skilled people to organization and increase their organizational commitment (Arthur, 1994). Training harmonizes employee skills with organizational expectations; performance evaluation that affects wage and promotion motivates employees to work hard; and all these increase individual performance (Huselid, 1995). Such employees who have firm-specific knowledge including products specifications, service, price, promotion use this knowledge in preparing sales offer that fits to customers wants and expectations (Batt, 2002, p. 588). Therefore, firm should give chance to high-performance employee in order to use their knowledge, skills and abilities in their job (Huselid, 1995). Productivity would be decreased when employees don t have an opportunity to design and program their job. Employees learn customers buying behavior and expectations via training, and use this knowledge in customer relations (Batt, 2002, p. 588). HR practices improve employee knowledge and skills about customers and sales offer. Practices support employees to carry their ability and knowledge to work place (Huselid, 1995, p. 637). Examples of firm-specific knowledge include firm structure, distribution, organizational processes and effects of this knowledge on sales offer (Batt, 2002). Hence, HR practices can be a source of sustainable competitive advantage. However, to obtain these outcomes and to increase firm performance via human resources depend on effectively implementing HR practices in organizations. But literature studies show that firms face some problems in implementing HR practices that may decrease the effectiveness of HR and may reduce the impact of HR on organizational performance. Strategic HRM: Employee Performance/Business Performance Relationship The aim of this part of the study is to identify strategic human resource management (SHRM) by

342 HUMAN RESOURCE FOCUS IN TQM AWARDS employee performance and business performance relationship. Theory Human Resource Management (HRM) is interested in employee performance. Therefore, HRM aims to increase employee performance (individual performance). Employees implement their tasks in organizations. Thus, HRM has several practices to increase individual performance such as staffing, training, performance appraisal, career planning, reward, compensation, so that employees efficiently implement their tasks. Secondly, HRM can be related to organizational positions in an organizational chart. An organizational position contains task and employees, and it is employees duty to implement tasks. Therefore, if all employees do their tasks and jobs at best (high individual performance), the total performance of company increases (business performance). This might set up HRM-SHRM relationship as employee/business performance relationship. Therefore, SHRM has a total approach that encompasses business performance. Business performance covers firm performance, market performance, and organizational performance. Hence, HRM is oriented to employee, while SHRM is toward to business performance (total performance of company). Concept The theoretical assumption of this study is that three moderators develop relation between HRM and SHRM in order to progress HRM to SHRM: (1) Interrelated HRM practices (HR system); (2) Organizational attitudes and behaviors (e.g., job motivation, satisfaction, commitment); (3) Effectiveness both organizational and employee (human capital). Because studies demonstrate that interrelated HRM practices, organizational attitudes and behaviors and effectiveness increase employee performance and business performance respectively. Therefore, HR system, organizational attitudes and behaviors and human capital set up relation between HRM and SHRM. This is also aligned with talent management. Because HRM finds talents for organizational positions, those talents implement tasks and duties to achieve position s targets and so talents increase business performance. For example, an organizational chart includes positions such as supply management, production management, marketing management, accounting management, finance management, etc. Task is sale, employee is marketing managers. HRM finds talents (marketing manager) for marketing position. If all employees in all organizational positions implement their tasks efficiently, therefore, total performance of company increases. Therefore, it is proclaimed that HRM is talent management to achieve firm performance. Therefore, SHRM is to set up relationship between HRM and organizational objective. The major objective of an organization is business performance such as market share, sales, profit. Therefore, this study considers employee and business performance relationship to understand strategic human resource management. It is expected that this relationship builds HRM-SHRM relationship. Conclusive Remarks Organizational outcomes are the reason for being exist for HRM. Therefore, outcomes reflect the mission of HRM practices. An organization wants employees to show high performance, efforts, job satisfaction, motivation,

HUMAN RESOURCE FOCUS IN TQM AWARDS 343 productivity, efficiency and commitment. HRM helps an employee to perform these expected behaviors at work. On the other hand, employees would like to obtain some results reciprocal to their contributions to organizational objectives. HRM increases contribution of employees. Hence, HRM s mediating role between employee and organization leads to positive relationship between two parts. Both sides achieve their demands, needs, and goals from the exchange relationship. Therefore, HRM practices can be an infrastructure in developing organizational commitment. Employees achieve career goals and make their career plans real via HRM practices. HRM finds out employee competencies and interest areas and specifies their career goals in accordance with their competencies and interests (Kocel, 2011). The practices also demonstrate employees what to do, how to do and where to develop individual performance to reach career goals. HRM can successfully match individual goals with organizational objectives. Employees feel organizational support when organization practices HRM. Perceived organizational support increases their effort and performance at work. They stay and work for the organization for a long period. This time of duration in the organization helps employees to get to know the firm in details and to obtain needed experience that is required to effectively carry out job. Employees with high experience effectively match consumers needs and demands with firm s priorities and interest and this carries the company to market success. HRM can influence firm performance via human capital. Human capital of a firm is knowledge, skills and ability of its employees (Huselid et al., 1997). HRM is the key to develop those elements of human capital. Therefore, contributions of employees to organizational goals and individual performance of employees can be increased. All also improve firm performance. How does HRM improve human capital? Learning. HRM can improve human capital through organizational learning such as coaching behaviors and on-the-job-training. Further, HR hires best candidates at the beginning who have right abilities and enough potential to contribute to the organization. Because new employees possess required potential and ability to successfully implement organizational jobs. They also have capability to easily absorb the knowledge and skills in training after selection. Abilities and potentials of employees can be developed via training programs, and employees are uploaded market-demanding knowledge and skills by training and development program. Work efforts and job success of employees can be assessed in performance evaluation. High performance results provide employees of achieving organizational rewards and subsequently their own individual objectives. These forms of HRM practices play an important role in increasing organizational impacts of HRM on organizational outcomes such as organizational performance, commitment, motivation, satisfaction, and perceived organizational support. However, to have such impacts on organization, HRM must be effectively applied in firm s activities. In practice, there are some issues that decrease effectiveness of HRM. These issues reduce the effects of HRM on organization. Hence, HR management of a firm should remove these problems to improve the effectiveness of and the impacts of HR system on organization. On the other hand, studies show that HRM increases firm performance. Even though some problems such as prejudice, unfairness, injusticeness, dissatisfaction exist in performance evaluation and reward, employees know that their performance is evaluated by firm and that organization implements performance-based compensation and reward work hard to be successful at work in order to obtain higher compensation, benefits and reward. Thus, HR reaches its own targets and mission. Therefore, HRM has four occasions: talent management, employee performance, organizational attitudes

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