Total Quality Management And HRM

Total Quality Management And HRM This chapter provides the background to this project termed The role of human resources management in the implementation of total quality management; it consists of an introduction to total quality management and human resources management. It will also provide an introduction to problem/questions the research intends to resolve, highlight the reason for my interest in the research topic, indicate the possible benefactors of this research work, specify the locus and focus of the project and the methodology that will be adopted during the course of the project. The aims, objectives and deliverables of the study will also be clearly defined followed by the project outline. 1.1 Introduction to Total Quality Management and Human Resources Management Organisations that pay special attention to the quality performance of their operations are mostly rewarded in the global business world, for organisations to survive in the tough competitive market they must continuously improve the quality level of their products and services; it is onus on the management to find ways of improving their quality services the question is how? Fortunately the business environment have been able to define certain means of achieving and improving quality in their individual organisations, although different organisations implore variable tactics they all have one method in common which is Total Quality Management (TQM), researchers have different interpretation of TQM, but according to youssef et al (1996) they all agree that based on the proper implementation of TQM, it can improve quality of products and services, improve company performance level, reduce costs thus improving the companys competitive advantage in the global market, in addition to this previous studies all agree that TQM is an approach to improving the effectiveness and flexibility of a business as a whole i.e. its essentially a way of organising and involving the whole organisation; every single individual at every level or department. This implies that for any organisation striving towards continuous improvement, each individual of the organisation must acknowledge the other and recognise that each activity (small or big) matters. From the literature review, it will be established that Human Resource Management plays a crucial role in implementing TQM through reinforcing human relationships, improving employee competence, and achieving culture change. Quality gurus such as: W. Edwards Deming, Joseph M. Juran, Philip B. Crosby, Genichi Taguchi, Kaoru Ishikawa and Walter A. Shewhart amongst others all agree on the importance of a team based culture for organisations to continuously improve on quality, perhaps the most popular of the quality gurus is Deming for hi s contribution to the Japanese industry in the 1950s, all of their quality philosophies had the following points in common: Providing quality goods and services. Customer focused (internal external). Production is optimised through team-work, transformational leadership and statistical measurement. The central focus of Total Quality Management and related approaches is customer (internal external) based, The external customer is the reason for a business to exist, and by directing every operation of the internal customers (employees) of the of the organisation towards the external customer satisfaction through continuous improvement in quality. Research by Wilkinson (1992) and Collinson et al. (1998) amongst other researchers opine that there are two sides to TQM a hard side and a soft side, and that the soft side emphasizes on the management of human resources, relationship between employees and employers (teamwork), customer care and the hard side lay emphasis on the technical aspect of an organisation. The soft side of TQM is mostly adopted by service industries while the hard side is accustomed to manufacturing industries. The issue with this Hard and Soft TQM concept is that most organisations fail to integrate these two parts effectively, especially in the manufacturing industries which tend to focus on production first and quality second due to their desire to meet the schedule. According to Omachonu, V. and Ross, J., (2004) in the United states and other highly industrialised countries the economy has shifted from manufacturing to service industries, indicating that 80% of workers globally are employed in the service sector. This suffices to say that quality improvement can only be achieved through the actions of the humans in the organisation, HRM is the practice adopted by organisations to achieve this goal, HRM can be defined as a strategic and coherent approach to the management of an organisations most valued assets i.e. the people/humans working there who individually and collectively contribute to the achievement of the organisations objectives (Michael, A. 2006). The notion sustaining the practice of HRM is that people are the organisations key resource and organisational performance largely depends on them. Therefore if an appropriate ra nge of HR practices and processes are developed and implemented effectively, then HR will make a substantial impact on an organisations performance. Although previous research has established the fact that HR is crucial to performance, the general consensus from most of the research especially that carried out by Purcell et al (2003) is that HR can make an impact by contributing to the following: The development and successful implementation of high performance work practices, particularly those concerned with job and work design, flexible working, resourcing (recruitment, selection and talent management),employee development (increasing skills and extending the skills base),reward, and giving employees a voice. The formulation and embedding of a clear vision and set of values. The development of a positive psychological contract and means of increasing the motivation and commitment of employees. The formulation and implementation of policies which, in the words of Purcell et al (2003) meet the needs of individuals and create a great place to work. The provision of support and advice to line managers on their role in implementing HR policies and practices. The effective management of change (Purcell et al, 2003.) From the above it is obvious that HRM plays a huge role in TQM, hence this research will be focused on the identifying the HRM practices that are most effective to TQM and how best this practices are implemented in the industry today, the research will focus its attention in the oil service industry of Nigeria thus the topic The role of human resources management in the implementation of total quality management in the oil service industry the research will be done using a multinational oil servicing company (Hercules Offshore) as a case study, the reason for this is that most developing countries still fail to recognise their employees and the role they play in the quality of goods and services, my interest in this topic arose from my experience working in the Nigerian company I realised that most employees lacked commitment to the managerial goals and objectives, emphasis are made more on individual performance rather than a holistic approach which is the main concept of TQM, there was a huge gap between the front office and the back office, this research aims to identify how this gaps could be closed to encourage continuous quality. Most companies in Nigeria and other developing countries that are yet to grasp the advantage of a committed work force will find this project useful, even the country as a whole would benefit from what this project aims to achieve because if every individual lives and performs for a general goal not an individual goal the country would move forward. 1.2 Project Aim The aim of this project is to identify and study the impact of Human resources management in the implementation of Total quality management and the role of the humans (employees) in quality attainment and improvement. 1.3 Project Objectives There are some objectives that fall within this specific aim and the objectives include: Does the Nigerian average worker know what TQM is? What are the perceptions of the companies customer service in Nigeria? How are these practices implemented in Nigerian oil servicing industries? What are the exact HRM practices that assist in the implementation of TQM in the oil service industry? What are the factors influencing employees to adhere or refute company quality policies? The determinants of employee responses to TQM 1.4 Deliverables Understanding the role of HRM in the implementation of TQM Understanding total quality management and the need for organisations to have an effective and efficient TQM model. Understanding how management strategies for continuous quality improvement can reach the roots of the organisation Improving employees commitment to quality in the Nigerian oil industry identify the major limitations to quality improvement practices in Nigeria Recommendations for further improvement. 1.5 Project Methodology This study is descriptive in its entirety rather than experimental. It entails collecting data in the form of literature review survey, questionnaire survey, and interview questions from some selected HR managers including the managers in the organisation for the case study (Hercules offshore). The methodology to be developed will focus on the mechanism through which high service level can be achieved by efficiently managing the human resources available to an organisation, the role of the human in TQM implementation, how TQM practices are implemented using HRM practices in the oil service industry in Nigeria, and to assess the average workers knowledge of TQM. This proposed project will involve a four phase design that will be used for implementation. The first phase of the project is the research planning, the second phase will involve the project planning, the third phase is for result analysis, fourth phase is the project summation. The main tasks to be completed at the end of the fourth phase plan are; i. Analysing the background of the survey through literature review ii. Selection of case study for the project iii. Carry out a feasibility study of the case study iv. Data Collection v. Data Analysis vi. Result Analysis vii. Discussion and Conclusion viii. Recommendation The methodology to be developed for the research and project planning, result analysis and project completion is illustrated in figure 1.1 Phase 1 Research Planning Phase 2 Project Planning Phase 3 Result Analysis Phase 4 Project Summation Figure 1:1 Methodology to be developed Source: Author This study addresses the importance of improving an organisations quality output through improving the efficiency and commitment of the internal customers (employees). Figure 1.2 shows a diagrammatic representation of the methodology giving the steps to be adopted. These steps are: understanding and knowing the aim of the project, designing questionnaires and arranging interviews, administering questionnaires and conducting telephone interviews with employees of an organisation in the oil services industry comprising of human resources managers, project managers, operations managers, vessel managers, shipyard managers and deck hands. Recommendation would also be made to enhance the organisations implementation of total quality management. This will be sent to the organisation in order to gain feedback from the recommended solutions. Understanding the direction of the project Designing questionnaires and arranging interviews Questionnaires and conducting interview Result Presentation and Analysis ng Discussion, Recommendations and Conclusion Figure 1.2: Diagrammatic representation of the Methodology Source: Author 1.6 Project Summary In this section the author provides a brief outline of the content of each chapter in the project. Chapter 1- Introduction to the dissertation, the project aim, objectives and the methodology to be adopted. Chapter 2 A literature review survey of the project that will comprise human resources management practices, total quality management, strategic management, and customer services. A summary of the literature review will be given at the end of the chapter. Chapter 3 A comprehensive study of the organisation background, including its products and services and an exhaustive insight into the oil servicing industry in Nigeria Chapter 4 The methodology to be used will be presented in this chapter. It will show the approach and other considerations that were made in obtaining data and result analysis for this project. Chapter 5 A compressive analysis of the empirical data and results of the study by describing the descriptive findings will be presented. Chapter 6- This will present the discussion of the work done, importance of the questionnaire, interviews and results to the project and issues encountered. The conclusion and recommendations are also presented in this chapter. The order of presentation for the chapters in this dissertation is shown graphically in figure 1.3 Chapter One Background of study Aim, Objectives and Deliverables Introduction Chapter Two Literature Review Related theories Chapter Three Company background and Oil service industry This chapter focuses on the concept of HRM and TQM in the Nigerian oil industry Chapter four Methodology Research design, approach and strategy Chapter five Results and Analysis of Data Results presentation Data analysis Chapter six Discussion and Future Work Discussion of findings Future works and Conclusion CHAPTER 2 Figure 1.3: Project Summary Source: Author LITERATURE REVIEW Introduction The role or effect of Human Resource practices on the implementation of Total Quality management cannot be over-emphasized, because it serves as a basis for ascertaining employees attitudes towards effective and efficient quality practices, simply put if the employees are not quality oriented, there is no quality hence the organisations ability to conform to its customers requirements is low, Several studies investigating the relationship of HRM and TQM have asserted the same ideology e.g. (Lammergeyer, 1991; Wilkinson, 1992; Oakland,1998; Palo and Padhi,2005). Additionally, according to Morrison and Rahim (1993) and Hoogervorst et al. (2005), TQM depends on the effective management of human resources. Considering the TQM model, Murphy and Cleveland (1991) state that the system that is used to appraise performance needs to be congruent with the culture and principles that guide the conduct of the organisation, unless congruence is retained, anything that is developed is liable to be rejected. Hence this chapter presents a literature review closely related to the project, the literature survey will be carried out in a topical format this is necessary to give an exhaustive background knowledge to the terms in the topic ; the first section will be on the definition and principles of human resource management, advantages of HRM in the global business world, the second section will consist of the definition and concept of total quality management, its origin and benefits to the industry, the third section will investigate the work done so far with respect to the role of HRM in the implementation of TQM and its importance, the fourth section will consist of the research background, proje ct justification and literature review summary. 2.1 Definition of Human Resources Management Presently in the dynamic competitive business environment, there has been reasonable doubt as to what the roles and functions of Human Resource Management (HRM) are in an organisation. According to Soderlund and Bredin (2005) previous research by American Business School Professors all identify HRM as an effective organisational tool, but due to the present volatile business environment there has been conflicts on the concept and role of HRM within an organisational structure. One of the main problems contributing to this is that there is no single unified concept of what is meant by HRM. There are a variety of definitions attributed in the literature as to what exactly HRM is. In addition to this philosophy, Brewster and Larsen (2000) stated that due to its diverse nature there is no generally accepted definition for HRM and what it entails. Less satisfactory definitions have been proposed by different authors Soderlund and Bredin (2005) classified HRM as a management philosophy tha t concentrates on people (employees) treatment, Dessler (2006) defined HRM as the process of acquiring, training, appraising, and compensating employees, and of attending to their labour relations and health and safety, Marchington and Wilkinson (2002) defined HRM as the management of employment. These definitions are perhaps simplistic in nature and failed to highlight the true concept of HRM (Michael, 2006). Michael (2006) went further to define HRM as a strategic and coherent approach to the management of an organisations most valued assets (humans/employees) the people working in the organisation who individually and collectively contribute to the achievement of its objectives, Price (2007) also supports Michaels definition with his proposed philosophy of HRM, according to Price, HRM is a philosophy of people management based on the belief that human resources are uniquely important to sustained business success. In addition to his philosophy he stated that an organisation gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Prof P.S Nel et al (2001) in their book strongly supports Michaels definition of HRM with this quote HRM is the only resource in an organisation that reacts when acted upon i.e. with the exception of human resources all other resources of an organisation are static because other resources derive their dynamic character from human resources. Although there are diverse definitions to HRM, for the purpose of this research the definition proposed by Michael (2006) will be adopted considering the fact that it clearly states that HRM is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies. 2.1.1 Human resources management in practice Armstrong, (2000) highlighted that HR is of immense importance to modern day organisations, it provides an approach to inducing improved performance levels through the use of the humans (employees) by improving their levels of customers service, productivity, growth, profits and quality control. There are a number of activities, roles, processes covered by HRM, Lado and Wilson (1994) outlined the following to be the HR activities in contemporary organisations Planning. Recruitment and selection Training Performance management Benefits and rewards Compensation Career development Banhegyi et al., (2008) and Robbins and Coulter, (2002) also supports the HR activities stated above as the salient global HR activities in present day organisations. 2.2.1 Planning Planning in Human Resource has been a debated topic in different HRM contexts over the years (Wren, 1994). HR was initially a strategy used to determine the strength and weaknesses among employees and to develop the skills and competences they needed (Gallagher, 2000). With the era of individual career plans, organisations started recruiting individuals with certain desired skills and competences as a method of employing individuals who shared the same orientation or objectives with that of the organisation (Kuratko and Morris (2002), this means that HR planning is essentially a method of selecting employees that align with the succession plan of the organisation. This aspect of HR is still been exhaustively discussed by many researchers, Schuler (1986) proposed that HR planning is a complicated and complex issue of debate within the HR activities. Storey (1995) argues that HR planning today is a very important task of every contemporary organisations HR department. According to him, HR planning mainly involves the identification of skills and competence within the organisation, the filling of identified competence gaps, and the facilitation of movements of employees within the organisation. An essential part of the HR planning is the succession planning which aims to ensure the supply of individuals and filling of gaps on senior key positions when they become vacant and replenish competences to areas where they are most valued (Wolfe, 1996). 2.2.2 Recruitment and selection This is the process by which an organisation places the diverse talents at their disposal in different levels of the organisation. Analoui, (2007) defined the process as an ethical approach by an organisation to find and attract the most efficient individual with the desirable skills for an available position. According to Price (2007), the recruitment process is divided into three approaches: Suitability the most qualified applicant for the position, Malleability moulded within the cultural norms, and Flexibility the most reliable and versatile employee. These factors are quite complicating and can be easily mistaken during the process of hiring employees. Suitability is a critical aspect hence its mainly concerned with the process of hiring the most suitable applicant for the position. Pfeffer (1994) proposed that the ability by an organisation to select and retain talented employees is of great advantage in the global competitive market. It is obvious from the present global market that organisations who possesses the greatest talents prevail in the competitive market hence firms tend to employ renowned managers to lead the thriving future. 2.2.3 Training It is already a well-established fact from the above literature that employees skills and knowledge are of immense impact on an organisations level of quality in goods and services (Guzzo, R A. and Noonan, K A, 1994). Ostroff and Kozlowski, (1992) supported this idea by stressing that for organisations to overcome certain problems and to attain continuous improvement the employees have to be continuously trained individually or as a team, their research also suggested that training also serves as a socialisation tool for new employees to gain cultural knowledge about the organisation, learn about the necessary tasks and how to perform their responsibility; clarifying their roles and relate with others inside the organisation. Additionally, Hackman and Wageman (1995) identified training in their study as the second most commonly used HRM practice in implementing TQM. Rollag Cardon (2003) supported this philosophy in their research as they indicated that the process of socialisation within a firm enhance new employees to integrate speedily within the new organisation. Formal training is a wide-spread method for organisations to enhance the personnel performance level, as important roles are covered also by organisational socialization and multitasking (Chao, 1997 and May, 1997). Research by Bishop (2003) highlights training as a cost effective strategy especially when there is a shortage in talented or skilled labour, employees could be trained on the job (OJB) thereby saving cost in time and resources of finding a competent workers. 2.2.4 Performance Management The concept of performance management within an organisation is to determine how the employers can get the highest level of commitment from their employees (Dransfield, 2000). There are three steps of approaching the performance measurement within an organisation, the three steps are stated below: Objectives Appraisal Feedback (Dransfield, 2000) Dransfield (2000) described the first step (objectives) as goals that are quantifiable, easy to measure and simple to communicate throughout the organisation after which the performance appraisal takes place and subsequently feedback. Although quality gurus like Deming and Juran are of the opinion performance appraisals are deterrent to quality improvement, according to Deming (1986) there are many undermining factors of performance appraisal as stated below It nourishes short-term performance, annihilates long-term planning, builds fear, demolishes teamwork, and nourishes rivalry and politics. It leaves people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after a receipt of an unacceptable rating, unable to comprehend why they are inferior. Soltani (2003; 2006), also supports this idea he believes that performance appraisal disregards the existence of variability in the system, it holds workers responsible for errors that may be the result of faults within the system and it undermines teamwork However, other investigators conclude that performance appraisal is compatible with TQM if it is based on quality criteria (Blackburn and Rosen, 1993; Simmons et al., 1995; Wilkinson et al., 1994; Wood and Peccei, 1995). Shadur et al., (1994) in their research claim that some organisations still have some form of performance appraisal and there is evidence that this HRM practice is useful in implementing TQM. Other researchers affirm that although performance appraisal can be related to individual performance, it can be of more advantage to quality improvement if it should be focused on measuring organisational and group performance (Petrick and Furr, 1995; Schuler and Jackson, 1987; Simmons et al., 1995) 2.2.5 Benefits and rewards The major determinant of human behaviour is the consequences to their actions, if employees know there is a reward for their actions they tend to work towards earning that reward, most managers in contemporary organisations have adopted the benefits and reward system as an incentive besides the wages that would derive that extra commitment from their employees, according to Appleby and mavin (2000) attaining high levels of commitment from employees within an organisation is highly essential. Consequently employee considerable effort will manifest into an intended realisation and fulfilment of a specific desired outcome. Such manifestation enhances the explanation of the crucial aspect of organisational reward system and how it can be sustain and elicit the firm human capital investment Tannenbaum and Dupuree-Bruno (1994). As defined by Manus and Graham (2003), total reward includes all types of rewards/benefits-indirect as well as direct, and intrinsic as well as extrinsic. Each aspect of reward, namely base pay, contingent pay, employee benefits and non-financial rewards, which include intrinsic rewards from the work itself, are linked together and treated as an integrated and coherent whole. The concept of total reward has emerged quite recently and is exerting considerable influence on reward management (Michael, 2006). An equally wide definition of total reward is offered by WorldatWork (2000) who state that total rewards are all of the employers available tools that may be used to attract, retain, motivate and satisfy employees. Thompson (2002) supports this idea with his definition of reward management, where he states that total reward typically encompass not only traditional, quantifiable elements like salary, variable pay and benefits, but also more intangible non-cash elements such as scope to achieve and exercise responsibility, career opportunities, learning and development, the intrinsic motivation provided by the work itself and the quality of working life provided by the organisation. 2.2.6 Compensation According to Patel Cardon (2010) compensation is an essential tool for modern-day organisations as it contributes to attract and retain high skilled employees with superior salaries, and it encourages a desired stakeholder behaviour regarding recognition and legitimacy. Minbaeva et al. (2003) inferred that compensation would enhance motivation among personnel too. Even though non-financial compensation can really work as a positive incentive for the workers, providing monetary benefits is necessary to increase the productivity of the employees on the individual or group level (Gomez-Meja, 1992). Balkin and Swift (2006) suggest a more flexible approach toward the payment issue. They proposed to relate it to the life stage of the organisation with a higher rate of non-monetary benefits during the first years of activity, and a re-equilibration whenever the company enters the mature stage. Non-monetary paybacks are represented by stock options, stocks or other form of equity sharing that enhance the participation and the motivation of employees, while spreading the risks over a larger number of people (Graham et al., 2002). The aforementioned ownership sharing represents also a long-term planning for compensation, as Graham et Al. (2002) stated, but also short-term rewards exist. These are represented by profit sharing policies aiming to encourage the employees toward group work, or to control the organisational outcomes (Heneman Tansky, 2002). 2.2.7 Career development (CD) Many practitioners and scholars within human resource development (HRD) field have claimed that the utmost crucial aspect of the practices is career development (McLagan, 1989; Weinberger, 1998; Swanson Holton, 2001). However, this area of studies has been given little attention (Upton, Egan Lynham, 2003). With the intense competition in the 21 century, many organisations have realised that in order to remain competitive they have to improve their employees and enhance their career development as an holistic approach (Boudreaux, 2001); rather than individual career development (Swanson Holton, Upton, Egan Lynham, 2003). Hence, many organisations are now taking proactive measures towards equipping their staffs (Leana, 2002) or create a climate that supports their staffs at all levels of the organisation to be more resultant and productive (Sullivan, 1999); which Boudreaux, (2001); Brown, (1997) referred to as shared responsibility. However, learning within an organisation is quite critical and expensive (McDonald et al., 2002). According to Power et al (2001) the most common learning methods within organisations are informal (i.e. on-the-job coaching, sessions, lesson learned, development assignment) and formal learning (i.e. as training/workshop and other forms of professional training conducted by professional bodies internally or externally (McDonald et al., 2002). 1.3.1 Reservations about HRM As many other departments within an organisation encounter, HRM has its own challenges, according to Michael (2006) the main reservation have been that HRM promises more than it can deliver and that its morality is suspect, Michael