TQM by Dale H. Besterfield Et Al (096-123)

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Employee Involvement
Chapter Objectives
• Understanding motivation
• Empowering employees
• Assessing current levels through surveys
• Basics of Empowerment
• Understanding functioning and effectiveness of teams
• Encouraging employee participation through suggestion systems
• Understanding the concept of Gain sharing
• Brief overview of performance appraisals
• Overview of unions and employee involvement
Introduction
Employee involvement is one approach to improving quality and productivity. Its use is credited for con-
tributing to the success enjoyed by the Japanese in the world marketplace. Employee involvement is not a
replacement for management nor is it the final word in quality improvement. It is a means to better meet the
organization’s goals for quality and productivity at all levels of an organization.
Motivation
Knowledge of motivation helps us to understand the utilization of employee involvement to achieve process
improvement.
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76 ■ CHAPTER 4
Self-actualization
Esteem
Social
Security
Survival
Figure 4-1 Maslow’s Hierarchy of Needs
Maslow’s Hierarchy of Needs

One of the first and most popular motivational theories was developed by Abraham Maslow. He stated that
motivation could best be explained in terms of a hierarchy of needs and that there were five levels. These lev-
els are survival, security, social, esteem, and self-actualization. They are shown in Figure 4-1. Once a given
level is satisfied, it can no longer motivate a person.
Relating these needs to motivation, we know that Level 1 (survival) means food, clothing, and shelter,
which is usually provided by a job. In the workplace, Level 1 needs include proper lighting, heating/air con-
ditioning, ventilation, phone system, data/voice access, and computer information system.1 Level 2 (security)
can mean a safe place to work and job security, which are very important to employees. When the organiza-
tion demonstrates an interest in the personal well-being of employees, it is a motivating factor. A threat of los-
ing one’s job certainly does not enhance motivation. Level 2 is not limited to job security. It also includes
having privacy on the job such as being able to lock one’s office door or having lockable storage for personal
items, as well as having a safe work environment that may include ergonomic adjustable furniture.2
Because we are social animals, Level 3 (social) relates to our need to belong. It has been said that cutting
someone out of the group is devastating to that individual. Isolation is an effective punishment. Conversely, giv-
ing an individual the opportunity to be part of the group by feeling important and needed will motivate that per-
son. If possible, employees should be provided with both formal social areas such as a cafeteria and conference
rooms and informal areas such as water coolers and bulletin boards.3 Being a member of a team is a good way
to bring employees into the group. Level 4 (esteem) relates to pride and self-worth. Everyone, regardless of
position or job assignment, wants to be recognized as a person of value to the organization. Where possible,
employees should be given offices or personal spaces with aesthetics. Business cards, workspace size, and
office protocols also provide employees with a certain level of self-esteem within an organization.4 Seeking
advice or input into business or production processes is a good way of telling employees that they are of value.
This activity requires giving employees control and freedom of their jobs by providing trust.5 Level 5
(self-actualization) says that individuals must be given the opportunity to go as far as their abilities will take
1 Brenner, Pamela M., “Motivating Knowledge Workers: The Role of the Workplace,” Quality Progress (January 1999): 33–37.
2 Brenner.
3 Brenner.
4 Brenner.
5 Brenner.
EMPLOYEE INVOLVEMENT ■ 77
them. Many organizations have a policy of promoting from within. It is true that some employees do not want
to move up the corporate ladder, which is understandable. However, those who do want to move up must
know that it is possible.
It is important to note that as employees move up the hierarchy, they will immediately revert back to the
previous level if they feel threatened. For example, if an employee is satisfied in Level 3, a rumor of down-
sizing may cause an immediate return to Level 2.6
Herzberg’s Two-Factor Theory

Frederick Herzberg extended the general work of Maslow by using empirical research to develop his theory
on employee motivation. He found that people were motivated by recognition, responsibility, achievement,
advancement, and the work itself. These factors were labeled motivators. In addition, his research showed that
bad feelings were associated with low salary, minimal fringe benefits, poor working conditions, ill-defined
organizational policies, and mediocre technical supervision. These job-related factors were labeled
dissatisfiers or hygiene factors, which implies they are preventable. It is important to realize that dissatisfiers
are often extrinsic in nature and motivators are intrinsic. The presence of the extrinsic conditions does not
necessarily motivate employees; however, their absence results in dissatisfaction among employees. Absence
of motivating factors does not make employees dissatisfied, but when there are motivating factors present,
they do provide strong levels of motivation that result in good job performance for the individual and the
organization. In general, dissatisfiers must be taken care of before motivators can be actuated. Herzberg’s dis-
satisfiers are roughly equivalent to Maslow’s lower levels, and the motivators are similar to the upper levels.7
Employee Wants
While management thinks that good pay is the number one want of the employee, survey results show that
this factor is usually in the middle of the ranking. Table 4-1 shows employee wants and manager perceptions
of employee wants. Employee wants tend to follow the theories of Maslow and Herzberg. It is interesting to
note that the managers’ perceptions are much different. By involving employees through the use of teams in
meaningful work and by providing the proper reward and recognition, managers can reap the advantages of
greater quality and productivity along with employee satisfaction. This chapter describes how managers can
develop employee motivation and how they can involve their employees through empowerment. If managers
are to effectively motivate employees, they must align their actions closer to the motivators.
Achieving a Motivated Work Force8

The building of a motivated work force is for the most part an indirect process. Managers at all levels cannot cause
an employee to become motivated; they must create the environment for individuals to motivate themselves. Con-
cepts to achieve a motivated work force are as follows:
1. Know thyself. Managers must understand their own motivations, strengths, and weaknesses. This
understanding can best be obtained by having peers and employees anonymously appraise the manager’s per-
formance. Some organizations like Cummins India Ltd. have implemented 360 degree feedback system for
the managers. Motivating managers know that the most valuable resource is people and that their success
largely depends on employees achieving their goals.
6 Ann S. Daughtrey and Betty R. Hicks, Contemporary Supervision (New York: McGraw-Hill, 1989).
7 Fred Luthans and Mark J. Martinko, The Practice of Supervision and Management, McGraw-Hill Book Company, New York, 1979.
8 This section adapted, with permission, from Theodore B. Kinni, “Motivating the Unmotivated,” Quality Digest (March 1993).
78 ■ CHAPTER 4
TABLE 4-1
What Employees Want
Employee Manager
Factor Rating Rating
Interesting work 1 5
Appreciation 2 8
Involvement 3 10
Job security 4 2
Good pay 5 1
Promotion/growth 6 3
Good working conditions 7 4
Loyalty to employees 8 7
Help with personal problems 9 9
Tactful discipline 10 6
Source: Study by K. Kovich, Advanced Management Journal, as reported in the article by Theodore B.
Kinni, “Motivating the Unmotivated,” Quality Digest, March 1993.
2. Know your employees. Most people like to talk about themselves; therefore, the motivating manager
will ask questions and listen to answers. With a knowledge of the employees’ interests, the manager can help
achieve them within the business context. As the manager learns more about the employee, he/she can assist
the employee in directing their efforts toward satisfying their goals and well-being. This knowledge will also
enable the manager to utilize their strengths.
3. Establish a positive attitude. A positive action-oriented attitude permeates the work unit. Managers are
responsible for generating attitudes that lead to positive actions. Feedback should, for the most part (say,
87%), be positive and constructive. Respect and sensitivity toward others is essential to the development of
positive attitudes. Asking employees for their opinions concerning job-related problems is an effective way
to build a cooperative atmosphere. Managers should treat ideas and suggestions as price-less treasures and
implement them immediately whenever possible.
4. Share the goals. A motivated work force needs well-defined goals that address both individual and orga-
nizational needs. Information on goal setting is given in Chapter 2.
5. Monitor progress. The process of goal-setting should include a road map detailing the journey with
periodic milestones and individual assignments. Managers should periodically review performance.
6. Develop interesting work. Managers should consider altering the employees’ assignments by means of
job rotation, job enlargement, and job enrichment.
Job rotation permits employees to switch jobs within a work unit for a prescribed period of time. This activ-
ity reduces boredom and provides knowledge of the entire process and the affect of the sub-process. Thus,
quality consciousness is raised, which may lead to process improvement.
Job enlargement combines tasks horizontally so that the employee performs a number of jobs sequentially.
Thus, the employee is responsible for a greater portion of the product or service, which may also lead to
process improvement.
Job enrichment combines tasks vertically by adding managerial elements such as planning, scheduling,
and inspection. This contributes to the employees’ sense of autonomy and control over their work, which may
lead to process improvement.
7. Communicate effectively. Effective communication provides employees with knowledge about their
work unit and the organization rather than “grapevine” information. Communication is covered in greater
detail in Chapter 2.
8. Celebrate success. Recognizing employee achievements is the most powerful tool in the manager’s
toolbox. Additional information is given in the recognition and reward section of this chapter.
These eight concepts can be used at all managerial levels of the organization.
Employee Surveys9
As described in the previous section, an initial step a manager should take in initiating employee empower-
ment is to survey their employees to determine their current level of perceived empowerment. Employee sur-
veys help managers assess the current state of employee relations, identify trends, measure the effectiveness
of program implementation, identify needed improvements, and increase communication effectiveness. The
success of the survey is directly related to the quality of the planning. An organization should not plan,
develop, and administer the survey unless managers are willing to use the results and work towards empow-
ering their employees.
The first step is for the quality council to create a multifunctional team with responsibilities as previously
described. In addition, the team will determine the objective and develop a plan to communicate results,
encourage root cause analysis, and encourage corrective action.
Next, the team will develop the survey instrument using in-house and external expertise. Identifiers such
as location, sex, age, seniority, and work unit are absolutely essential to analyze the results. If the entire
population is not surveyed, then the sampling procedure should be determined for the initial and subsequent
ones. The survey is pilot tested and revised as needed.
Other constructs to address in the survey include personality characteristics, management styles, job atti-
tudes, and the work.10 Examples of each include:
• Personality characteristics—anxiety, self-esteem in the organization, and ability to participate in the
organization.
• Management styles—consideration of subordinates, initiating structure, commitment to quality.
• Job attitudes—job satisfaction, social support at work and co-worker’s commitment to quality.
• The work—task variety, autonomy and importance.
Several employee empowerment questionnaires exist in the literature.10,11
The third step is to administer the survey. This activity begins by communicating to the employees the pur-
pose, schedule of events, and employee expectations. The survey should be administered by an outside group
to maintain anonymity. Written comments should be typed with names disguised. Employees should be given
time to complete the questionnaire, preferably during normal work hours in a large area such as the cafeteria.
Surveys are administered every 12 to 18 months.
9 This section is adapted from Ronald D. Snee, “Listening to the Voice of the Employee,” Quality Progress (January 1995): 91–95: and
Roger E. Breisch, “Are You Listening,” Quality Progress (January 1995): 59–62.
10 Hayes, Bob E., “How to Measure Empowerment,” Quality Progress (February 1994): 41–46.
11 Kontoghiorghes, Constantine and Doborah Dembeck, “Prioritizing Quality Management and Sociotechnical Variables in Terms of
Quality Performance,” Quality Management Journal, Vol. 8, No. 3: 36–48.

80 ■ CHAPTER 4
Next, the results are compiled and analyzed, and a report is prepared for the quality council in a timely
manner. This report is shared with the entire organization, including a mechanism for input of reactions and
suggestions.
The last step is to determine areas for improvement. Such areas for improvement will occur at the work
unit level, cross boundaries among work groups such as between engineering design and marketing, and cover
the entire organization.
By listening to the voice of the employee, the organization can receive feedback to help ensure a thriving
TQM effort.
Empowerment
The Manufacturers’ Alliance for Productivity and Innovation stated that “[o]rganizations that empower
employees as part of their total management effort are twice as likely as other firms to report significant prod-
uct or service improvement.”12
The dictionary definition of empowerment is to invest people with authority. Its purpose is to tap the enor-
mous reservoir of potential contribution that lies within every worker. An operational definition follows:
Empowerment is an environment in which people have the ability, the confidence, and the commitment to take the
responsibility and ownership to improve the process and initiate the necessary steps to satisfy customer require-
ments within well-defined boundaries in order to achieve organizational values and goals.
Empowerment should not be confused with delegation or job enrichment. Delegation refers to distribut-
ing and entrusting work to others. Employee empowerment requires that the individual is held responsible for
accomplishing a whole task. The employee becomes the process owner—thus, the individual is not only
responsible but also accountable. Job enrichment is aimed at expanding the content of an individual’s job,
whereas empowerment focuses on expanding on the context of the job such as its interactions and interde-
pendencies to other functions of the organization.13
In order to create the empowered environment, three conditions are necessary.
1. Everyone must understand the need for change. People fear change. The effective communication of
why the organization needs to change is critical to success. In addition, people need to understand the role
they will play in the change process. Senior management must understand that people change for their own
reasons, not for reasons of the organization. People who are older, well educated, highly skilled, and experi-
enced are more likely to accept increased demands and expectations associated with empowerment. In addi-
tion, one’s perceived internal control (locus of control) contributes to whether or not an employee is receptive
to an empowered environment.14
2. The system needs to change to the new paradigm. The system needs to change to reinforce and motivate
individual and group accomplishments. Individuals and groups must understand that freedom to act and (some-
times to fail) is not only OK but is encouraged. Other contextual factors need to be considered if empowerment
is to be successful, such as the role of unions and the type of industry (service or manufacturing). If the union
environment is not willing to engage employees in an empowerment culture, success will be difficult.15
12 “News—Employee Involvement Linked to Quality Gains,” Quality Progress (December 1993): 14.
13 Dimitriades, Zoe S., “Empowerment in Total Quality: Designing and Implementing Effective Employee Decision-Making Strategies,”
Quality Management Journal, Vol. 8, No. 2 (2001): 19–28.
14 Dimitriades.
15 Dimitriades.
3. The organization must enable its employees. Enablement means providing information, education, and
skill. To ask people to change work habits without providing them with the tools for change only increases
resistance to the change process. Additional factors that should be considered before determining if organi-
zation can enable its employees are strategy and technology.16 Companies that have a business strategy and
technology focus of customization are more likely to embrace empowerment compared to companies whose
strategy is that of low-cost and high volume.
There is nothing mystical about empowerment. People generally want to be more in charge of their jobs
and careers. After all, they do that successfully in their personal lives every day. Most people appreciate and
value the trust and responsibility inherent in an environment that supports empowered people and their
actions. When people have the information, education, and skills required to perform in a changed environ-
ment, understand their boundaries of empowerment, and realize the necessity for change, their resistance to
that change decreases greatly.17
A 1993 ASQ/Gallup survey showed that employees feel empowered to:
Stop work in progress . . . . . . . . . . . . . . . . . . . . . . . . . .83%
Intervene on customer’s behalf . . . . . . . . . . . . . . . . . .81%
Make exception to procedures . . . . . . . . . . . . . . . . . . .61%
Rework product or service . . . . . . . . . . . . . . . . . . . . . .61%
Replace merchandise . . . . . . . . . . . . . . . . . . . . . . . . . .37%
Refund money/authorize credit . . . . . . . . . . . . . . . . . .26%
Teams
Employee involvement is optimized by the use of teams. Teams, however, are not a panacea for solving all qual-
ity and productivity problems, but in most instances, they are effective.
Definition
A team is defined as a group of people working together to achieve common objectives or goals. Teamwork is
the cumulative actions of the team during which each member of the team subordinates his individual interests
and opinions to fulfill the objectives or goals of the group. The objective or goal is a need to accomplish some-
thing such as solve a problem, improve a process, design a refrigerator, plan a conference, audit a process, or
please a customer. It needs to be clearly defined, have milestones set, have resources provided, and use a sys-
tematic approach. Members of the team will need to focus on how they relate to each other, listen to the sug-
gestions of others, build on previous information, and use conflict creatively. They will need to set standards,
maintain discipline, build team spirit, and motivate each other. Each member of the team has their own history
of experience to help achieve the objective. They should have a need to see the task completed, but also the
needs of companionship, fulfillment of personal growth, and self-respect.
Why Teams Work

Teams work because many heads are more knowledgeable than one. Each member of the team has special
abilities that can be used to solve problems. Many processes are so complex that one person cannot be
16 Dimitriades.
17 Bob Mann, “Empowerment: An Enabling Process,” Quality Digest (January 1994): 39–44.
82 ■ CHAPTER 4
knowledgeable concerning the entire process. Second, the whole is greater than the sum of its members. The
interaction within the team produces results that exceed the contributions of each member. Third, team members
develop a rapport with each other that allows them to do a better job. Finally, teams provide the vehicle for
improved communication, thereby increasing the likelihood of a successful solution.
Types of Teams
The early history suggests that work simplification efforts by management and labor were most likely the
first production-oriented teams. However, the development of quality control circles by the Japanese in
1961 is considered to be the beginning of the use of teams to improve quality. Quality control circles are
groups of people from one work unit who voluntarily meet together on a regular basis to identify, analyze,
and solve quality and other problems within their area. They choose their own problems and focus on qual-
ity-of-work-life and health/safety issues rather than on improving work processes. Often they remain in
existence over a long period of time, working on project after project. Quality control circles have been
quite successful in Japan and enjoyed some initial success in other countries but not as extensive. A major
drawback was a lack of middle management support. Without managers on teams or directly overseeing
the teams as a quality council might, members frequently were not able to persuade management to imple-
ment their recommendations.
Outside Japan, the popularity of quality control circles has declined; however, this type of team is the pro-
genitor of our present teams. The current types of teams can be divided into four main groups. They may be
called by different names and have slightly different characteristics to accommodate a particular organization.
1. Process improvement team. The members of a process improvement team represent each operation of
the process or sub-process. Usually the scope of the team’s activity is limited to the work unit. A team of
about six to ten members will come from the work unit and, depending on the location of the sub-process,
an external or internal supplier and external or internal customer would be included on the team. During the
course of the team’s life, additional expertise from other work areas may be added on a permanent or tem-
porary as-needed basis. The life cycle of this type of team is usually temporary—it is disbanded when the
objective has been obtained. When the targeted process includes many work units or the entire organization,
a cross-functional team may be more appropriate with work unit teams as sub-teams.
2. Cross-functional team. A team of about six to ten members will represent a number of different func-
tional areas such as engineering, marketing, accounting, production, quality, and human resources. It may also
include the customer and supplier. A design review team is a good example of a cross-functional team. This
type of team is usually temporary. An exception would be a product support team, which would be permanent
and have as an objective to serve a particular product line, service activity, or a particular customer. This type
of team breaks down functional area boundaries.
3. Natural work teams. This type of team is not voluntary–it is composed of all the members of the work
unit. It differs from quality control circles because a manager is part of the team and the projects to be
improved are selected by management. Some employees may opt not to work in teams for a variety of rea-
sons, and managers should anticipate this action and be prepared to help employees become comfortable in
the team environment or, alternatively, find work in another unit that still performs work as individuals. Even
though “team work” is technically feasible, there may be such resistance that its introduction should be
delayed until there has been substantial turnover.
4. Self-directed/self-managed work teams. They are an extension of natural work teams without the super-
visor. Thus, they are the epitome of the empowered organization—they not only do the work but also man-
age it. There is wide discretion to organize their work subject to organizational work flow requirements. There
is a team coordinator to liaison with senior management, that may rotate among members. The team meets
daily to plan their activities, and decisions are usually by consensus. Additional responsibilities may include:
hiring/dismissal, performance evaluation, customer relations, supplier relations, recognition/reward, and

training. The team must have access to business information in order to plan, control, and improve their
processes.
Self-managed teams are empowered to take all decisions about the work which they do. For example,
Federal Express claims productivity up to 40% with self-managed teams. According to a survey of Fort-
une 1000 companies, 68% of the companies use self-directed work teams; however, only 10% of the
workers are involved in such teams.18 Developing these types of teams requires not only careful planning
and substantial training of the individuals, but also several organizational changes. As a result, many
companies begin with a few pilot teams that are implemented slowly to full development over several
years.
The growth of Shri Mahila Griha Udyog Lijjat Papad (popularly known as just “Lijjat”) over last 5
decades is spectacular. Lijjat is managed solely by women. The members believed and practised principles of
cooperation and collective ownership. Seven women initiated the venture in 1957 to make household papads.
As the demand increased, more and more women entered the production process. The paucity of space forced
the Lijjat sisters to decentralize production to the homes of their members.
From the initial membership of 7 women in Mumbai, it has now scaled up to over 50,000 women across
the country. From a one shop organization, it has now over 65 branches and 50 divisions.19
Of course, there is some overlap between these four main types of teams. Also, organizations will modify
them to accommodate their culture.
Recognize that the use of teams to empower employees should be done gradually so that acceptance
by both management and employees is built on successful results of teamwork. As an organization
becomes more comfortable with the use of teams for empowerment, teams will form both laterally and
vertically throughout the organization. As Figure 4-2 indicates, a permanent process improvement team
(here, a business improvement team) that is directed by the quality council may address overall cross-
functional improvements for the organization. By direction of the quality council, several cross-functional
teams may be established to address specific improvement problems that span several functional areas.
Within functional areas, one or more process improvement teams may be engaged. Finally, one or more
Quality
Council
Business Process Team
Cross Functional Teams
Process Process Process Process Process

Improvement Improvement Improvement Improvement Improvement
Teams Teams Teams Teams Teams
Work Work Work Work Work

Group Group Group Group Group
Figure 4-2 The Use of Teams Throughout an Organization
18 Dumaine, B., “The Trouble with Teams,” Fortune, Vol. 130, No. 5 (1994): 86–87.
19 2006 Report by UN-World Food Program.
84 ■ CHAPTER 4
functional areas may establish a work group or quality control circle to address overall improvements to
the particular functional area.
Characteristics of Successful Teams

In order for a team to be effective, it should have certain characteristics, listed below.
1. Sponsor. In order to have effective liaison with the quality council, there should be a sponsor. Prefer-
ably the sponsor is a member of the quality council, thereby providing organizational support.
2. Team charter. A team charter is a document that defines the team’s mission, boundaries, the back-
ground of the problem, the team’s authority and duties, and resources. It also identifies the members and
their assigned roles–leader, recorder, timekeeper, and facilitator (optional). Detailed information on roles
is given in a later section. The sponsor and the team negotiate the charter.
3. Team composition. The size of the team should rarely exceed ten people except in the case of natural
work teams or self-directed teams. Larger teams have difficulty maintaining commitment, and interpersonal
aspects become difficult to control. Teams should be diverse by having members with different skills, per-
spectives, and potential. Where appropriate, internal and external customers and suppliers should be included.
4. Training. As the need arises, members should be trained in problem-solving techniques, team dynam-
ics, and communication skills. A later section discusses training in detail.
5. Ground rules. The team must develop its rules of operation and conduct. There should be open discussion
on what will and will not be tolerated. Periodically the ground rules should be reviewed and revised when appro-
priate.
6. Clear objectives. Without clear objectives and goals, the team will have difficulty. In addition, the cri-
teria for success should be agreed on with management. Detailed information on objectives and goals is given
in Chapter 2.
7. Accountability. The team is accountable to perform. Periodic status reports should be given to the qual-
ity council. In addition, the team should review its performance to determine possible team process weak-
nesses and make improvements.
8. Well-defined decision procedures. Effective, acceptable, and timely decisions have to be made by the
team. Detailed information on decisions is given later in the chapter.
9. Resources. Not only is funding and employee release time for the project important, but also important
is access to information. The team cannot be expected to perform successfully without the necessary tools.
10. Trust. Management must trust the team to perform the task effectively. There must also be trust among
the members and a belief in each other.
11. Effective problem solving. Decisions are based on the problem-solving method given in Chapter 5.
They are not made on hunches or quick fixes.
12. Open communication. Members actively listen, without interruption, to other members, speak with
clarity and directness, ask questions, and say what they mean.
13. Appropriate leadership. All teams need leadership—whether imposed by the quality council, or
whether someone emerges as a leader figure as the life of the team progresses, or whether the leadership
changes as the team matures. Detailed information on leadership is given in Chapter 2.
14. Balanced participation. All members must become involved in the team’s activities by voicing their
opinions, lending their knowledge, and encouraging other members to take part.
15. Cohesiveness. Members should be comfortable working with each other and act as a single unit, not
as individuals or sub-groups.
Team Member Roles

Teams are usually selected or authorized by the quality council. A team will consist of a team leader, facili-
tator, recorder, timekeeper, and members. All team members have clearly defined roles and responsibilities.
The team leader, who is selected by the quality council, sponsor, or the team itself, has the following
roles.20
• Ensures the smooth and effective operation of the team, handling and assigning record keeping, orches-
trating activities, and overseeing preparation of reports and presentations.
• Facilitates the team process, ensures that all members participate during the meetings, prevents other mem-
bers from dominating, actively participates when appropriate, guides without domineering, and uses posi-
tive interpersonal behavior.
• Serves as a contact point between the team and the sponsor or quality council.
• Orchestrates the implementation of the changes recommended by the team within organizational con-
straints and team boundaries.
• Monitors the status and accomplishments of members, assuring timely completion of assignments.
• Prepares the meeting agenda, including time, date, and location; sticks to the agenda or modifies it where
appropriate; and ensures the necessary resources are available for the meeting.
• Ensures that team decisions are made by consensus where appropriate, rather than by unilateral decision,
handclasp decision, majority-rule decision, or minority-rule decision.
The facilitator is not a member of the team; he/she is a neutral assistant and may not be needed with a
mature team. This person does not get involved in the meeting content or evaluation of the team’s ideas. Roles
are as follows:
• Supports the leader in facilitating the team during the initial stages of the team.
• Focuses on the team process; is concerned more with how decisions are made rather than the decision itself.
• Acts as resource to the team by intervening when necessary to keep the team on track.
• Does not perform activities that the team can do.
• Provides feedback to the team concerning the effectiveness of the team process.
The team recorder, who is selected by the leader or by the team and may be rotated on a periodic basis,
has the following roles:
• Documents the main ideas of the team’s discussion, the issues raised, decisions made, action items, and
future agenda items.
• Presents the documents for the team to review during the meeting and distributes them as minutes after
the meeting in a timely manner.
• Participates as a team member.
The timekeeper, who is selected by the leader or by the team and may be rotated on a periodic basis, has
the following roles:
• Monitors the time to ensure that the team maintains the schedule as determined by the agenda.
• Participates as a team member.
20 Jane E. Henry, “Lessons From Team Leaders,” Quality Progress (March 1998): 57–59.
86 ■ CHAPTER 4
The team member, who is selected by the leader, sponsor, or quality council or is a member of a natural
work team, has the following responsibilities:21
• Contributes best, without reservation, by actively participating in meetings and sharing knowledge,
expertise, ideas, and information.
• Respects other people’s contributions—doesn’t criticize, complain, or condemn.
• Listens carefully and asks questions.
• Is enthusiastic—it’s contagious and helps galvanize the entire team.
• Works for consensus on decisions and is prepared to negotiate important points.
• Supports the decisions of the team—badmouthing a decision or a member reduces the effectiveness of
the team.
• Trusts, supports, and has genuine concern for other team members.
• Understands and is committed to team objectives.
• Respects and is tolerant of individual differences.
• Encourages feedback on own behavior.
• Acknowledges and works through conflict openly.
• Carries out assignments between meetings such as collecting data, observing processes, charting data,
and writing reports.
• Gives honest, sincere appreciation.
Effective Team Meetings

If the participants know their roles and utilize the characteristics of successful teams, the probability of effec-
tive team meetings is enhanced. There are, however, a few items that can help improve the process:
• Meetings should be regularly scheduled; have a fixed time limit, and start on time. Participants should
be notified ahead of time with the location, time, and objective. Avoid unnecessary meetings through
e-mail, voice mail and telephone calls; however, also avoid accumulated issues.22
• An agenda should be developed, either at the end of the previous meeting or prior to the beginning of the
next meeting. It should be sent to the participants prior to the meeting. Each agenda item includes a process,
such as brainstorming, affinity diagram, discussion, and so forth; the presenters; and time guidelines.
• Agendas usually list: opening focus, previous meeting feedback, agenda review, agenda items, summary,
and action items.
• Periodically, the meetings should be evaluated by the participants.
A simple evaluation survey can be developed and completed by team members, such as the example pro-
vided in Figure 4-3.23 Once the team has completed their evaluations individually, specific areas of improve-
ment can be readily identified and addressed.
Successful team meetings require planning, training, and evaluation, as well as excellent leadership. Meet-
ings should give workers direction and allow them to take action. Meetings should not be used to learn what
21 Karen A. Eichelberger, “Leading Change Through Projects,” Quality Progress (January 1994): 87–90.
22 Eckberg, John, “Fewer Meetings Can Reduce Inefficiency,” Business Monday (July 31, 2000): 3.
23 Coaching and Teambuilding Skills for Managers and Supervisors, SkillPath, Inc. 1992.
Agree Disagree
1. The purpose of our meeting was well-defined. 0 0
2. We decided what we wanted to achieve by the
end of the meeting. 0 0
3. We were sufficiently prepared for the meeting. 0 0
4. We reviewed our progress during the meeting. 0 0
5. We allocated the meeting time well. 0 0
6. We captured and developed spontaneous ideas. 0 0
7. We listened to all views for understanding. 0 0
8. We kept on track. 0 0
9. We kept our attention and concentration
focused. 0 0
10. The meeting did not break up into small group
discussions. 0 0
11. We reviewed and confirmed what had been
agreed upon and how those decisions would be
activated. 0 0
12. We had fun. 0 0
Figure 4-3 Example Meeting Evaluation Survey
action they should take.24 Once at the meeting, stick to the agenda. Agendas keep the discussion moving and
allow the meeting to run on time.
Stages of Team Development25

Organizations can dramatically improve team performance by understanding and recognizing the stages in the
life cycle of teams. Knowing a team’s location in the life cycle helps management understand team performance
and avoid setting unrealistic objectives that limit a team’s success. Bruce Tuckerman found that there were four
stages to a team’s development. These stages are forming, storming, norming, and performing.26
Forming is the beginning stage where members become aware of the boundaries of acceptable behavior.
Members are often not familiar with each other’s skills, and each prefers to do the work on their own as there
is a lack of trust. Members are cautious with their communication and tend to be formal. In general, the mis-
sion and goals of the team are still questionable, and the problems seem too large to solve.27 It is a stage of
transition from individual to member status and of testing the leader’s guidance. Considerable time is spent
in organizing and training. The team accomplishes little in regard to its objectives. To expedite the forming
stage, an individual should be tasked with chartering the team.28 In chartering a team, a facilitator commonly
meets with the upper management to discuss the specific problem; he/she then develops a macro flowchart of
24 Eckberg.
25 Adapted, with permission, from Peter R. Scholtes, The Team Handbook (Madison, WI: Jointer Associates Inc., 1988).
26 “Development Sequence in Small Groups,” Psychological Bulletin (1965).
27 Hoye, J. and T. Tupper, “Empowering Self-Managing Work Teams,” Quality Digest (March 1994): 34–51.
28 Cupello, James M., “The Gentle Art of Chartering a Team,” Quality Progress (September 1995): 83–87.
88 ■ CHAPTER 4
the major processes associated with the product, service or process. From this information, the facilitator can
better determine the team members that should be selected based on their skills and knowledge. The facilita-
tor can then have the team meet to evaluate the problem posed by management, determine the type of train-
ing team members may need, and identify the appropriate team leader.
Storming is the most difficult stage as members start to realize the amount of work that lies ahead. There is a
tendency to panic. Members rely almost solely on their personal and professional experience and resist working
with other team members. There is a great deal of conflict, and the leader needs to be patient and flexible in work-
ing with the team. However, not all conflict is bad. If a team does not have any conflict, chances are the level of
organizational performance is low.29 Such teams adapt slowly to change, show apathy, or are stagnant. On the
other hand, when conflict becomes disruptive, interferes with activities and makes coordination difficult, the team
is dysfunctional. Owen indicates that good teams fight more than bad teams, at least at first.30 Each individual,
particularly those on cross-functional teams, brings with them both hierarchical and functional baggage, differ-
ences in goals, differences in perceptions, as well as different levels of work ethics, sense of time,
career-family priorities, and attitudes toward authority. Team leaders and facilitators need to know how to man-
age team conflict so that it is productive and not destructive. Below are tips to help team members handle conflict.
• Ask those who disagree to paraphrase one another’s comments. This may help them learn if they really
understand one another.
• Work out a compromise. Agree on the underlying source of conflict, engage in a give and take, and
finally agree on a solution.
• Ask each member to list what the other side should do. Exchange lists, select compromises all are will-
ing to accept, and test the compromise to see if it meshes with team goals.
• Have the sides each write ten questions for their “opponents.” This will allow them to signal their major
concerns about the other side’s position. The answers often lead to compromise.
• Convince team members they sometimes may have to admit they are wrong. Help them save face by con-
vincing them that changing a position shows strength.
• Respect the experts on the team. Give their opinions more weight when the conflict involves their expert-
ise, but don’t rule out conflicting opinions.
If managed properly, functional conflict leads to positive movement toward goals, innovation and creativity,
and solutions to problems.
Norming is the stage where members begin to work together. Emotional conflict is reduced as cooperation,
cohesion, and constructive criticism start to become the normal behavior. Because there is more time and
energy to focus on the objectives, significant progress begins to occur.
Performing is the stage where the team members have settled their relationships and expectations. They
better understand the project and begin performing by diagnosing and solving problems and choosing and
implementing changes. Members understand their roles and work in concert to achieve their objective(s)
effectively and efficiently.
Adjourning is a stage that is reserved for temporary teams. The team needs to evaluate its performance and
determine lessons learned. This information can be transferred by members when they participate
on future teams. There also needs to be a celebration to recognize the team’s contribution to the organization.
As a result of proper training and effective leadership, some teams arrive at the performing stage so quickly
that it may be difficult for an organization to observe the first three stages.
29 Chester, Raymond, “When Teams Go to War—Against Each Other,” Quality Progress (June 1999): 25–28.
30 Owen, Jean V., “Why Teams Fail,” Manufacturing Engineering (September 1995): 63–69.
Ten Common People Problems and Their Solutions31

One way to deal with group problems is to talk about them as soon as they occur. Most problems require a
more structured approach. Common team problems and their solutions are given below.
1. Floundering occurs when the team has trouble starting or ending a project or different stages of the
project. Solutions to this state are to look critically at the improvement plan, review the mission statement,
determine the cause of the holdup, and have each member write down reasons and discuss them at the next
meeting.
2. Overbearing participants have an unusual amount of influence in the team. They usually have a posi-
tion of authority or a particular expertise. Teams need these abilities; however, it becomes detrimental when
they discourage discussion on their expertise and discount other members’ ideas. Solutions are to reinforce
the ground rules, talk to the person off-line and ask for cooperation, and enforce the importance of data and
the problem-solving method.
3. Dominating participants like to hear themselves talk, use overlong anecdotes, and dominate the meet-
ing. Members get discouraged and find excuses for missing meetings. Solutions are to structure discussion
on key issues for equal participation, talk to the offending person off-line, and have the team agree on the need
for limits and a balanced participation. In addition, the leader may act as a gatekeeper by asking questions
such as “Gupta, we heard from you; what do the others think?”
4. Reluctant participants feel shy or unsure of themselves and must be encouraged to contribute. Prob-
lems develop when there are no built-in activities that encourage introverts to participate and extroverts to lis-
ten. In addition to structured activities, solutions include dividing the task into individual assignments and
acting as a gatekeeper by asking questions such as, “Sanjeev, what is your experience in this area?”
5. Unquestioned acceptance of opinions as facts occurs when members assert personal beliefs with such
confidence that other members think they are facts. Solutions are to request data and to follow the problem-
solving method.
6. Rush to accomplish is common to teams being pushed by one or more members who are impatient for
results. Teams must realize that improvements do not come easily and rarely overnight. Solutions are to remind
members that the ground rules call for the problem-solving method or to confront the rusher off-line and explain
the effects of impatience.
7. Attribution is the activity of guessing at a person’s motives when we disagree or don’t understand his
or her opinion or behavior. Solutions are to reaffirm the importance of the problem-solving method, question
whether this opinion is based on data, and find out the real meaning of the problem.
8. Discounts and “plops” arise when members fail to give credit to another’s opinions or no one responds
to a statement that “plops.” Every member deserves the respect and attention from the team. Solutions are to
reinforce active listening as a team behavior, support the discounted member, or talk off-line with members
who frequently discount, put down, or ignore.
9. Wanderlust: digression and tangents happen when members lose track of the meeting’s purpose or want
to avoid a sensitive topic. Discussions then wander off in many directions at once. Solutions are to use a written
agenda with time estimates, write meeting topics on flip charts, or redirect the conversation back to the agenda.
10. Feuding team members can disrupt an entire team with their disagreements. Usually these feuds predate
the team and are best dealt with outside the team meetings. Solutions are to get the adversaries to discuss the
issues off-line, offer to facilitate the discussion, and encourage them to form some contract about their behavior.
31 Adapted, with permission, from Peter R. Scholtes, The Team Handbook, (Madison, WI: Jointer Associates Inc., 1988).
90 ■ CHAPTER 4
When people work together on a team, some of their energies are expended on “people issues.” Mastery
of these “people issues” leads to team success.
Common Barriers to Team Progress32

Evidence shows that the barriers given below are due primarily to the system rather than to the team.
• Insufficient training. Teams cannot be expected to perform unless they are trained in problem-solving
techniques, group dynamics, and communication skills.
• Incompatible rewards and compensation. In general, organizations make little effort to reward team per-
formance. Because of a strong focus on individual rewards it is difficult for individuals to buy into the
team concept. Similarly, performance appraisals do not accept input from peers or team members.
• First-line supervisor resistance. Supervisors are reluctant to give up power, confident that they can do
the work better and faster, are concerned about job security, and are ultimately held responsible.
• Lack of planning. A lack of common direction or alignment on the use of collaborative efforts, internal
competition, redundancy, and fragmented work processes all prevent team progress.
• Lack of management support. Management must provide the resources and “buy into” the quality coun-
cil/sponsor system.
• Access to information systems. Teams need access to organizational information such as business per-
formance, competitive performance, financial data, and so forth.
• Lack of union support. Organizations need union support for the team to be successful.
• Project scope too large. The team and organization are not clear on what is reasonable, or management
is abdicating its responsibility to guide the team.
• Project objectives are not significant. Management has not defined what role the team will play in the
organization.
• No clear measures of success. The team is not clear about its charter and goals.
• No time to do improvement work. Values and beliefs of the organization are not compatible with the
team’s work. Individual departmental politics interfere with the team’s progress. Management has not
given the team proper resources.
• Team is too large. The organization lacks methods for involving people in ways other than team
membership.
• Trapped in groupthink. Team members all have a mind-set that no actions are taken until everyone agrees
with every decision.
With a knowledge of these barriers, management can evaluate their own performance and take the neces-
sary corrective action to support team progress.
Training
Training is essential for an effective team. The quality council must take an active role in establishing train-
ing programs. Large organizations spend lakhs of rupees in team training. Maruti Suzuki’s annual expendi-
32 Information for this section comes from two surveys: Association for Quality and Participation, “Self-Directed Teams: A Study of Cur-
rent Practice,” Development Dimensions International and Industry Week, 1990, as reported in Quality Digest (October 1993): 42; and
Wilson Learning Corporation, “Meeting the Collaborative Challenge: A Study of Supports and Barriers to Team Effectiveness,” as
reported in Quality Digest (April 1994): 8. And from two articles: Snee, Ronald D., K. H. Kelleher, J. G. Myers, and S. Reynard,
“Improving Team Effectiveness,” Quality Progress (May 1998): 43–48; and Beck, John D. W., and Neil M. Yeager, “How to Prevent
Teams from Failing,” Quality Progress (March 1996): 27–31.
ture on employee training was Rs. 13 crore during the year 2008. This large investment has its payoffs.
Motorola, Inc. estimates that it earns $30 for every dollar invested in employee training. A recent study of
small to mid-sized manufacturing firms found a significant positive relationship between company perform-
ance, as measured by profitability, and quality management training.33
The training must be experimental, because the trainees will retain 20% of what they hear and about 90%
of what they do. Training should be practical and given on an as-needed basis. When possible, role-playing
and case studies should be used. Trainers should be carefully selected for their knowledge, enthusiasm, and
respect from the trainees.
Credibility must be established early. The team members should feel comfortable with the trainer and the
program that has been developed. A clear picture of the objectives and how each member will benefit must
be in place. The trainees should be encouraged to express their thoughts about the training program. Team
leaders should be receptive to suggestions and make changes where warranted. Employees are much more
likely to support a program that they helped develop.
The first step in the training process is to make everyone aware of what the training is all about. Thoughts,
suggestions, and feedback should be gathered. The second step is to get acceptance. Trainees must feel that
the training will be of value to them. The third step is to adapt the program. Is everyone ready to buy into it?
Does everyone feel they are a part of what is going to take place? The fourth step is to adapt to what has been
agreed upon. What changes must be made in behavior and attitudes?
In addition to team training covering group dynamics and communication skills, all members must receive
training in quality awareness (TQM), specific problem solving techniques such as SPC, safety, and technical
aspects of the job. The only difference among the types of training is that some may be required more often
and for greater lengths of time than others. Training programs fail for many different reasons, but they pri-
marily fail because the focus is usually on the training itself and not on helping the organization improve in
a real and measurable way.34 To be efficient for the team members and the organization, training should be
action oriented so that results can be obtained right away. Depending on an individual’s position in the organ-
ization, Juran suggests different types of training in quality, as Table 4-2 suggests.
Team leaders play an important role in team building. There is a difference between being a supervisor
and a team leader. Supervisors who become team leaders will experience a different situation than what
they were accustomed to as supervisors. Team leaders share their responsibilities with other team mem-
bers. They give team members a chance to succeed on their own. The team leader must be aware of the
85/15 rule, which means that 85% of the problems are part of the system. To be a good team leader requires
specific training. Courses from local colleges in human relations, motivation, conflict resolution, commu-
nications, and related matters are recommended. Some organizations provide on-site training in these
areas. Consultants are also available for this type of training. A well-trained team leader can help ineffec-
tive team members improve, but team members usually cannot help an ineffective team leader.
Suggestion System35
Suggestion systems are designed to provide the individual with the opportunity to be involved by con-
tributing to the organization. Most of the ideas for continuous improvement will come from the team
33 Ryan, Chuck, Richard H. Deane, and Ned P. Ellington, “Quality Management Training in Small to Midsized Manufacturing Firms,”
Quality Management Journal, Vol. 8, No. 2 (2001): 44–52.
34 Snee, Ronald D., “Make the View Worth the Climb,” Quality Progress (November 2001): 58–61.
35 James A. Heath, “A Few Good Ideas for a Good Idea Program,” Quality Progress (January 1994): 35–38.
92 ■ CHAPTER 4
TABLE 4-2
Who Needs to Receive Quality Training
Other
Top Quality Middle Work
Subject Matter Management Managers Managers Specialists Facilitators Force
Quality Awareness X X X X X
Basic Concepts X X X X X X
Strategic quality
management X X
Personal Roles X X X X X X
Quality Processes X X X X X X
Problem Solving Methods X X X X X
Basic Statistics X X X X X X
Advanced Statistics X X
Quality in Functional Areas X X X
Motivation for Quality X X X X
Reproduced, with permission, from J. M. Juran ed., Quality Control Handbook, 4th ed., (New York: McGraw-Hill, 1988).
approach. However, once the foundation for a TQM organization has been established, a suggestion system
can operate effectively and in parallel to the team approach. The key to an effective system is management
commitment. Management must make it easy for employees to suggest improvements. Management should
then review them promptly and if feasible, implement them.
Stimulating and encouraging employee participation starts the creative process. There are five ground rules:
1. Be progressive by regularly asking your employees for suggestions. Merely putting up a suggestion
box will not create the necessary motivation.
2. Remove fear by focusing on the process and not on the person. When employees know that punitive
actions will not occur, they are more likely to respond.
3. Simplify the process so it is easy to participate. Stamp out superfluous paperwork, review, and proce-
dures.
4. Respond quickly to suggestions and within a specific period of time. The evaluation process must be
simple and effective. The response, in writing, has three possible responses—acceptance, rejection, or
referral to a committee for further evaluation. If accepted, a time frame for implementation should be
given; if rejected, the reason for the rejection should be stated; and if referred to a committee, the eval-
uation time should be stated.
5. Reward the idea with published recognition so that everyone knows the value of the contribution.
Individual ideas are a vast untapped resource. The five-step approach helps to create an environment that
opens communication between employees and managers. Idea generation is a skill that requires practice. It
supplements the team process.
Recognition and Reward

Recognition is a form of employee motivation in which the organization publicly acknowledges the positive
contributions an individual or team has made to the success of the organization. This acknowledgment is
delivered using verbal and written praise and may include symbolic items such as certificates and plaques.
Reward is something tangible such as theater tickets, dinner for two, or a cash award to promote desirable
behavior. Recognition and reward go together to form a system for letting people know they are valuable
members of the organization.
Employees should be involved in the planning and implementation of the recognition and reward pro-
gram. This activity should be performed by a cross-functional team that represents all areas of the
organization. Systems that are developed with employee involvement will most likely succeed. It should be
fully understood by the employees and reviewed periodically in order to continuously improve the system
and because priorities—either the employee’s or the organization’s—may change. In addition, the system
should be simple. Employees should be involved with the manager and sometimes the customer and sup-
plier in the nomination and selection of the individuals and teams to be recognized and rewarded. Criteria
for selection can utilize some of the information discussed in the section on appraisal.
The system that is developed by the team must have clear recognition criteria. Policies and procedures
must be consistently and fairly applied throughout the organization. The system should be structured to
avoid ranking individuals, because ranking fosters the counterproductive notion that there are winners and
losers. Recognition should be valid, genuine, and meaningful for the giver and the recipient; it should not
be used to manipulate people. The organization should recognize effort as well as easy-to-measure results.
Recognition should not be based primarily on chance, which frequently occurs in employee-of-the-month
programs.
The system should be so developed that monetary reward is not a substitute for compensation. While the
reward may be delayed until an appropriate time, the recognition should be on a timely basis. Rewards should
be appropriate to the improvement level—the greater the improvement, the greater the reward. They should
be of value—a coffee cup does not provide much incentive to improve performance, especially when this is
the third cup awarded to the employee and everyone else has two. It is also desirable for the employee to select
the form of the reward from various alternatives.36
People like to be recognized, either as a team or individually. A person’s feeling of achievement, value to
the organization, knowing the organization cares, and having peer recognition may be more important than
any reward. In addition to the plaque or framed certificate given at a formal banquet or informal pizza party,
there are other forms of individual and team recognition. Other forms of recognition include pictures on the
bulletin board, articles in newsletters or newspapers, letters to families, making a presentation to manage-
ment, passing along compliments from others, personal phone calls or notes, placing positive notes in fold-
ers, and increased responsibility. Supervisors can also informally use the power of recognition by giving
on-the-spot praise for a job well done whenever it is earned.
There are many different forms of individual and team rewards. Individual rewards include a better park-
ing space, dinner out, gift certificates, gift to charity in the name of the recipient, washing an employee’s car
during the lunch hour, trips, and event tickets, to name a few. Group rewards are similar and can also include
an outing such as a ball game, bowling, and movies; group lunch or dinner; allowing the team to make some
decisions affecting their work or allowing the team to spend their reward “earnings” to improve their work
36 Gene H. Milas, “How to Develop a Meaningful Employee Recognition Program,” Quality Digest (May 1995): 139–141.
94 ■ CHAPTER 4
environment. Cash awards are also effective motivators for individual and team awards. Gainsharing is dis-
cussed next in this chapter. A survey of 100 organizations found the following intrinsic (those related to feel-
ings of accomplishment or self-worth) and extrinsic (those related to pay or compensation issues) reward
practices to be effective in their companies in supporting their TQM practices, as described in Table 4-3. Many
organizations have periodic celebration banquets where awards are presented to individuals or teams.37
To summarize, an effective recognition and reward system:
1. Serves as a continual reminder that the organization regards quality and productivity as important.
2. Offers the organization a visible technique to thank high achievers for outstanding performance.
3. Provides employees a specific goal to work toward. It motivates them to improve the process.
4. Boosts morale in the work environment by creating a healthy sense of competition among individu-
als and teams seeking recognition.
Gainsharing
Gainsharing is a financial reward and recognition system that results from improved organizational per-
formance. It is different than profitsharing, in which the stockholders share a portion of the year-end profits
TABLE 4-3
Effective Reward Practices
Intrinsic Rewards Extrinsic Rewards
• Non-monetary forms of recognition to • Profit sharing

acknowledge achievement of quality • Gainsharing
improvement goals • Employment security
• Celebrations to acknowledge achievement • Compensation time
of quality improvement goals • Individual based performance systems
• Regular expressions of appreciation by • Quality based performance appraisals
managers and leaders to employees to
acknowledge achievement of quality
improvement goals
• 360 degree performance appraisals—
feedback from co-workers (other than the
immediate supervisor), subordinates or
customers is incorporated into performance
appraisals
• Formal suggestion system available for
individuals to make quality improvement
suggestions
• Developmental based performance appraisals
• Quality based promotions
Reproduced, with permission, from Richard S. Allen and Ralph H. Kilmann, “How Well Does Your
Reward System Support TQM?” Quality Progress (December 1998): 47–51.
37 1001 Ways to Reward Employees (New York: Workman Publishing Co. Inc., 1994).
with salaried and occasionally hourly employees. Gainsharing is based on the philosophy that people and
teamwork are the keys to success. Because organizational success is dependent on team effort, the team shares
in the rewards of success. Thus, gainsharing is a measurement of organizational productivity and a method to
share productivity gains.
There are many different variations to the technique. We will illustrate the basic approach. This particular
method utilizes labor costs and potential sales income for the calculations and is based on four-week periods;
however, calculations are made on a weekly basis. At the end of the week, the team performance is calculated
based on potential sales income from the week’s production less rejections and outsourcing costs. Financial
data shows that labor costs are a certain percentage of sales income, and this value multiplied by the income
gives the team goal. Team cost is the sum of all labor costs for the week including fringe benefits. The gain
or loss is the difference between the team cost and the team goal. For example:
Potential income = $ 535,000
Labor cost as a percent of sales = 27%
Team goal = $ 5,35000 ⫻ 0.27 = $ 144,450
Actual team cost = $ 138,365
Gain = $ 144,450 – 138,365 = $ 6,085
Payments are usually made every four weeks, thereby providing motivational reinforcement. They are sep-
arate from the regular paycheck. Every four weeks gainsharing meetings are held to review the calculations,
evaluate the performance, and discuss ways to make additional gains. Distribution of the gain can be to hourly
personnel or to both salary and hourly personnel. It should be prorated by the employees’ regular weekly earn-
ings for four weeks. In other words, the gainsharing amount for an employee is the ratio of his four weeks earn-
ings divided by the four weeks earnings of all employees in the plan. This ratio is multiplied by the gain. There
are two types of performance strategies—financial performance measure as illustrated by the example or phys-
ical performance measure such as pieces, weight, or volume.
One of the key issues is the amount of the gains. Organizations distribute between 30% and 100%, with
50% appearing to be equitable.
Another issue is the baseline determination, which in the example was 27%. The baseline can be based on
historical information or, if unavailable, targeted information. It should be changed several times a year, using
a weighted average, so that gains are for recent improvements rather than old ones. The baseline may also
need to be adjusted for capital improvements or changes in mix.
Gain sharing is a widely used policy in software and engineering service industry in India.
Technology service firms in India are moving to a revenue/gain share model where they get a chunk of the
client’s revenues or gains made due to increased productivity or reduction in processing time.
For HCL Technologies, which adopted the revenue/gain share model in 2005, less than 5% of revenue cur-
rently comes from such contracts. While engineering services and infrastructure management services clients
have more readily adopted this model, those in the applications space are yet to adopt. HCL has a revenue shar-
ing arrangement with Cisco.
Gainsharing is an excellent motivational tool that improves quality, productivity, and, of course, the bot-
tom line.
Performance Appraisal
The purpose of performance appraisals is to let employees know how they are doing, and provide a basis for
promotions, salary increases, counseling, and other purposes related to an employee’s future. There should be a
good relationship between the employee and the appraiser. Employees should be made aware of the appraisal
96 ■ CHAPTER 4
TABLE 4-4
Appraisal Formats
Type Description
Ranking Compares employees by ranking from highest to lowest.

Narrative Gives a written description of employee’s strengths and weaknesses.
Graphic Indicates the major duties performed by the employee and rates each
duty with a scale, which is usually from 1 (poor) to 5 (excellent).
Forced choice Places each employee in a category with a predetermined percentage—
for example, excellent (10%), very good (25%), good (30%), fair
(25%), and poor (10%).
process, what is evaluated, and how often. Employees should be told how they are doing on a continuous basis,
not just at appraisal time. The appraisal should point out strengths and weaknesses as well as how performance
can be improved. Common appraisal formats are shown in Table 4-4.
Performance appraisals may be for the team or individuals. Regardless of the system, a key factor in a suc-
cessful performance appraisal is employee involvement. An employee should always be given the opportunity
to comment on the evaluation, to include protesting, if desired. Performance must be based on standards that are
developed and agreed upon by the appraisor and employee. Standards normally contain an ideal level and an
acceptable level. Standards should change when the situation changes, such as when equipment changes or new
production techniques are developed.
Performance appraisals should be viewed as a positive way to get employees involved. Many supervi-
sors look at appraisals as one of the unpleasant duties they must perform. Yet, if employees have been ade-
quately interviewed as a part of the hiring process, properly trained, given help when needed, and
counseled, then their performance will be a reflection on how well those tasks were performed. Perfor-
mance appraisals also can be a pleasant duty for supervisors and can reveal how effective the employee is
in contributing to the success of the organization.
Every effort should be made to avoid errors in performance evaluations. Culture, ethics, education level,
and predetermined opinions can affect evaluations. It would be unfair indeed to render a poor rating based on
bias or anything except how the employee has performed based on established standards. An unfair evalua-
tion could cost the organization a valuable employee.
The traditional performance appraisal system has been criticized as being counter-productive and unneces-
sary by such quality experts as Deming and Scholtes. There are a number of arguments to support their opinion.
Appraisals nourish short-term performance and destroy long-term planning. Frequently, long-term gains
are sacrificed by making the individual look good in the short term. This outlook is especially prevalent when
we look at the emphasis on the quarterly profit and loss statement. Another criticism states that individual
appraisal destroys teamwork. If teams are to become a cohesive unit of “all for one and one for all,” then indi-
vidual ranking would undermine the entire concept. The end result would be a team that performs poorer, not
better. A third concern is the assumption that an individual is responsible for all results. In reality, the results
are frequently beyond an individual’s control, such as processes and equipment. Deming has stated that 85%
of the problems are the result of the system. Last, there is a concern that appraisals are frequently based on
subjectivity and immeasurables. They should be based on objectivity; however, it is difficult to measure some
attributes such as customer satisfaction and leadership.38
38 George Eckes, “Practical Alternatives to Performance Alternatives,” Quality Progress (November 1994): 57–60.
Rather than scrap performance appraisals, a number of practitioners have suggested that the perform-
ance appraisal system be improved. Some improvement suggestions are:
1. Use rating scales that have few rating categories. It is difficult to differentiate the middle range of per-
formers (approximately 67%), whereas it is relatively easy to rate the 10 to 20% at each end. Therefore, scales
should be limited to between 3 and 5.
2. Require work team or group evaluations that are at least equal in emphasis to individual-focused evalu-
ations. The increased interdependence of tasks associated with TQM in the workplace dictates that team per-
formance be utilized. This action will encourage team members to help, support, and cooperate with each other.
3. Require more frequent performance reviews where such reviews will have a dominant emphasis on future
performance planning. Work team and individual performance data should be collected and reviewed with an
evaluation of results and lessons learned. It may be necessary to have two reviews—one immediately after com-
pletion of the task and one when the performance cycle of the task allows evaluation of results. More frequent
reviews with emphasis on improvement is much less threatening than the annual appraisal.
4. Promotion decisions should be made by an independent administrative process that draws on current-
job information and potential for the new job. Placing too much weight on current performance in the selec-
tion process can force well-intentioned appraisers to make a poor decision. For example, the highest
performing teller in a bank may not be the best person to be promoted to loan officer.39
5. Include indexes of external customer satisfaction in the appraisal process. In order to accomplish this
process, the customers and their requirements will need to be identified, performance metrics determined
using a rating scale, and the improvement process initiated. Evaluation will be based on the change in the met-
rics once the baseline has been established.
6. Use peer and subordinate feedback as an index of internal customer satisfaction. Initiation of this activ-
ity would be similar to the previous item.
7. Include evaluation for process improvement in addition to results. Process behavior tends to be more
within the person’s control. One of the basic concepts of TQM is continuous process improvement; therefore,
if this concept is to be achieved, it must be appraised. There is frequently a lag between process improvement
and the results from that improvement.40
Despite Deming’s reservations, performance appraisals can reinforce TQM concepts provided these sug-
gestions are implemented where appropriate.
Unions and Employee Involvement

In general, unions support quality improvement programs but express concern regarding management exer-
cising too much control over employees. Union representatives must be involved in any program involving
employees. Although employee involvement has been widely accepted, it could be a problem if not properly
addressed. In some instances where management takes too much control over employee involvement, it could
be a violation of the National Labor Laws. Some have argued that a law passed to serve a good purpose in
1935 may not be appropriate for today’s problems. However, unless the National Labor Law is amended, it
is in the best interest of management to be sure actions taken will not violate the National Labor Law.
39 J. Bruce Prince, “Performance Appraisal and Reward Practices for Total Quality Organizations,” Quality Management Journal
(January 1994): 36–46.
40 Allan J. Weber, “Making Performance Appraisals Consistent With a Quality Environment,” Quality Digest (June 1995): 65–69.
98 ■ CHAPTER 4
Teams should not discuss wages, rates of pay, hours of employment, or conditions of work. In some cases,
these limitations will adversely effect the team’s objective.41
Both management and unions must examine long-held views of what constitutes proper union-management
relationships. Desire for unilateral power must be changed to shared power for the benefit of employees and the
organization. A joint process of determining how best to proceed to effectively meet the competition, especially
from foreign organizations, is the only sensible solution. Management must recognize and respect the unique
role unions play in employee involvement. A feeling of trust must be established and a partnership developed
between management and the union.
There are two ways in which unions and management have chosen to deal with the implementation of
employee involvement in an organization. Some have chosen to work cooperatively, giving unions member-
ship on quality councils and having them participate fully in planning, implementation, and evaluation of the
entire effort. Others have adopted the more “traditional” mode of bargaining the impact and implementation
actions affecting those in the improvement team. Each approach presents benefits and potential risks. Union
involvement improves the continuous improvement process; however, union leadership runs the risk of crit-
icism from other members if it is perceived as working too closely with management. The nature of the
relationship will be determined by the background and history or the labor-management relations in the organ-
ization and the willingness of the union to participate. Ideally, the leadership of the organization will seek
early involvement of the union and make the nature of the involvement as specific as possible.42
An example of union-management cooperation is illustrated by the collective bargaining agreement between
the United Auto Workers and Ford Motor Company. It provides for joint leadership in the quality improvement
effort by joint committees at the corporate, division, and facility levels. These committees have the authority of
the contract to plan, implement, evaluate, and expand quality systems as needed. Many orga-nizations can pro-
vide evidence that their successful quality systems can be attributed to the unions. Unions will grow if they are
seen as a superior way to support democracy in the workplace and improve the performance of the organization.43
Benefits of Employee Involvement

Involving employees, empowering them, and bringing them into the decision-making process provides the
opportunity for continuous process improvement. The untapped ideas, innovations, and creative thoughts of
employees can make the difference between success and failure. Competition is so fierce that it would be
unwise not to use every available tool.
Employee involvement improves quality and increases productivity, because
• Employees make better decisions using their expert knowledge of the process.
• Employees are more likely to implement and support decisions they had a part in making.
• Employees are better able to spot and pinpoint areas for improvement.
• Employees are better able to take immediate corrective action.
• Employee involvement reduces labor/management friction by encouraging more effective communica-
tion and cooperation.
• Employee involvement increases morale by creating a feeling of belonging to the organization.
41 Donald L. Dewar, “National Labor vs. Teams: What You Should Know,” Quality Digest (May 1993): 60–62.
42 Federal Quality Institute, Employee Involvement and Quality Management in the Federal Government, July 1993.
43 Sidney P. Rubinstein, “Democracy and Quality as an Integrated System,” Quality Progress (September 1993): 51–55.
• Employees are better able to accept change because they control the work environment.
• Employees have an increased commitment to unit goals because they are involved.
Additional Comments
Employee involvement should not be looked at as a fad that will go away soon. It is a way of life, crucial to
TQM, and it can mean the difference between being competitive and going out of business. Employees, not sen-
ior management, hold the future in their hands. The sign over the plant entrance that says, “Through these doors
pass our most important asset, our employees” does not ring true when employees have a feeling that no one
really cares. More involvement might be encouraged by the sign “No one of us knows as much as all of us.”
As the organizational culture begins the process of change, resistance to this change will certainly be present.
Keeping people informed will reduce resistance, especially when they see the benefits. Change is an ongoing
process that must occur if an organization is to continue to exist in the competitive world. People do not neces-
sarily resist change; they resist being changed, and problems arise when a person’s comfort zone is disturbed.
Much of the information in this chapter has related to the role of management. However, we must not over-
look the role of the work force. Workers must become knowledgeable about the needs of the customer and
nominate quality problems for solution. In addition, workers must know what they are supposed to do and
how they are doing and have a commitment to improving their job.
TQM Exemplary Organization44

Infosys Technologies Ltd was started in 1981 by 7 people. Today, Infosys is the biggest IT venture in India.
It is a leader in the “next generation” of IT and consulting services with revenue of over US$ 4 billion.
The services provided include business and technology consulting, application services, systems integra-
tion, product engineering, custom software development, maintenance, re-engineering, independent test-
ing and validation services, IT infrastructure services and business process outsourcing.
Infosys pioneered the Global Delivery Model (GDM), which emerged as a disruptive force in the industry
leading to the rise of offshore outsourcing. The GDM is based on the principle of taking work to the location
where the best talent is available making the best economic sense with the least amount of acceptable risk.
Infosys has a global presence with over 50 offices and development centers in India, China, Australia, the
Czech Republic, Poland, the UK, Canada and Japan. Infosys and its subsidiaries have over 10 lakh employees.
In recent years, Infosys has been noted as the best employer in the country by many HR surveys. The com-
pany is well known for its employee-friendly HR practices. Though, Infosys grew to become a US$ 2 billion
company by the year 2006, it still retained the culture of a small company. Infosys attracted the best talent from
across the world and recruited candidates by conducting one of the toughest selection process. All the selected
candidates were required undergo an intensive 14 week training program. All the employees were also required
to undergo training every year and some of the chosen employees were trained at the Infosys Leadership Insti-
tute to take on higher responsibilities in the company. Infosys was one of the first companies to offer Employee
Stock Ownership Plans (ESOPs) to its employees. According to, Mr. Narayan Murthy, non-executive Chairman
of Infosys Technologies Ltd. “We always felt that the leader cannot operate in a vacuum. For a leader to succeed
you need to have thousands of people who will work with him/her. Those people are adding value towards cre-
ating a wonderful company and its only fair that we share our wealth with these people too.”
44 Malcolm Baldrige National Quality Award, 2001 Manufacturing Category Recipient, NIST/Baldrige Homepage.
100 ■ CHAPTER 4
The company followed variable compensation structure where the compensation of the employees
depended on the performance of the individual, the team and the company.45,46
Summary
Employee Involvement is an important approach to improve quality and productivity. Involvement of
employees is a crucial factor in achieving higher quality collective business growth. Mature organizations
should demonstrate increasing participation of employees at various levels of business operations.
There are several levels of motivation and its knowledge helps the organization understand its work-
force. Management should create an environment of trust among the employees and nurture the ability of
their workforce, their confidence and ownership of their processes. Employee involvement is also opti-
mized by the use of teams.
Organization must also encourage individual efforts and ideas. Suggestion and schemes provide an indi-
vidual with an opportunity to get involved by contributing to the organization.
Recognition of efforts should be done publicly acknowledging the positive contributions of an individual
or a team.
Gain sharing is a financial reward and recognition system that results from improved organizational per-
formance. It is a measurement of an organization’s productivity and a method to share the productivity gains.
Performance appraisals of the individuals or teams should be done to let the employees know that their
performance is evaluated and should provide basis for promotions, counseling and several other purposes.
Exercises
1. As a supervisor, list ways to improve morale.
2. List the five levels in Maslow’s hierarchy of needs and describe each level.
3. How do recognition and reward affect motivation?
4. List at least five reasons given by supervisors when resisting change.
5. Discuss the advantages of an empowered team.
6. You recently completed a performance appraisal for one of your employees. The employee is not
happy with the evaluation and has asked for an appointment to discuss the evaluation process. Dis-
cuss the following:
(a) The purpose of the performance evaluation.
(b) The evaluation criteria.
(c) The employee’s options regarding the evaluation.
7. You have been asked to develop an employee involvement policy for your organization. Respond to
the following:
(a) Why do you need union involvement?
(b) How will you get the union involved?
(c) What resistance should you expect?
45 Public domain information derived from the Website of Infosys Technologies Limited, www.infosys.com.
46 Article “The Renaissance Man” by Yasmin Taj. Published on 14th October 2009 in “Ascent” Supplement of Time of India, Pune.
8. Describe the role of employees’ involvement in TQM by responding to the following:

(a) Why is employee involvement important to TQM?
(b) Why do we need involved employees? We haven’t before.
(c) Employee time is valuable. How will it pay reasonable dividends?
9. Define the following:
(a) teams
(b) performance
(c) reward
(d) motivation
(e) recognition
(f) empowerment
(g) gainsharing
10. Describe and analyze an incident where you wished you had the authority (empowerment) to make
a decision but had a concern about whether or not you should make the decision on your own.
11. Conduct an employee opinion survey for a work unit and analyze the results. This may be done as an
individual assignment or as a team effort.
12. Describe Herzberg’s dissatisfiers and motivators.
13. What conditions are necessary for empowerment?
14. What are the different types of teams?
15. Why do teams work?
16. List five common barriers to team progress.
17. Evaluate an organization’s
(a) suggestion system
(b) performance appraisal system
(c) recognition and reward system
(d) decision-making methods
This may be done as an individual assignment or as a team effort.
18. Which of the following is correct hierarchy of needs?
(a) survival, security, esteem, social, self actualization
(b) survival, security, social, esteem, self actualization
(c) security, survival, social, esteem, self actualization
(d) security, survival, esteem, social, self actualization
19. Which of the following are motivators?
I salary
II certificate from the President
III appreciation from customer
IV air-conditioned office
(a) I and IV only
(b) II and III only
102 ■ CHAPTER 4
(c) I, II, III and IV

(d) I, II and III only
20. Which of the following is correct sequence?

(a) forming-norming-storming-performing-adjourning
(b) forming-storming-performing-norming-adjourning
(c) forming-norming-storming-adjourning-performing
(d) forming-storming-norming-performing-adjourning
21. Which of the following should be the key aspect of any performance appraisal system?
(a) opportunity for employee to comment on evaluation
(b) opportunity for peers to comment on evaluation
(c) opportunity for the customers to comment on evaluation
(d) opportunity for the HR manager to comment on the evaluation
22. At which of the team stages a team leader would generally get selected?
(a) forming
(b) norming
(c) performing
(d) storming

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qxp 6/24/11 4:36 PM Page 75

Figure 4-1 Maslow’s Hierarchy of Needs

Maslow’s Hierarchy of Needs

Herzberg’s Two-Factor Theory

Achieving a Motivated Work Force8

Quality Performance,” Quality Management Journal, Vol. 8, No. 3: 36–48.

Why Teams Work

hiring/dismissal, performance evaluation, customer relations, supplier relations, recognition/reward, and

Business Process Team

Cross Functional Teams

Process Process Process Process Process

Work Work Work Work Work

Figure 4-2 The Use of Teams Throughout an Organization

Characteristics of Successful Teams

Team Member Roles

Effective Team Meetings

Figure 4-3 Example Meeting Evaluation Survey

Stages of Team Development25

Ten Common People Problems and Their Solutions31

Common Barriers to Team Progress32

Recognition and Reward

• Non-monetary forms of recognition to • Profit sharing

Ranking Compares employees by ranking from highest to lowest.

Unions and Employee Involvement

Benefits of Employee Involvement

TQM Exemplary Organization44

EMPLOYEE INVOLVEMENT ■ 101

8. Describe the role of employees’ involvement in TQM by responding to the following:

(c) I, II, III and IV

20. Which of the following is correct sequence?

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