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HRM is concerned with the peoples dimension in the organization

Facilitating the competencies and retention of skilled force
Developing management systems that promote commitment
Developing practices that foster team work
Making employees feel valued and rewarded.

Unit -1

Prospects
of HRM

Nature of
HRM

Industrial
Relations

HRM

Employee
Hiring

Very Vast
Covers all major activities in
Employee
Maintenance

Employee
Motivation

Employee
&
Executive
Remunera
tion

the working life of a worker

-from time an individual enters
into an organization until he
or she leaves
comes under the purview of
HRM

Definition - Edwin Flippo defines HRM as planning,

organizing, directing, controlling of procurement,

development, compensation, integration ,
maintenance and separation of human resources to
the end that individual, organizational and social
objectives are achieved.
According to Dessler: HRM is a process of accquiring ,
training, appraising, compensating employees and
attending their labor relations, health, safety and
fairness concerns

Facilitating the retention of skilled and competent

employees
Building the competencies by facilitating continuous
learning and development
Developing practices that foster team work and flexibility
Making the employees feel that they are valued and
rewarded for their contribution
Developing management practices that endanger high
commitment
Facilitating management of work force diversity and
availability of equal opportunities to all.

HRM involves management functions like planning,

organizing, directing and controlling
It involves procurement, development, maintenance of

human resource

It helps to achieve individual, organizational and social

objectives

HRM is a multidisciplinary subject. It includes the study of

management psychology communication, economics and

sociology.
It involves team spirit and team work.
It is a continuous process.
It is an inherent function
Pervasive function
People centered
Based on Human relations

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Social Man

According to Elton Mayo social setting and interpersonal

behavior of a person at workplace gets affected
Motivated by social needs and realizes identity
More responsive to social groups
Generally react to members of group rather than as
individuals
Informal leaders play imp role to set social norms

Rational Man
Motivated by economic gains
Controlled by orgn-custodial model
Feelings of ppl are irrational and interfere in ratiojnal

self interest
Orgn to control unpredictable traits

Complex Man
People are complex and variable
Capable of learning by orgn experiences
Motives of ppl can be different
Response to business strategies may be diff.

HRP
Recruitment
Selection
Orientation/Induction , placement
T &D
Performance appraisal
Compensation
Motivation
Rewards , recognition & incentives
Social security and welfare
Maintenance , health and safety
Review and audit

Welfare: working conditions & wkplace

Labor/ personnel aspect: recruitment & selection,

compensation
Industrial relations aspect : Industrial disputes,

workers participation, factories act, collective

bargaining etc

Societal objectives

To be ethically & socially responsible to the needs of the

society while minimizing the negative impact of such
demands upon the organization
Organizational objectives
To recognize the role of HRM in bringing about
organizational effectiveness
Functional objectives
To maintain the departments contribution at a level
appropriate to the organizations needs
Personal objectives
To assist employees in achieving their personal goals in a
manner that their personal goals enhance the individuals
contribution to the organization

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Traditional HRM Functions

1.

Policy and Planning

2.

Procurement /Acquisition / Employment (Recruitment and Selection)

3.

Development (Skill enhancement for appropriate Work Performance)

4.

Compensation (Financial and Non Financial rewards)

5.

Integration (Harmony between individual and organizational interests)

Planning

Staffing

5.

Maintenance (Retention of able and willing employees)

Organizing

6.

Separation (Parting of ways in the most amicable manner)

Development
Compensation

MANAGERIAL
FUNCTIONS

Directing
Controlling

OPERATIVE
FUNCTIONS

Advisory functions
Advice to top
mgmt
Advice to dept.s

Motivation
Maintenance
Integration
Emerging Issues

STAFFING

Job analysis, HRP, Recruitment, Selection,

Placement, Induction, Internal Mobility

DEVELOPMENT

Competency profiling, Training and development,

Performance & potential management, Career
management, 360 degree feedback

COMPENSATION
& MOTIVATION

MAINTENANCE

Job design, Work scheduling, Job evaluation,

Compensation administration, Incentives and
benefits

INTEGRATION

EMERGING
ISSUES

Health, Safety, Welfare, Social security

Employment relations, Grievance, Discipline,

Trade unions, Participation, Collective
bargaining

HRIS, HR audit, HR scorecard, International

HRM, Workforce Diversity

Human Resource Management Contd.

I.
II.

Statutory HRM
Compliance of Legal Framework
Voluntary HRM
Guidelines for Carrying Out
Management

People core strength of an organization

Any resource can be replaced but not HR
Processes evolve over a period of time
IT enabled environment facilitates engineering

Human

Resource

effortlessly
Performance the pillars of performance are people and IT
Organizational performance in terms of value creation
and return on investment

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Policy formation
Advisory role
Linking pin B/w mgmt and wkrs

The 'hard' approach rooted in the manpower planning

approach is concerned with aligning human resource

strategy with business strategy

Representative
Decision making role
Mediator
Leadership role
Welfare role
Research in absenteeism etc

The 'soft' approach is rooted in the human

relations school, with concern for workers'

outcomes and encourages commitment to the
organisation by focussing on workers' concerns.

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Changing Role of HRM

QWL
Productivity
Innovation & change

The collective bargaining role

The implementer of legislation role
The bureaucratic role
The social conscience of business role.
A growing performance improvement role

1900s 1940s 1960s -

1980s -

1990s -

2000s -

Employee Advocate
Passive Administrator
Reactive Provider /
Compliance Monitor
Reactive Partner /
Specialist Service Provider
Proactive Partner /
Business Manager
Change Agent /
Internal Consultant

Robert Owen 1800 -1828

Practiced reduced working hours, housing facilities,

education for workers etc.
Worked towards British Factory Act, 1819
Charles Babbage: 1828-1839
British Mathematician
Worked on work measurement, cost determination
and incentives
Daniel McCallum
Initiated JDs merit promotions

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Growth of trade unions

Scientific Management-F.W. Taylor
Experiment on machinery ,motion study, piece rate
system, standardization of tools, working conditions
Principles:

Replacement of rule of thumb

Scientific selection & training of wkers
Cooperation b/w labor & mgmt.
Max output
Equal division of responsibility

Commodity concept

Humans were considered as a commodity

Factor of production concept-Mechanistic
Factory system
Ppl employed against fixed wages
Human were other factor of production

Industrial Psychology

People had better wkin conditions than commodity

Human relations approach-Hawthorne

concept.

experiments -1932-Elton Mayo

Paternalistic concept

Partnership concept

During trade unions

Maintenance of health and workers.
Appointment of welfare officer
Orgn have protective nature towards employees

Humanistic concept ( social system approach)

Focused upon responsibility of employers to provide facilities for

social and psychological satisfaction

1950s behavioral sciences

Motivation, leadership, grp dynamics & teamwork
Value of HR being considered
Efforts to integrate objective with HR
Mgmt practices like-MBO, QCs etc were used

Dimension
1. Employment Contract

Personnel Management

3.

Behaviour referent

4.

Managerial task

Monitoring

Nurturing

5.

Management Role

Transactional

Transformational leadership

6. Communication

Indirect

Direct

7.

Conflict handling

Reach temporary truce

Manage climate & culture

8.

T&D

Controlled access to courses

Learning organization

Personnel procedures

Wide ranging cultural,

structural & personnel
strategies
Mutuality of interests

9.

Focus of attention for

interventions

10. Shared interests

Interests of the org. are

uppermost

Learning organization, OD, QWL, conducive wk

place, Potential appraisals

Employees development
Work culture and climate

Human Resources
Management
Aim to go beyond contract

Careful delineation of written

contracts
Importance of guiding clear
rules
Norms/customs/practices

2. Rules

ESOPs

HRD concept

Enabling employee capabilities

Human Resource concept

Modern view

Can do outlook, impatience

with rule
Values/mission

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Personnel /IR
Dimension

Personnel/IR

Beliefs and assumptions

1. Contract

Careful delineation of written

contracts

Aim to go 'beyond contract'

2. Rules

Importance of devising clear

rules/mutuality

'Can-do' outlook; impatience with

'rule'

3. Guide to management
action

Procedures

'Business need'

4. Behaviour referent

Norms/custom and practice

Values/mission

Managerial task
vis a vis labour

Monitoring

Nurturing

6. Nature of relations

Pluralist

Unitarist

7. Conflict

Institutionalised

De-emphasised

Personnel / IR

HRM

12. Management role

Transactional

Transformational
leadership

13. Key managers

Personnel/IR specialists

General/business/line
managers

14. Communication

Indirect

Direct

15. Standardisation

High (for example

'parity' an issue)

Low (for example 'parity'

not an issue)

16. Prized management

skills

Negotiation

HRM

HRM

Facilitation

LWO required for 500 wkers

Function of LWO:
Supervision of health, safety, grievance redressal
Counselling of wkrs on family, personal, adjusting to
wk rights & privileges to work
Advising mgmt on: welfare policies, training program,,
statutory obligations, FBT, wkrs education, use oof
media
Liasoning with mgmt disputes, harmony
Wking with mgmt & wkrs -harmony, prodctivity
Wking with public

8. Key relations

Labour management

Customer

9. Initiatives

Piecemeal

Integrated

10.Corporate plan

Marginal to

Central to

11. Speed of decision

Slow

Fast

Personnel / IR

HRM

17. Selection

Separate, marginal task

Integrated, key task

18. Pay

Job evaluation (fixed

grades)

Performance related

19. Conditions

Separately negotiated

Harmonisation

20. Labour management

Collective bargaining
contracts

Towards individual contracts

21. Thrust of relations with

stewards

Regularised through
facilities and training

Marginalised (with exception

of some bargaining for
change models)

22. Job categories and

grades

Many

Few

23. Communication

Restricted flow

Increased flow

24. Job design

Division of labour

Teamwork

25. Conflict handling

Reach temporary truces

Manage climate and culture

26. Training and

development

Controlled access to
courses

Learning companies

27. Foci of attention for

interventions

Personnel procedures

Wide ranging cultural,

structural and personnel
strategies

HCM refers to the task of measuring the cause and effect

relationship of various HR programs and policies on the

bottom line of the organization. It seeks to obtain
additional productivity.
What is Human Capital?
Think of it as quality of labor
Similarity to physical capital
It is productive
It is produced
Investment
Role of savings.importance of credit
constraints
It earns returns to the investment
It is subject to depreciation

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Sumantra Ghoshal has given the following three categories:

Intellectual Capital: Stock of knowledge, skills & expertise
Social Capital: Structure, quality & flexibility of human
relationships
Emotional Capital

Intellectual Capital

Social Capital

Emotional Capital

Specialized knowledge

Network of
relationships

Self-confidence

Skills and expertise

Sociability

Ambition and courage

Cognitive complexity

Trust-worthiness

Risk taking ability

Learning capacity

Resilience

44

Repositioning HRM
Understanding key
business drivers

Aligning HR as a
strategic business
partner

Competitive
instinct and
intelligence

Competitive Challenges Influencing HRM

Three competitive challenges that companies now

face will increase the importance of human resource
management practices:
1. The challenge of sustainability
2. The global challenge and
3. Technology challenge

Driving transition
by managing change

Envisioning,
enabling and
encouraging
creativity and
innovation
Leading through
personal credibility
by value based on
time delivery of
promises

45

46

Changes in PEST and LPG have brought chances in MNC

& domestic companies
Reasons for challenges: leading HR managers to become
change agents
Changes in internal environment-free trade
Customers approach
Changing profile of workforce: edu, employees
preferences
Advancement in technology
Economic policies

Globalization: structural changes, new forms of orgn,

LPG, trends of IT
Integration of economies-new markets for big
industries , harmony b/w labor & mgmt
Global Benchmarking
New management styles
Privatization-PSU, BPR
Women employment

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The Sustainability Challenge

Technological advancement change management, T

Traditionally, sustainability has been viewed as one

aspect of corporate social responsibility related to the
impact of the business on the environment. However,
we take a broader view of sustainability. For our
purposes, sustainability refers to the ability of a
company to survive and succeed in a dynamic
competitive environment. Company success is based
on how well the company meets the needs of its
stakeholders.

&D
IT revolution
Quality control-customer focus
Changes in PL environment-govt policies, budget,
laws-ESIC, minimum wages, payment of bonus act, PF,
Gratuity, mergers & acquisitions
Changes in wkforce diversity
Mobility of professionals- changing jobs

50

The Global Challenge

Companies are finding that to survive they must

compete in international markets as well as fend off
foreign corporations attempts to gain ground in the
United States. To meet these challenges, U.S.
businesses must develop global markets, use their
practices to improve global competitiveness and
better prepare employees for global assignments.

51

New Proficiencies
HR proficiencies
Business proficiencies
Leadership proficiencies
Learning proficiencies

152

Managing workforce diversity

Managing stress

Meeting aspirations- engagement and TNA

Job satisfaction

Empowerment of employees- delegation, DM, leadership,

Improves productivity

participative management
Managing Human relations- change in value systems, self
directed workers
Dynamic policies and procedures
Building responsive orgn
Customer oriented orgn
Contribution in BPR
Dynamic work culture- QWL

HRD
Job analysis, assignment of task
Employee health, safety to be ensured
Personnel problems and counseling, turnover,

absenteeism
SHRM
Coordination with Govt rules

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TQM

Strategy: Adapted by War

Overall plan of dealing with environment

BPR
QC
Empowerment

Def: Strategy is a unified, comprehensive, integrated

plan designed to ensure that basic objectives of

enterprise are achieved.
Features:
Top mgmt initiative
Futuristic
Influenced by Ext. Environment
Forecasting

Corporate:
Orgn wide policies
Top level mgmt
Involves acquisition/ diversification
Focus on product
Objectives like profit max, image building, sustainability
Business Level:
Specific objectives of SBU
SBU-operative division focusing on a particular
division/product/segment etc.
Less scope than corporate strategy
Functional Level: strategies of Dept.

Cost Leadership: Lower costs

SM is formulation & implementation of plans &

Classified in 2 areas:

carrying out activities related to matters important to

complete orgn.
Continuous approach
Systematic approach
Focus on mission & goals
Framework for operational planning
Coherence with orgn policies
To see implementation of CS

HR strategy : define work for emp, job specific training,

Perf. Appraisal to remove employees, focus on incentives

Differentiation Strategy: Uniqueness/ Brand loyalty
HR strategy: Innovation/ Hire new ppl, broad job

classification, ext. recruitment at all levels, potential

appraisal, PA as a development tool
Focus Strategy: Low cost & diff.
HR strategy :Boosting efficiency and minimizing costs

Strategic formulation
Strategic implementation

Steps of process
Determination of mission & purpose
Environmental scanning

PEST
SWOT analysis
ETOP- Envi. Threat & opp. profile
Other forces

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Orgn Analysis:
Current domain of firm
Product & services

SHRM is linking of HRM with strategic goals &

Geographical coverage

objectives in order to imp. Business performance and

develop orgn culture that fosters innovation &
flexibility.

Competitive adv
Financial position
Utilization of HR
Productive capacity

Development of Strategic alternatives

Building HR based competitive advantage

Valuable HR
Rareness in HR
Imitatibility of HR
Substitution of HR

Evaluation of Alternatives- PERT/CPM

Choice of strategy
Execution of plan

Challenges: IT, economic policies, IB, profile of workers,

HRP-manpower audit

customer preferences, quality control, globalization

Learning culture and continuous learning

Web based CRM

Role of HR mgr

Providing purposeful direction

Building core competency
Creating competitive a advantage
Facilitation of change
Managing wkforce diversity
Mobility of HR
Develop work ethics & culture
Empowerment of HR
TQM

Open house
Organization of executive leadership camp to develop-

10 days program ( team building, meditation etc)

Willy Korf Innovation scheme ( awards)
Training program in concerned area
Special program- TNA

Acquiring and Preparing Human Resources

Contd.

Assessment and Development of Human Resources Contd.

This area of human resource management deals with:

o Identifying human resource requirementsthat is, human
resource planning, recruiting employees, and selecting
employees.
o Training employees to have the skills needed to perform their
jobs.

This area of human resource management addresses:

o Measuring employees performance.
o Preparing employees for future work roles and identifying employees work
interests, goals, values and other career issues.
o Creating an employment relationship and work environment that benefits
both the company and the employee.

Compensating Human Resources Contd.

This area of human resource management includes:
o Creating pay systems.
o Rewarding employee contributions.
o Providing employees with benefits.

65

66

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EMOTIONAL INTELLIGENCE

Emotional Intelligence (EQ)

The extent to which people are self-aware, can manage their emotions,
can motivate themselves, express empathy, and possess social skills
Persons with high EQs may perform better on jobs that require
interaction and directing others.

The ability of an organization to perform depends on the relationships of the

people involved, which ultimately relates to the degree of emotional
intelligence of its employees and leaders.

EQ can be developed and is not biologically based.

Leaders possessing Emotional Intelligence will create an effective work climate
that will further develop emotional intelligence at the subordinate level.
The higher the level of a jobs complexity and authority, the greater the impact
of high Emotional Intelligence.

FOUR QUADRANT MODEL

FOR EMOTIONAL INTELLIGENCE
The ability of an organization to perform depends on the relationships of the
people involved, which ultimately relates to the degree of emotional
intelligence of its employees and leaders.

Aware-ness

Self

Others

Quadrant 1

Quadrant 3

Emotional Self Awareness

Egon Zehnder International analyzed 515 senior executives. Those strong in EQ

were more likely to succeed than those who were strongest in relevant
experience or IQ. EQ is a stronger predictor of success than experience or high
IQ. Study included execs from Latin America, Germany, Japan with same results
across cultures.

Actions

Quadrant 2
Emotional Self Control

Social Awareness

Quadrant 4
Social Skills

FOUR QUADRANT MODEL (SCHEMATIC)

MENTORING --- DEFINITIONS
Self
Aware-ness Emotional Self Awareness

Others
Social Awareness

Emotional awareness

Social awareness

Self image

Impact

Self expression

Empathy

Emotional Self Control

Social Skills

Resilience

Communication, Active Listening

Self Control

Assertion

Expression

Conflict management

Motivation

Interpersonal skills, trust and

intimacy

Mentoring is a term used to help, advise and guide employees through the
complexities of the business.
Mentoring is a mutual learning partnership in which individuals assist each other
with personal and career development through coaching, role modeling counseling,
sharing knowledge and providing emotional support.
Offline help from one person to another in making significant transitions in
knowledge, work or thinking.

Actions

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MENTORING --- DEFINITIONS

DIMENSIONS OF MENTORING
INFLUENCE

Creating possibilities and providing guidance and support to others

in a relationship of trust; it includes facilitating, bringing visions to life
and enabling people to achieve.

A mentor is that person who achieves a one-to-one developmental

relationship with a learner; and one whom the learner identifies as having
enabled personal growth to take place.

(Directive)

COACH

GUARDIAN

EMOTIONAL NEED

INTELLECTUAL NEED

(Challenging)

NETWORKER/
FACILITATOR

(Nurturing)

COUNSELLOR
(Non-Directive)
INFLUENCE

MENTORING

A MENTOR & A COACH: THE DIFFERENCE

Coaching earlier seen as a remedial activity; mentoring as positive,
developmental intervention
Coaching is seen more skill related, with specific capabilitieslinked outcomes
Line managers often called upon to coach.
Mentoring positioned much more around the whole person and
the big picture

* Coach is Process Expert

* Mentor shares personal perspectives

* Coachee shares personal perspectives

* Mentor uses teaching paradigm; focused

on what mentor knows

* Coach uses questioning paradigm; focused on what

coachee can learn

* Protge listens/Mentor shares

* Coachee talks/ Coach listens and questions

* Focused on any goal or achievement
important to coachee
* Utilized learn and experience new
information, skills, wisdom, and
knowledge

* Focused on development
* Utilized to pass on experience,
information, knowledge, skill, wisdom
* May focus on actions steps, goals, and
accountability (depending on mentor style
and relationship goals)

Line manager, due to performance management responsibility, not

seen as appropriate to take a mentoring role.

* Pre-training; one year relationship

Coaching normally short term; Mentoring is long term.

* Minimal to no cost

* Monthly meetings, typically

Coaching addresses specific issues; Mentoring --- larger issues

Coaching (the How); Mentoring (the Why)

POSSIBLE FORMS OF MENTORING HELP:

A.

Specific learning functions:

COACHING

* Mentor is Subject Matter Expert

* Excellent mentors use coaching

approaches, but the focus in on sharing the
knowledge and wisdom of the mentor
* Mentors come from inside the
organization

* Always focuses on action steps, goals, and

accountability
* No pre-training; often 3-12 months,
depending on goals.
* Weekly or bi-weekly meetings, typically
* No cost if coach internal; external coaches range
$500-$2000/month
* Excellent coaches are ego-less, and
focused entirely on helping the coachee
learn by experience, self-discovery, and
application of knowledge gained from
multiple sources
* Coaches can come from inside our outside the
organization

POSSIBLE FORMS OF MENTORING HELP:

B.

General Career Development functions:

- Learning technical skills and knowledge

- Obtaining challenging tasks

- Learning current jobs

- Obtaining protection

- Learning organizational culture

- Obtaining sponsorship, recommendations

- Learning organizational policies

- Obtaining endorsement for acts / views

- Being prepared for future jobs / promotions

- Making career moves

- Getting achievements showcased
- Clarifying work / Career goals

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POSSIBLE FORMS OF MENTORING

HELP:
C.

Personal help functions:

- Obtaining counseling
- Obtaining moral support / encouragement
- Obtaining a Role Model
- Obtaining praise
- Obtaining a confidante
- Achieving friendship
- Achieving trust

An employee stock ownership plan (ESOP) is a way in which

employees of a company can own a share of the company they

work for. There are different ways in which employees can receive
stocks and shares of their company. Employees can receive them
as a bonus, buy them directly from the company, or receive them
through an ESOP.
In the United States, ESOPs are a very common form of
employee ownership. They have been growing in strength since
about 1974.
The main purpose of an ESOP is to reward and motivate
employees. They are also used to provide a market for departing
owners of successful companies. In most cases, an ESOP is given
to an employee, rather than purchased by an employee.

Got recognition in 1998

Eligible employees get stock below mkt price- sweat
An ESOP is similar to a profit-sharing plan.
A trust fund,
contributes either new shares of its own stocks or cash to buy existing

shares.

Another version of the ESOP borrows money in order to buy existing or

equity
Retention strategy
Eligibility is salary, tenure

new shares.
repay the loan.
Shares in the trust are generally allocated to individual employee
accounts.
When employees leave the company, they receives their share options,
and the company must be able to buy back these options. They must
buy them back at their full market value. In private companies,
employees are able to vote their shares on major issues such as
relocation or closure. In public companies, employees can vote on all
issues.

Provision of installment buying

Reservation on IPO for employees in every financial

It is a programme that allows flexible entering and leaving

times for employees. Developed in 1967 by west german
orgn
Advantages are:
Increase in productivity
Decline the tardiness & absenteeism
Reduction in employee turnover
Increase in morale and work consciousness rather than
time consciousness
Improve Quality

year pref. share

SEBI says ESOS is voluntary
Suitable % in existing shares
5% in new shares reserved for employees
Max ltd of shares held 200
Only for permanent employees

Partnership
Mutuality of interest
Stocks are held in trust
Enforce by: installment purchase, gift to employees,

stock option purchase

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What is KAIZEN?

KAIZEN TECHNIQUE

(Original Definition)

= KAI = CHANGE

Kaizen- defines the managements role in continuously encouraging and

implementing small improvements in the individual & organization.

Break the complex process into sub-processes and then improve the subprocesses.

Continuous improvements in small increments make the process more

efficient ,controllable and adaptable.

Does not rely on more expense, or sophisticated equipment and

techniques.

= ZEN = GOOD
(FOR THE BETTER)

= KAIZEN =
CONTINUAL IMPROVEMENT
GEM = Real; BA = Place

What really is KAIZEN?

Extracting money by eliminating
from process is Kaizen.
Kaizen is process improvement:

QUALITY IS .THE QUALIFIER!

waste

significant (large)
done in strategically important areas
speedily
in sustainable manner
which is

Doing it right first time and all the time.

This boosts Customer satisfaction immensely and increases efficiency of

the Business operations.

Clearing the bar (ie. Specification or Standard stipulated) Excellence that

is better than a minimum standard.

using Scientific data; not opinion.

using Systematic Roadmap, Tools & Techniques
under KAIZEN Paradigms
resulting in Human Development

QUALITY - DEFINITIONS

THE 9 DIMENSIONS OF QUALITY

Performance

Quality is excellence that is better than a minimum standard.

It is conformance to standards and fitness of purpose
ISO 9000:2000 definition of qualityIt is the degree to which a set of inherent characteristics
fulfills requirements.
Quality is fitness for use of the product Joseph Juran.
TQM philosophy and guiding principles continuously
improve the Organisation processes and result in customer
satisfaction.

Features
Conformance
----------------------------Performance

Reliability
Durability
Service

Cost

---------------------------- Response- of Dealer/

Mfgr. to Customer

Service

Features

Aesthetics of product
Reputation- of
Mfgr./Dealer

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TQM SIX BASIC CONCEPTS

Management commitment to TQM principles and methods & long term

Quality plans for the Organisation

Focus on customers internal & external

Quality at all levels of the work force.

Continuous improvement of the production/business process.

Treating suppliers as partners

Establish performance measures for the processes.

EFFECTS OF POOR QUALITY

Low customer satisfaction

Low productivity, sales & profit

Low morale of workforce

More re-work, material & labor costs

High inspection costs

Delay in shipping

High repair costs

Higher inventory costs

Greater waste of material

ROLE OF TQM LEADERS

BENEFITS OF QUALITY
Higher customer satisfaction

Reliable products/services

All are responsible for quality improvement especially the senior

management & CEOs

Senior management must practice MBWA

Better efficiency of operations

Ensure that the teams decision is in harmony with the quality

statements of the organization

Senior TQM leaders must read TQM literature and attend

conferences to be aware of TQM tools and methods

Improved process

Senior managers must take part in award and recognition

ceremonies for celebrating the quality successes of the
organization

Coaching others and teaching in TQM seminars

More market share

Senior managers must liaise with internal ,external and suppliers

through visits, focus groups, surveys

They must live and communicate TQM.

More productivity & profit

Better morale of work force
Less wastage costs
Less Inspection costs

Spread of happiness & prosperity

Better quality of life for all.

TQM IMPLEMENTATION
What is Six Sigma?

Begins with Sr. Managers and CEOs

Timing of the implementation process

Formation of Quality council

Union leaders must be involved with TQM plans implementation

Sigma is a measure of goodness: the capability of a process to produce

perfect work.

A defect is any mistake that results in customer dissatisfaction.

Everyone in the organization needs to be trained in quality awareness

and problem solving

Sigma indicates how often defects are likely to occur.

Quality council decides QIP projects.

The higher the sigma level, the lower the defect rate.

The lower the defect rate, the higher the quality.

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SIX SIGMA METHOD

A metric that indicates how well a process is performing.

Measures the capability of the process to perform defect-free work.

Six sigma method is a TQM process that uses process

capability analysis as a means of measuring progress.

Also known as z, it is based on standard deviation for continuous

data.

The smaller the standard deviation, the lesser the deviation

of the product characteristic from its mean value. If the
process has a normal distribution, the upper and lower
specification limits are +/- 6 sigma from the mean u. The
non-conformance is 2ppb and the process capability Cp is
2.0(1.33 Cp is de facto standard.)

For discrete data it is calculated from DPMO.

Machines
Methods
Materials
Measurements
Manpower
Milieu, Mother nature (environment)
Money
Management

A normal process with mean shifted +/-1.5 sigma from the

target value desired has non-conformance of 3.4ppm and
process capability index Cpk= 1.5, with 1.0 being the de facto
standard.

Practices designed to improve manufacturing

processes and eliminate defects

Started by Motorola after their bad quality products in

1970
Increases quality and decrease cost of production
Registered service mark of Motorola
Concept of DPMO
Lean Manufacturing- process flow and waste issues

Miscellaneous

Inspired by W.E deming cycle of PDCA

Define

DMAIC
DMADV/DFSS

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Six steps to Six Sigma

Define

Product

Customer

Need

Process

MistakeProof

Ensure

Reengineering

Possible Applications

Benchmarking

Problem solving

Manufacturing

Human
Resource

Customer
Service

Engineering
Support

Order
Fulfillment

Finance

Team leader/Facilitator

Statistical Tool

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