How the implementation of Total Quality Management

can improve Human Resource Managemant in

Company

Robby Sepriadi (33783)

Ghita Pritikaranaputri (33762)
Nezar Alfian (33927)
Hany Primadana (33867)
Hedar (33876)

Program Studi Teknik Industri

Jurusan Teknik Mesin Industri
Fakultas Teknik
Universitas Gadjah Mada
Yogyakarta
2010
How the implementation of Total Quality Management
can improve Human Resource Managemant in
Company

A. Introduction

According to global crisis at this time, competition around companies getting harder.
So, it makes the owner think harder to keep their company working. One of way to
get it is decrease the defect in product. Beside that we have to improve their quality.
The TQM (Total Quality Management) was often found in the world of industry. This
term really was connected with a company’s efforts in increasing the quality of the
production from all the fields. TQM was interpreted as the approach management in
an organization that focused on the quality, which all the human resources went along
together and was aimed at the long-term success through the customer's satisfaction.
Human Resource Management (HRM) can be important function of company,
because a failure on HRM's part to recognize this opportunity and act on it may result
in the loss of TQM implementation responsibilities to other departments with less
expertise in training and development. The ultimate consequence of this loss an
ineffective piece mealing of the TQM strategy. Thus, HRM should act as the pivotal
change agent necessary for the successful implementation of TQM.

B. TQM overview
Total Quality Management, TQM, is a method by which management and employees
can become involved in the continuous improvement of the production of goods and
services. It is a combination of quality and management tools aimed at increasing
business and reducing losses due to wasteful practices. [Total Quality Management
and Business Excellence, 2010]

As defined by the International Organization for Standardization (ISO):

"TQM is a management approach for an organization, centered on quality, based on
the participation of all its members and aiming at long-term success through customer
satisfaction, and benefits to all members of the organization and to society." ISO
8402:1994. [Total Quality Management, 2010]
 The purpose of Total Quality Management is creating an atmosphere in organization
so that synergic effectively and efficient in all activity in company environment can
be reached

The key principles of TQM are as following:

Management Commitment

• Plan (drive, direct)

• Do (deploy, support, participate)

• Check (review)

• Act (recognize, communicate, revise)

Employee Empowerment

• Training

• Suggestion scheme

• Measurement and recognition

• Excellence teams

Fact Based Decision Making

• SPC (statistical process control)

• DOE, FMEA DOE, FMEA

• The 7 statistical tools

• TOPS (FORD 8D - Team Oriented Problem Solving)

Continuous Improvement

• Systematic measurement and focus on CONQ

• Excellence teams

• Cross-functional process management

• Attain, maintain, improve standards

Customer Focus

• Supplier partnership

• Service relationship with internal customers

 • Never compromise quality

• Customer driven standards

Beyond communicating the TQM philosophy, the specific training and development needs
for making TQM a practical reality must be assessed. Basically HR professionals must decide
the following: What knowledge and skills must be taught? How? What performance
(behaviors) will be recognized, and how will we reward them? HRM has faced these
questions before and can best confront them in the TQM process. Training and development
that does not fit within the realm of these questions will more than likely encounter heavy
resistance. However, training and development does fall within the realm of these questions
probably will be accepted more readily.(3)

TQM can improve Training and Development.

TQM and the Training and Development. In general, HRM is responsible for providing
training and development. With their background, the HR department is positioned well to
take the leading role that provides programs that are consistent with the philosophy of TQM.
HR managers have an important opportunity to communicate the history of their
organization's TQM program and its champion. Equally important, the HRM can tell
employees that inspired the philosophy of TQM. As a historian of the company, the HR
department should be responsible primarily to convey to members of the TQM culture in the
organization's employee orientation training.
In addition to communicating the TQM philosophy, specific training and development needs
to make a practical reality of TQM should be assessed. Basically, HR professionals should be
decided as follows: What knowledge and skills to be taught? How? Is the performance
(behavior) will be recognized, and how we appreciate them? HRM has faced these questions
before and can best deal with them in the process of TQM. Training and development in
areas that do not conform to this question are likely to face more serious opposition.
However, training and development does not fall within the territory of this question may be
more readily accepted.
Training and development in quality is crucial and necessary if a company is succeed and
achieve its quality vision, to increase its productivity, and to ensure increasing customer
satisfaction. Listed here are some basic quality methodologies that should be part of an
employee education effort.
Course and content Target audience
1. Introduction to total quality. Current All employees (special modification for
trends and techniques of quality;the senior manager, with a bussines and profit
way, what, and how of productivity, focus recommended).
quality and customer satisfaction
2. The PDCA improvement cycle All employee
3. The proactive PDCA cycle Employee with experience in using the
PDCA cycle
4. Seven quality control tools. All employee
5. Seven new quality control tools. All staff, but only after the seven quality
control tools are well understood and used
frequently
6. Design of experiments and taguchi All engineering staff
methods
7. Design for realibility techniques. For All engineering staff
examples, training in internal design,
componen derating, and FMEA.
Other training as appropriate with the
products you may manufacture
8. Quality function deployment (QFD) Marketing, R&D, and engineering staff.
training. Management must understand consepts.
9. Long-long and annual Hoshin All managers
planning.

TQM can improve Recruitment and Selection.

Recruitment and selection is process is to find the workforce to fill a position in a

company(Edenborough:2005)[1]. In the company can not disconnect from the recruitment of
employees. This directly affects the survival of the company. Because the longer an
employee at a company, one day he will lower productivity. So that the necessary recruitment
and selection of new employees.

Important role in the process of recruitment and selection of new employees is a Human
Resource Management (HRM).HRM means employing people, developing their capacities,
utilizing, maintaining and compensating their services in tune with the job and organizational
requirement(Amstrong:2006)[2]. Sometimes there was confusion between the HRM function
with HRD. Here, in emphasizing that the HRM function to restrict the activities while the
HRD has a broader scope such as training and development potential.

Error in reading the potential possessed by a person, which resulted in the failure of the
application of TQM in the company's losses. Like a football team, is spearheading the HRM.
Therefore, HRM should be a pioneer or an agent of change in the successful implementation
of TQM[3].

As an obvious example is the application of the Toyota Way principles to all employees at
Toyota's manufacturing companies worldwide. The Toyota Way associated with recruitment
and selectionon the recruitment and selection. :

– Principle 1 : Base your management decisions on long-term philosophy, even when

having to sacrifice short-term financial goals .
– Principle 2 : Create continuous process flow to bring problems to surface.
– Principle 3 : Use a system of "pull" (pull) to avoid excessive production.
– Principle 4 : Flatten workload (heijunka). (Work like the tortoise, not like a rabbit).
– Principle 5 : Building a culture of stopping to fix the problem, in order to obtain
quality results from the first.
– Principle 6 : Roles and process standards that are the basis for continuous
improvement and employee empowerment.
– Principle 7: Use visual control so no hidden problems.
– Principle 8: Use only technology that can be trusted and really tested to serve the
people and processes.
– Principle 9: Grow leaders who thoroughly understand the work, live the philosophy,
and teach it to others.
– Principle 10: Develop people and outstanding team, who would follow your
company's philosophy.
– Principle 11: Respect your partner and supplier network to continue to challenge them
and help them improve themselves.
– Principle 12: Go and see for yourself to truly understand the situation (genchi
genbutsu).
– Principle 13: Take decisions slowly by consensus, thoroughly considering all options;
implement decisions quickly (nemawashi).
 – Principle 14: Become a learning organization through continuous reflection (hansel)
and continuous improvement (kaizen).

Three of the fourteen concept of the Toyota Way associated with recruitment and
selectionon the recruitment and selection is :

– Principle # 6: Roles and process standards that are the basis for continuous
improvement and employee empowerment.
– Principle #9: Grow leaders who thoroughly understand the work, live the philosophy,
and teach it to others.
– Principle #10: Develop people and outstanding team, who would follow your
company's philosophy.

From the application of the principles of the Toyota Way , in the year 2007, Toyota
received the number one position in the manufacture of motor vehicles from General
Motors (GM)[4].

Senior management or Executive management is generally a team of individuals at the

highest level of organizational management who have the day-to-day responsibilities of
managing a company or corporation, they hold specific executive powers conferred onto
them with and by authority of the board of directors and/or the shareholders. There are most
often higher levels of responsibility, such as a board of directors and those who own the
company (shareholders), but they focus on managing the senior or executive management
instead of the day-to-day activities of the business. In Project Management, senior
management is responsible for authorizing the funding of projects

TQM can improve performance evaluation and reward

Evaluation of performance can be done in overall business performance, departments’
performance, and employee performance. Firstly, overall business performance should be
evaluated consistently. Analyzing and investigating of overall business performance can
influence of implementation of TQM. It can improve human resource. It can identifications
of development areas, and areas caused attention also. Evaluating of overall business
performance consists of employee satisfaction, product quality, customer satisfaction, and
strategic business performance. The information of evaluation can be used in identifying the
areas that need action or draw attention (Dale, 1993; Rummler and Brache, 1995). Secondly,
firms evaluate different departments’ performance in order to improving overall business
performance. The criteria should be objectively, rationally, and fairly. It is imperative that
departmental objectives be aligned with the organizational objectives; otherwise,
organizational objectives are difficult to achieve. The result of evaluation can be used as the
input for subsequent recognition and reward. Last evaluation is in employee performance.
Employee performance evaluation is a process by which a firm establishes measures (targets)
and evaluates an individual employee’s behavior and accomplishments within a finite time
period. The firm needs to evaluate employee performance against set targets regularly.
Individual targets should be established on the basis of job requirements, potential
contributions to organizational objectives, teamwork, working attitudes, etc. The results of
employee performance evaluation can serve as input for employees’ recognition, reward,
dismissal, education, and training.

Recognition and reward program are important in a firm. First, the recognition and reward is
given because specific organizational values and objectives. Individual or team must
contribute realization of the overall organizational objectives. Objectives of individuals or
teams need to be continuously reviewed and updated. Second, criteria should be objective
and measurable. Third, the recognition and reward should be match with organizational
culture. Fourth, the program should be approved by the workers’ congress. Fifth, individual
and teams effort should be able to implemented. Finally, recognition and reward can be
provided at several levels: Individual, team, department, or business unit (Cherrington, 1995).

Next is salary level promotion. Salary level can affect employee’s satisfaction and
contributions. The salary range is different. It is based on performance of individual.
Performance is measured in defining objectives. Other aspects of employees’ performance is
attendance, positive work attitudes, or initiatives. The firm should pay more for employees
who have demonstrated knowledge, skills, and performance. Salary promotion should be fair
and rational. In a word, the firm should carry out diverse distribution forms with “to each
according to his work” as the main form, and establish an effective incentive mechanism
(Cherrington, 1995). After that is bonus scheme. In order to encourage employees (teams,
departments, or business units) to make more contributions to the firm, a bonus scheme
should be implemented. Employees can meet set targets. Targets is set up for different
employees (teams, departments, or business units). These targets may be related to quality,
yields, productivity, customer satisfaction, profits, and other performance measures. All
target is same like overall organizational business objectives. The firm should move toward
more performance-oriented pay. The principle of “distribution according to work” should be
thoroughly implemented (Cherrington, 1995). Then position promotion should be
implemented too. Position promotion must be based on, for example, employees’ capabilities,
skills, performance, and contributions to the firm, and must not be based on the employees’
personal relationships with the director of the firm. If position holders cannot fulfill their
duties due to lack of skills, capabilities, performance, or support from their colleagues, more
qualified personnel should take over. Every employee in the firm is guarantee to get
promotion opportunities. Thus, employees’ enthusiasm, creativity, and active participation
are encouraged. If the employee is not scheme with target, they will get penalty. In order to
intensify the firm’s management and establish a strict responsibility system at different levels
and stages, the firm needs to have various kinds of rules and regulations, which can force
employees to abide by work discipline. It is effective in enhancing employees’ commitment
and responsibilities, adhering to various regulations, and sticking to work discipline. The
penalty criteria should be announced to employee. The firm should implement the penalty
scheme seriously and impartially. Penalty can make employee in right way to get objective
but it can make negative effect too. The employee is pressured by the regulation.

Conclusion

Implementation of TQM is strategy in all types of organizations. It focus on quality,

combined with increasing costs of materials, equipment, labor and training. Human resource
management is set up in making TQM succeed. Quality is viewed as the responsibility for all
departments in a company. Employee influence in productivity and quality of improvement
program.

Human resource is related with recruitment and selection, training and development,
performance evaluation and reward systems with TQM strategy. The full potential of the
entire work force must be realized by encouraging commitment, participation, teamwork, and
learning.
References:
Unknown, 2010,TOTAL QUALITY MANAGEMENT AND BUSINESS EXCELLENCE
[online, accessed 19 May.2010 ], URL: http://www.negotiationskills-
training.com/total-quality-management-and-business-excellence.html
Unknown, 2010, Total Quality Management, [online, accessed 19 May 2010], URL:
Unknown, 2010, [online, accessed 19 May 2010], URL:
http://www.beyondlean.com/total-quality-management.html
Soin, Sarv Singh, 1998, Total Quality Essentials. New York : The McGrawl-Hill
Companies, Inc.
Dale, B.G. and Cooper, C. (1993) Total quality and human resources: An executive
guide. Oxford: Blackwell.
Rummler, G. A., & Brache, A. P. (1995). Improving performance: How to manage
the white space on the organization chart (2nd ed.). San Francisco: Jossey-Bass.
[1]

Edenborough, Robert . ASSESSMENT METHODS IN RECRUITMENT, SELECTION

& PERFORMANCE. London and Sterling: Kogan Page. 0749442948
[2]

Armstrong, Michael (2006). A Handbook of Human Resource Management Practice

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[3]
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[4]

Anon. (2010) Welcome to TOYOTA back to campus. [shown at Yogyakarta:

Mechanical and Industrial Departement, Courtroom I ] [viewed on 19/05/2010]