EMPLOYEE INVOLVEMENT (Participation and Teamwork)

1. EMPLOYEE INVOLVEMENT (Participation and Teamwork) Assoc Prof. Dr. Jegak Uli

2. Outline 1. The important and scope of Employee Involvement (EI) ~ Historical influence ~ Modern EI approaches ~ Leading practices 2. Individual Commitment & Personal Quality ~ Making Quality personal 3. Suggestion System 4. Teamwork ~ Quality (control) circles ~ Self-managed teams 5. Implementation EI program ~ Planning for EI ~ Overcoming resistance to change ~ Transition of self-managed team 6. Evaluating EI and Human resource practice 7. Concluding remarks on EI

3. The objectives of this lesson are to examine: 1. the history and development of employee involvement, 2. discusses approaches for individual participation and teamwork, and 3. ways of measuring and evaluating these approaches.

4. Introduction • Participation and teamwork -- the foundations of employee involvement (EI) -- represent core principles of total quality management and are a natural extension of effective human resource management practices. • Informal communication, open door policies, suggestion systems, and teams encourage employees to share their knowledge and use their abilities to improve the processes that lead to customer satisfaction.

5. Introduction • In a TQM culture, employees are encouraged to challenge ineffective company policies and bring quality concerns directly to top management. • Individual participation and team approaches involve transforming the culture of the entire organization to top the creative energies of all employees and improve their motivation.

6. EI offers many advantages over traditional management practices: 1. Replacing the adversarial mentality with trust and cooperation, 2. Developing the skills and leadership capability of individuals, creating a sense of mission and fostering trust, 3. Increasing employee morale and commitment to the organization, 4. Fostering creativity and innovation, the source of competitive advantage,

7. El advantages : 5. Helping people understand quality principles and instilling these principles into the corporate culture, 6. Allowing employees to solve problems at the source immediately, and 7. Improving quality and productivity

8. Employee involvement should begin with • Employee involvement (EI) should begin with a personal commitment to quality. • If employees accept and commit to a quality philosophy, they are more apt to learn quality tools and techniques and use them in their daily work. • As they begin to see the benefits of a commitment to quality, they will then be more receptive to working in teams. • This team interaction, in turn, reinforces personal commitment, driving a never ending cycle of improvement. • EI also depends on the amount and type of information shared with employees, training, compensation and rewards, and the empowerment practices of the firms.

9. Employee involvement should begin with • Thus, human resource management (HRM) practices must be designed to support and facilitate El. • El is exciting because it offers unprecedented possibilities for tapping the knowledge, enthusiasm, and expertise of the entire work force. • Empowered employees take ownership of their jobs, improve processes they control, and make individual and team decisions. • EI promise workers autonomy over their jobs and gives managers a powerful approach to improve quality and productivity. • Philip Caldwell, former chief executive of Ford Motor Company stated: “ The magic of EI is that it allows individuals to discover their own potential & to put that potential to work in more creative ways.”

10. Employee involvement should begin with • El is also controversial because it threatens old ways of working and could undermine managerial and union control. If approached incorrectly by management, it could fail miserably. • Fortunately, such attitudes are changing. EI is gaining increased acceptance as an important component of modern quality management. Many experts, however, believe that the movement is not spreading fast enough, especially considering the potential benefits.

11. THE IMPORTANCE AND SCOPE OF EMPLOYEE INVOLVEMENT • El is rooted in the psychology of human needs. • The motivation models of Maslow, Herzberg, and McGregor form a rational basis for El approaches. • Employee involvement provides a powerful means of achieving the highest order needs of self realization and fulfillment. • Employees are motivated through exciting work, responsibility, and recognition. • Companies gain many benefits by placing trust in people through the delegation of responsibility and self control (Theory Y) aspects of employee involvement. • 1. Maslow’s Theory of needs: • A theory of motivation stating that there are 5 basic needs that determine human behavior. (psychological, security, social, esteem & self-actualization need) • Herzberg Two-factors Theory: • This motivation theory is based on the idea that 2 factors (motivators & hygienes), which determine how a person performs at work. • 3. McGregor Theory X / Theory Y: • Theory Y is the underlying attitude required for EI. • Theory X is that employees are lazy, do not like, and do not want to take responsibility.

12. THE IMPORTANCE AND SCOPE OF EMPLOYEE INVOLVEMENT • Employee participation relies on empowerment and managers' sharing the tasks of setting goals, making decisions, and solving problems with subordinates. • HRM has traditionally focused on individuals. • This orientation makes sense since much of the work that gets done in organizations assembly, order filling, invoicing is performed by individuals, who know their customers better than anyone else. • However, a single person rarely has enough knowledge on all aspects of the most important work processes; thus team approaches are essential for process improvement.

13. THE IMPORTANCE AND SCOPE OF EMPLOYEE INVOLVEMENT • Traditional HRM practices also encourage individual advancement. This mindset is built into the management system by such practices as management by objectives, individual performance evaluation, professional status and privileges, and individual promotion. • Focusing on individuals contributes to rivalries, competition, favoritism, and self centeredness, which collectively work against accomplishing the true mission of an organization: serving customers. • Employee involvement breaks down barriers between individuals, departments, and line and staff functions, an action prescribed by one of Deming's 14 Points. Deming’s 14 point: 9. Break down barriers between department (optimize the efforts of team)

14. Historical Influences • El programs are by no means new. • Many programs and experiments were initiated on a sporadic basis by industrial engineers, statisticians, and behavioral scientists. • These early attempts influenced modern practices considerably. • Unfortunately, these approaches lacked the complementary elements of TQM, such as a customer orientation, top management leadership and support, and a common set of tools for problem solving and continuous improvement. • Early work improvement activities at the Zeiss Company in Germany in the 1890s involved workers in work planning, design of precision machinery, and group problem solving.

15. Historical Influences • In 1913, the Lincoln Electric Company began to develop its unique mix of work improvement and employee incentive plans, including an employee advisory board, employee stock ownership, year end bonuses, and a benefit package. • Lincoln Electric still boasts outstanding productivity, quality, and employee loyalty, some 85 years after beginning its experiment. • Other productivity improvement initiatives, such as work simplification and planned methods change, relied on some form of employee involvement. All these approaches were based on a multifunctional process that cut across boundaries of disciplines and organizational levels.

16. Historical Influences • Statistical quality control (SQC), involves employees in quality measurement and improvement activities. • Many of the statistical quality control techniques developed at AT&T's Bell Labs in the 1930s by Drs. Shewhart, Dodge, and Romig, as well as others, were the result of group participation. • The company's Statistical Quality Control Hand­book -- designed for operations level people was written in 1956 by a manufacturing engineering team. • The book, which is still in print, has been and continues to be used in numerous companies for training in SQC basics.

17. Historical Influences • The authors recommended continued use of a quality team that consisted of a manufacturing supervisor, a quality control manager, a manufacturing engineer, and a statistical clerk for coordination of quality improvement and control projects. • W. Edwards Deming's approach to quality was always grounded in statistical quality control concepts but with a visionary recognition that, to make quality happen, individuals and groups of managers and operating level employees had to be involved. • During the 1940s, Deming gave the same series of courses on statistical quality control in the United States that he gave in Japan during the 1950s.

18. Historical Influences • The only difference was that top management and technicians attended the courses in Japan, while only quality control staff, engineers, and technicians attended the U.S. sessions. The results of this difference in commitment are strikingly clear. • During the 1940s and through the 1960s, a number of work innovation experiments that focused on worker motivation and productivity took place. • These behavioral experiments frequently, though not exclusively, relied on the use of group participation at the operating level to achieve organizational change. • One of the most publicized cases of work innovation was the Weldon Company, a division of Harwood Manufacturing, a garment manufacturing firm.

19. Historical Influences • Weldon engaged in a multifaceted program to improve productivity and effectiveness by a combination of: 1. improving personnel practices for hiring, training, and termination, 2. instituting group problem solving sessions with first line supervisors and employees, 3. conducting attitude surveys and acting on results to make beneficial improvements. • Texas Instruments (TI) instituted several work innovations in the 1960s. Most production employees in the firm participated in a work simplification training program. • All the people from a given line were trained at the same time to encourage group interaction and problem solving. • A performance review system that emphasized individual goal setting was established.

20. Historical Influences • An annual opinion survey was also implemented with samples of 10-25 percent of TI employees. • This survey measured employee attitudes for each of the factors identified in the Herzberg motivation maintenance theory. • Walton listed large and small firms that were leaders in work innovation experiments in the 1960s and1970s.

21. Historical Influences • From a review of work improvement experiment, Walton concluded that: 1. Most such experiments were neither extreme successes nor extreme failure. 2. Such innovations must take into account the interrelation of techniques, outcomes, and corporate culture. 3. Work improvement efforts that have balanced goals of both productivity and quality of work life improvement are the most likely to succeed.

22. Modern Employee Involvement Approaches • Employee involvement typically falls along a continuum, which ranges from simple information sharing to total self direction. • As total quality matures in an organization, higher levels of employee involvement are evident. • In today's complex organizations, individuals are often called on to shift roles from individual "followers," to leaders, to system architects and back to followers again in a relatively short time. • Thus, individuals must develop the flexibility to engage in team based projects at all these levels.

23. Modern Employee Involvement Approaches QWL is a program between management and the union, a program designed to improve cooperation and to help both the worker and the organization. • A number of different labels have been applied to various El approaches used in organizations. • Some of the broad behavioral management approaches for individual participation include "quality of work life (QWL)," "humanization of work," "work reform," "work restructuring," "work design," and "sociotechnical systems." • Terms used to designate team approaches include QWL teams, productivity action teams (PATs), quality circles, and self managed teams.

25. Leading Practices • Total quality leaders employ several key practices to foster employee involvement in their organizations: 1. They involve all employees at all levels and in all functions. 2. They use suggestion systems effectively to promote involvement and motivate employees. 3. They emphasize support teamwork throughout the organization. 4. They monitor the extent and effectiveness of employee involvement. • Teams encourage free-flowing participation & interaction among its members. • e.g.: FedEx has more than 4000 Quality Action Team. • e.g.: At least 60% of Cadillac employees are members of some team. • e.g. : General motor established a suggestion system more than 50 years ago, & Cadillac believes that it is one of the secrets to their quality success. • Indicators such as the number of teams, rate of growth, percentage of employees involved, number of suggestion implemented, time to respond to suggestions, & team activities provide a basis for evaluation & improvement. • Leading companies also conduct extensive employee opinion & effectiveness assessment to improve employee involvement processes. • Companies are asking employees to take more responsibility for acting as the point of contact between the organization and the customer, to be team players as part of EI teams that seek ways to improve systems for better production and more effective and efficient customer service. • involving everyone in everything, in such activities as quality & productivity improvement, measuring & monitoring results, budget development, new technology assessment, recruiting & hiring, making customer calls, & participating in customer visits. • Many companies found that having production workers visit customers is a great way to help employees understand their role in customer satisfaction. • e.g. : FedEx has call in opportunities on the corporative television network for employees to interact with management.

26. INDIVIDUAL COMMITMENT AND PERSONAL QUALITY • Individual commitment is vital to employee involvement efforts. • Commitment leads to employee actions and goals that support those of the organization. • Committed employees often go beyond what they're asked or normally expected to in order to uphold a corporate goal or improve the value of a product or service for a customer. • So how does a company gain commitment in these situations? Gary Dessler examined 10 companies that show extraordinary concern for their employees, such as Saturn Corporation, Delta Airlines, Ben and Jerry's Homemade, Inc., FedEx, and IBM, to determine how they deal with the commitment problem. • During the turbulent business environment of the 1990s, several of these firms have had to scrap long standing policies such as "lifetime employment" due to serious financial setbacks.

27. Nevertheless, Dessler suggested that they still have the capability to inspire commitment in their employees by following many of his eight "Keys to Commitment": 1. People-first values: A total management commitment to employees that includes such things as fair treatment, written policies, hiring and indoctrination processes, managers who "walk the talk" in everyday actions, and elimination of trust barriers such as time clocks. 2. Double-talk: A catchy way of saying that communication must flow up the organization as well as down. One example is the "Speak-up" programs used by companies such as Toyota, FedEx, IBM, and others to give employees a chance to air complaints and clarify misunderstandings about vital organization changes that affect them.

28. “8 Keys to Commitment": 3. Communion: Efforts to encourage people to take pride and develop a sense of ownership and belonging in their organization. It includes such practices as value based hiring (such as hiring people who have team values), eliminating status differences between managers and line employees (such as executive dining rooms), employee recognition rituals, regular group contact meetings, and having profit sharing and risk sharing plans that apply to both executives and employees. 4. Transcendental meditation: Articulation and development of the ideologies, missions, and values, and communication mechanisms they require. eg: Mary Kay cosmetic emphasizes the Golden Rule, family rules, and truth, sincerity, and honesty in customer dealings.

29. “8 Keys to Commitment": 5. Value-based hiring: Careful attention to the hiring process by articulating the corporate values carefully, advertising widely, thorough (often multilevel, multiphase) interviewing, realistic job previews, and rigorous training and early job assignments under sometimes adverse conditions. 6. Securitizing: Lifetime employment without guarantees, which seems to be a contradiction in terms but indicates that the company will do whatever it can to maintain permanent employment security through such practices as cross training, use of part time and temporary workers, bonuses given only if the company is profitable, and "sharing the pain" by salary and work week reductions during economic downturns.

30. “8 Keys to Commitment": 7. Hard-side rewards: Pay plans that support employees and provide incentives for them to help themselves while they help the organization. Such practices include bonus systems, "at risk" portions of pay packages, benefit and pension plans that give employees the idea that they are valued for the long term, and self reporting of time worked. 8. Actualizing: Giving employees the opportunity and incentives to use a wide variety of skills and knowledge to accomplish their jobs. This "key" is derived from the top of Maslow's Hierarchy of Needs self actualization.

31. Making Quality Personal • EI focused on personal initiative. • Personal initiative means taking action to spot and fix problems, contribute to a company's goals, and bring about change. • The responsibility for action lies with the individual and refers to how one manages oneself. • Personal initiative is different from empowerment, which places responsibility on the organization or leaders to get people to act.

32. Making Quality Personal • It is also different from leadership, which refers to how one manages others. • Rath & Strong suggest that: "focusing too heavily on leadership or empowerment can actually undermine an organization's ability to affect change. . . . Ultimately, it is the personal initiative of an organization's employees that is responsible for enabling the company to create and sustain true change." • If employees can develop a personal commitment to quality, they will persist in tasks, do them better, and commit to the goals and objectives of the organization.

33. Making Quality Personal • The concept of "personal quality" has been promoted by Harry V. Roberts, Professor Emeritus at the University of Chicago's Graduate School of Business, and Bernard F. Sergesketter, Vice President of the Central Region of AT&T. • Personal quality may be thought of as personal empowerment, and is implemented by systematically keeping personal checklists for quality improvement. • It can also be implemented through using Pareto analysis to evaluate the results and focus on improvements in much the same way as continuous improvement.

34. Making Quality Personal • Robert & Sergesketter developed the idea of a personal quality check list to keep track of personal shortcoming, or defect, in personal work process. “Defect” has a negative connotation for some people who would like to keep track of the times we do things right rather than times we do things wrong. • Personal quality is an essential ingredient to make quality happen in the workplace, yet it has been neglected for a long time in the development of the quality movement. • The Personal Quality Checklist can aid one to understand what Deming is during at the point which he advocates as a route for transformation of management. • Personal quality is the key to unlock the door to a wider understanding of what TQM really is all about.

36. SUGGESTION SYSTEMS • Involving employees on a individual basis and increasing employee participation in quality improvement can be accomplished by many methods, including mentoring systems in which senior managers or employees counsel others at lower levels of the company, company newsletters, open door policies of senior executives, employee surveys, and even video-based "town meetings" as done by FedEx.

37. SUGGESTION SYSTEMS • Perhaps the most refined form of individual participation for quality improvement is the suggestion system. • An employee suggestion system is a management tool for the submission, evaluation, and implementation of an employee's idea to save cost, increase quality or improve other elements of work such as safety.

38. SUGGESTION SYSTEMS • Suggestion systems operate on the theory that the person best equipped to initiate improvements is the person closest to the job. • Formats of suggestion systems vary by company. Among the frequently used methods to gather suggestions are by web sites, telephone hotlines or suggestion boxes.

39. SUGGESTION SYSTEMS • The ideas developed from suggestion systems can range from simple quality of work life improvements such as putting a refrigerator in the coffee room to larger streamlining issues that can save the company millions of dollars like switching all salespeople's cellular phones from individual contracts to group contract with a discount vendor. • Suggestion systems are meant to create a win-win situation.

40. SUGGESTION SYSTEMS • Companies typically reward employees for implemented suggestions. • Fostering employee creativity has many benefits. • Thinking makes even routine work enjoyable; writing down the suggestions improves workers' reasoning ability and writing skills. • Satisfaction is the byproduct of an implemented idea and a job made easier, safer, or better. • Recognition for suggestions leads to higher levels of motivation, peer recognition, and possible monetary rewards.

41. SUGGESTION SYSTEMS • Workers gain an increased understanding of their work, which may lead to promotions and better interpersonal relationships in the workplace. • Suggestion systems, like most successful quality improvement methods, originated in the West but were refined in Japan. • Most large Japanese firms and about half of the small and medium sized firms have employee suggestion systems, which appear to be more extensive than those in the United States.

42. SUGGESTION SYSTEMS • In fact, many U.S. plans have met with failure. One study found that about 90 percent of the suggestion plans begun in U.S. firms before 1977 have been abandoned. • The relatively poor rates of participation in suggestion systems in the United States are due to a variety of reasons. • Most U.S. suggestion systems emphasize cost savings; it is the primary criterion for evaluation. • U.S. systems favor significant, innovative ideas.

43. SUGGESTION SYSTEMS • Muse and Finster suggest that this focus effectively excludes fair consideration of suggestions that promise quality or productivity improvements over a longer period. • Many employees perhaps feel they are unable to generate ideas that will save significant sums of money. • Also, many managers typically take a passive approach, waiting for suggestions to be submitted. • Additionally, many companies do not provide time for employees to develop suggestions during the regular work day, and employees are often unable to find time outside of their regular work schedules to develop ideas. • A Swedish study found that the most common cause for withholding ideas is fear of a new time study and consequent loss of earnings or job security.

44. In addition to these reasons, the failure of many programs has also been attributed to 1. unclear policies 2. lack of continuous and enthusiastic promotion 3. poor administration 4. lack of management support

45. SUGGESTION SYSTEMS • Suggestion systems in Japan are quite different. The Japanese modified U.S. suggestion systems to fit in their own culture, stressing participation and employee motivation over economic benefits. • Japanese suggestion systems are similar to the kaizen concept: small, gradual, but continuous improvements. • The number of suggestions per employee per year rose from about five to over 24 by 1987. • In contrast, the average number of suggestions per employee in the United States was slightly more than one.

46. SUGGESTION SYSTEMS • Overall participation rate in Japan exceeds 65 percent, and many companies, such as Toyota, have participation rates above 90 percent, while that of typical U.S. firms is only about eight percent.

47. Differences in suggestion systems between the United States and Japan have been attributed to several reasons. • First, the suggestion process in Japan is included in formal training sessions and involves continual guidance from supervisors. Most U.S. systems revolve around a few posters or suggestion boxes. • Second, management support in the United States is generally less than enthusiastic, in direct contrast to that in Japan. • Third, American unions have not supported programs, especially if some jobs are at risk. In Japan, however, unions are company based; thus any activity that is good for the company is good for the union and its employees. • Finally, the group centered culture in Japan facilitates cooperation rather than individual competition.

48. SUGGESTION SYSTEMS • Suggestion systems should not simply be empty boxes for ideas, they must be carefully planned and executed. • Management should encourage submissions with no restrictions, acknowledge all of them and respond promptly, evaluate the suggestions carefully, reward employees, and monitor suggestions that are implemented. • Employees also need training in how to identify problems and develop solutions.

49. How A Suggestion System Works 1) An employee submits an idea. 2) An evaluator investigates the idea’s usefulness and financial impact. 3) The suggestion is accepted or rejected. 4) If accepted, the suggestion submitter receives recognition and an award. 5) An action plan is developed to implement the idea.

50. Below give a list of strategies that can foster the success of suggestion systems.(Success Factor or Suggestion Systems) 1. Ensure that management, first and foremost, is involved in the program. Involvement should begin at the top and filter down through all levels until all employees participate. 2. Push decision making regarding suggestion evaluation to lower levels. 3. Cain union support by pledging no layoffs due to productivity gains from adopted suggestions. 4. Train everyone in all facets of the suggestion system. Improve problem solving capability by promoting creative problem solving through the use of the seven basic statistical tools.