Total Quality Management(TQM)ByMartin Murray, About.com GuideSee More About: tqm best practices quality managementAdsTop 15 Manufacturing2012 Top 15 Manufacturing Software. Find Best Software in Free Report.Business-Software.com/ManufacturingQuality Mgmt SoftwareDocument control, complaints, capa, audits... Free online presentation!www.VivaldiSoftware.comInfinityQS Official SiteLeader in Quality Control Software. Free 30-Day Trial - Register Today!www.infinityqs.comLogistics / Supply Chain Ads Total Quality Management Supply Chain Management System Supply Chain and Logistics Quality Control Supply Chain LogisticsAdsSemiconductor Wafer CartsAnti Vibration Wafer Transport Cart Wafers, Cassettes, SMIFs & FOUPswww.palbamclass.comManufacturing technologyGet Manufacturing technology info from American MachinistAmericanMachinist.comTotal Quality Management (TQM) is an approach that seeks to improve quality and performance which will meet or exceed customer expectations. This can be achieved by integrating all quality-related functions and processes throughout the company. TQM looks at the overall quality measures used by a company including managing quality design and development, quality control and maintenance, quality improvement, and quality assurance. TQM takes into account all quality measures taken at all levels and involving all company employees.Origins Of TQMTotal quality management has evolved from the quality assurance methods that were first developed around the time of the First World War. The war effort led to large scale manufacturing efforts that often produced poor quality. To help correct this, quality inspectors were introduced on the production line to ensure that the level of failures due to quality was minimized.After the First World War, quality inspection became more commonplace in manufacturing environments and this led to the introduction of Statistical Quality Control (SQC), a theory developed by Dr. W. Edwards Deming. This quality method provided a statistical method of quality based on sampling. Where it was not possible to inspect every item, a sample was tested for quality. The theory of SQC was based on the notion that a variation in the production process leads to variation in the end product. If the variation in the process could be removed this would lead to a higher level of quality in the end product.After World War Two, the industrial manufacturers in Japan produced poor quality items. In a response to this, the Japanese Union of Scientists and Engineers invited Dr. Deming to train engineers in quality processes. By the 1950s quality control was an integral part of Japanese manufacturing and was adopted by all levels of workers within an organization.By the 1970s the notion of total quality was being discussed. This was seen as company-wide quality control that involves all employees from top management to the workers, in quality control. In the next decade more non-Japanese companies were introducing quality management procedures that based on the results seen in Japan. The new wave of quality control became known as Total Quality Management, which was used to describe the many quality-focused strategies and techniques that became the center of focus for the quality movement.Principles of TQMTQM can be defined as the management of initiatives and procedures that are aimed at achieving the delivery of quality products and services. A number of key principles can be identified in defining TQM, including: Executive Management Top management should act as the main driver for TQM and create an environment that ensures its success. Training Employees should receive regular training on the methods and concepts of quality. Customer Focus Improvements in quality should improve customer satisfaction. Decision Making Quality decisions should be made based on measurements. Methodology and Tools Use of appropriate methodology and tools ensures that non-conformances are identified, measured and responded to consistently. Continuous Improvement Companies should continuously work towards improving manufacturing and quality procedures. Company Culture The culture of the company should aim at developing employees ability to work together to improve quality. Employee Involvement Employees should be encouraged to be pro-active in identifying and addressing quality related problems.The Cost Of TQMMany companies believe that the costs of the introduction of TQM are far greater than the benefits it will produce. However research across a number of industries has costs involved in doing nothing, i.e. the direct and indirect costs of quality problems, are far greater than the costs of implementing TQM.The American quality expert, Phil Crosby, wrote that many companies chose to pay for the poor quality in what he referred to as the Price of Nonconformance. The costs are identified in the Prevention, Appraisal, Failure (PAF) Model.Prevention costs are associated with the design, implementation and maintenance of the TQM system. They are planned and incurred before actual operation, and can include: Product Requirements The setting specifications for incoming materials, processes, finished products/services. Quality Planning Creation of plans for quality, reliability, operational, production and inspections. Quality Assurance The creation and maintenance of the quality system. Training The development, preparation and maintenance of processes.Appraisal costs are associated with the vendors and customers evaluation of purchased materials and services to ensure they are within specification. They can include: Verification Inspection of incoming material against agreed upon specifications. Quality Audits Check that the quality system is functioning correctly. Vendor Evaluation Assessment and approval of vendors.Failure costs can be split into those resulting from internal and external failure. Internal failure costs occur when results fail to reach quality standards and are detected before they are shipped to the customer. These can include: Waste Unnecessary work or holding stocks as a result of errors, poor organization or communication. Scrap Defective product or material that cannot be repaired, used or sold. Rework Correction of defective material or errors. Failure Analysis This is required to establish the causes of internal product failure.External failure costs occur when the products or services fail to reach quality standards, but are not detected until after the customer receives the item. These can include: Repairs Servicing of returned products or at the customer site. Warranty Claims Items are replaced or services re-performed under warranty. Complaints All work and costs associated with dealing with customers complaints. Returns Transportation, investigation and handling of returned items.

TheEight Elements Of TQMEight elements are key in ensuring the success of TQM in an organization.Total Quality Management is a management approach that originated in the 1950s and has steadily become more popular since the early 1980s. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the companys operations, with processes being done right the first time and defects and waste eradicated from operations.To be successful implementing TQM, an organization must concentrate on the eight key elements:1. Ethics2. Integrity3. Trust4. Training5. Teamwork6. Leadership7. Recognition8. CommunicationThis paper is meant to describe the eight elements comprising TQM.Key ElementsTQM has been coined to describe a philosophy that makes quality the driving force behind leadership, design, planning, and improvement initiatives. For this, TQM requires the help of those eight key elements. These elements can be divided into four groups according to their function. The groups are:I. Foundation It includes: Ethics, Integrity and Trust.II. Building Bricks It includes: Training, Teamwork and Leadership.III. Binding Mortar It includes: Communication.IV. Roof It includes: Recognition.I. FoundationTQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements move together, however, each element offers something different to the TQM concept.1. Ethics Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs.2. Integrity Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity.3. Trust Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM.II. BricksBasing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition. It includes:4. Training Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company.5. Teamwork To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt:A. Quality Improvement Teams or Excellence Teams (QITS) These are temporary teams with the purpose of dealing with specific problems that often re-occur. These teams are set up for period of three to twelve months.B. Problem Solving Teams (PSTs) These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months.C. Natural Work Teams (NWTs) These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week.6. Leadership It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals.III. Binding Mortar7. Communication It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended.There are different ways of communication such as:A. Downward communication This is the dominant form of communication in an organization. Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM.B. Upward communication By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others.C. Sideways communication This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner.IV. Roof8. Recognition Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed. Recognition comes in different ways, places and time such as, Ways It can be by way of personal letter from top management. Also by award banquets, plaques, trophies etc. Places Good performers can be recognized in front of departments, on performance boards and also in front of top management. Time Recognition can given at any time like in staff meeting, annual award banquets, etc.ConclusionWe can conclude that these eight elements are key in ensuring the success of TQM in an organization and that the supervisor is a huge part in developing these elements in the work place. Without these elements, the business entities cannot be successful TQM implementers. It is very clear from the above discussion that TQM without involving integrity, ethics and trust would be a great remiss, in fact it would be incomplete. Training is the key by which the organization creates a TQM environment. Leadership and teamwork go hand in hand. Lack of communication between departments, supervisors and employees create a burden on the whole TQM process. Last but not the least, recognition should be given to people who contributed to the overall completed task. Hence, lead by example, train employees to provide a quality product, create an environment where there is no fear to share knowledge, and give credit where credit is due is the motto of a successful TQM organization.About The AuthorNayantara Padhi is an HR Executive in an Indian Steel Industry, and is pursuing a Ph.D. on The Human Dimension Of TQM. Mr. Padhi has published numerous articles in different national and international journals, and has completed a P.G. in Industrial Relations And Personnel Management.

A FEW WORDS ABOUT

TQM

Total Quality Management is an approach to the art of management that originated in Japanese industry in the 1950's and has become steadily more popular in the West since the early 1980's.

Total Quality is a description of the culture, attitude and organization of a company that aims to provide, and continue to provide, its customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with things being done right first time, and defects and waste eradicated from operations.

Many companies have difficulties in implementing TQM. Surveys by consulting firms have found that only 20-36% of companies that have undertaken TQM have achieved either significant or even tangible improvements in quality, productivity, competitiveness or financial return. As a result many people are sceptical about TQM. However, when you look at successful companies you find a much higher percentage of successful TQM implementation.

Some useful messages from results of TQM implementations: if you want to be a first-rate company, don't focus on the second-rate companies who can't handle TQM, look at the world-class companies that have adopted it the most effective way to spend TQM introduction funds is by training top management, people involved in new product development, and people involved with customers it's much easier to introduce EDM/PDM in a company with a TQM culture than in one without TQM. People in companies that have implemented TQM are more likely to have the basic understanding necessary for implementing EDM/PDM. For example, they are more likely to view EDM/PDM as an information and workflow management system supporting the entire product life cycle then as a departmental solution for the management of CAD data

Important aspects of TQM include customer-driven quality, top management leadership and commitment, continuous improvement, fast response, actions based on facts, employee participation, and a TQM culture.

Customer-driven qualityTQM has a customer-first orientation. The customer, not internal activities and constraints, comes first. Customer satisfaction is seen as the company's highest priority. The company believes it will only be successful if customers are satisfied. The TQM company is sensitive to customer requirements and responds rapidly to them. In the TQM context, `being sensitive to customer requirements' goes beyond defect and error reduction, and merely meeting specifications or reducing customer complaints. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements, but also those that enhance and differentiate them for competitive advantage.

Each part of the company is involved in Total Quality, operating as a customer to some functions and as a supplier to others. The Engineering Department is a supplier to downstream functions such as Manufacturing and Field Service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers.

TQM leadership from top managementTQM is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement TQM often fail because top management doesn't lead and get committed - instead it delegates and pays lip service. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company, and in creating and deploying well defined systems, methods and performance measures for achieving those goals. These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration.

Continuous improvementContinuous improvement of all operations and activities is at the heart of TQM. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product, continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. As well as recognizing the link between product quality and customer satisfaction, TQM also recognizes that product quality is the result of process quality. As a result, there is a focus on continuous improvement of the company's processes. This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality, and to an increase in customer satisfaction. Improvement cycles are encouraged for all the company's activities such as product development, use of EDM/PDM, and the way customer relationships are managed. This implies that all activities include measurement and monitoring of cycle time and responsiveness as a basis for seeking opportunities for improvement.

Elimination of waste is a major component of the continuous improvement approach. There is also a strong emphasis on prevention rather than detection, and an emphasis on quality at the design stage. The customer-driven approach helps to prevent errors and achieve defect-free production. When problems do occur within the product development process, they are generally discovered and resolved before they can get to the next internal customer.

Fast responseTo achieve customer satisfaction, the company has to respond rapidly to customer needs. This implies short product and service introduction cycles. These can be achieved with customer-driven and process-oriented product development because the resulting simplicity and efficiency greatly reduce the time involved. Simplicity is gained through concurrent product and process development. Efficiencies are realized from the elimination of non-value-adding effort such as re-design. The result is a dramatic improvement in the elapsed time from product concept to first shipment.

Actions based on factsThe statistical analysis of engineering and manufacturing facts is an important part of TQM. Facts and analysis provide the basis for planning, review and performance tracking, improvement of operations, and comparison of performance with competitors. The TQM approach is based on the use of objective data, and provides a rational rather than an emotional basis for decision making. The statistical approach to process management in both engineering and manufacturing recognizes that most problems are system-related, and are not caused by particular employees. In practice, data is collected and put in the hands of the people who are in the best position to analyze it and then take the appropriate action to reduce costs and prevent non-conformance. Usually these people are not managers but workers in the process. If the right information is not available, then the analysis, whether it be of shop floor data, or engineering test results, can't take place, errors can't be identified, and so errors can't be corrected.

Employee participationA successful TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities. Such participation is reinforced by reward and recognition systems which emphasize the achievement of quality objectives. On-going education and training of all employees supports the drive for quality. Employees are encouraged to take more responsibility, communicate more effectively, act creatively, and innovate. As people behave the way they are measured and remunerated, TQM links remuneration to customer satisfaction metrics.

A TQM cultureIt's not easy to introduce TQM. An open, cooperative culture has to be created by management. Employees have to be made to feel that they are responsible for customer satisfaction. They are not going to feel this if they are excluded from the development of visions, strategies, and plans. It's important they participate in these activities. They are unlikely to behave in a responsible way if they see management behaving irresponsibly - saying one thing and doing the opposite.

Product development in a TQM environmentProduct development in a TQM environment is very different to product development in a non-TQM environment. Without a TQM approach, product development is usually carried on in a conflictual atmosphere where each department acts independently. Short-term results drive behavior so scrap, changes, work-arounds, waste, and rework are normal practice. Management focuses on supervising individuals, and fire-fighting is necessary and rewarded.

Product development in a TQM environment is customer-driven and focused on quality. Teams are process-oriented, and interact with their internal customers to deliver the required results. Management's focus is on controlling the overall process, and rewarding teamwork.

Awards for Quality achievementThe Deming Prize has been awarded annually since 1951 by the Japanese Union of Scientists and Engineers in recognition of outstanding achievement in quality strategy, management and execution. Since 1988 a similar award (the Malcolm Baldrige National Quality Award) has been awarded in the US. Early winners of the Baldrige Award include AT&T (1992), IBM (1990), Milliken (1989), Motorola (1988), Texas Instruments (1992) and Xerox (1989).

Basic Principles of Total Quality Management (TQM)by Ron Kurtus (28 May 2001)The basic principles for the Total Quality Management (TQM) philosophy of doing business are to satisfy the customer, satisfy the supplier, and continuously improve the business processes.Questions you may have include: How do you satisfy the customer? Why should you satisfy the supplier? What is continuous improvement?This lesson will answer those questions.Satisfy the customerThe first and major TQM principle is to satisfy the customer--the person who pays for the product or service. Customers want to get their money's worth from a product or service they purchase.UsersIf the user of the product is different than the purchaser, then both the user and customer must be satisfied, although the person who pays gets priority.Company philosophyA company that seeks to satisfy the customer by providing them value for what they buy and the quality they expect will get more repeat business, referral business, and reduced complaints and service expenses.Some top companies not only provide quality products, but they also give extra service to make their customers feel important and valued.Internal customersWithin a company, a worker provides a product or service to his or her supervisors. If the person has any influence on the wages the worker receives, that person can be thought of as an internal customer. A worker should have the mind-set of satisfying internal customers in order to keep his or her job and to get a raise or promotion.Chain of customersOften in a company, there is a chain of customers, -each improving a product and passing it along until it is finally sold to the external customer. Each worker must not only seek to satisfy the immediate internal customer, but he or she must look up the chain to try to satisfy the ultimate customer.Satisfy the supplierA second TQM principle is to satisfy the supplier, which is the person or organization from whom you are purchasing goods or services.External suppliersA company must look to satisfy their external suppliers by providing them with clear instructions and requirements and then paying them fairly and on time.It is only in the company's best interest that its suppliers provide it with quality goods or services, if the company hopes to provide quality goods or services to its external customers.Internal suppliersA supervisor must try to keep his or her workers happy and productive by providing good task instructions, the tools they need to do their job and good working conditions. The supervisor must also reward the workers with praise and good pay.Get better workThe reason to do this is to get more productivity out of the workers, as well as to keep the good workers. An effective supervisor with a good team of workers will certainly satisfy his or her internal customers.Empower workersOne area of satisfying the internal suppler is by empowering the workers. This means to allow them to make decisions on things that they can control. This not only takes the burden off the supervisor, but it also motivates these internal suppliers to do better work.Continuous improvementThe third principle of TQM is continuous improvement. You can never be satisfied with the method used, because there always can be improvements. Certainly, the competition is improving, so it is very necessary to strive to keep ahead of the game.Working smarter, not harderSome companies have tried to improve by making employees work harder. This may be counter-productive, especially if the process itself is flawed. For example, trying to increase worker output on a defective machine may result in more defective parts.Examining the source of problems and delays and then improving them is what is needed. Often the process has bottlenecks that are the real cause of the problem. These must be removed.Worker suggestionsWorkers are often a source of continuous improvements. They can provide suggestions on how to improve a process and eliminate waste or unnecessary work.Quality methodsThere are also many quality methods, such as just-in-time production, variability reduction, and poka-yoke that can improve processes and reduce waste.SummaryThe principles of Total Quality Management are to seek to satisfy the external customer with quality goods and services, as well as your company internal customers; to satisfy your external and internal suppliers; and to continuously improve processes by working smarter and using special quality methods.

Containing costs

One of the biggest challenges to the Human Resources department is to try and contain costs. Labor costs are the largest expenditures of any company and the HR department is in charge of downsizing or outsourcing, should the need to occur.

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The Challenges of Human Resource Management - Transcript

Slide 1:The Challenges of Human Resource ManagementThere is an old joke that goes.. The organization of the future will be so technologically advanced that it will be run by just one person and a dog. The person will be there to feed the dog, and the dog will be there to make sure that the person doesnt touch anything. In the past, observers feared that machines might one day eliminate the need for people at work. In reality, just the opposite has been occurring. Competitive advantage belongs to companies that know how to attract, select, deploy, and develop talent. Competitive Advantage Through People While people have always been central to organization, today they have taken on an even more central role in building a firms competitive advantage. In knowledge-based industries such as software and information services, success increasingly depends on people-embodied know-how. This includes the knowledge, skills, and abilities imbedded in an organizations members.Slide 2:The Challenges of Human Resource ManagementCompetitive Advantage Through People A firms success is based on establishing a set of core competencies integrated knowledge sets within an organization that distinguish it from its competitor and deliver value to customers. Examples: McDonalds management efficiency Federal Express package routing, delivery, and employee relations Canon Corporation precision mechanics, fine optics, and microelectronics Organizations can achieve competitive advantage through people if they meet the following criteria: The Resources must be of value Value is increased when employees find ways to decrease costs, provide something unique to customers, or some combination of the two. Empowerment programs, total quality initiative, and continuous improvement efforts. The Resource must be rare people are a source of competitive advantage when their skills, knowledge, and abilities are not equally available to competitors. Microsoft and other firms hire and train the brightest employees in order to gain advantage over competitors.Slide 3:The Challenges of Human Resource ManagementCompetitive Advantage Through People The Resources must be difficult to imitate when employee capabilities and contributions cannot be copied by others. (teamwork) The Resources must be organized when employees talents can be combined and deployed to work on new assignments at a moments notice. Nearly 80% of executives said the importance of HRM in their firms has grown substantially over the past ten years, and two-thirds said that HR expenditures are now viewed as a strategic investment rather than simply a cost to be minimized. Competitive Challenges and Human Resources Management Going Global Embracing technology Managing Change Developing human capital Responding to the market Containing CostsSlide 4:The Challenges of Human Resource ManagementCompetitive Challenges and Human Resources Management Challenge 1 Going Global In order to grow and prosper, many companies are seeking business opportunities in global markets. Exporting accounts for more than 956 billion a year. US trade deficit is now nearly 400B Impact on Globalization Globalization trend toward opening up foreign markets to international trade and investment Approximately 70% to 85% of the US economy today is affected by international competition. Nearly 97% of all US exporters are small and medium-sized companies. Efforts to lower international barriers: NAFTA facilitate commerce between Mexico, Canada, and the U.S. FTAA Will encompass the entire Western Hemisphere and extend from the tip of Alaska to the bottom of Argentina.Slide 5:The Challenges of Human Resource ManagementEfforts to lower international barriers: EU European Union focuses on the integration of European markets APEC Asia Pacific Economic Cooperation has helped establish freer trade among Pacific Rim Countries. Effect on Globalization on HRM Finding competent individuals that understand, geographies, cultures, laws, and business practice. Challenge 2 Embracing New Technology The introduction of advanced technology tends to reduce the number of jobs that require little skill and to increase the number of jobs that require considerable skills. This move is from touch labor to knowledge workers, where employees responsibilities expand to include a richer array of activities such as planning, decision making, and problem solving.Slide 6:The Challenges of Human Resource ManagementChallenge 2 Embracing New Technology Today, fully one-third of all courses are devoted to computer skills training (compared with 25% in 1996) Influence of Technology in HRM Today, many firms are using technology to manage their HRM called Human Resources Information System (HRIS) HRIS computerized system that provides current and accurate data for purposes of control and decision making. Three major components The operational impact automating routine activities, alleviating the administrative burden, reducing costs, and improving productivity internal to the HR function itself. (payroll processing, maintaining employee records, administering benefits programs) The Relational impact it enhances service by providing line managers and employees with remote access to HR databases, supporting their HR related decisions, and increasing their ability to connect with other parts of the corporation. (scanning resumes, tracking application information)Slide 7:The Challenges of Human Resource ManagementThree major components The transformational impact expanding the scope and function of the HR depart. (training, on-line performance evaluation, employees self-learning) Challenge 3: Managing Change Due to technology, the globalization of competition and markets, and workforce demographics, CHANGE in today's business world is inevitable. Types of Change Programs that focused on total quality, continuous improvement, downsizing, reengineering, outsourcing, and the like are all examples of the means organizations are using to modify the way they operate in order to be more successful. Two types of change: Reactive-change that occurs after external forces have already affected performance Proactive-change initiated to take advantage of targeted opportunities.Slide 8:The Challenges of Human Resource ManagementManaging Change Through HR 84% of executives polled said that they have at least one change initiative going on in their organizations. Unfortunately, successful change or change management rarely occurs naturally or easily. Here is why: Not establishing a sense or urgency Not creating a powerful coalition to guide the effort Lacking leaders who have a vision Lacking leaders who communicate the vision Not removing obstacles to the new vision Not systematically planning for and creating short-term wins Declaring victory too soon Not anchoring changes in the corporate culture Responsibilities change, job assignments change, work processes change. And this is a continuous change- a part of the job rather than temporary.Slide 9:The Challenges of Human Resource ManagementChallenge 4: Developing Human Capital The idea that organizations compete through people highlights the fact that success increasingly depends on an organizations ability to manage Human capital. Human capital the economic value of knowledge, skills, and capabilities. Human Capital and HRM Human capital is intangible and elusive and cannot be managed the way organizations manage jobs, products, and technologies. One of the reasons for this is that employees, not the organization, own their human capital. If valued employees leave a company, they take their human capital with them, and any investment the company has made in training and developing those people is lost. To build human capital in organizations, managers must continue to develop superior knowledge, skills, and experience within the workforce.Slide 10:The Challenges of Human Resource ManagementHuman Capital and HRM Staffing programs focus on identifying, recruiting, and hiring the best and the brightest talent available. Training programs complement these staffing practices to provide skill enhancement, particularly in areas that cannot be transferred to another company if an employee should leave. (What is transferable skills?) Challenge 5: Responding to the Market Meeting customers expectations is essential for any organization. Focusing on internal management issues, managers must also meet customer requirements of quality, innovation, variety, and responsiveness. These standards separate the successful and unsuccessful companies: Who well does a company understand its customers needs? How fast can it develop and get a new product to market? How effectively has it responded to special concerns? Faster, better, cheaper..Slide 11:The Challenges of Human Resource ManagementChallenge 5: Responding to the Market Organizations use several approaches to address this very crucial issues: Total Quality Management (TQ M) Six Sigma Reengineering TQM, Six Sigma, Reengineering, and HRM TQM is a set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement. Six Sigma a statistical method of translating a customers needs into separate tasks and defining the best way to perform each task in concert with the others. Reengineering has been described as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service and speed. (ISO 9000+)Slide 12:The Challenges of Human Resource ManagementChallenge 6: Containing Costs Investments in reengineering, TQM, human capital, technology, globalization, and the like are all very important for organizational competitiveness. Yet, at the same time, there are increasing pressures on companies to lower costs and improve productivity to maximize efficiency. Labor costs are one of the largest expenditures of any organization Organizations have tried a number of approaches to lower costs: Downsizing, outsourcing and employee leasing, and productivity enhancement. 1) Downsizing the planned elimination of jobs. Other ways of downsizing besides direct layoffs: Early retirements Sweetened voluntary separation program Sabbaticals Severance packagesSlide 13:The Challenges of Human Resource ManagementChallenge 6: Containing Costs 2) Outsourcing contracting outside the organization to have work done that formerly was done by internal employees. Some of the most common outsourcing are: Services of accounting firms Advertising firms Law firms Maintenance such as, security, catering, and payroll Employee Leasing Process of dismissing employees who are then hired by a leasing company (which handles all HR related activities) and contracting with that company to lease back the employees. Impact on HR: 93% of all HR depts. reported outsourcing some of their work Increasing morale especially if you know your work is only temporarily Increasing productivity level Managing contracting companies Legal issues with temporary workersSlide 14:The Challenges of Human Resource ManagementChallenge 6: Containing Costs 3) Productivity Enhancement Productivity can be defined as the output gained from a fixed amount of inputs, organizations can increase productivity either by reducing the imports (the cost approach) or by increasing the amount that employees produce. Two view points: View Point #1 managers may cut costs only to find that productivity falls at even at ore rapid rate WHY????????? View Point #2 -Mangers may find that increasing investment in employees (raising labor costs) may lead to even greater returns in enhanced productivity. ? Fact: The US is the worlds most productive nation. However, other can catch-up How to Increase Productivity? Employee productivity is the result of a combination of employee abilities, motivation, and work environment. Figure 1.3 When productivity falls off or more positively, when productivity improves the changes is usually traceable to enhanced skill, motivation, or a work environment conducive to high performance.Slide 15:The Challenges of Human Resource ManagementChallenge 6: Containing Costs How to Increase Productivity? Employee productivity is the result of a combination of employee abilities, motivation, and work environment. Figure 1.3 When productivity falls off or more positively, when productivity improves the changes is usually traceable to enhanced skill, motivation, or a work environment conducive to high performance. Demographics and Employee Concerns Demographic Changes among the most significant challenges to managers are the demographic changes occurring the the US. The Diversity Challenges figure 1.4 In the year 2010 minorities will make up an even larges share of the US labor force than they do today. Blacks will increase their share from 10 to 12 percent Hispanics from 7 to 12 percent Asian American from 3 to 6 percent These groups are expected to account for about 70 percent of labor force.Slide 16:The Challenges of Human Resource ManagementDemographics and Employee Concerns Age Distribution of Employees The # of older workers is beginning to rise as baby boomers approach retirement age and is projected to reach 15.2% by 2010. Companies are finding that large portions of their workforces are nearing retirement. Managers are concerned that the expertise of these employees is likely to be drained too rapidly from companies. What are companies dealing with this issue: Attracting older workers to work for them Innovative ways of training Old version You cant teach an old dog new tricks New version You cant teach an old dog the same way you teach a puppy Gender Distributions of the Workforce (figure 1.5) Bureau of Labor suggest that women will continue to join the US labor force and are expected to account for about 48% by 2010.Slide 17:The Challenges of Human Resource ManagementDemographics and Employee Concerns Gender Distributions of the Workforce (figure 1.5) HR Issues with the upcoming Gender Employers are under constant pressure to ensure equality for women with respect of employment, advancement opportunities, and compensation. Need to accommodate working mothers and father through parental leaves, part-time employment, flexible work schedules, job sharing, telecommuting, and more sensitive to the growing need for policies and procedure to eliminate sexual harassment in the workplace. Rising Levels of Education (figure 1.5) The most Secure and fastest-growing sectors of employment over the past few decades have been in areas requiring higher levels of education. However, this brings yet another challenge and that is that the there is a widening gap between the educated and the noneducated. Recent study suggests that less than half of all high school seniors are able to handle mathematics problems involving fractions, decimals, percents, elementary geometry, and simple algebra.Slide 18:The Challenges of Human Resource ManagementDemographics and Employee Concerns Cultural Changes The attitudes, beliefs, values, and customs of people in a society are an integral part of their culture. Employee Rights Over the past few decades, federal legislation has radically changed the rules for management of employees by granting them many specific rights. Among these are: Equal Employment Opportunity (chapter 2) Union Representation, if desired (chapter 14) Safe and Healthful Work environment (chapter 12) Pension plan that is fiscally sound (chapter 11) Equal Pay for men and women performing the same job (chapter 9) Employment at will doctrine (chapter 13)Slide 19:The Challenges of Human Resource ManagementDemographics and Employee Concerns Changing Attitudes Towards Work Employees today are less likely to define their personal success only in terms of financial gains. This trend has been evolving for some time, but observes have noted that it has peaked since the terrorist attacks of 9/11. Personal fulfillment and self-expression as well as a balance between work and family are key factors in a complex array of job attitudes. Employees are looking for: Interesting work Balancing the challenges and rewards of work with those in their personal lives Ways of living that are less complicated but more meaningful HRM has become more complex than it was when employees were concerned primarily with economic survival.Slide 20:The Challenges of Human Resource ManagementResponsibilities of the Human Resource Manager Advise and Counsel Service Policy formulation and implementation Employee advocacy Competencies of the Human Resources Manager (figure 1.9) Business mastery HR Mastery Change Mastery Personal credibility