841961

Employee involvementand qualitymanagement

Hongyi Sun

Ip Kee Hui

Agnes Y.K. Tam and

Jan Frick

Introduction

EI is a process designed to empower members

of an organization to make decisions and to

solve problems appropriate to their level in

the organization (Pace, 1989). The logic of EI

is that the people closest to a problem or

opportunity are in the best position to make

decisions for improvement if they have

control of the improvement process.

At the heart of TQM is the concept of

intrinsic motivation-involvement in decision

making. It is becoming an increasingly

popular maxim of good management that

human resources are the most important

dimension in quality and productivity

improvement (Ross, 1994). The chief

executive officers of some of the most quality-

conscious companies in the USA are quick to

point out that the best way to achieve

organizational success is by empowering and

involving employees at all levels. The

Chairman of General Electric has said: `̀ To

get every worker to have a new idea every day

is the route to winning in the 1990s''.

A survey by HR Focus (1993) revealed that

EI was rated as one of the top three concerns

by 46 per cent of the 1,000 respondents. EI

has also been widely studied in association

with TQM and human resources

management (Wood and Peccei, 1995;

Cheng and Tummala, 1998; Wilkinson,

1998). In the past few years, a large amount

of case evidence has shown that

empowerment does produce more satisfied

customers and employees. However, there

has been little research done on the empirical

relationship between employee involvement

and quality management. This current study

investigated the relationship between EI,

TQM, ISO 9000 registration and the

improvement of business performance.

Literature review and researchframework

Perhaps the most interesting results from the

study are how EI and TQM work together to

impact on organizational performance

(Lawler et al., 1995). Some researchers

believe that EI is associated with quality

management activities such as quality circles

The authors

Hongyi Sun, Ip Kee Hui and Agnes Y.K. Tam are all in

the Department of Manufacturing Engineering and

Engineering Management, City University of Hong Kong,

Hong Kong.

Jan Frick is in the Department of Business

Administration, Stavanger College, Norway.

Keywords

Employee involvement, TQM, ISO 9000, Performance

Abstract

This paper records the research on the investigation of the

empirical relationship between employee involvement (EI)

and quality management. It is based on data from a

survey of 180 manufacturing companies. The main

findings are: EI is positively correlated with total quality

management (TQM) enablers; EI is positively correlated

with improvements in business performance; EI positively

influences the contribution of TQM to the improvement of

business performance; EI is marginally related to ISO

registration; and EI has no effect on the contribution of

ISO 9000 registration. The conclusion is that EI should be

incorporated into TQM and ISO 9000 registration.

Implications for practice and future research are also

discussed.

Electronic access

The research register for this journal is available at

http://www.mcbup.com/research_registers/

quality.asp

The current issue and full text archive of this journal is

available at

http://www.emerald-library.com

Research and concepts

The authors acknowledge the financial support of

Strategic Research Grant (SRG 7000948) from

City University of Hong Kong.

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Volume 12 . Number 5 . 2000 . pp. 350±354

# MCB University Press . ISSN 0954-478X

http://www.emerald-library.com

http://www.mcbup.com/research_registers/quality.asp

and communication. According to Evans

(1985) and Hogan (1992), employees

participate in advisory groups to voice

concerns and exchange views on quality

issues. For example, two hotels use employee

focus groups, called `̀ employee exchange

communication meetings'', as a means of

giving employees an opportunity to address

their concerns or to provide input on

upcoming issues.

In the past few years, a large amount of case

evidence has shown that empowerment does

result in more satisfied customers and

employees. For example, research has shown

that job enrichment and task characteristics

such as skill variety and autonomy are directly

associated with higher work quality and

employee satisfaction (Kopelman, 1986).

Self-managing work teams typically produce

positive results in terms of quality and costs

(Beekun, 1990; Sundstrom et al., 1990).

Similarly, gain-sharing plans result in

substantial cost improvements as well as

better services (Cooper et al., 1992). In

addition, Partlow (1996) suggested that

TQM should be supported by human

resources practices such as EI. Inspired by the

discussions in previous research on the

relationship between EI, TQM and

performance, we formulated the following

three research questions:

(1) Does EI have any relationship with the

implementation of quality management

practices such as TQM?

(2) Does EI influence the improvement of

business performance?

(3) Does EI influence the contribution of

TQM to the improvement of business

performance?

Very little research has been done on the

relationship between ISO 9000 and EI.

Velury (1996) believes that it seems logical for

an organization to obtain ISO 9000

certification through EI, which has been

shown to reduce the time to certification by

shortening the initial learning curve.

Ultimately, the initial benefits of ISO 9000

are directly proportional to the depth and

breadth of EI. However, Curkovic and

Handfield (1996) found that ISO 9000

registration criteria fail to measure key areas

of quality management, including strategic

planning, EI, quality results and customer

satisfaction. These arguments lead to a

further two questions:

(4) Does EI have any relationship with ISO

9000 certificates?

(5) Does EI influence the contribution of

ISO 9000 certificates to the improvement

of business performance?

The variables and their relationships in the

above research questions are illustrated in a

framework in Figure 1. Previous research was

mainly based on case studies and in service

organizations. This research will investigate

the empirical relationship between EI,

TQM and ISO 9000 in manufacturing

companies.

Research method and empiricaldata

This study is based on a survey. The first

version of the questionnaire was designed by

Rao and Raghu-Nathan (Solis et al., 1998) at

Toledo University. It covers the following

criteria: quality leadership; human resources

development; quality strategy; information

resources; process and product; people

satisfaction; customer satisfaction; social and

environmental impact; and the results. EI

questions were added to the survey conducted

in Norway, in order to find out whether

employees were given appropriate power in

decision making, etc. (Sun, 1999). Twelve

questions on employee involvement were

asked.

Other information on ISO 9000

certification was also requested. This survey

was conducted in Norway with the support of

the Norwegian Quality Association (NFK)

Figure 1 A framework illustrating the variables and research questions

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Employee involvement and quality management

Hongyi Sun, Ip Kee Hui, Agnes Y.K. Tam and Jan Frick

The TQM Magazine

Volume 12 . Number 5 . 2000 . 350±354

and the Rogaland Research Institute in early

1997. Questionnaires were sent to all 900

NFK member companies. All the informants

are quality managers in these companies. A

total of 363 replies were received, a return

rate of about 40 per cent. The sampled

companies include manufacturing companies

(180, 50 per cent), service companies (85, 23

per cent), public companies (47, 13 per cent),

and other types of organizations such as

research institutes and foundations (51, 14

per cent).

In this research, the 180 manufacturing

companies are used. Their sizes range from

less than 150 employees (51 per cent), to 150-

500 employees (31 per cent), to more than

500 employees (18 per cent).

Reliability and validity tests (Nunnally,

1978) were conducted. Based on the tests, 14

valid TQM factors (F1-F8), two performance

factors (F7 and F72) and one employee

involvement factor (EI) are identified as

shown in Table I. Data analysis described

below are based on these factors, which have a

mean of zero.

Results

Data analyses produce the following results as

shown in Table I.

EI and TQM (Q1)

EI is positively correlated with improvement

in business performance. Correlation

coefficients between EI and the 12 TQM

factors range from 0.2 to 0.5, all at the

significant level of 0.05 and 0.01, as shown in

Table I. This indicates that EI is highly

related to the implementation of TQM. There

are two explanations for this. One, EI will

enhance the implementation of TQM

programmes; and two, TQM programmes

provide opportunities for employees to be

involved.

EI and business performance (Q2)

The correlation between EI and business

performance is significant. However,

significant correlation was found only in the

high-EI group (0.39 and 0.35). This indicates

there is a learning-curve effect in EI. In other

Table I Means and correlation coefficients between participation, TQM and results

Correlation coefficients

High EI

(47 per cent)

Low EI

(53 per cent)

Factors Code Means EI F71 F72 F71 F72

Employee involvement EI 2.74 1.00 0.39** 0.35**

Leadership system F11 3.51 0.50** 0.35*

Citizenship F12 4.17 0.27** 0.32* 0.45*

Availability and use of quality information F21 3.32 0.41** 0.32*

Benchmarking F22 3.07 0.35** 0.30*

Strategic management F3 3.28 0.61** 0.47** 0.43*

Human resources development F41 3.02 0.65** 0.49**

Training F42 2.57 0.46**

Quality assurance F51 3.97 0.20* 0.32*

Design control F52 4.02 0.22*

Process control F53 3.62 0.40**

Supplier co-operation F61 3.39 0.37** 0.36* 0.32*

Supplier selection F62 2.96 0.37** 0.31*

Customer satisfaction F81 3.86 0.29** 0.50**

Customer feedback F82 3.62 0.29**

External performance F71

Internal performance F72

ISO-EI ISO 0.15 ±0.11 ±0.02 0.37 0.36

Non-ISO ±0.22 ±0.26 ±0.30 0.13 ±0.09

T-value 4.48 0.24 0.83 0.60 2.11

Significant 0.04 0.63 0.37 0.44 0.15

Notes: * Correlation is significant at the 0.05 level (2-tailed)** Correlation is significant at the 0.01 level (2-tailed)

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words, it takes time for the benefits to be

obvious.

EI and the contribution of TQM (Q3)

For this question, the sample was divided into

two groups by the mean of the degree of

employee involvement, i.e. high-EI and low-

EI. In the high-EI group, the correlation (0.31

and 0.50) between EI and performance

improvement is at the significant level of 0.01.

However, in the low-EI group, only two

significant correlation coefficients are noted.

It is concluded, therefore, that EI positively

influences the contribution of TQM. In other

words, TQM programmes accompanied by

EI tend to be more successful.

EI and ISO certificates (Q4)

The degree of EI is slightly different between

those companies with and without ISO 9000

certificates. The test of the difference is at the

level of 0.04, which indicates that there is

some positive relationship between ISO 9000

certification and EI. However, based on the

data in this research, it is still impossible to

determine which influences which. Juran and

Gryna (1988) believe that without EI, the

future of quality management and ISO 9000

certificates will be gloomy. However, the

current version of ISO 9000 does not cover

several key issues, such as quality goals in the

business plan, quality improvement at a

revolutionary rate, training in managing for

quality, and participation by the work force. It

is to be hoped that these issues will be

addressed in a future version of ISO 9000

standards.

EI and the contribution of ISO

certificates (Q5)

In either high- and low-EI there is no

significant difference in performance

improvement between companies with and

without ISO 9000 certificates. This indicates

that EI has no effect on the contribution of

ISO 9000 certificates to performance

improvement. However, this may be because

EI and ISO 9000 have not been well-

incorporated (cf. `̀ EI and ISO certificates'').

Discussions and implications

This research revealed that EI is positively

related to various aspects of quality

management and should be emphasized in

quality management programmes. The results

suggest that instead of implementing TQM

and EI as separate programmes, they should

be implemented in combination.

However, the `̀ means'' column in Table I

indicates that the average implementation of

EI is very low compared with other quality

management practices. Companies are

therefore recommended to pay more attention

to EI and to incorporate it with TQM. In

order to participate in the business, employees

at all levels must have power, information,

knowledge and rewards (Lawler et al., 1995),

all of which should be incorporated in quality

management programmes.

EI must, however, be implemented within

certain strategic contexts. It is meaningful

only after a strategic concept has been

established and communicated to all

employees. Employees need to share strategic

information to direct their efforts at the

operational level. It is the responsibility of top

management to evaluate customer value and

determine the company's goals and the task of

middle management to turn the goals into

operations tasks.

EI is a process for empowering members of

an organization to make decisions and to

solve problems appropriate to their levels in

the organization (Pace, 1989). To participate

effectively, employees must be given more

responsibility. This requires the delegation of

certain decision making and administrative

powers to employees at various levels.

Without the necessary power, EI cannot be

utilized for making continuous improvements

and will be limited to just making suggestions.

Increased involvement means more

responsibility, which in turn requires a higher

level of skills. Training should be provided to

allow employees to attain higher skills and

should include training in both techniques,

such as statistical methods, and managerial

skills in decision making, leadership, team

building, etc. Training is the essential part of

all quality programmes and it is relatively easy

to incorporate knowledge development with

TQM programmes.

Companies which implemented quality

management programmes must recognize

and reward quality improvement and better

customer service. The reward system should

provide incentives to motivate employees to

participate further. Performance-based,

individual and group-based payment systems,

business interests sharing, and gain-sharing

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Volume 12 . Number 5 . 2000 . 350±354

programmes, etc., are commonly used

incentive-based reward systems in successful

companies.

EI takes various forms, such as work teams,

job enrichment/rotation, quality circles, task

forces and labour-management action

(Bounds et al., 1994). However, quality

circles are the most common, with many

successful instances being reported. It is

suggested that companies use quality circles

as the first step in implementing EI.

Finally, management must hold a new

management philosophy and new attitude

towards employees. To implement EI,

management should hold the assumption that

employees are willing to contribute and be

able to contribute. The above implications are

summarised in a framework as shown in

Figure 2.

Conclusions

The research reported in this paper revealed

that EI contribute to various aspects of quality

management. The result supports the

proposition that EI is a prerequisite for TQM

and other quality management programmes.

To implement EI, management needs to

hold a new management philosophy and

new attitude towards employees and employees

should be provided with the necessary

authority, information, skills, and reward.

References

Beekun, R.I. (1990), `̀ Assessing the effectiveness of socio-technical interventions: anitdore or fad?'', HumanRelations, Vol. 42, pp. 887-97.

Bounds, G., Yorks, L., Adams, M. and Ranney, G. (1994),Beyond Total Quality Management: Towards theEmerging Paradigm, McGraw-Hill, New York, NY.

Cheng, S.P. and Tummala, V.M.R. (1998), `̀ An employeeinvolvement strategy for ISO 9000 registration andmaintenance: a case study for Hong Kong and Chinacompanies'', International Journal of Quality &Reliability Management, Vol. 15 No. 8, pp. 860-91.

Cooper, C., Dyck, B. and Frohlich, N. (1992), `̀ Improvingthe effectiveness of gainsharing: the role of fairnessand participation'', Administrative ScienceQuarterly, Vol. 376, pp. 471-90.

Curkovic, S. and Handfield, R. (1996), `̀ Use of ISO 9000and Baldrige Award criteria in supplier qualityevaluation'', International Journal of Purchasing andMaterials Management, Vol. 32 No. 2, pp. 2-12.

Evans, M.R. (1985), `̀ Opyland Hotel: managing Nashville'scomplete destination'', Cornell Hotel and RestaurantAdministration Quarterly, Vol. 25 No. 4, pp. 44-55.

Hogan, J.J. (1992), `̀ Turnover and what to do about it'',Cornell Hotel and Restaurant AdministrationQuarterly, Vol. 33 No. 1, pp. 40-45.

HR Focus (1993), January, pp. 1-4.Juran, J.M. and Gryna, F.M. (1988), Juran's Quality

Control Handbook, McGraw-Hill Book Company,New York, NY.

Kopelman, R.E. (1986), Managing Productivity inOrganizations, McGraw-Hill, New York, NY.

Lawler, E.E., Mohrman, S.A. and Ledford, E. (Ed.) (1995),Creating High Performance Organizations: Practicesand Results of Employee Involvement and TotalQuality Management in Fortune 1000 Companies,Jossey-Bass, San Francisco, CA.

Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill,New York, NY.

Pace, L.A. (1989), `̀ Motivation towards systemintegration'', Survey of Business, Vol. 25 No. 1,pp. 57-41.

Partlow, C.C. (1996), `̀ Human-resources practices of TQMhotels'', Cornell Hotel and RestaurantAdministration Quarterly, Vol. 37 No. 5, pp. 67-79.

Ross, J.E. (1994), Total Quality Management, Text, Casesand Readings, Kogan Page, London.

Solis, L.E.S., Rao, S., Raghu-Nathan, T.S., Chen, C. andPan, S. (1998), `̀ Quality management practices andquality results: a comparison of manufacturing andservice sectors in Taiwan'', Managing ServiceQuality, Vol. 8 No. 1, pp. 46-54.

Sun, H. (1999), `̀ An empirical study of TQM in Norway'',Total Quality Management, Vol. 10 No. 6,pp. 901-14.

Sundstrom, E., DeMeuse, K.P. and Futell, D. (1990), `̀ Workteams'', American Psychologist, Vol. 45, pp. 120-33.

Velury, J. (1996), `̀ ISO 900: focusing on quality systems'',Industrial Management, Vol. 38 No. 6, pp. 11-15.

Wilkinson, A. (1998), `̀ Empowerment: theory andpractice'', Personnel Review, Vol. 27 No. 1,pp. 40-56.

Wood, S. and Peccei, R. (1995), `̀ Does total qualitymanagement make a difference to employeeattitudes'', Employee Relations, Vol. 17 No. 3,pp. 52-62.

Figure 2 A managerial framework for employee involvement

Commentary

Extensive research results on the essential area of employee involvement.

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