Human Capital Management (HCM)

In today’s hyper-competitive business environment, companies must maintain the highest level of performance in order to succeed and win.

As a result, companies must increasingly leverage every resource to create and maintain a competitive advantage. The resource most difficult toharness is people. This
resource, however, is also where companies find their greatest gains in productivity, creativity, and innovation. People are central to the success of any organization. Simply put, great people make great teams that make great products, and deliver great service. In order to deliver excellent results, employees must be motivated and have the necessary competencies, or the capacity to develop them. Furthermore, the organization must have the proper tools and support for the employee to succeed. The desire to harness the latent potential of employees is
driving the adoption of Human Capital Management (HCM) software, in order to motivate,
teach and allocate resources. In the paper How Smart HCM Drives Financial Performance,
Dr. Jac Fit-enz author of eight books and acknowledged father of HCM metrics, and Erik
Berggren of SuccessFactors Research, proved that there is significant financial benefit to
implementing a superior Human Capital Managementsystem . Now that this link has been established, it is critical to understand how HCM actually drives increases in revenue and profit.

Smart HCM Drives Financial Performance 2007 Analysis yielded the following findings:
Finding 1: 67% of companies with stronger financial performance cover all managers and some levels below with the performance management system. Only 28% of the weaker performers do.
Finding 2: 44%of the stronger performers have almost 100%aligned goals at the managerial level. None of the weaker performers do.
Finding 3: 38% of the strong performers have a succession planning program in place. 0% of the weaker performers do.

HCM Business Impact Model
The SuccessFactors Research
Human Capital Management Business Impact Model illustrates the dramatic impact of HCMon all aspects of business. Two-way relationships are noted with two-way arrows, one-way relationships with one-way arrows and partial relationships with dotted-line arrows .
Employee engagement stands at the apex of this model, driving customer satisfaction, productivity, and retention, which in turn drive revenues and profits.
The following relationships are illustrated:
1. Engagement to Customer Satisfaction (2-way)
2. Engagement to Productivity (1-way)
3. Engagement to Retention (2-way)
4. Retention to Productivity(1-way)
5. Retention to Customer Satisfaction (1-way)
6. Retention, Productivity and Customer Satisfaction to financial performance.Defining Engagement while retention, productivity and customer service are self-explanatory, it is important to understand what engagement is, and how it is defined for the purposes of this paper.

A recently conducted a survey of 12 research studies that were focused on understanding and driving employee engagement, which they define as:
a heightened emotional and intellectual connection that an employee has for his or her job, organization, manager, or co-workers that, in turn, influences him or her to apply additional discretionary effort to his or her work.
Driving Engagement
The aforementioned survey found eight drivers of engagement across all of the examined
engagement studies .

Eight Factors that Drive Engagement:
1.Trust and Integrity
2.Relationship with One’s Manager
3.Nature of the Job
4.Career Growth Opportunities
5.Line-of-Sight between Individual Performance and Company Performance
6.Employee Development
7.Coworkers/Team Members
8.Pride About the Company

Defining Engagement
While retention, productivity and customer service are self-explanatory, it is important to understand what summarized through one theme:
self-determination: In order to operate with self- determination, an employee must have trust in their business processes, a clear understanding of the business environment, the ability
to gain the skills necessary to succeed in the environment, and a career path within that environment.
This is evident in a published paper with Emerald, Transparency Drives
Strategy Execution2, where a SuccessFactors Research discuss the importance of a transparent environment for driving strategy forward. They explain the link between strategic transparency and employee performance and the open, navigable environment desired by self-determined, engagedemployee.
Engagement to Customer Satisfaction
It is logical that an engaged employee would produce higher levels of customer satisfaction. An engaged high performer would offer better customer service, with more frequent engagement with the customer. The SuccessFactors Research HCM Business Impact model links engagement to customer satisfaction. The Harvard Business Review article, Manage Your Human Sigma, shows the clear bidirectional relationship
between engaged customers and engaged employees. As customers
and employers become more engaged, performance increases
dramatically. However, customer satisfaction is not only the product of outward facing
employees. Timely order fulfillment and product quality are also critical to
customer satisfaction. According to a Northwestern University study:
Employee Satisfaction and Employee Engagement have both direct and indirect effects on subsequent market and financial outcomes. Employee Satisfaction directly influencesCustomer Satisfaction, while Employee Engagement’s effects on Customer Satisfaction are indirect
through market orientation and Customer Behavior.

Global Engagement Survey
14% of the World Workforce is highly engaged
84% of HighlyEngaged Employees believe they can positively impact the quality of their work
86% of the World Workforce is moderately engaged or disengaged
31% of disengaged employees believe they can positively impact the quality of their work
Source: Talent Management in the 21st Century:
Attracting, Retaining and Engaging Employees of Choice WorldatWork Journal, 1st Quarter 2006.

Retaining Top Talent
Retaining top talent employees constitutes the following:

1. Opportunities to Advance One’s Career. This retention factor maps directly with the career growth opportunities sought by engaged employees.
2. Employee Learning and Development. Also linked to career growth opportunities, skill development drives both engagement and retention.
3. Reputation of the Company. This retention factor maps directly with the Pride About the
Company engagement factor. While not always a controllable factor, it illustrates the strong similarity in those factors that encourage engagement and retention, respectively.

Driving Real Performance Engagement
“Engagement with employees within a firm has shown to motivate the employee to work beyond personal factors and work more for the success of the firm.” —The Gallup Organization
Inspires Retention
“Work groups whose members are positively engaged have higher levels of productivity and profitability, better safety and attendance records, and higher levels of retention. Not surprisingly, they’re also more effective at
engaging the customers they serve.” — Manage Your Human Sigma
Customer Satisfaction
“In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy” — Lawrence J. Gitman
Productivity
“Mature systems support consistent application across units driving down G&A expense. More importantly they promote communication with employees, giving them clarity in terms of their effect on the business, thereby driving motivation. This leads to productivity and financial gain.”

Conclusion
The SuccessFactors Research HCM Business Impact model demonstrates the clear linkages between engagement, customer service, productivity, and retention. An engaged employee is
more likely to put extra thought and effort into their work, engage the customer more frequently, speak highly of the company, and is far less
likely to leave. This adds tangible value and savings for businesses that invest in HCM. This investment in improved process and smart technology can help drive engagement, therefore improving productivity, customer service and retention, which ultimately drives revenue and profit.
Dr. Peter Cappelli and SuccessFactors Research revealed in a recent presentation
that 65% of the costs of doing business are labor related. Employee performance is crucial. Businesses with engaged employees simply perform better, and are all the more suited to the hyper-competitive business environment of today. HCM drives this performance, engaging and retaining employees, leading ultimately to satisfied customers and superior financial performance.

References
Baker, A. (1998), Employee RetentionImproves with Virtual Routing Systems, Call Center Solutions.
Barret, V.M. (2007), Fight the Jerks.Forbes Magazine, New York, NY.
Bassi, L., McMurrer, D. (2007),Maximizing Your Return on People,
Harvard Business Review,Boston, MA.
Berggren, E., Bernshteyn, R. (2007),Transparency Drives Strategy
Execution, Emerald Press,London, U.K.
Coffman, K., Fleming J. H., Harter, J. K. (2005), Manage Your Human
Sigma,

Harvard Business Review,
Boston, MA.
Cozzani, C. Organizational Characteristics to Employee Attitudes and Behavior, Forum for
People Performance Management,
Evanston, IL.
Gebauer, J. (2005), Building the Global Village, Synnovation:
Gibbons, J. (2006), Employee Engagement: A Review of Current Research and Its Implications,
The Conference Board, New York, NY.
Gitman, L. (2004), The Future of Business, South Western College Publishing.
ISR Research. (2006), Global Employee Engagement Study, Chicago, IL.
Towers Perrin. (2003), The 2003 Towers Perrin Talent Report: Working Today: Understanding What Drives Employee Engagement, Stamford, CT.

Sustaining Employees' High Performance

Sustaining good calibre employees through enhancing their performance is becoming a hot issue nowadays. It is a non-stop management process that ensures a competitive edge for any organization. Here are some creative ideas to help us doing this.
1. Make Sure Employees’ Daily Efforts Contribute to Your Company’s Business Objectives
The first step in unlocking your company’s true potential is ensuring your employees understand how their specific job/role contributes to achieving your company’s business objectives. Without a consistent process of setting goals for each individual employee that map directly to your company’s objectives, they may be spending too much time on the wrong activities.
In fact, leading industry analysts estimate nearly 95% of workers are unaware of their company’s top objectives. And, that’s often because an effective process to communicate and track progress against these objectives does not exist. So how can your company expect its people to work toward a shared vision — and deliver bottom-line results — if they’re unclear what’s expected of them?
Establishing a formal process for creating relevant goals for each employee, and monitoring/measuring performance against company objectives, unquestionably results in both individual and company success. The benefits of this approach deliver a host of positive results, such as:
• Employees and managers achieve more — through greater visibility into both individual and company-wide goals.
• Employees and managers see the goal plan — and understand how their individual goals fit into the company’s business objectives.
• Creating shared employee responsibility — by cascading his or her goals with others in the company.
• Managers more easily stay in touch with employees’ progress — during every phase of goal completion, and offer immediate reinforcement or coaching to keep performance and deadlines on track.
Keep in mind your success in aligning employee and company goals depends on an open and ongoing dialogue with management. This is the only way to ensure business strategy is woven in to all HR efforts, including an automated proces.

2. Keep Employees Energized and Engaged
Jack Welch, former CEO of GE — and one of the most respected business leaders of our time — wrote the book on motivating people. One of his key insights to driving phenomenal performance shows how much faith Mr. Welch had in the power of engaging and inspiring people; in a nutshell, he believed the ultimate goal of managing is not to get an employee to perform as expected, but to have them willingly go above and beyond the call of
duty — because they want to. Building a culture in which employees are energized and engaged to perform at maximum levels (and beyond) requires both strong management skills, and
a consistent process for providing accurate, quality feedback. Easier said than done, of course. But recent progress in HR-software designed specifically to address this challenge is helping significantly. There are now effective means like writing assistants and coaching tools that can significantly improve the overall quality of feedback, and help managers provide:
• More relevant reviews — writing and goal management tools help
managers deliver meaningful, accurate reviews so employees understand
their performance against goals.
• Richer, more meaningful feedback — built-in writing tools ensure
consistency between managers, and deliver a deeper level of feedback.
• Stronger, more relevant coaching — managers receive specific,
actionable suggestions for coaching employees through a range of issues.
Ultimately, quality feedback is what keeps your employee’s head in the game
and can be used to inspire and fire them up. It also increases job satisfaction
and reduces turnover — two critical factors that most small- to mid-sized
businesses say they are concerned with on a daily basis.
Changing.

3. Develop, Implement and Reinforce a Pay-for-Performance Culture
The importance of having the best people in key areas is critical to the success of your business. It’s no secret the key to retaining the best and brightest talent is recognizing and compensating top performers. According to Giga Information Group, retention can be improved by meritocratic management — or pay-for-performance — by up to 27%. Establishing a pay-for-performance culture is considered the #1 tool for achieving financial results by senior executives. Today’s HR technologies now give managers easy access to all the information they need to reward individuals for actual performance — 360 degree feedback, goal alignment
metrics, review data and performance notes taken throughout the year. This allows managers to make consistent, quantifiable and fair decisions,
and avoid compensating the wrong people. Other positive benefits include the ability to:
• Track employee progress against performance goals.
• Identify who is delivering against expectations, and contributing the most.
• Improve ongoing job satisfaction, productivity and retention by recognizing and rewarding exceptional effort.
• Avoid overcompensating by seeing where compensation and performance are not aligned.
Changing.

4. Automate Performance Management from Start To Finish
Technology designed specifically to help organizations manage and optimize employee performance has advanced considerably over the years. Yet it’s interesting to note that most companies still rely on paper-based processes and outdated performance management methods. By adopting a system that manages the entire employee lifecycle — from performance assessment to goal alignment to employee retention — it’s safe to say automation can truly transform your business.
A tangible example of how automation pays off can be seen in the massive improvements around performance reviews. Once a source of great pain and often viewed as a waste of time, performance reviews have been converted by HR technology into a simple, cost-effective process. The result: managers are freed to up to focus on the tasks that are most meaningful—and critical—to achieving company goals. This clearly illustrates how both employee and
company-wide performance potential can be unlocked by HR automation.
Here are other key benefits your company can realize by automating performance management:
• Easily implement performance management best practices
• Increase goal visibility and boost shared accountability
• Use data more effectively to gain powerful insights
about company performance
• Ensure compliance and employee participation
• Eliminate paperwork hassles
• Improve feedback quality and strengthen management skills
• Save time
• Give employees honest, objective, and open feedback
• Improve your bottom line
Changing.

A final thought to help you raise employee (and overall company) performance: HR professionals in organizations of all sizes consistently report that providing their management with visibility into HR achievements is essential. Your managers need quantitative and qualitative information to support your strategic decisions about human capital. And just as
sales or marketing must justify technology investments in light of business strategy, HR must also learn to do the same.

How Social Awareness Work

Social awareness refers to the behavioral range that runs from instantly sensing the inner state of other people, to understanding their feelings and thoughts, to comprehending the meaning and significance of complicated social situations. This awareness includes:
Primal Empathy: To sense the non-verbal emotional signals of others and to feel what they are feeling.
Atunement: To attend and attune to others with a sustained receptivity that leads to rapport.
Empathetic Accuracy: To consciously and accurately understand another person's thoughts, feelings, and intentions. Mirror neurons function at a subliminal level, but we often need to add prior experience with the immediate challenge in order to consciously grasp and appropriately respond to the real intentions of the other person (such as in contract negotiations, or when confronting an assailant).
Social cognition: Knowing how the social world works (such as the appropriate behavior in restaurants and museums, the appropriate conversation for various social settings). Social cognition emerges out of the development of primal empathy, attunement, and empathetic accuracy.
To simply sense how other people feel, or to know what they think or intend, doesn't guarantee fruitful interactions. Social skills build on social awareness to allow smooth, effective interactions. The spectrum of social facility includes:
Synchrony: To interact smoothly with others at the non-verbal level. This includes the ability to automatically read and respond to nonverbal cues (such as knowing when to smile and frown, how to orient our body). While these skills develop effortlessly in many children, the awkward behavior of others reduces the quality of their social life.
Self-Presentation: To present ourselves effectively in social situations, so that others can easily understand how we feel and think about the issues at hand.
Influence: To help shape the outcome of social interactions in a manner that is acceptable to others. Most social issues require at least some negotiation, so it's very important to learn how to negotiate fairly and effectively.
Concern: To care about and appropriately act on the needs of others. The behavioral spectrum is broad—from simply holding a door open for a person laden with packages to contributing to charitable and cultural institutions. We're a highly interdependent social species, and so it's inappropriate for us to expect others but not ourselves to contribute to common needs.
The functional elements of social intelligence identified above constitute the heart of the book, but what's especially fascinating is how Goleman draws on recent brain research to ground these functions in neurobiology. These forms of awareness and behavior do have an underlying biological explanation. This means that we can move towards the educational enhancement of social intelligence, and to effective interventions when the system goes awry.

Education & The Social Intelligence

To survive and thrive, we have to understand how the world's various systems function. This encompasses such things as knowing the flow of days and seasons; whether a dropped object will bounce, splat, or break; and how water shifts among its fluid, frozen, and gaseous states.
Human life is a major subset of the world's systems, so much of our time and energy is focused on trying to understand and get along with each other. Last month's column focused on the sense of gratitude we feel when objects and other people enrich our life. This month's related column will focus on an excellent new book by Daniel Goleman, Social Intelligence: The New Science of Human Relations (2006).
Goleman rose to international prominence a decade ago with Emotional Intelligence: Why It Can Matter More Than I.Q. (1995), an informative, easily read book that synthesized the dramatic developments that had been emerging out of emotion research. The conventional wisdom had previously viewed our emotional arousal system as a disembodied and often unruly phenomenon. Goleman demystified it by explaining its underlying neurobiology, and by then suggesting how we can consciously use this biological thermostat as a force to enhance the quality of our life.
In Social Intelligence, Goleman similarly synthesizes the growing body of cultural and neuroscience research on how we develop social awareness and manage our social relationships. We can thus consider the two books as companion volumes—about understanding what occurs within (Emotional Intelligence) and what occurs between (Social Intelligence).
What occurs between can be thought of as the range of relationships that exist within a social continuum. At one end we're simply emotionally neutral and detached from a person with whom we're interacting (such as a supermarket checker). At the other end, we're rude and exploitative, assuming that the other person exists at the level of an object, to satisfy our needs. Psychopaths and sociopaths would exemplify behavior at that far end of the continuum.
The relationships in the center of this continuum imply a close empathetic human relationship that's temporarily or permanently tuned to the experiences, needs, and feelings of another person. Goleman suggests that we are constantly involved in both close and detached relationships, and that our relationship with a person can appropriately shift back and forth between close and detached, depending on the circumstances.
Many relationships are better off detached, in that most folks don't appreciate intrusive restaurant waiters; and realize that the professional judgment of one's physician, attorney, or counselor may be negatively affected by a close personal relationship.
Exploring a Social Brain
Neuroimaging technologies have revolutionized the study of complex brain properties and systems. Our brain has been described as a social brain, because hundreds of separate processing systems collaborate in the execution of thought and behavior, and because our brain is organized to empathetically connect us to the thoughts and behaviors of others.
Social decisions and behavior are especially complex, and so they require the collaboration of many processing systems. The research technologies capable of imaging such processes have emerged only recently, so Goldman's explanations and discussions of the relative brain systems thus have an exciting immediacy about them.
Our Social Brain
Like objects and fluids, social relationships can also bounce, splat, break, flow, freeze, and even disappear into a gaseous state. Since an organism's potential resources and survival are enhanced within a collaborative setting, the development of good social relationships creates a decided advantage. Social competence has thus become a central human property.
Goleman explores and explains the various brain processing systems and combinations of systems that allow us to be sociably adept. Chief among these is the recently discovered mirror neuron system that is central to social thought and behavior. Mirror neurons prime our own movements, but they also activate when we observe another person make the same movement. Since any goal-directed motor behavior involves sequences of actions (such as to focus on, reach for, grasp, and then throw a ball), the neuronal sequence that regulates the overall movement thus activates in parallel in the brains of both the actor and the observer. We can therefore infer the intentions and motivations of another person, and act accordingly.
Mirror neurons also activate when we observe an emotional reaction in another person, and so provide the neuronal basis of empathy. Mirror neurons thus help to create the contagious behavior that is so integral to social life—the shared grief at a funeral, the shared joy at a birthday.
Goleman explores social intelligence as both a functional and biological phenomenon. Social intelligence allows us to develop an enhanced awareness of the mind of others, and to develop the skills that we need to maintain appropriate relationships. Goleman also explores these functional elements in terms of the cognitive processing systems that regulate various social behaviors.

Full Time Home Based Jobs

How would you like to work from home? No hustling out the door 10 minutes late, no fighting your road rage or battling for the last seat on train, no fast food lunch and no noisy co-workers. Sounds like heaven doesn't it?

More than ever, workers are attracted to the 30-second commute, thanks to social and economic trends. Technologies necessary for setting up a home office are widely available, relatively inexpensive and getting easier for people to use. And more workers are seeking flexible schedules to care for aging parents and children.
In Depth: Work at Home Home-based working is growing rapidly, according to a 2004 survey by ITAC, the association for advancing work from anywhere. The number of employed Americans who worked from home, from as little as 1 day a year to full time, grew from 41.3 million in 2003 to 44.4 million in 2004.
Many people associate working from home with starting a home-based business and becoming an entrepreneur, but more and more employers are offering this option to workers in order to attract and retain top employees. In fact, 7.6 million employees conduct work from home every month.
Don't fret, there are jobs that you can find with established employers. Even if the job is advertised as office-based, these positions are telework-friendly and could be in your future.
Administrative assistantAlso known as virtual assistants, home-based administrative assistants use office experience and computer skills as support personnel. Many skills easily transition into this position which offers many part-time and temporary opportunities.
Advertising sales agentIt's said that Americans are exposed to more than 3,000 ad messages a day. Advertising sales representatives sell or solicit advertising space in print and online publications, custom-made signs, or TV and radio advertising spots.
Computer software engineerComputer software engineers are projected to be one of the fastest-growing occupations over the 2002-2012 period. Duties include design, development, testing and evaluation of computer software, and continual training is suggested for the quickly evolving industry.
Corporate event plannerEmployed by a private company rather than a hotel or convention facility, a corporate event planner coordinates staff activities including group meetings, client presentations, special events, conventions and travel.
Copy editorCopy editors mostly review and edit a writer's copy for accuracy, content, grammar and style. This is a competitive field; however, the growth of online publications and services is spurring the demand for writers and editors, especially those with Web experience.
Desktop publisherDesktop publishers use computer software to format and combine text, images, charts and other visual elements to produce publication-ready material. Duties of this fast-growing profession include writing and editing text, creating graphics, converting photos and drawings into digital images, designing page layouts and developing presentations.
Data entry clerkLike administrative assistants, job prospects should be best for those with expertise in computer software applications. By typing text, entering data into a computer, and performing other clerical duties, these workers ensure companies keep up with information and technology.
Insurance underwriterInsurance underwriters serve as the main link between the insurance carrier and the insurance agent. Underwriters analyze insurance applications, calculate the risk of loss from policyholders, decide whether to issue the policy and establish appropriate premium rates.
Market research analystMarket Research Analysts gather data on competitors and analyze prices, sales, and methods of marketing and distribution. They often design surveys, compile and evaluate the data and make recommendations to their client or employer based upon their findings.

Exploring Employees Performance Potential

A powerful transformation is underway: more successful small and
mid-sized businesses are embracing “strategic HR” to drive higher
performance, productivity and profits. But you probably know it hasn’t
always been this way…
That Was Then
Historically, HR has not been viewed as a key businesses driver, unlike “vital” functions such as sales, marketing,
or operations. It’s no wonder, then, that HR unfairly earned a reputation as a tactical back-office task, or worst
case, completely unrelated to the overall health and success of the company.
…This Is Now!
Today, the role of HR has been radically redefined and more emphasis has been placed on effectively managing every
aspect of the employee lifecycle, from talent acquisition, to performance measurement to employee compensation.
This amazing shift in HR starts at the most fundamental level: helping raise the bar on individual performance not
only helps employees realize their full potential, but also the company as a whole. In other words, strategic HR is
ensuring that companies aren’t leaving huge amounts of money on the table in the form of missed profits due to
unrealized performance and productivity.

1. Make Sure Employees’ Daily Efforts Contribute
To Your Company’s Business Objectives
The first step in unlocking your company’s true potential is ensuring your
employees understand how their specific job/role contributes to achieving
your company’s business objectives. Without a consistent process of setting
goals for each individual employee that map directly to your company’s
objectives, they may be spending too much time on the wrong activities.
In fact, leading industry analysts estimate nearly 95% of workers are
unaware of their company’s top objectives. And, that’s often because an
effective process to communicate and track progress against these objectives
does not exist. So how can your company expect its people to work toward a
shared vision — and deliver bottom-line results — if they’re unclear what’s
expected of them?
Establishing a formal process for creating relevant goals for each employee,
and monitoring/measuring performance against company objectives,
unquestionably results in both individual and company success. The benefits
of this approach deliver a host of positive results, such as:
• Employees and managers achieve more — through greater visibility
into both individual and company-wide goals.
• Employees and managers see the goal plan — and understand how
their individual goals fit into the company’s business objectives.
• Creating shared employee responsibility — by cascading his or her
goals with others in the company.
• Managers more easily stay in touch with employees’ progress —
during every phase of goal completion, and offer immediate reinforcement
or coaching to keep performance and deadlines on track.
Keep in mind your success in aligning employee and company goals depends
on an open and ongoing dialogue with management. This is the only way to
ensure business strategy is woven in to all HR efforts, including an
automated process.

2. Keep Employees Energized and Engaged
Jack Welch, former CEO of GE — and one of the most respected business
leaders of our time — wrote the book on motivating people. One of his key
insights to driving phenomenal performance shows how much faith Mr. Welch
had in the power of engaging and inspiring people; in a nutshell, he believed
the ultimate goal of managing is not to get an employee to perform as
expected, but to have them willingly go above and beyond the call of
duty — because they want to.
Building a culture in which employees are energized and engaged to perform
at maximum levels (and beyond) requires both strong management skills, and
a consistent process for providing accurate, quality feedback. Easier said
than done, of course. But recent progress in HR-software designed specifically
to address this challenge is helping significantly. There are now effective means
like writing assistants and coaching tools that can significantly improve the
overall quality of feedback, and help managers provide:
• More relevant reviews — writing and goal management tools help
managers deliver meaningful, accurate reviews so employees understand
their performance against goals.
• Richer, more meaningful feedback — built-in writing tools ensure
consistency between managers, and deliver a deeper level of feedback.
• Stronger, more relevant coaching — managers receive specific,
actionable suggestions for coaching employees through a range of issues.
Ultimately, quality feedback is what keeps your employee’s head in the game
and can be used to inspire and fire them up. It also increases job satisfaction
and reduces turnover — two critical factors that most small- to mid-sized
businesses say they are concerned with on a daily basis.
Changing.

3. Develop, Implement and Reinforce a
Pay-for-Performance Culture
The importance of having the best people in key areas is critical to the
success of your business. It’s no secret the key to retaining the best and
brightest talent is recognizing and compensating top performers. According
to Giga Information Group, retention can be improved by meritocratic
management — or pay-for-performance — by up to 27%.
Establishing a pay-for-performance culture is considered the #1 tool for
achieving financial results by senior executives. Today’s HR technologies
now give managers easy access to all the information they need to reward
individuals for actual performance — 360 degree feedback, goal alignment
metrics, review data and performance notes taken throughout the year.
This allows managers to make consistent, quantifiable and fair decisions,
and avoid compensating the wrong people. Other positive benefits include
the ability to:
• Track employee progress against performance goals.
• Identify who is delivering against expectations,
and contributing the most.
• Improve ongoing job satisfaction, productivity and retention
by recognizing and rewarding exceptional effort.
• Avoid overcompensating by seeing where compensation
and performance are not aligned.

4. Automate Performance Management
From Start To Finish
Technology designed specifically to help organizations manage and optimize
employee performance has advanced considerably over the years. Yet it’s
interesting to note that most companies still rely on paper-based processes
and outdated performance management methods. By adopting a system
that manages the entire employee lifecycle — from performance assessment
to goal alignment to employee retention — it’s safe to say automation can
truly transform your business.
A tangible example of how automation pays off can be seen in the massive
improvements around performance reviews. Once a source of great pain and
often viewed as a waste of time, performance reviews have been converted
by HR technology into a simple, cost-effective process. The result: managers
are freed to up to focus on the tasks that are most meaningful—and critical—
to achieving company goals. This clearly illustrates how both employee and
company-wide performance potential can be unlocked by HR automation.
Here are other key benefits your company can realize by automating
performance management:
• Easily implement performance management best practices
• Increase goal visibility and boost shared accountability
• Use data more effectively to gain powerful insights
about company performance
• Ensure compliance and employee participation
• Eliminate paperwork hassles
• Improve feedback quality and strengthen management skills
• Save time
• Give employees honest, objective, and open feedback
• Improve your bottom line

A final thought to help you raise employee (and overall company)
performance: HR professionals in organizations of all sizes consistently
report that providing their management with visibility into HR achievements
is essential. Your managers need quantitative and qualitative information
to support your strategic decisions about human capital. And just as
sales or marketing must justify technology investments in light of business
strategy, HR must also learn to do the same. . . Changing.

Bridging the Generation Gap

Young people, we hear, want to play video games all day, while thinking they should be in charge the Monday after they start. They are disloyal and will leave the job at the drop of a hat. Young people need praise all the time, yet they are non-conforming and don’t understand the rules of workplace.
Stereotypes of older people are equally common, including that they are RIP (“retired in position”) and unwilling to leave their jobs until someone drags them out. Older people can’t learn new things - especially technology.
People tend to have these implicit mental conceptions of who older people and younger people are, and what they can and cannot do. For a counter point, however, consider this hypothetical job description: Well-paid interesting work, with opportunities for learning and advancement, a supportive boss, credible leaders and trustworthy peers and subordinates.
Who wouldn’t want that job? The truth is people of all generations want jobs with those characteristics. So is there really a generation gap?
Demographic Realities and the Leadership Pipeline
At the Center for Creative Leadership, we constructed a survey on the topic and gathered data for more than five years. As of April, 2007, we had more than 6,000 respondents from more than 100 organizations on 6 continents. The results reported in the book (and in this article) are based on the 3,200 respondents both born and currently living in U.S.
We broke our American respondents down into five cohorts:
 The Silent Generation, born 1925-1945
 Early Baby Boomers, born 1946-1954
 Late Baby Boomers, born 1955-1963
 Early Generation X-ers, born 1964-1976
 Late Generation X-ers, born 1977-1986
What most people don’t understand about the generations is their relative size, and that is critical. It affects everything from retention to advancement to the need for learning. The defining demographic fact of Generation X is too few bodies, especially as compared to the Baby Boomer bulge; there are more than a million fewer Gen X-ers than there are Boomers. As the 1994 McKinsey & Company study War for Talent said, in the short term, the demand for young talent will far outstrip supply.
Because organizations face a leadership talent gap, they are likely to be paying more for young talent. At the CEO level, it’s not much of an issue because we can always import CEOs. But five levels down in the leadership pipeline, it is an issue; if you have too few bodies to fill jobs at the bottom or middle of the pipeline, you potentially have a real problem.
The take-away here is that stereotype of young people having an “entitlement mentality” is based in demographics; supply and demand underpins everything in the workplace. Gen X-ers are a scarce commodity, and they can demand more because the market will bear it. This understanding is critical because it affects the way you deal with requests like pay raises. If you walk in thinking, “They feel so entitled,” you are going to deal with them differently than if you are thinking, “Their demands are not personal, it’s just a matter of economics.”
Everyone Wants to Learn
I’ve had people come tell me, “If I know an employee’s generation, I can develop a training system for them; their age is all I need to know.” I find that outlook rather frightening, in large part because our research found surprisingly high levels of similarity across generations. In other words, age is not the critical piece of information people think it is.
When we asked respondents about learning on the job, 97% across generations said it was important . . . and when do 97% of people agree on anything? This finding is particularly important because it means you can walk in assuming most people of every generation want to learn; you don’t have to spend time convincing them. Happily, 90% of respondents reported they were learning on the job.
Why do people want to learn? Many respondents said the work contract has changed: they don’t think they have a job for life. Their desire to maintain their viability on the job market creates a driving desire to learn. Again, happily, 79% said they were developing skills they need for future. What’s important for employers to realize is that on-the-job learning is about as important as pay when it comes to retention, and that can be especially important for younger people who are bumping up against non-retiring Baby Boomers.
Learning Depends More on Level than on Age
So people of all generations are motivated to learn. But what do they want to learn? The common wisdom holds that older people want training on big picture things like vision and strategy, while younger people can’t see the big picture and therefore want only skills and tactics. Yet, when we offered respondents 40 different areas of learning, there were no substantial differences among the generations in what training they wanted.
When we looked at level-in-organization, however, we found a strong pattern. Everyone wants leadership training. As people move from professional to executive positions, their desire for skills training goes down, while their desire for strategy, vision, managing change, and team building goes up. Only those in management positions are strongly interested in strategic planning. Therefore, if you want to know what training someone wants (and believes that they need), it is more productive to look at their position in the organization than their age.
Though level and age are highly correlated, we found that position in the organization was more relevant to what people wanted to learn than their age was. In other words: a 30-year-old executive and a 50-year-old executive are likely to want the same development, and what they want is going to be different from a 30-year-old and a 50-year-old professional.
Surprising Facts about Computer-based Training
How do people want to learn new skills? We gave respondents 15 options, including three that were computer based. Before we began the study, many people assured us: “Younger people want to do everything on the computer, and older people don’t want to touch the computer at all.”
What we found was remarkably consistent across the generations. When it comes to soft skills, such as leadership and communication, respondents from every single generation rated “on the job” as their first choice; computer-based options did not appear in the top five choices for any generation.
With hard skills, such as accounting and project management, older workers said they preferred live classroom instruction, while younger groups still liked on-the-job learning best. What explains this discrepancy? Our best guess is that many younger people are in school after work, so they are already putting in classroom time and would prefer learning through some other method.
Surprisingly, Late Boomers were most likely to say they wanted computer-based training for hard skills. Why is that? We theorized that since Late Boomers are more frequently in management and upper management, they may perceive computer-based training as the most efficient use of their time.
Everybody Wants a Coach
One of the most striking findings of our research is that everyone – regardless of age or level – wants a coach. Across generations, nearly 85% of each generation said they wanted a coach, someone who helps and advises them on their job, career, and leadership development. There were some variations across age and level. Early X-ers wanted more focus on their careers, while professionals wanted more focus on their job, and managers wanted more focus on leadership development.
What form do employees want their coaching to take? I have heard that web-based coaching is the new thing, and that young people in particular want coaching over the Internet. In fact, our data show that an overwhelming majority of every generation say they want face-to-face coaching. And the majority of employees don’t just want it face-to-face, they want it frequently, as often as every week or every other week.
This would seem to pose a practical dilemma. How can employers possibly fulfill this widespread desire for frequent, face-to-face coaching? First, let’s remember the old maxim, “The best way to learn is to teach.” Second, it is helpful to realize that in many cases what people want is simply someone to listen to them, and luckily that role can be filled by peers. Third, when we asked employees, more than 75% said they thought they could be coaches, and that number increased with age and level in the organization. One possible solution, then, is to use your own employees as coaches. Of course some training would be required, but more than training, employees would need time to serve as coaches for one another.
The Bottom Line
You can’t change the birth rate from 20 or 30 years ago, but you can accelerate the development of the leadership talent you already have. The ace up your sleeve is that 97% of people of all generations want to learn on the job, and such development is arguably as important to retention as pay. But you need to remember that what people want to learn is related to their job, not to their age. Given that nearly everybody wants a coach, I believe using employees to coach one another is an efficient, targeted way to develop leadership talent on the job. The best part of the strategy is that you already have a population that wants it.

Managing Transition in TQM

Steps in Managing the Transition
Beckhard and Pritchard (1992) have outlined the basic steps in managing a transition to a new system such as TQM: identifying tasks to be done, creating necessary management structures, developing strategies for building commitment, designing mechanisms to communicate the change, and assigning resources.
Task identification would include a study of present conditions (assessing current reality, as described above); assessing readiness, such as through a force field analysis; creating a model of the desired state, in this case, implementation of TQM; announcing the change goals to the organization; and assigning responsibilities and resources. This final step would include securing outside consultation and training and assigning someone within the organization to oversee the effort. This should be a responsibility of top management. In fact, the next step, designing transition management structures, is also a responsibility of top management. In fact, Cohen and Brand (1993) and Hyde (1992) assert that management must be heavily involved as leaders rather than relying on a separate staff person or function to shepherd the effort. An organization­wide steering committee to oversee the effort may be appropriate. Developing commitment strategies was discussed above in the sections on resistance and on visionary leadership.
To communicate the change, mechanisms beyond existing processes will need to be developed. Special all­staff meetings attended by executives, sometimes designed as input or dialog sessions, may be used to kick off the process, and TQM newsletters may be an effective ongoing communication tool to keep employees aware of activities and accomplishments.
Management of resources for the change effort is important with TQM, because outside consultants will almost always be required. Choose consultants based on their prior relevant experience and their commitment to adapting the process to fit unique organizational needs. While consultants will be invaluable with initial training of staff and TQM system design, employees (management and others) should be actively involved in TQM implementation, perhaps after receiving training in change management which they can then pass on to other employees. A collaborative relationship with consultants and clear role definitions and specification of activities must be established.
Institutionalization of TQM
Ledford (cited in Packard & Reid, 1990) has proposed a model including four processes which are forces which determine whether a change will persist through the phases of institutionalization. These processes are concerned with congruence among these variables: the change (TQM) with the organization, the change with other changes initiated at the time, the change with environmental demands, and with the level of slack resources in the organization. TQM needs to be congruent with the organization's current culture, and with other changes occurring in the organization. In this period of diminishing resources, organizations are likely to be trying to cope, by downsizing or other methods. In some organizations there are increasing demands for quality or client service improvements. Many such changes are likely to be driven by environmental demands, and TQM may be more likely to be successful than at times of less environmental pressure. Unfortunately, the fourth element, slack resources, is less likely to be present: under current conditions, extra resources (money and staff time) are less likely to be easily available. The challenge is to find a way to make the initial investment outlay to start a process which will pay off in the long term.
Institutionalization may also be enhanced by overlaying another, but compatible, change model: the learning organization (Senge, 1990). This involves, at both the micro and systems levels, staff always learning how to do better and management learning how to be more responsive to staff and the community. Leaders help staff develop their own visions and align these with the organization's vision of quality.
Beckhard and Pritchard (1992) emphasized top management commitment to the change, and Cohen and Brand (1993) apply this specifically to TQM by recommending finding and nurturing a core group which is interested in organizational change. They also emphasize the importance of personal leadership and example: managers need to apply TQM in their daily work and to get people to think about and use the concepts and tools. Ongoing monitoring, and action research to make changes as needed, will be required. And, once again, the systems perspective must be noted: TQM must be built into other systems, particularly those involving planning and rewards. Leaders should expect a long term process, including a transition period. They will need to be persistent, using constant reinforcement, for example, through continuous training. Cohen and Brand suggest that TQM should eventually be made an "invisible" part of the organization, permeating all areas and the responsibility of everyone. TQM may be instituted organization­wide or started in one unit or program and then expanded. Diffusion occurs as TQM is spread from its initial application to other units. Dynamics of resistance mentioned earlier will have to be addressed at this stage.
Some Do's and Don'ts
Following are some miscellaneous do's and don'ts which are based on experiences with TQM in the public sector and the human services. Many are drawn from Cohen and Brand (1993), Hyde (1992), and Chaudron (1992).
First, don't "do TQM": a canned approach is likely to be met with skepticism and ultimately fail because it is not adapted to the uniqueness of a particular organization. TQM is particularly susceptible to this phenomenon, because some adherents adopt almost a religious fervor, (they have been described by one observer as "Deming lemmings" (Reid, 1992). "Deming as demigod" is another way this phenomenon has been described: a statement takes on an added aura when prefaced by "Dr. Deming said..." (Chaudron, 1993). Don't copy any particular model but use relevant basic principles such as an emphasis on quality, continuous analysis of tasks to improve performance, and work with suppliers to enable the organization to start with high quality supplies. TQM should be seen as a process, not a program. It should be integrated into ongoing agency operations, and the focus should be on how an organization can better accomplish its goals and objectives. At the tactical level, don't overemphasize techniques such as statistical process control and the use of charts. Focus instead on the systems ­ the analysis and improvement of processes ­ not on statistics or individual variations.
Whereas some large­scale organizational change efforts are often driven by a centralized steering committee or group of executives, in TQM it may be best to not centralize the effort and establish a separate quality management bureaucracy ("qualiticrats", according to Hyde). Don't believe that top management support is necessary at first, as is axiomatic in organization development. While an organization needn't start TQM at the top, successes in particular units or programs should set the stage for diffusion in other directions. Change from below may be appropriate for those at lower levels who want to initiate TQM. It may work best to start TQM with a temporary task force and then hire trainers, expose staff, and hope that managers will be motivated to learn more. People responsible for leading shouldn't devote full time to TQM; they should maintain their regular work as well. Cohen and Brand believe that TQM is best taught by people doing it day to day in their work. Implement it gradually to ensure meaningful culture change, and use frequent feedback to ensure that change isn't just superficial. There is no need for a "grand plan" (a quality council, etc.); just start where the organization is.
Perhaps the most important "do" worth repeating is to involve employees in the decision making process, at whatever stages and levels possible. As a specific aspect of this, advance negotiations and discussions with any unions present should occur. Create "atmosphere of amnesty" (Cohen & Brand, 1993, 202) so workers and managers feel free to share improvement needs. Tell people what the quality standards are so that inspection and review isn't necessary. Emphasize client feedback and both quantitative and qualitative performance tracking. Make sure quality teams have the necessary tools and resources, such as training, facilitation, and time to meet. In large organizations, regional offices in particular will need lots of support in order to keep the process alive and thriving.
Several suggestions may be offered to managers. First, understand the direct service work of your organization. "Management by walking around" is a useful way to stay in touch with direct service workers and their needs. Practice what you preach: use TQM on your own processes. Meet frequently with middle managers regarding their personal efforts to use TQM. Focus on the nature of the work and try to establish in employees' minds excitement about a new way of working. TQM training will be needed for all involved work groups. Also, horizontal and vertical communication training may be useful to get groups communicating with each other. Team building is a core element of the process, to ensure employee involvement and effective problem solving. Build analysis into the culture: "stop and think about how we work," according to Cohen and Brand. Insist on objective measures of results. Look for visible improvement, but not optimization; and try to generate some quick results in terms of time or money saved. Constantly check with employees to assess their comfort with the process. If people are feeling threatened, slow down. Human resources aspects such as team functioning and analysis must be kept in balance. Prevent or watch for schisms between TQM and human resources functions or other parts of the organization.
Summary
In summary, first assess preconditions and the current state of the organization to make sure the need for change is clear and that TQM is an appropriate strategy. Leadership styles and organizational culture must be congruent with TQM. If they are not, this should be worked on or TQM implementation should be avoided or delayed until favorable conditions exist.
Remember that this will be a difficult, comprehensive, and long­term process. Leaders will need to maintain their commitment, keep the process visible, provide necessary support, and hold people accountable for results. Use input from stakeholder (clients, referring agencies, funding sources, etc.) as possible; and, of course, maximize employee involvement in design of the system.
Always keep in mind that TQM should be purpose­driven. Be clear on the organization's vision for the future and stay focused on it. TQM can be a powerful technique for unleashing employee creativity and potential, reducing bureaucracy and costs, and improving service to clients and the community.
References
Beckhard, R. & Harris, (1987). Organizational Transitions: Managing Complex Change. (2nd ed.) Reading, MA: Addison­Wesley.
Beckhard, R. & Pritchard, W. (1992). Changing the Essence. San Francisco: Jossey­Bass.
Bennis, W. (1989) On Becoming a Leader. Reading, MA: Addison Wesley.
Bennis, W., Benne, K, & Chin, R., Eds. (1985). The Planning of Change. 4th Ed., New York: Holt, Rinehart, & Winston, 98­105.
Bennis, W. & Nanus, B. (1985). Leaders. New York: Harper & Row.
Brager, G. & Holloway, S. (1992). "Assessing the Prospects for Organizational Change: The Uses of Force Field Analysis." Administration in Social Work. 16(3/4), 15­28.
Chaudron, D. (1992). "How OD can help TQM." OD Practitioner. 24(1), 14­18.
Chaudron, D. (1993, June). Organization Development Does not Equal Total Quality Management. Presentation to the San Diego Organization Development Network.
Cohen, S. & Brand, R. (1993). Total Quality Management in Government. San Francisco: Jossey­Bass, Inc.
Ezell, M., Menefee, D., & Patti, R. (1989). "Managerial Leadership and Service Quality: Toward a Model of Social Work Administration," Administration in Social Work. 13(3/4), 73­98.
Gilbert, G. (1992). "Quality Improvement in a Defense Organization," Public Productivity and Management Review. 16(1), 65­75.
Hyde, A. (1992). "The Proverbs of Total Quality Management: Recharting the Path to Quality Improvement in the Public Sector," Public Productivity and Management Review. 16(1), 25­37.
Kanter, R. (1983). The Change Masters. New York: Simon & Schuster.
Martin, L. (1993). "Total Quality Management: The New Managerial Wave." Administration in Social Work. 17(2), 1­15.
Milakovich, M. (1991). "Total Quality Management in the Public Sector," National Productivity Review. 10, 195­213.
Nanus, B. (1992). Visionary Leadership. San Francisco: Jossey­Bass.
Osborne, D. & Gaebler, T. (1992). Reinventing Government. Reading, MA: Addison­Wesley.
Packard, T. (1989). Participation in decision making, Performance, and job satisfaction in a social work bureaucracy. Administration in Social Work. 13(1), 59­73.
Packard. T. & Reid, R. (1990). "OD in a Fire Department: Lessons in Using Parallel Structures and Institutionalization," Consultation. 9, 167­184.
Pruger, R. & Miller, L. (1991). "Efficiency," Administration in Social Work. 15(1/2), 42.
Rapp, C. & Poertner, J. (1992). Social Administration: A Client­Centered Approach. New York: Longman.
Reid, R. (1992). Personal communication.
Robey, D. (1991). Designing Organizations 3rd ed., Homewood, IL: Irwin, p. 42.
Senge, P. (1990). The Fifth Discipline. New York: Doubleday Currency.
Sugarman, B. (1988). "The Well­Managed Human Service Organization: Criteria for a Management Audit," Administration in Social Work. 12(2), 17­27.
Swiss, J. (1992). "Adapting TQM to Government," Public Administration Review. 52, 356­362.
Tichey, N. (1983). Managing Strategic Change. New York: John Wiley & Sons.
Vroom, V. and Yetton, P. (1973). Leadership and Decision Making. Pittsburgh: University of Pittsburgh Press.

Force Field Analysis in TQM

The analysis of the force field involves looking at which driving forces may be strengthened and which restraining forces may be eliminated, mitigated, or counteracted. If it appears that, overall, driving forces are strong enough to move back restraining forces, adoption of TQM would be worth pursuing. The change plan would include tactics designed to move the relevant forces.
It is also important to note and validate any points of resistance which are, in fact, legitimate, such as the limited amount of staff time available for TQM meetings. Klein (cited in Bennis, Benne, & Chin, 1985) encouraged change agents to validate the role of the "defender" of the status quo and respond to legitimate concerns raised. This will allow appropriate adaptations of the TQM process to account for unique organizational circumstances. Sell TQM based on the organization's real needs, note legitimate risks and negatives, and allow improvements in your own procedures. This should enhance your credibility and show your openness to critically looking at the process.
Another way to address resistance is to get all employees on the same side, in alignment towards the same goal. Leadership is the mechanism for this, and specific models known as transformational or visionary leadership (Bennis & Nanus, 1985) are most effective. Research on change implementation (Nutt, cited in Robey, 1991) has identified four methods. The first, "intervention," involves a key executive justifying the need for change, monitoring the process, defining acceptable performance, and demonstrating how improvements can be made. This was found to be more successful than "participation," in which representatives of different interest groups determine the features of the change. Participation was found to be more successful than "persuasion" (experts attempting to sell changes they have devised) or "edict," the least successful. Transformational or visionary leadership, the approach suggested here, is an example of the intervention approach. This would involve a leader articulating a compelling vision of an ideal organization and how TQM would help the vision be actualized. These principles will be discussed in more detail in a later section, as a framework for the change strategy.
A powerful way to decrease resistance to change is to increase the participation of employees in making decisions about various aspects of the process. There are actually two rationales for employee participation (Packard, 1989). The more common reason is to increase employee commitment to the resultant outcomes, as they will feel a greater stake or sense of ownership in what is decided. A second rationale is that employees have a great deal of knowledge and skill relevant to the issue at hand (in this case, increasing quality, identifying problems, and improving work processes), and their input should lead to higher quality decisions. A manager should consider any decision area as a possibility for employee participation, with the understanding that participation is not always appropriate (Vroom and Yetton, 1973). Employees or their representatives may be involved in decision areas ranging from the scope and overall approach of the TQM process to teams engaging in quality analysis and suggestions for improvements. They may also be involved in ancillary areas such as redesign of the organization's structure, information system, or reward system. Involvement of formal employee groups such as unions is a special consideration which may also greatly aid TQM implementation.
A change agent should understand that, overall, change will occur when three factors (dissatisfaction with the status quo, desirability of the proposed change, the practicality of the change) added together are greater than the "cost" of changing (time spent in learning, adapting new roles and procedures, etc.) (Beckhard and Harris, 1987). This is represented in the formula in Exhibit II. Any key group or individual will need a level of dissatisfaction with the status quo, must see a desired improved state, and must believe that the change will have minimal disruption. In other words, the change (TQM) must be seen as responding to real problems and worth the effort or cost in getting there. Conditions favoring change may be created by modifying these variables. The change agent may try to demonstrate how bad things are, or amplify others' feelings of dissatisfaction; and then present a picture of how TQM could solve current problems. The final step of modifying the equation is to convince people that the change process, while it will take time and effort, will not be prohibitively onerous. The organization as a whole and each person will be judging the prospect of TQM from this perspective. A variation of this is the WIIFM principle: "What's in it for me?" To embrace TQM, individuals must be shown how it will be worth it for them.

TQM As a Tool to Affect Organizational Change

Introduction
While Total Quality Management has proven to be an effective process for improving organizational functioning, its value can only be assured through a comprehensive and well­thought­out implementation process. The purpose of this chapter is to outline key aspects of implementation of large­scale organizational change which may enable a practitioner to more thoughtfully and successfully implement TQM. First, the context will be set. TQM is, in fact, a large­scale systems change, and guiding principles and considerations regarding this scale of change will be presented. Without attention to contextual factors, well­intended changes may not be adequately designed. As another aspect of context, the expectations and perceptions of employees (workers and managers) will be assessed, so that the implementation plan can address them. Specifically, sources of resistance to change and ways of dealing with them will be discussed. This is important to allow a change agent to anticipate resistances and design for them, so that the process does not bog down or stall. Next, a model of implementation will be presented, including a discussion of key principles. Visionary leadership will be offered as an overriding perspective for someone instituting TQM. In recent years the literature on change management and leadership has grown steadily, and applications based on research findings will be more likely to succeed. Use of tested principles will also enable the change agent to avoid reinventing the proverbial wheel. Implementation principles will be followed by a review of steps in managing the transition to the new system and ways of helping institutionalize the process as part of the organization's culture. This section, too, will be informed by current writing in transition management and institutionalization of change. Finally, some miscellaneous do's and don't's will be offered.
Members of any organization have stories to tell of the introduction of new programs, techniques, systems, or even, in current terminology, paradigms. Usually the employee, who can be anywhere from the line worker to the executive level, describes such an incident with a combination of cynicism and disappointment: some manager went to a conference or in some other way got a "great idea" (or did it based on threat or desperation such as an urgent need to cut costs) and came back to work to enthusiastically present it, usually mandating its implementation. The "program" probably raised people's expectations that this time things would improve, that management would listen to their ideas. Such a program usually is introduced with fanfare, plans are made, and things slowly return to normal. The manager blames unresponsive employees, line workers blame executives interested only in looking good, and all complain about the resistant middle managers. Unfortunately, the program itself is usually seen as worthless: "we tried team building (or organization development or quality circles or what have you) and it didn't work; neither will TQM". Planned change processes often work, if conceptualized and implemented properly; but, unfortunately, every organization is different, and the processes are often adopted "off the shelf" ­ "the 'appliance model of organizational change': buy a complete program, like a 'quality circle package,' from a dealer, plug it in, and hope that it runs by itself" (Kanter, 1983, 249). Alternatively, especially in the under­funded public and not­for­profit sectors, partial applications are tried, and in spite of management and employee commitment do not bear fruit. This chapter will focus on ways of preventing some of these disappointments.
In summary, the purpose here is to review principles of effective planned change implementation and suggest specific TQM applications. Several assumptions are proposed: 1. TQM is a viable and effective planned change method, when properly installed; 2. not all organizations are appropriate or ready for TQM; 3. preconditions (appropriateness, readiness) for successful TQM can sometimes be created; and 4. leadership commitment to a large­scale, long­term, cultural change is necessary. While problems in adapting TQM in government and social service organizations have been identified, TQM can be useful in such organizations if properly modified (Milakovich, 1991; Swiss, 1992).
TQM as Large­Sale Systems Change
TQM is at first glance seen primarily as a change in an organization's technology ­ its way of doing work. In the human services, this means the way clients are processed ­ the service delivery methods applied to them ­ and ancillary organizational processes such as paperwork, procurement processes, and other procedures. But TQM is also a change in an organization's culture ­ its norms, values, and belief systems about how organizations function. And finally, it is a change in an organization's political system: decision making processes and power bases. For substantive change to occur, changes in these three dimensions must be aligned: TQM as a technological change will not be successful unless cultural and political dimensions are attended to as well (Tichey, 1983).
Many (e.g., Hyde, 1992; Chaudron, 1992) have noted that TQM results in a radical change in the culture and the way of work in an organization. A fundamental factor is leadership, including philosophy, style, and behavior. These must be congruent as they are presented by a leader. Many so­called enlightened leaders of today espouse a participative style which is not, in fact, practiced to any appreciable degree. Any manager serious about embarking on a culture change such as TQM should reflect seriously on how she or he feels and behaves regarding these factors. For many managers, a personal program of leadership development (e.g., Bennis, 1989) may be a prerequisite to effective functioning as an internal change agent advocating TQM.
Other key considerations have to do with alignment among various organizational systems (Chaudron, 1992; Hyde, 1992). For example, human resource systems, including job design, selection processes, compensation and rewards, performance appraisal, and training and development must align with and support the new TQM culture. Less obvious but no less important will be changes required in other systems. Information systems will need to be redesigned to measure and track new things such as service quality. Financial management processes may also need attention through the realignment of budgeting and resource allocation systems. Organizational structure and design will be different under TQM: layers of management may be reduced and organizational roles will certainly change. In particular, middle management and first line supervisors will be operating in new ways. Instead of acting as monitors, order­givers, and agents of control they will serve as boundary managers, coordinators, and leaders who assist line workers in getting their jobs done. To deal with fears of layoffs, all employees should be assured that no one will lose employment as a result of TQM changes: jobs may change, perhaps radically, but no one will be laid off. Hyde (1992) has recommended that we "disperse and transform, not replace, mid­level managers." This no layoff principle has been a common one in joint labor­management change processes such as quality of working life projects for many years.
Another systems consideration is that TQM should evolve from the organization's strategic plan and be based on stakeholder expectations. This type of planning and stance regarding environmental relations is receiving more attention but still is not common in the human services. As will be discussed below, TQM is often proposed based on environmental conditions such as the need to cut costs or demands for increased responsiveness to stakeholders. A manager may also adopt TQM as a way of being seen at the proverbial cutting edge, because it is currently popular. This is not a good motivation to use TQM and will be likely to lead to a cosmetic or superficial application, resulting in failure and disappointment. TQM should be purpose­oriented: it should be used because an organization's leaders feel a need to make the organization more effective. It should be driven by results and not be seen as an end in itself. If TQM is introduced without consideration of real organizational needs and conditions, it will be met by skepticism on the part of both managers and workers. We will now move to a discussion of the ways in which people may react to TQM.
People's Expectations and Perceptions
Many employees may see TQM as a fad, remembering past "fads" such as quality circles, management by objectives, and zero­based budgeting. As was noted above, TQM must be used not just as a fad or new program, but must be related to key organizational problems, needs, and outcomes. Fortunately, Martin (1993) has noted that TQM as a "managerial wave" has more in common with social work than have some past ones such as MBO or ZBB, and its adaptations may therefore be easier.
In another vein, workers may see management as only concerned about the product, not staff needs. Management initiatives focused on concerns such as budget or cost will not resonate with beleaguered line workers. Furthermore, staff may see quality as not needing attention: they may believe that their services are already excellent or that quality is a peripheral concern in these days of cutbacks and multi problem clients. For a child protective service worker, just getting through the day and perhaps mitigating the most severe cases of abuse may be all that one expects. Partly because of heavy service demands, and partly because of professional training of human service workers, which places heavy value on direct service activities with clients, there may be a lack of interest on the part of many line workers in efficiency or even effectiveness and outcomes (Pruger & Miller, 1991; Ezell, Menefee, & Patti, 1989). This challenge should be addressed by all administrators (Rapp & Poertner, 1992), and in particular any interested in TQM.
Workers may have needs and concerns, such as lower caseloads and less bureaucracy, which are different from those of administration. For TQM to work, employees must see a need (e.g., for improved quality from their perspective) and how TQM may help. Fortunately, there are win­win ways to present this. TQM is focused on quality, presumably a concern of both management and workers, and methods improvements should eliminate wasteful bureaucratic activities, save money, and make more human resources available for core activities, specifically client service.
Sources of Resistance
Implementation of large­scale change such as TQM will inevitably face resistance, which should be addressed directly by change agents. A key element of TQM is working with customers, and the notion of soliciting feedback/expectations from customers/clients and collaborating with them, perhaps with customers defining quality, is a radical one in many agencies, particularly those serving involuntary clients (e.g., protective services). Historical worker antipathy to the use of statistics and data in the human services may carry over into views of TQM, which encourages the gathering and analysis of data on service quality. At another level, management resistance to employee empowerment is likely. They may see decision making authority in zero­sum terms: if employees have more involvement in decision making, managers will have less. In fact, one principle in employee involvement is that each level will be more empowered, and managers lose none of their fundamental authority. There will undoubtedly be changes in their roles, however. As was noted above, they will spend less time on control and more on facilitation. For many traditional managers, this transition will require teaching/training, self reflection, and time as well as assurances from upper management that they are not in danger of being displaced.
Resistance in other parts of the organization will show up if TQM is introduced on a pilot basis or only in particular programs (Hyde, 1992). Kanter (1983) has referred to this perspective as segmentalism: each unit or program sees itself as separate and unique, with nothing to learn from others and no need to collaborate with them. This shows up in the "not invented here" syndrome: those not involved in the initial development of an idea feel no ownership for it. On a broader level, there may be employee resistance to industry examples used in TQM ­ terms like inventory or order backlog (Cohen and Brand, 1993, 122).
Dealing with Resistance
There are several tactics which can be helpful in dealing with resistance to TQM implementation. Generally, they have to do with acknowledging legitimate resistance and changing tactics based on it, using effective leadership to enroll people in the vision of TQM, and using employee participation.
A useful technique to systematically identify areas of resistance is a force field analysis (Brager & Holloway, 1992). This technique was originally developed by Kurt Lewin as an assessment tool for organizational change. It involves creating a force field of driving forces, which aid the change or make it more likely to occur, and restraining forces, which are points of resistance or things getting in the way of change. Start by identifying the change goal, in this case, implementation of TQM. Represent this by drawing a line down the middle of a piece of paper. Slightly to its left, draw a parallel line which represents the current state of the organization. The change process involves moving from the current state to the ideal future state, an organization effectively using TQM. To the left of the second line (the current state), list all forces (individuals, key groups, or conditions) which may assist in the implementation of TQM. These may include environmental pressures leading to reduced funds, staff who may like to be more involved in agency decision making, and the successful applications of TQM elsewhere. On the other side, list restraining forces which will make the change implementation more difficult. Examples may be middle management fear of loss of control, lack of time for line workers to take for TQM meetings, and skepticism based on the organization's poor track record regarding change. Arrows from both sides touching the "current state" line represent the constellation of forces. Each force is then assessed in two ways: its potency or strength, and its amenability to change. More potent forces, especially restraining ones, will need greater attention. Those not amenable to change will have to be counteracted by driving forces.

Working With EI

Six Sigma in Motorola

For Motorola, the originator of Six Sigma, the answer to the question "Why Six Sigma?" was simple: survival. Motorola came to Six Sigma because it was being consistently beaten in the competitive marketplace by foreign firms that were able to produce higher quality products at a lower cost. When a Japanese firm took over a Motorola factory that manufactured Quasar television sets in the United States in the 1970s, they promptly set about making drastic changes in the way the factory operated. Under Japanese management, the factory was soon producing TV sets with 1/20th the number of defects they had produced under Motorola management. They did this using the same workforce, technology, and designs, making it clear that the problem was Motorola's management. Eventually, even Motorola's own executives had to admit "our quality stinks,"[i]
Finally, in the mid 1980s, Motorola decided to take quality seriously. Motorola's CEO at the time, Bob Galvin, started the company on the quality path known as Six Sigma and became a business icon largely as a result of what he accomplished in quality at Motorola. Today, Motorola is known worldwide as a quality leader and a profit leader. After Motorola won the Malcolm Baldrige National Quality Award in 1988 the secret of their success became public knowledge and the Six Sigma revolution was on. Today it's hotter than ever.
It would be a mistake to think that Six Sigma is about quality in the traditional sense. Quality, defined traditionally as conformance to internal requirements, has little to do with Six Sigma. Six Sigma is about helping the organization make more money. To link this objective of Six Sigma with quality requires a new definition of quality. For Six Sigma purposes I define quality as the value added by a productive endeavor. Quality comes in two flavors: potential quality and actual quality. Potential quality is the known maximum possible value added per unit of input. Actual quality is the current value added per unit of input. The difference between potential and actual quality is waste. Six Sigma focuses on improving quality (i.e., reducing waste) by helping organizations produce products and services better, faster and cheaper. In more traditional terms, Six Sigma focuses on defect prevention, cycle time reduction, and cost savings. Unlike mindless cost-cutting programs which reduce value and quality, Six Sigma identifies and eliminates costs which provide no value to customers: waste costs.
For non-Six Sigma companies, these costs are often extremely high. Companies operating at three or four sigma typically spend between 25 and 40 percent of their revenues fixing problems. This is known as the cost of quality, or more accurately the cost of poor quality. Companies operating at Six Sigma typically spend less than 5 percent of their revenues fixing problems (Figure 1). The dollar cost of this gap can be huge. General Electric estimates that the gap between three or four sigma and Six Sigma was costing them between $8 billion and $12 billion per year.
Figure 1: Cost of Poor Quality versus Sigma Level
What is Six Sigma?
Six Sigma is a rigorous, focused and highly effective implementation of proven quality principles and techniques. Incorporating elements from the work of many quality pioneers, Six Sigma aims for virtually error free business performance. Sigma, s, is a letter in the Greek alphabet used by statisticians to measure the variability in any process. A company's performance is measured by the sigma level of their business processes. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The Six Sigma standard of 3.4 problems per million opportunities[1][1] is a response to the increasing expectations of customers and the increased complexity of modern products and processes.
If you're looking for new techniques, don't bother. Six Sigma's magic isn't in statistical or high-tech razzle-dazzle. Six Sigma relies on tried and true methods that have been around for decades. In fact, Six Sigma discards a great deal of the complexity that characterized Total Quality Management (TQM). By one expert's count, there were over 400 TQM tools and techniques. Six Sigma takes a handful of proven methods and trains a small cadre of in-house technical leaders, known as Six Sigma Black Belts, to a high level of proficiency in the application of these techniques. To be sure, some of the methods used by Black Belts are highly advanced, including the use of up-to-date computer technology. But the tools are applied within a simple performance improvement model known as DMAIC, or Define-Measure-Analyze-Improve-Control[1][2]. DMAIC can be described as follows:
D
Define the goals of the improvement activity. At the top level the goals will be the strategic objectives of the organization, such as a higher ROI or market share. At the operations level, a goal might be to increase the throughput of a production department. At the project level goals might be to reduce the defect level and increase throughput. Apply data mining methods to identify potential improvement opportunities.
M
Measure the existing system. Establish valid and reliable metrics to help monitor progress towards the goal(s) defined at the previous step. Begin by determining the current baseline. Use exploratory and descriptive data analysis to help you understand the data.
A
Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal. Apply statistical tools to guide the analysis.
I
Improve the system. Be creative in finding new ways to do things better, cheaper, or faster. Use project management and other planning and management tools to implement the new approach. Use statistical methods to validate the improvement.
C
Control the new system. Institutionalize the improved system by modifying compensation and incentive systems, policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize systems such as ISO 9000 to assure that documentation is correct.

Infrastructure
A very powerful feature of Six Sigma is the creation of an infrastructure to ensure that performance improvement activities have the necessary resources. In this author's opinion, failure to provide this infrastructure is the #1 reason why 80% of all TQM implementations failed in the past. Six Sigma makes improvement and change the full-time job of a small but critical percentage of the organization's personnel. These full time change agents are the catalyst that institutionalizes change. Figure 2 illustrates the required human resource commitment required by Six Sigma.
Figure 2: Six Sigma Infrastructure
Leadership
Six Sigma involves changing major business value streams that cut across organizational barriers. It is the means by which the organization's strategic goals are to be achieved. This effort cannot be led by anyone other than the CEO, who is responsible for the performance of the organization as a whole. Six Sigma must be implemented from the top-down.
Champions and Sponsors
Six Sigma champions are high-level individuals who understand Six Sigma and are committed to its success. In larger organizations Six Sigma will be led by a full time, high level champion, such as an Executive Vice-President. In all organizations, champions also include informal leaders who use Six Sigma in their day-to-day work and communicate the Six Sigma message at every opportunity. Sponsors are owners of processes and systems who help initiate and coordinate Six Sigma improvement activities in their areas of responsibilities.
Master Black Belt
This is the highest level of technical and organizational proficiency. Master Black Belts provide technical leadership of the Six Sigma program. Thus, they must know everything the Black Belts know, as well as understand the mathematical theory on which the statistical methods are based. Master Black Belts must be able to assist Black Belts in applying the methods correctly in unusual situations. Whenever possible, statistical training should be conducted only by Master Black Belts. Otherwise the familiar "propagation of error" phenomenon will occur, i.e., Black Belts pass on errors to green belts, who pass on greater errors to team members. If it becomes necessary for Black Belts and Green Belts to provide training, they should do only so under the guidance of Master Black Belts. For example, Black Belts may be asked to provide assistance to the Master during class discussions and exercises. Because of the nature of the Master's duties, communications and teaching skills are as important as technical competence.
Black Belt
Candidates for Black Belt status are technically oriented individuals held in high regard by their peers. They should be actively involved in the process of organizational change and development. Candidates may come from a wide range of disciplines and need not be formally trained statisticians or engineers. However, because they are expected to master a wide variety of technical tools in a relatively short period of time, Black Belt candidates will probably possess a background including college-level mathematics and the basic tool of quantitative analysis. Coursework in statistical methods may be considered a strong plus or even a prerequisite. As part of their training, Black Belts receive 160 hours of classroom instruction, plus one-on-one project coaching from Master Black Belts or consultants.
Successful candidates will be comfortable with computers. At a minimum, they should understand one or more operating systems, spreadsheets, database managers, presentation programs, and word processors. As part of their training they will be required to become proficient in the use of one or more advanced statistical analysis software packages. Six Sigma Black Belts work to extract actionable knowledge from an organization's information warehouse. To ensure access to the needed information, Six Sigma activities should be closely integrated with the information systems (IS) of the organization. Obviously, the skills and training of Six Sigma Black Belts must be enabled by an investment in software and hardware. It makes no sense to hamstring these experts by saving a few dollars on computers or software.
Green Belt
Green Belts are Six Sigma project leaders capable of forming and facilitating Six Sigma teams and managing Six Sigma projects from concept to completion. Green Belt training consists of five days of classroom training and is conducted in conjunction with Six Sigma projects. Training covers project management, quality management tools, quality control tools, problem solving, and descriptive data analysis. Six Sigma champions should attend Green Belt training. Usually, Six Sigma Black Belts help Green Belts define their projects prior to the training, attend training with their Green Belts, and assist them with their projects after the training.
Staffing Levels and Expected Returns
As stated earlier in this article, the number of full time personnel devoted to Six Sigma is not large. Mature Six Sigma programs, such as those of Motorola, General Electric, Johnson & Johnson, AlliedSignal, and others average about one-percent of their workforce as Black Belts. There is usually about one Master Black Belts for every ten Black Belts, or about 1 Master Black Belt per 1,000 employees. A Black Belt will typically complete 5 to 7 projects per year. Project teams are led by Green Belts, who, unlike Black Belts and Master Black Belts, are not employed full time in the Six Sigma program. Black Belts are highly prized employees and are often recruited for key management positions elsewhere in the company. After Six Sigma has been in place for three or more years, the number of former Black Belts tends to be about the same as the number of active Black Belts.
Estimated savings per project varies from organization to organization. Reported results average about US$150,000 to US$243,000. Note that these are not the huge mega-projects pursued by Re-engineering. Yet, by completing 5 to 7 projects per year per Black Belt, the company will add in excess of US$1 million per year per Black Belt to its bottom line. For a company with 1,000 employees the numbers would look something like this:
Master Black Belts: 1
Black Belts: 10
Projects: = 50 to 70 (5 to 7 per Black Belt)
Estimated saving: US$9 million to US$14.6 million (US$14,580 per employee)
Do the math for your organization and see what Six Sigma could do for you. Because Six Sigma savings impact only non-value added costs, they flow directly to your company's bottom line.

Implementation of Six Sigma
After over two decades of experience with quality improvement, there is now a solid body of scientific research regarding the experience of thousands of companies implementing major programs such as Six Sigma. Researchers have found that successful deployment of Six Sigma involves focusing on a small number of high-leverage items. The steps required to successfully implement Six Sigma are well-documented.
1. Successful performance improvement must begin with senior leadership. Start by providing senior leadership with training in the principles and tools they need to prepare their organization for success. Using their newly acquired knowledge, senior leaders direct the development of a management infrastructure to support Six Sigma. Simultaneously, steps are taken to "soft-wire" the organization and to cultivate an environment for innovation and creativity. This involves reducing levels of organizational hierarchy, removing procedural barriers to experimentation and change, and a variety of other changes designed to make it easier to try new things without fear of reprisal.
2. Systems are developed for establishing close communication with customers, employees, and suppliers. This includes developing rigorous methods of obtaining and evaluating customer, employee and supplier input. Base line studies are conducted to determine the starting point and to identify cultural, policy, and procedural obstacles to success.
3. Training needs are rigorously assessed. Remedial skills education is provided to assure that adequate levels of literacy and numeracy are possessed by all employees. Top-to-bottom training is conducted in systems improvement tools, techniques, and philosophies.
4. A framework for continuous process improvement is developed, along with a system of indicators for monitoring progress and success. Six Sigma metrics focus on the organization's strategic goals, drivers, and key business processes.
5. Business processes to be improved are chosen by management, and by people with intimate process knowledge at all levels of the organization. Six Sigma projects are conducted to improve business performance linked to measurable financial results. This requires knowledge of the organization's constraints.
6. Six Sigma projects are conducted by individual employees and teams led by Green Belts and assisted by Black Belts.
Although the approach is simple, it is by no means easy. But the results justify the effort expended. Research has shown that firms that successfully implement Six Sigma perform better in virtually every business category, including return on sales, return on investment, employment growth, and share price increase. When will you be ready to join the Six Sigma revolution?