This is an information copy of the attachment to FPM Bulletin 990-90, dated November 11, 1992. ================================================================ FPM BULLETIN ON TOTAL QUALITY MANAGEMENT 1. Purpose. The purpose of this Bulletin is to prepare personnelists to work effectively with agency managers in planning and implementing Total Quality Management (TQM) initiatives. The guidance focuses on specific personnel functions, and suggests ways that current personnel rules and policies in these functional areas can be used to support rather than impede TQM. It suggests practices which may be useful across a broad spectrum of Federal agencies, including those beginning to implement TQM or even just at the stage of considering how to systematically improve organizational management. Much can be done within the existing statutory and regulatory framework to support implementation of TQM, and managers need the assistance of their personnel experts to take full advantage of these flexibilities. Meanwhile, the Office of Personnel Management (OPM) continues to review aspects of the existing legal framework which may not be as supportive of TQM as some might wish. This effort will help determine what changes might be appropriate and feasible to enhance Federal human resources management in a TQM environment. This Bulletin complements publications of the Federal Quality Institute (FQI) which explain TQM in greater detail and offer guidance directly to managers. Copies of FQI publications can be obtained by writing to the Federal Quality Institute, P.O. Box 99, Washington, DC 20044-0099, or by calling 202-376-3747. The FQI also maintains a Federal Supply Schedule of TQM contractors that can be used, with limited competition, by Federal agencies to help them implement TQM. Information on this Schedule can be obtained by contacting FQI. 2. Total Quality Management. Total Quality Management is a comprehensive customer-focused management philosophy for improving the quality of an organization's products and services. It is a way of structuring relationships in agencies to achieve customer satisfaction by involving all employees in continuously improving the work processes of the organization. Many of the world's leading corporations attribute their success to the adoption of this philosophy. TQM seeks to improve the quality of an organization's work and the quality of worklife of employees and managers. Internal and external customers are identified for each service or work product, their expectations about services or products determined, and variations in the work process controlled to enable the organization to meet or exceed customers' expectations consistently. There is always room to improve quality. Quality improvements can be incremental and continuous, or can come in significant spurts when breakthroughs are made in systems. For maximum effectiveness, the principles of TQM should be tailored to each organization. In this way, the TQM approach to managing organizational performance will fit with the organization's mission, and improve its culture, environment, quality, and productivity. In order to successfully implement TQM, it is vital that the effort have the active and visible support and leadership of the top management and union of that organization. Management in organizations undertaking TQM should be aware of the up-front investment of time, effort, and resources required to start and maintain a TQM effort. Activities would include assessing systematically the climate and culture within the organization and developing a strategic plan and an organizationally tailored strategy for TQM implementation. With effective implementation of TQM, an organization can recoup the costs of start-up many times over. TQM creates a climate or culture in which employees may play new roles in the organization. It builds on key assumptions about employees and their roles in the organization. For example, they: - want to do good work and take pride in their work; - do not require close supervision and are capable of motivating their own best efforts through self-set goals if given constructive and timely feedback; - are effective problem-solvers, particularly in the team setting; - know best how to improve the way their particular jobs are done; - make their greatest contributions to an organization they trust, and perform optimally if they are involved in planning for its future, improving current systems and services, and ensuring the success of those systems and services (this requires that they be well-informed of developments affecting the organization and themselves, and that they understand how their work contributes to the whole); and - want opportunities to learn and apply new skills. TQM uses specific techniques to achieve quality improvement: Strategic planning enables the organization to take a longer view of the possibilities for the future and to decide on courses of action which will bring about positive outcomes. Statistical process control (SPC) provides the tools that enable employees to track variation in work processes, to pinpoint problems, and to mark progress towards quality improvement goals. These tools include check sheets, flow charts, brainstorming, pareto charts, histograms, cause and effect diagrams, control charts, etc. Teams enable work groups within and across organizations to diagnose problems, design better work processes, stimulate creative thinking, schedule work, and, ultimately, break through to previously unattained targets of excellence. Process-oriented work teams and work redesign may result in teams' developing degrees of autonomy, with teams collectively assuming many of the traditional supervisory functions. Training is offered for all employees in quality improvement techniques as is developmental training to improve specific job skills. Training includes quality awareness, group dynamics, interpersonal communication skills, and problem- solving tools. Recognition and rewards are provided that are congruent with the principles of TQM and emphasize team and organizational achievement. Recognition and rewards frequently are non- monetary in form and reinforce teamwork and organizational cooperation. Quality assurance systems are developed to prevent problems and errors from occurring in the first place. The initial focus of quality assurance is at the front-end, and continues throughout the process. Continuous assessment of processes and of the organization's quality and productivity efforts is a hallmark of total quality. This contrasts with the more traditional quality control mode of inspecting for errors after products or services are developed. 3. Labor-Management Relations. TQM calls for a high degree of employee participation and involvement. About 60 percent of Federal employees are represented by an employee union elected to be the exclusive representative of all employees in the bargaining unit. Unions have consultation rights, rights to negotiate over changes in most working conditions, and rights to negotiate over the impact and implementation of other changes in working conditions which might otherwise be non-negotiable. Union representatives also have a right to be represented at formal discussions with bargaining unit employees concerning general working conditions. Union support and active participation in the TQM approach can make an enormous difference in an organization's success with TQM and the amount of time that it may take to implement TQM. a. Union Involvement. Personnel officials should strongly encourage management to discuss with union officials as early as possible the introduction of TQM. Early and full involvement will build the trust necessary for cooperation and partnership, and the ultimate success of the TQM approach. A good beginning would include keeping union leadership well informed, inviting them to participate in training sessions along with agency management, and offering them full partnership with management in planning the implementation of TQM through membership on TQM steering committees and quality councils, and participation in strategic planning processes and policy-making bodies. In some instances, management may find that initial efforts to consult with labor are questioned because the union representatives are unclear about the objectives of the TQM effort and believe that TQM might erode union solidarity. It is also possible that some unions will have no interest in participating with management but do not object to the introduction of TQM in the organization. In both cases, personnel officials should advise managers to keep the union informed of plans, activities, and progress in implementing TQM during all phases of the quality improvement effort, and every effort should be made to get and keep the union cooperatively and actively involved in quality improvement activities. Union participation in TQM will improve its chances for success. If the union chooses not to cooperate in the development and implementation of TQM, management will have to consider whether a more limited implementation can be accomplished by working with only non-bargaining units and supervisory and management officials within the organization. b. Negotiations. The introduction and implementation of TQM may involve changes in conditions of employment. Agencies, therefore, should ensure that they meet bargaining obligations resulting from TQM-related activities and changes before such changes are implemented. To help ensure efficient and constructive bargaining, agencies are encouraged to provide unions with timely and complete information about TQM and the specific changes in process, organization, procedures, etc. that are proposed. c. Cooperation. Ongoing union-management relationships with respect to TQM should be marked by a high degree of labor-management cooperation to help ensure TQM's successful implementation. TQM presents an opportunity for labor and management to develop cooperative relationships. Such a cooperative relationship can result in a more constructive approach to bargaining over TQM-related matters as well as cooperative relationships within the formal collective bargaining process. Labor-management cooperation can take different forms ranging from informal, ad hoc, day-to-day communications to formal, joint participation in specific programs. Cooperation relies on common understandings and joint agreements on matters of mutual interest. OPM has published guidance on labor management cooperation: FPM Chapter 711, Subchapter 3: "Labor-Management Cooperation: Policy Guidance," October 24, 1988, encourages Federal agencies to engage in these initiatives and provides useful information on how to proceed. Labor-Management Cooperation: A Guide to Resources, contains information about publications, training, and agency-union experience with labor-management cooperation, as well as contacts at the Federal Mediation and Conciliation Service and the Department of Labor who can answer questions and provide assistance. Compendium of Labor-Management Cooperation Activities in the Federal Government presents several dozen examples of cooperative activities, ranging from simple open-door policies to union participation in total quality management organizations. Many organizations include union representation on the quality council or other steering groups established to guide the overall TQM implementation effort. While a troubled labor-management relationship can crush a TQM effort, a healthy and constructive relationship between labor and management can be very helpful to clarifying the purposes and intent of the TQM effort to employees. 4. Performance Management. TQM supports performance management through its emphasis on the following activities: - developing long-term plans and strategies; - emphasizing employee involvement in planning, goal- setting, and identifying measures; - providing frequent, sometimes daily, performance feedback; - making only meaningful distinctions among performance levels; - putting a premium on both internal and external customer measures and customer feedback; - improving continuously the processes by which work is performed; and - stressing group collaboration as opposed to individual competition. Federal performance management systems requirements are flexible enough to permit implementation of TQM within the Federal structure. However, many of our existing performance appraisal systems do not reflect adequate use of these flexibilities. While much has been said about the incompatibility of performance appraisal and TQM, Federal agencies have been innovative in finding ways to incorporate TQM philosophy with required performance appraisal systems to be more supportive of a TQM environment. The following are major ways in which TQM and performance appraisal can complement each other: Performance plans are most effective if developed against the backdrop of a long-term strategic plan, and if developed jointly by the employee, the team, and the manager. Performance plans can emphasize customer satisfaction, improvements to work processes, contributions to team efforts, intergroup cooperation, initiative, and receptivity to new approaches. For managers, performance can be defined and assessed to emphasize the extent to which they have applied TQM principles and techniques, and how well they have empowered and coached employees and encouraged continuous workflow systems improvement. Progress reviews are most effective if done frequently and not limited to once or twice a year. Teams should be given feedback on a frequent, even daily, basis. Managers can then schedule regular--biweekly, monthly, or quarterly-- meetings with employees to review trends, discuss new ideas, and talk about ways to solve problems and enhance skills. Frequent feedback supports continuous improvement and employee involvement, eliminates surprises, and reduces the fear and anxiety associated with annual performance appraisal. Appraisals and ratings can be used as summary documentation of the feedback that has been occurring continually throughout the performance period. Raters should be encouraged, where appropriate, to solicit input from a wide range of sources, including customers, other team members, and subordinates, to ensure that the most relevant information available is used to assess performance. Also, it is possible for a team to establish an appraisal process for the individual team members as well as for the team as a whole. The rating official can invite subordinates to assess their manager's effectiveness, and in some cases the manager may request such input for a self-assessment. A rating official must still sign the required performance documentation based upon the input and recommendations received from other sources. TQM emphasizes the importance of measuring how well the system serves the customer. Techniques for measurement are focused on customer satisfaction, not just on traditional measures of the amount of activity or achievement of internal organizational production goals (e.g., 10 percent increase in production, number of reports produced, phone calls answered). Traditional measures provide objective data gathered over time on organizational performance, which is fed back to keep the organization informed of its progress in achieving continuous improvement. However, traditional measures may not measure the quality (value) of the effort in meeting or exceeding customer expectations, which is the goal of quality. As TQM becomes more widely implemented and agencies gain more experience in linking individual and organizational performance, OPM may need to consider further revisions to current FPM guidance and policy. 5. Employee Recognition. Organizations implementing TQM should review their incentive awards policy. TQM encourages the use of a variety of forms of recognition that can be used to celebrate achievements both large and small, such as incremental quality improvements, a team's exceeding a target for the first time, or an individual's suggesting a way to improve customer service. Managers should be encouraged to consider the full range of informal to formal recognition available--ranging from a simple thank you to a mug or t-shirt, to more tangible monetary and nonmonetary incentive awards or time off. The key is to select a form of recognition that is meaningful to the group or individual. Recognition systems should emphasize giving employees feedback on the merits of their ideas, suggestions, and achievements. It is important for management to respond to employee input in a timely manner regardless of whether the idea is adopted. It is also important that recognition--formal or informal, monetary or nonmonetary--be given in a timely manner. The motivational impact of recognition and awards relates directly to the promptness with which they are granted. Many organizations implementing TQM will want to give greater emphasis to group awards. Some may wish to develop productivity gainsharing programs which can distribute awards across an organization. Gainsharing programs can distribute a percentage of savings that result from reduction in unit cost of production, or from individuals' exceeding production standards. FPM Letter 451-6, April 10, 1989, contains more specific guidance about productivity gainsharing programs. In addition, organizations should revisit their employee suggestion programs. TQM puts great value on employees' contributing ideas on how to improve the work processes, especially those that involve their own jobs. Organizations may, therefore, want to make it easier for employees to submit suggestions, including suggestions outside the scope of their positions. Agencies should improve the timeliness and quality of the review process of those awards so that recognition is achieved in a way that encourages employees to participate in suggestion programs. Managers should periodically assess new ideas which have been tested or adopted within the group, and grant individual or group recognition accordingly. Managers or work teams may want to solicit ideas about how to improve particular work processes, with management giving suggestion awards to those whose ideas are adopted, plus recognition for others who offered suggestions. Organizations should consider heightening the publicity about awards, especially suggestion awards. The personnel office can assist by publicizing awards through employee newsletters, bulletin boards, and other means. Often the publicity about a contribution or success is effective recognition by itself. 6. Training. A TQM training strategy should be developed as an integral element of an overall TQM implementation plan. TQM organizations will be receptive to an aggressive and strategic approach to managing training. They will view training as a key way to protect and enhance their investment in human resources. They may also be especially interested in systems which keep track of employee skills, which monitor career development, and which enable organizations to do succession planning. Training in a TQM context should be on a "just in time" basis, and TQM training will normally be given on an organizational basis, rather than to individuals. Policies should be developed for phasing in training in relation to TQM implementation generally, and for scheduling training as needed. Many organizations provide TQM training to their top managers initially, followed by appropriate training for mid-level managers, first-line supervisors, and employees in that order. Other organizations train whole work groups of employees and managers at the same time. TQM organizations should provide skills training for their employees in such areas as team building, strategic planning, problem-solving tools, statistical and other quantitative analysis, creative thinking, interpersonal communications skills, group decision-making, etc. Supervisors' and managers' training will need to stress establishing a climate for quality improvement, team-building, interpersonal relations, and other skills which will prepare them to coach employees and facilitate teams in a TQM environment. TQM organizations put a premium on employee development and need to apply a broad definition of job-relatedness. In addition to stressing training in TQM principles and techniques, they will want people to learn more about the functions of the organization as a whole, especially the functions that are immediately downstream or upstream in the employee's workflow. Employees will be encouraged to learn skills which are related, but not necessarily integral, to their current positions. 7. Position Classification and Position Management. Agencies implementing TQM will wish to use the position management system as a way to accomplish agency goals, achieve organizational efficiency and productivity, foster creativity and innovation, improve quality, and enrich the lives of employees. Because this often involves changing the organization of work, a TQM initiative can present some special challenges in the areas of position classification and position management. For many organizations, the first step in relating classification and position management to TQM efforts lies in recognizing the extent to which agencies can control how they organize work--the content of positions and the managerial considerations involved in designing an effective position structure reflecting TQM principles. An agency is at liberty to structure work and design positions and organizations in whatever way it believes is best to achieve its mission in the most efficient and economical way. Many of the positions designed through such an effort do not appear as examples in any standard. This does not mean such positions cannot be established, but it may mean that special care should be taken to compare the position with the criteria in standards to arrive at a classification determination. Therefore, as a practical matter, classifying novel or unusual positions created as part of a TQM initiative may take more time than usual. It is advisable to include everyone involved in the classification process very early in the planning and design stages for a new or modified organization. At the same time, organizations can simplify their job classifications by developing generic position descriptions and by automating the creation and classification of position descriptions. Typically, implementation of TQM results in the use of broader jobs, less hierarchy, and fewer controls and guidelines. TQM may result in more use of generalist positions. In some cases the generalist will encompass most of the sub-specialties of a family of jobs, and in extreme cases the position will include work which is normally classified in different job families. When management determines that the use of generalist positions will promote effectiveness, classifiers should expect to classify jobs accordingly, i.e., into more general occupational series such as GS-201, GS-301, GS-303, GS-401, and GS-601. Where titles are not prescribed in the standard, classifiers may want to make full use of titling flexibility including parenthetical titles to denote multiple specialties. Most organizations, regardless of whether they are implementing TQM, are looking for ways to reduce unnecessary requirements which impede productivity. TQM organizations typically go further by "empowering" teams and individuals to apply judgement and to try changes in their work processes. In these instances, functions previously performed by the supervisor are divided among the members of the teams--"enlarging" their opportunity to do a greater variety of work involving more personal responsibility and authority. In some instances the increased scope, complexity, and responsibility of team positions could enhance the grades of the team member positions. The additional salary costs would be offset, at least to some extent, by the elimination of supervisory positions and by increased team productivity. Empowering teams often means reducing the number of supervisory positions and broadening the supervisory span of control. Both "guidelines" and "supervision" are often more loosely defined in a TQM setting. Organizations may accomplish a reduction in the number of supervisory positions without triggering reclassification to lower grade by: - converting supervisory positions to non-supervisory "leader" or "facilitator" positions where appropriate. - converting vacant supervisory positions to non- supervisory "leader" positions. - designating senior non-supervisory staff as "leaders" in lieu of supervisory positions. Classifiers should be as flexible as possible in titling such positions. If the standards do not permit use of "leader" or "facilitator" in the official position title, managers can still use them as organizational or working titles. "Leaders" in the TQM environment have a level of responsibility which is exercised through coaching rather than through directing. Similarly, "facilitators" exercise their responsibilities through planning and coordination. In one-grade interval occupations, the Work Leader Grade Evaluation Guide may provide the flexibility for classifying some team positions one grade above the highest level of non- supervisory work led. As teams become more autonomous and assume more of the responsibilities previously held by managers, these new responsibilities may be given classification consideration to the extent permitted by applicable position classification standards. 8. Staffing. TQM's focus on treating managers as customers of the staffing process can lead that process to become more directly responsive to the real requirements of work to be accomplished. This approach gives the organization greater ability to shape its skill base to accomplish its overall strategic direction. TQM can affect staffing in a number of more specific ways: (1) broader jobs lead to broader qualification requirement; (2) selecting officials can communicate about, and select for, those skills and abilities which the organization values as important to a successful TQM implementation; (3) creative methods of testing for interpersonal and other skills needed in a participative management setting may be used to select both employees and managers; (4) employees can participate in interviewing candidates and effectively recommending selection of new hires and promotions; (5) organizations may seek to improve the staffing process by seeking and incorporating input from applicants as another customer of the process; and (6) greater operating flexibilities can be made available through delegated and shared examining arrangements and delegated staffing authorities, supported by increasing automation. 9. Delegations of personnel authority. Generally, TQM organizations prefer to redelegate personnel authorities to the lowest practical level in the organization. In the case of self-managed teams, authorities may be delegated to a team leader, even if that designation is one that rotates among the team members on a regular basis. While delegations may be to a particular official, there is rarely any bar to that official's consulting with others in the work group or with customers before exercising the authority. There is virtually no personnel authority which, by OPM regulation, cannot be redelegated to a team leader. 10. Conclusion. Agencies and organizations within agencies embrace TQM in order to improve the quality of the services they deliver and the programs they administer. This undertaking is challenging and often difficult. The personnel official's challenge is to be flexible, creative, and innovative in order to meet the needs and expectations of his or her customers in the new organizational environment. There is much that can be done within existing personnel policies to support organizations implementing TQM. If particular policies, guidance, or procedures appear to be in the way of an effective implementation of TQM in a given agency, and the personnel organization does not see any way for it to interpret and apply the existing regulations to solve the organizational problems identified, the issue should be raised with the Office of Personnel Management and the Federal Quality Institute so that they may consider and propose other actions to alleviate the problem.