Empowerment in the Workplace and the Quality Imperative Chapter 9 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Empowerment in the Workplace  Employee participation has a positive impact on business success  It is almost never negative or neutral  Stock ownership alone doesn’t motivate employees to work harder: ownership plus participation does © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-2

The Need for Empowerment To diagnose the need for empowerment in a group or organization, answer the following questions: :  Do people seem uninterested in their work?  Are absenteeism or turnover rates too high?  Do people lack loyalty and team spirit?  Is there a lack of communication among individuals and groups? © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-3

The Need for Empowerment  Is there a low level of pride?  Are costs too high because of waste and inefficiency?  Does the quality of product or service need improvement?  If the answer is yes to any of these questions, then empowering people can help. © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-4

Empowerment in the Workplace  Empowerment is generated by efforts to improve performance  As companies are forced to compete in an increasingly global economy, they are finding that the path to success is long and winding.  On that path are many boulders and pebbles that must be cleared. © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-5

Empowerment in the Workplace  Jack Welch, former CEO of General Electric, was asked “What is your job?”  Choose the right people  Allocate the right money  Transmit ideas from one group to another with the speed of light  He was a communicator and facilitator for the work of others © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-6

Empowerment in the Workplace  Welch held leaders accountable to the four E’s of leadership:  High personal energy  The ability to energize others  The edge to make tough decisions  The ability to execute strategy © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-7

Empowerment in the Workplace  Welch reformed practices and culture that determined how the company worked:  Wiped out bureaucratic management  Launched the workout process  Spread ideas across the company  Rewarded those with good ideas  Borrowed ideas from other companies © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-8

Empowerment in the Workplace  Behind the scenes people practices:  Conversations were candid, not scripted  Arguments and shouting  Managers forced to think on the spot  Written follow-up to conversation © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-9

Principles of an Empowered Workplace Trust in people Invest in people Recognize accomplishments Decentralize decision making View work as a cooperative effort © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-10

Characteristics of an Empowered Workplace  People experience ownership in empowered organizations:  This ensures they will do everything possible to create success  Their egos are invested in the organization, as are their abilities  The result is victory for both the person and the organization © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-11

Workplace Empowerment © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part Table 9-1

The Importance of Communication  Most preferred sources:  Immediate supervisor  Small group meetings  Top executives  Policy handbook  Orientation programs  Member newsletters © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-13

Where People Go For information © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part Table 9-2

Filling the “Need to Know” Gap Employees have three “needs to know”: 1. The grand plan – the purposes, values, and strategies 2. What is expected of them personally, and why 3. Feedback on individual performance and recognition © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-15

Filling the “Need to Know” Gap  This must be a top-to-bottom process to be effective  Messages must be clearly communicated and understood by every individual  Leaders must be held accountable for this task © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-16

Communication ProblemsDistanceDistortionFear TrustSizeComplexes StructureConflict © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-17

Leadership Challenge  Ren McPherson, past president of Dana Corporation, states:  “People are our most important asset”  The human side counts  Number one factor is the character and actions of leaders © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-18

Leadership Challenge Colin Powell’s rules for leadership 1.Have a vision 2.Be demanding 3.Check small things 4.Share credit 5.Be calm and kind 6.Remember that perpetual optimism is a force multiplier © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-19

The Quality Movement  The quality challenge is faced by most companies:  Consumers demand quality products and services  Providing them requires a talented, committed, empowered workforce 9-20 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

The Quality Movement Three essential ingredients: 1. Participative leadership 2. Continuous process improvement 3. The use of groups 9-21 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

The Quality Movement  Quality movement philosophy:  The people closest to the work have the experience and knowledge to come up with the best solutions 9-22 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

W. Edwards Deming  The influence of W. Edwards Deming was critical in the quality movement  Was recruited to help prepare a census in 1950  Ended up restructuring the Japanese economy  The Japanese applied his ideas, and he became a legend 9-23 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

W. Edwards Deming  Results of Deming’s influence:  People at the production level were taught the statistical techniques of quality control  They were then delegated the task and the power to organize their work so product quality could be improved  Management was convinced of the necessity for personal involvement and commitment to quality 9-24 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

W. Edwards Deming  Deming taught that:  The more quality is built in, the less a product costs over time  It is important to design a good system and process 9-25 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

The Deming Chain Reaction 9-26 Figure 9-1 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Deming’s 14 Points 1. Create consistency and continuity of purpose 2. Set high standards 3. Eliminate dependence on mass inspection for quality 4. Reduce the number of suppliers 5. Recognize that there are two sources of quality problems 6. Improve job training 7. Provide a higher level of supervision 9-27 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Deming’s 14 Points 8. Break down barriers between departments 9. Stamp out fear by encouraging open, two-way communication 10. Abolish numerical goals and slogans 11. Use statistical methods 12. Remove barriers to pride of work 13. Institute a program of education and training 14. Define management’s commitment to quality and productivity 9-28 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Roots of the Quality Movement  Frederick W. Taylor wrote Principles of Scientific Management:  Father of modern management and industrial engineering principle  Developed the first monetary incentive system  His principles and incentive system became the basis for a worldwide scientific management movement 9-29 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Four Basic Principles 1. Develop a science for each element of a job that replaces the old rule-of-thumb method 2. Scientifically select, train, teach, and develop the worker 3. Heartily cooperate with employees to ensure that all work is done according to the principles of science 4. Divide the work and responsibility between management and employee 9-30 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Experiments in Participative Management  Texas Instruments  Work simplification training to solve manufacturing problems and improve productivity  AT&T  Job enrichment programs to increase motivation and employee output 9-31 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Experiments in Participative Management  Factors common to successful experiments:  Management attitudes were positive  Employees were viewed as important assets  Workers were given increased scope and control  Workers felt the projects were important and doable  Training in human relations, problem-solving, and decision-making was provided  Opportunities for advancement were provided  Productivity and morale increased 9-32 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Quality Synthesis  Classicist vs. Behaviorist:  No one best way to manage in a complex environment  Some good in both points of view 9-33 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Quality Synthesis  The philosophy behind TQM and CQI is both hard and soft  Hard—based on scientific management  Soft—concerned with the human side of work  Balance between the two helps account for acceptance by a broad spectrum of managers 9-34 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Quality Synthesis 9-35 © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Figure 9-2

Improving Performance through Quality Initiatives  Background:  Systematic final inspection is referred to as “inspecting in quality”  Prevention-based strategies are known as “building in quality” © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-36

Improving Performance through Quality Initiatives  Companies that adopted quality management practices achieved:  Better employee relations  Higher productivity  Greater customer satisfaction  Increased market share  Improved profitability © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-37

Improving Performance through Quality Initiatives  Common features that contributed to improved performance:  Meeting customer needs became a first priority  All employees were trained, empowered, and involved in improving quality and reducing costs  Systematic processes were integrated throughout the organization to foster continuous improvement © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-38

Quality Initiatives Specific Findings  U.S. companies can improve performance through quality efforts  Better employee relations  Improved quality and lower cost  Greater customer satisfaction © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-39

Financial Benefits of Improving Quality The implicit value of the quality movement is in this saying:  If you always do what you have always done, you will always get what you have always gotten. © 2015 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 9-40