Managing Quality and Performance

. Managing the quality of products and services is very important to ensure that the
business excels in meeting the customer requirements and achieves organizational goals.

By combining quality control techniques and statistical process control methods, several
quality management principles were formulated that are to this day used in industries across the
world.

While product quality is measured through its ability to meet the user’s requirement and
the value of its features and characteristics, service quality is more of a comparison of the
customer expectations and the service performance. Though the principles of improving product
quality are applicable to services as well, it’s very important to know the focus areas of
improvement with respect to increasing customer satisfaction when it comes to service quality
management. This can be done by measuring the gap between customers’ expectations and how
they perceive the services offered to them. The larger the gap size, the more improvements to be
made.

By implementing quality management in our organization, we can boost the quality of

our deliverables and achieve total success.

Quality Management Process will help us to:

 Set Quality Targets to be met by our team

 Define how those quality targets will be measured
 Take the actions needed to measure quality
 Identify quality issues and improvements
 Report on the overall level of quality achieved

By using Quality Management Process, we can:

 Perform Quality Assurance

 Undertake Quality Control
 Initiate Quality Improvement
 Implement Quality Management

A Quality Management Process is critical process within any business, as it helps us to

ensure that the deliverables produced, actually meet the requirements of our customer. Quality
Management Process will help us to improve the quality of our deliverables, today.
 A Quality Management Process is a set of procedures that are followed to ensure that the
deliverables produced by a team are "fit for purpose". The start of the Quality Management
Process involves setting quality targets, which are agreed with the customer. A "Quality
Assurance Process" and "Quality Control Process" are then undertaken, to measure and report
the actual quality of deliverables. As part of the Quality Management Process, any quality issues
are identified and resolved quickly.

You should implement a Quality Management Process any time that we want to improve
the quality of our work. Whether you are producing deliverables as part of a project or
operational team, an effective quality management and quality assurance process will be
beneficial. By implementing this Quality Management Process, you can ensure that your team's
outputs meet the expectations of your customer.

Quality Management is a recent phenomenon but important for an organization.

Managers set up control systems that consist of the four key steps illustrated in Exhibit
19.1:
establish standards, measure performance, compare performance to standards, and make
corrections as necessary.
Imagine becoming better at your job and more satisfied with your life by tracking
information that reveals exactly how you spend your day. For 22 years, entrepreneur and
scientist Stephen Wolfram did just that. He mapped data about his time spent in meetings, e-mail
usage, and the number of keystrokes he logged so that he could analyze how he spent his time.
Wolfram was able to identify work habits that squelched his creativity and stymied his
productivity. So he started planning changes that would help him become more productive and
happier. New devices such as computer software and smartphone apps help people gather and
analyze data about what they do at work so they can use it to do their jobs better. This interest in
self-awareness is part of a growing discipline called auto-analytics, which is the practice of
voluntarily collecting and analyzing data about oneself in order to improve. It consists of
the following:
Tracking screen time. While it may be unsettling to have our managers watching what’s
on our computer screens, it’s much more acceptable when we do the watching. New technology
called knowledge workload tracking records how you use your computer, such as measuring how
long you have an open window, how often you switch between windows, and how long you’re
idle. The software turns all the measurements into charts so that you can see where you’re
spending your time and how you can improve your productivity. One computer programmer
thought that his online chats were eating into his programming time, so he analyzed how much
time he spent chatting during certain periods, and then looked at how much code he wrote during
those times. Surprisingly, he found that talking online with colleagues actually improved his
productivity.
• Measuring cognitive tasks. Another set of tracking tools can help you gather data as
you perform cognitive tasks, such as client research on your smartphone or statistical analysis in
Microsoft Excel. Although it is notoriously difficult to measure knowledge work, a tool such as
MeetGrinder can measure the time and money spent doing any activity. Bob Evans, a Google
engineer, used it to explore the relationship between his attention and productivity. “As
engineers, we load up our heads with all these variables, the intellectual pieces of the systems we
are building. If we get distracted, we lose that thread in our heads,” he said. MeetGrinder
revealed to him that he needs about four straight hours to get anything challenging done, so he
tackles those projects when he has that kind of time, not on days that are interrupted with
meetings and phone calls.
• Improving health. Exercise, amount of sleep, and the stress levels of knowledge
workers have been shown to affect productivity, creativity, and job performance. Employees can
choose from a variety of mobile apps and wearable sensors that collect valuable data about their
physical health. Sacha Chua wanted to better understand how her sleep schedule affected her
professional priorities, so she monitored her bedtimes, wake-up times, and amount of sleep over
several weeks using a tracker called Sleep On It. She changed her routine and started waking up
at 5:40 a.m. instead of 8:30 a.m. She gave up late-night activities like browsing the Web and
started going to bed earlier. With these adjustments, she discovered that her work productivity
soared. The data from Sleep On It gave Chua measurable information that allowed her to
establish priorities on what really mattered to her. Tools used for auto-analytics will continue to
become more sophisticated. The data that they reveal will provide the hard evidence we
sometimes need to adjust the way we use our time and nurture our minds and bodies to have
more success in work and life.
Within the organization’s overall strategic plan, managers define goals for organizational
departments in specific, operational terms that include a standard of performance against which
to compare organizational activities.

Tracking such measures as customer service, product quality, or order accuracy is an

important supplement to traditional financial and operational performance measurement, but
many companies have a hard time identifying and defining nonfinancial measurements. To
evaluate and reward employees effectively for the achievement of standards, managers need
clear standards that reflect activities that contribute to the organization’s overall strategy in a
significant way. Standards should be defined clearly and precisely so that employees know what
they need to do and can determine whether their activities are on target.
 The final step in the feedback control model is to determine what changes, if any, are
needed. An example comes from FreshDirect, a premium online grocer in New York City, which
used a feedback control model to improve the quality of its products and customer service.

A current approach to organizational control is to take a balanced perspective on

company performance, integrating various dimensions of control that focus on markets and
customers, as well as employees and financials.11 Managers recognize that relying exclusively
on financial measures can result in short-term, dysfunctional behavior. Nonfinancial measures
provide a healthy supplement to the traditional financial measures, and companies are investing
significant sums in developing more balanced measurement systems as a result. The balanced
scorecard is a comprehensive management control system that balances traditional financial
measures with operational measures relating to a company’s critical success factors. A balanced
scorecard contains four major perspectives, as illustrated in Exhibit 19.2: financial performance,
customer service, internal business processes, and the organization’s capacity for learning and
growth.14 Within these four areas, managers identify key performance metrics the organization
will track:

Financial performance. The financial performance perspective reflects a concern that the
organization’s activities contribute to improving short- and long-term financial performance. It
includes traditional measures such as net income and return on investment.

Customer service. Customer service indicators measure information such as how

customers view the organization and customer retention and satisfaction. These data may be
collected in many forms, including testimonials from customers describing superlative service or
from customer surveys.15 The Internal Revenue Service (IRS) has been embroiled in a
controversy that shows poor attention to customer service. As a part of the government that many
people already loathe, the IRS opened itself to scathing attack by selecting certain groups
applying for tax-exempt status for extra scrutiny. The initial impression was that the IRS was
targeting only conservative “tea party” organizations, but subsequent investigation revealed they
were looking at both left- and right-leaning groups. The scandal has particularly tarnished the
image of the IRS’s tax-exempt unit, which has been described as “a bureaucratic mess, with
some employees ignorant about tax laws, defiant of their supervisors, and blind to the appearance
of impropriety.”

Internal business processes. Business process indicators focus on production and

operating statistics. For an airline, business process indicators may include on-time arrivals and
adherence to safety guidelines. An event at Reagan National Airport in Washington, D.C.,
reflected weak adherence to safety standards, for instance. When a lone air traffic controller at
this airport fell asleep while on duty and failed to respond to repeated radio transmissions, two
pilots waiting to land jets carrying a total of 160 people decided to land without clearance,
violating Federal Aviation Administration (FAA) safety regulations and damaging the
reputations of both airlines involved, as well as the airport.

Potential for learning and growth. The final component of the balanced scorecard looks
at the organization’s potential for learning and growth, focusing on how well resources and
human capital are being managed for the company’s future. Metrics may include things such as
employee retention and the introduction of new products. The components of the scorecard are
designed in an integrative manner, as illustrated in Exhibit 19.2. Managers record, analyze, and
discuss these various metrics to determine how well the organization is achieving its strategic
goals. The balanced scorecard is an effective tool for managing and improving performance, but
only if it is clearly linked to a well-defined organizational strategy and goals.18 At its best, use
of the scorecard cascades down from the top levels of the organization so that everyone becomes
involved in thinking about and discussing strategy. The scorecard has become the core
management control system for many well-known organizations, such as Bell Emergis (a
division of Bell Canada), Exxon Mobil Corporation, CIGNA (insurance), Hilton Hotels, and
even some units of the U.S. federal government.19 As with all management systems, the
balanced scorecard is not right for every organization in every situation. The simplicity of the
system causes some managers to underestimate the time and commitment that is needed for the
approach to become a truly useful management control system. If managers implement the
balanced scorecard proach that links targets and measurements to corporate strategy, use of the
scorecard can actually hinder or even decrease organizational performance.

The feedback control model involves using feedback to determine whether performance
meets established standards.

Well-designed control systems include four key steps: establish standards, measure
performance, compare performance to standards, and make corrections as necessary.

A balanced scorecard is a comprehensive management control system that balances

traditional financial measures with measures of customer service, internal business processes,
and the organization’s capacity for
learning and growth.

Managers’ approach to control is changing in many of today’s organizations. In

connection with the shift to employee participation and empowerment, many companies are
adopting a decentralized rather than a hierarchical control process. Hierarchical control and
decentralized control represent different philosophies of corporate culture, which was discussed
in Chapter 3. Most organizations display some aspects of both hierarchical and decentralized
control, but managers generally emphasize one or the other, depending on the organizational
culture and their own beliefs about control.

• The philosophy of control has shifted to reflect changes in leadership methods.

• Hierarchical control involves monitoring and influencing employee behavior through
extensive use of rules, policies, hierarchy of authority, written documentation, reward systems,
and other formal mechanisms.
• With decentralized control, the organization fosters compliance with organizational
goals through the use of organizational culture, group norms, and a focus on goals rather than
rules and procedures.
• Campbell Soup uses decentralized control at its plant in Maxton, North Carolina, to
encourage employees to cut costs and increase efficiency.
• Open-book management allows employees to see for themselves the financial
condition of the organization and encourages them to think and act like business owners.

Principles of TQM are as follows:

1. Customer-focused
 2. Total employee involvement
3. Process-centered
4. Integrated system
5. Strategic and systematic approach
6. Continual improvement (kaizen)
7. Fact-based decision making
8. Communications
 TQM Techniques
 The implementation of TQM involves the use of many techniques, including quality
circles,
 benchmarking, Six Sigma principles, quality partnering, and continuous improvement.

TQM does not always work despite its prance Thus, TQM success factor should be
careful in TQM Management. The main important factors are Committenent, Culture,
Continuous improvement, Cooperation, Customer Focus and Control it Leads do Long-Term
success through customer satisfaction.

To be effective total Quality Management, all member must participle in improving

process, products, services and culture. Quality is not an act, it is a habit. Quality is everyone’s
responsibility in any organization.

Budgeting is an important part of organizational planning and control. Many traditional

companies use top-down budgeting, which means that the budgeted amounts for the coming year
are literally imposed on middle- and lower-level managers.46 These managers set departmental
budget targets in accordance with overall company revenues and expenditures specified by top
executives. Although the top-down process provides some advantages, the movement toward
employee empowerment, participation, and learning means that many organizations are adopting
bottom-up budgeting, a process in which lower-level managers anticipate their departments’
resource needs and pass them up to top management for approval.47 Companies of all kinds are
increasingly involving line managers in the budgeting process. At the San Diego Zoo, scientists,
animal keepers, and other line managers use software and templates to plan their department’s
budget needs because, as CFO Paula Brock says, “Nobody knows that side of the business better
than they do.” Each of the 145 zoo departments also does a monthly budget close and reforecast
so that resources can be redirected as needed to achieve goals within budget constraints. Thanks
to the bottom-up process, for example, the zoo was able to redirect resources quickly to protect
its valuable exotic bird collection from an outbreak of a highly infectious bird disease without
significantly damaging the rest of the organization’s budget.
 Many companies use top-down budgeting, which means that the budgeted amounts for
the coming year are literally imposed on middle- and lower-level managers.
On the other hand, bottom-up budgeting involves lower-level managers anticipating
their department’s budget needs and passing them up to top management for approval.
Budgetary control is important for focus on TQM because TQM philosophy focus on
teamwork, increasing customer satisfactions and lowering costs.
As global business expands, many companies have adopted a universal benchmark for
quality management practices, including ISO 9000 standards, which represent an international
consensus of what constitutes effective quality management as outlined by the International
Organization for Standardization (ISO).
Many organizations are moving toward increased control from the top in terms of
corporate governance, which refers to the framework of systems, rules, and practices by which
an organization ensures accountability, fairness, and transparency in the firm’s relationships
with stakeholders.
Indeed Quality in a service or product is not what we put into it. It is what the customer
gets out of it.