Integrated TQM

TOTAL QUALITY MANAGEMENT, VOL. 13, NO. 6, 2002, 759- 777

Development of an integrated total quality

management and performance measurement

system for self-assessment: A method

Kit-Fai PunDepartment of Mechanical Engineering, The University of the West Indies, St Augustine,

Trinidad & Tobago, West Indies

abstract Competitive environments and priorities change over time, eþ ective enterprise manage-

ment always depends on the eþ ective measurement of performance and results. The ® rst condition to

establish and implement, and ultimately to achieve excellence, is a sound system for performance

measurement (PM). Many organizations also adopt the total quality management (TQM) philosoph-

ies and continuous improvements in the pursuit of excellence. There is a need to foster TQM/PM

integration with feasible means of self-assessment. This paper presents the key ® ndings from an

empirical study of TQM/PM integration (TPI) in Hong Kong. It discusses the essential ingredients

and self-assessment criteria for building a TPI model. A results-oriented scoring method to facilitate

TPI in public sector and government organizations is also described.

Introduction

Performance measurement (PM) serves a wide range of purposes within businesses, includingmonitoring internal systems, monitoring external performance, tracking the implementationof change, stimulating continuous improvement at system and personnel levels, and trackingthe overall ® nancial performance of an organization (e.g. Austin, 1996; Feurer & Chaharbaghi,1995; Neely, 1998). Many organizations measure ® nancial results, the performance of theiremployees, the quality of service provided to their customers, employees’ attitude and morale,absenteeism, the quality of processes and products, innovation and creativity (Kermally,1997; Neely et al., 1995). They would employ a range of qualitative and quantitative measuresthat have accumulated over time to meet particular operational requirements. Quantitativemeasures such as ® nancial ratios, staþ turnover and number of customers’ complaints areeasy to measure and manage. Qualitative measures, such as quality, customer satisfaction,innovation, motivation, morale, style of leadership and customers’ perception, are diYcult tomeasure; and the way they are managed depends on the corporate agenda. They are often atdiþ erent levels of aggregation and linked loosely, if at all, to the current policies and strategiesof the business (Hax & Majluf, 1996; Platts et al., 1998). Some studies also show that it isnot unusual to ® nd PM systems that send confusing and occasionally contradictory signalsto the organization (e.g. Kasul & Motwani, 1995; Zairi, 1994). PM should support corporatestrategy formulation and monitor the value drivers and elements that really make the business

Correspondence: Kit-Fai Pun. Tel: 868 662 2002 Ext-2069; Fax: 868 662 4414; E-mail: [email protected]

ISSN 0954-4127 print/ISSN 1360-0613 online/02/060759-19 © 2002 Taylor & Francis LtdDOI: 10.1080/0954412022000010127

760 K.-F. PUN

pro® table (Kermally, 1997; Neely, 1998). Managing organizational performance plays animportant role in translating corporate policy and strategy into results.

On the other hand, the concepts and philosophies of total quality management (TQM)have come to the fore in recent times, being adopted by organizations as the means ofunderstanding and satisfying the needs and expectations of their customers and taking costsout of their operations (Dale, 1999; Ross, 1993). TQM strives to create an organizationalculture that fosters continuous improvements in everything by everyone at all times, andrequires changes in organizational processes, strategic priorities, individual belief, attitudesand behaviours (Dale, 1999; Pun, 2001; Shin et al., 1998). The shift from traditionalmanagement to TQM is revolutionary and the implementation of TQM involves a funda-mental change in the way in which business is conducted (Bounds et al., 1994). Those changesinclude making customers a top priority, a relentless pursuit of continuous improvement ofbusiness processes and managing the systems of the organization through teamwork. Recently,the interest in TQM has been fuelled with a range of national and regional awards for quality,such as the Malcolm Baldrige National Quality Award (MBNQA) and the European QualityAward (EQA). These awards, based on models of business excellence, are being increasinglyused by organizations as part of the PM and business improvement process (EFQM, 2001;NIST, 2001). Integrating PM with TQM concepts becomes an imperative in the pursuit ofexcellence. In this regard, the paper discusses the parameters, factors and processes of TQM/PM integration. It incorporates the ® ndings from a recent empirical study and derives a self-assessment approach to evaluate the performance measures and determinants of the inte-gration in public sector and government organizations.

The TQM/PM integration and self-assessment

TQM is an integrated management philosophy and set of practices that emphasize continuousimprovement, meeting customers’ requirements, reducing rework, long-range thinking,increased employee involvement and teamwork, process redesign, competitive benchmarking,team-based problem-solving, constant measurement of results and closer relationships withsuppliers (Powell, 1995; Pun, 2001; Whitney & Pavett, 1988). It refers to a basic vision ofhow an organization should look like and of the way is should be managed. TQM includes astakeholder perspective, customer and people orientation and corporate responsibility (Dale,1999; Ross, 1993; van Schalkwyk, 1998). On the other hand, PM is the process of quantifyingaction, where measurement is the process of quanti® cation and action leads to performance(Neely et al., 1995). It has a clear methodical focus that helps organizations monitor corporateperformance at an operational level. Sink and Tuttle (1989) claim that performance of anorganizational system is a complex interrelationship between the seven performance criteria,including eþ ectiveness, eYciency, quality, productivity, quality of work life, innovation andpro® tability. Kanji (2001) adds that PM requires attention by the drivers of success, whichprimarily are:

· Delighting the customers (i.e. focusing on both external and internal customersatisfaction).

· Managing the most important organizational asset, which is its people (i.e. providingthem with adequate training for quality and encouraging teamwork).

· Managing by fact (i.e. analysing the organizational processes and measuring the keyvariables).

· Developing a culture of continuous improvement (i.e. constantly looking for newimprovement opportunities and preventing problems from occurring).

TQM AND PERFORMANCE MEASUREMENT SYSTEM 761

Recent research suggests that both TQM and PM can produce economic value to many ® rms(Dale, 1999; Kermally, 1997; Neely, 1998). One of the best indicators is the achievement orcompetitive advantage obtained from integrating PM and TQM concepts. The integrationhas to comprise a thorough de® nition of measures and indicators to monitor the TQMimplementation process and corporate performance from a stakeholder perspective. Manyresearchers and practitioners believe that few well-de® ned performance dimensions andcritical success factors (CSFs) can help develop speci® c measures to monitor progress andperformance towards excellence (Kanji, 2001; Kermally, 1997; Neely et al., 1995). In manycircumstances, these measurement systems are embedded in the CSFs. Despite being atsome extent organization- or industry-speci® c, these factors can be grouped into someprinciples that have been systematically proven to be universally valid. Kanji (2001) arguesthat the criteria for PM are rooted in the CSFs of the organization and ultimately correspondto the determinants of business excellence. Various balanced scorecard techniques (Kaplan& Norton, 1996) and various excellence awards (EFQM, 2001; NIST, 2001) are examplesthat incorporate the principles identi® ed using a CSF approach and have been empiricallytested and validated in diþ erent contexts.

The ultimate objective of TQM/PM integration is to assist organizations in their questfor continuous improvement and better organizational performance and results. If eþ ortsfocus solely on conformity of current management systems and practices, there may be aseparation between TQM and PM, reversing a trend toward integration. The integrationshould align with corporate missions and strategies, and intertwine with the operationgoals, management systems, measurements and practices. It also mandates continuousself-assessment to identify relevant factors that help with organizational changes. Recentdevelopments of international and regional quality awards have oþ ered a continually changingblueprint for organizational self-assessment (Pun et al., 1999). For instance, both MBNQAand EQA propagate the TQM principles and stress the importance of self-assessment foridentifying and monitoring improvement (Porter & Tanner, 1996). They share a set offundamental concepts and elements, including leadership and constancy, results orientation,management by processes, people development and involvement, and continuous improve-ment (Pun & Lau, 2002). There is no signi® cance intended in the order of these conceptsand elements. The list in Table 1 is not meant to be exhaustive and will change asorganizations develop and improve.

According to Henderson (1997), self-assessment can make comprehensive, systematicand regular reviews of an organization’s activities that ultimately result in planned improve-ment actions. The assessment process helps organizations identify their strengths andshortcomings and best practices where they exist (Neely, 1998). With the common directionand an increased consistency of purpose, self-assessments can provide organizations withopportunities to build greater unity in pursuit of initiatives that eþ ect improvement (Hakes,1996; Hills, 1996). They not only generate the results and valuable inputs into the annualcorporate planning cycle, but also encourage the integration of a range of quality initiativesand performance improvements that may have been separately pursued across the organiza-tion (Beasley, 1994; Pun et al., 1999). In other words, self-assessments are a means that helpanalyse organizations’ status quo in implementing the TQM/PM concepts and in achievingtheir strategic objectives.

Organizations must therefore establish a coherent system with self-assessment orientation.Otherwise, this may result in fragmentation of eþ orts, slow response and weak productivitygrowth throughout the organizations (Henderson, 1997). Business environment and opera-tional situations vary in diþ erent organizations. The identi® cation and assessment of variousCSFs provides a feasible means for integrating PM and TQM concepts strategically (Kanji,

762 K.-F. PUN

Table 1. Integration of PM with TQM concepts

Core concepts Descriptions

1. Leadership and · Top management recognizes its roles and responsibilities to set directions,constancy of management principles and vision, and develops strategies and policiespurpose · Management should exercise its involvement and commitment in developing the

management structure and environment in which the organization and its peoplecan excel to achieve the organization’s objectives

2. Results · The customer is the ® nal arbiter of product and service quality and customerorientation loyalty, retention and market share gain are best optimized through a clear focus

on the needs of current and potential customers· An organization works more eþ ectively when it has mutually bene® cial

relationships with its people and partners focusing on both ® nancial and non-® nancial results and organizational eþ ectiveness

· The long-term interests of the organization and its people are best served byexceeding the expectations and regulations of the community at large

3. Management · Using reliable information and analysis of data, make eþ ective decisions for theby processes current operations and planned improvements

· More predicable results can be obtained and achieved more eYciently when theinterrelated activities are managed as a process

· Improvements are made though sharing of information and knowledge andeþ ective implementation of organizational strategies and policies

4. People · Through shared values, trust and empowerment, which encourages thedevelopment involvement of people in all levels in the organization to release their full potentialand to be used for the organization’s bene® tinvolvement · Achieving the highest levels of employee performance requires well-developed

people education and training and adoption of an ethical approach to promotepeople well-being and satisfaction

5. Continuous · The resources are planned, managed and improved with continuous review andimprovement update of strategies and policies

· The importance of continuous innovation with the emphasis of learning cultureshould be developed and maintained

· Excellence is dependent upon balancing and satisfying the needs of all relevantstakeholders

Source: Based on NIST (2001) and EFQM (2001).

2001). The integration will bring changes to the current operations and practices in organiza-tions, and will succeed only if they are implemented as a long-term organizational paradigmshift, not as a quick ® x (Bounds et al., 1994). Macdonald (1993) argues that the changes arenot really about technology or new management tools, but are concerned with culture value,management, people and communication. In some cases, the changes can be an area-by-area evolution with minor course corrections, or can be more complex and dynamic in manyorganizations. Senior management must therefore take the lead, commit to the integration andpush it downward throughout the organization (Pun et al., 1999). It is also crucial to have thestakeholders (including the management, employees, customers, etc.) involved in the design,implementation, ongoing development and maintenance of the coherent system.

An empirical study

There has been disagreement on whether the principles of TQM/PM could be applied equallyin diþ erent organizations, particularly in public sector and government organizations. In thisregard, an empirical study was conducted in Hong Kong to investigate whether both TQM andPM are compatible and to explore the in¯ uences that they will contribute to performance


improvements as perceived (Pun & Lau, 2002). The study was composed of a questionnairesurvey and a series of personal interviews with senior executives and technical personnel in arepresentative government organizationÐ the ITSD in Hong Kong. The organization has sixbranches, including the Corporate Services Branch, three Departmental Services Branches(DSB-1, -2 and -3), the Management and Community Services Branch, and the InfrastructureServices Branch. The department provides information technology (IT) services to all policybureaus and some 70 government departments and organizations in accordance with the Gov-ernment’s IT policy. It also provides IT services to some quasi-government organizations withprior service agreements. According to the latest statistics, about 74% of analyst/programmergrade staþ are hired on the establishment of the ITSD. The remaining 26% are hired on theestablishment of other government organizations and departments, including the Census andStatistics Department, the Housing Department, the Hong Kong Police Force, the HongkongPost and the Treasury. The ITSD serves many stakeholders, including citizens, IT profes-sionals, local and overseas IT industries, parents, students, teachers, trainees, schools, universi-ties, staþ , managers, employers, government departments and agencies (HKSAR, 2001).

A set of questionnaires sought the respondents’ views concerning the current status ofTQM/PM integration and the determinants (including evaluation criteria, sub-criteria andbene® ts) that might in¯ uence the integration and its eþ ectiveness in government departmentsand organizations. The research frame was de® ned within the ITSD, and the samplepopulation was de® ned in two stages. Firstly, a random sampling was employed and eventuallythe DSB-2 was selected among the six branches of the ITSD. The selected branch had some240 employees (including the contract staþ ) and was one of the largest branches of thedepartment. A systematic sampling approach was then adopted to determine the sample sizein the subsequent stage. The elements were selected from the research frame of a targetedpopulation at a uniform sampling interval. As a result, 24 respondents were selected as thesurvey sample. They were grouped according to their job nature and position; and twogroups of management and technical personnel were formed.

According to the analytic hierarchy process (AHP) methodology advocated by Saaty(1994, 1996), the questionnaire survey acquired both the management and technical person-nel’s views on various determinants for the TQM/PM integration. Apart from the analysis ofpro® le and background information, the respondents were asked to compare the relativeimportance among the determinants and criteria aþ ecting TQM/PM adoption in the ITSDand other government departments and organizations they were serving. A list of TQM/PMcriteria, bene® ts and sub-elements is given in Table 2, and structured into the analyticalframework as illustrated in Fig. 1. The framework helps accommodate both objective andsubjective judgements of the respondents involved in order to make trade-oþ s and todetermine priorities among the criteria (Saaty, 1994, 1996). All valid replies were recordedand the computations of survey ® ndings were made using a computer software of ExpertChoice (Decision Support Software, 1995)

For the second stage of the study, a series of personal interviews was carried out withsenior management and technical personnel who participated in the survey. All interviewsinvolved personal visits with a set of prescribed questions. The questions focused on acquiringpersonal opinions on the TQM/PM integration and the needs of integration strategies forperformance improvement in government departments and organizations.

Analysis of empirical study results

Survey response rate and respondents pro® le

Ten valid responses were received from the sample of 24 managerial staþ and technical

764 K.-F. PUN

Table 2. A list of TQM/PM criteria, bene® ts and sub-elements

TQM/PM criteria and bene® ts Sub-criteria or elements

1. Leadership and constancy of · Corporate mission, vision and valuespurposes · Management involvement

· Management commitment· Strategy and policy development

2. Results orientation · Customer focus· Financial results· Non-® nancial results· Organizational eþ ectiveness· Social responsibilities

3. Management by processes · Product and service processes· Sharing of information· Sharing of knowledge· Implementation of strategy and policy

4. People development · People education, training and development· People well-being and satisfaction· People involvement· People empowerment

5. Continuous improvement · Learning culture· Continuous innovation· Review and update of strategy/policy· Balancing and satisfying stakeholders’ needs

6. Anticipated bene® ts · Optimization of value added operations· Improvement of organizational eYciency and eþ ectiveness· Enhancement of corporate image and reputation· Strengthening of people’s loyalty and morale

Source: Abstracted from Pun and Lau (2002).

personnel in the ITSD, yielding a response rate of 41.7 per cent. Half of the respondentswere either senior managers or managers, with the rest being technical personnel includingthe contract staþ employed on a project basis serving the ITSD and other governmentdepartments and organizations. Eighty per cent of the management group and 40 per centof the technical group of respondents served the Government for more than ® ve years; and60 per cent of the technical group respondents were contract staþ .

Priorities among the determinants of TQM/PM

Table 3 summarizes the normalized weights of judgements from the two respondent groups.The results comprise three parts, including the management, technical personnel and theircombined judgements. The overall inconsistency index of evaluator judgements was calcu-lated to be 0.05, which fell within the acceptable level of 0.10 as recommended by Saaty(1994, 1996). This implied that most respondents held a positive view and assigned theirweightings consistently on examining the priorities of decision criteria and evaluating theeþ ectiveness of TQM/PM integration.

Level 1: Evaluation criteria

By examining the normalized priority weights of evaluation criteria in level 1 (see Table 3),the management group of respondents considered continuous improvement (i.e. with normal-


Figure 1. An analytical framework for evaluating TQM/PM integration (source: abstracted from Pun & Lau, 2002).

ized weight, CI 5 0.278) to be the top criterion followed by results orientation (i.e. RO 5 0.230)and leadership and constancy (i.e. LC 5 0.197). The technical group had a slightly diþ erentview on the importance of the criteria, they considered results orientation (i.e. RO 5 0.305) tobe the most signi® cant decision criterion. People development (i.e. PD 5 0.227) and continuous

improvement (i.e. CI 5 0.225) followed in the second and third places, respectively. Theresults coincided with the combined judgements, that is, the top-ranked criteria were RO( 5 0.269), PD ( 5 0.227) and CI ( 5 0.225). Many respondents stressed the importance ofresults orientation (such as customer focus, ® nancial results and social responsibilities) andcontinuous improvement (such as innovation, balancing and satisfying corporate needs) onthe direction of the organizations. In particular, the management group realized that theirleadership and constancy of purpose could drive the introduction and promotion of TQM/PM integration in government departments and organizations. The technical group wouldlook into the people development aspects that could facilitate people education, involvementand empowerment with respect to promoting the results orientation and continuous processfor performance improvement. Nevertheless, the respondents considered the management by

processes (MP) criteria to be less critical when compared with the other three criteria inevaluating the TQM/PM integration. The normalized weights obtained from the managementgroup, the technical group and the combined judgement were 0.127, 0.081 and 0.106,respectively.

766 K.-F. PUN

Table 3. Normalized weights of judgements from respondent groups

Management Technical Combinedgroup group judgements

Level 1: Evaluation criteria

Leadership and constancy (LC) 0.197 0.143 0.172Results orientation (RO) 0.230 0.305 0.269

Management by processes (MP) 0.127 0.081 0.106People development (PD) 0.167 0.290 0.227Continuous improvement (CI) 0.278 0.180 0.225

Level 2: Evaluation sub-criteria LC LC LCCorporate mission (COM) 0.102 0.099 0.104Management involvement (MIN) 0.127 0.315 0.205Management commitment (MAC) 0.542 0.394 0.479

Strategy and policy development (SPD) 0.229 0.192 0.212RO RO RO

Customer focus (CUR) 0.298 0.269 0.290

Financial results (FIR) 0.262 0.221 0.260Non-® nancial results (NFR) 0.091 0.129 0.108Organizational eþ ectiveness (OEF) 0.116 0.252 0.176Social responsibilities (SOR) 0.234 0.129 0.166

MP MP MP

Product and service processes (PSP) 0.165 0.343 0.244Sharing of information (SIN) 0.137 0.241 0.191Sharing of knowledge (SKN) 0.365 0.157 0.255

Implementation of strategy and policy (ISP) 0.333 0.258 0.310PD PD PD

Education, training and development (ETD) 0.133 0.160 0.147People well-being and satisfaction (PWS) 0.312 0.416 0.370

People involvement (PIN) 0.155 0.224 0.191People empowerment (PEM) 0.400 0.199 0.292

CI CI CILearning culture (LEC) 0.225 0.221 0.239Continuous innovation (COI) 0.275 0.231 0.256Review and update of strategy/policy (RUS) 0.197 0.225 0.209Balancing and satisfying needs (BSN) 0.273 0.323 0.296

Level 3: Bene® ts

Optimize value added operations (OVO) 0.229 0.179 0.206Improve eYciency and eþ ectiveness (IEE) 0.193 0.360 0.295Enhance corporate image (ECI) 0.455 0.220 0.329

Strengthen loyalty and morale (SLM) 0.124 0.241 0.170

Notes: Priority score, i.e. 0.000 5 the least signi® cant, 1.000 5 the most signi® cant.

Level 2: Evaluation sub-criteria

Under each evaluation criterion, the relative importance (that is, in terms of local normalizedpriority weights) of the sub-criteria in level 2 was computed. It was found that both evaluatorgroups have certain diverted views of their relative weights and rankings among the sub-criteria (see Table 3). For the management group, the leading sub-criteria were management

commitment (i.e. MAC 5 0.542), people empowerment (i.e. PEM 5 0.400), sharing of knowledge

(i.e. SKN 5 0.365), customer focus (i.e. CUR 5 0.298) and continuous innovation (i.e.COI 5 0.275), corresponding to their parent decision criteria. With regard to the considera-tions of the technical group, they were people well-being and satisfaction (i.e. PWS 5 0.416),management commitment (i.e. MAC 5 0.394), product and service processes (i.e. PSP 5 0.343),


balancing and satisfying needs (i.e. BSN 5 0.323) and customer focus (i.e. CUR 5 0.269). Whilecombining the judgements of both groups, the top sub-criteria were MAC ( 5 0.479), PWS( 5 0.370), BSN ( 5 0.296), CUR ( 5 0.290) and SKN ( 5 0.255). The rankings of normalizedpriorities among sub-criteria coincided with those of the global priorities relative to the goalof evaluating TQM/PM eþ orts as shown in Table 4. It was found that ® nancial results (FIN)were included, whereas SKN was not. The top-ranked sub-criteria were PWS ( 5 0.084),MAC ( 5 0.083), FIN ( 5 0.71), CUR ( 5 0.070) and BSN ( 5 0.067).

While considering the global priority weights of sub-criteria in individual respondentgroups, there were certain diverted views of the relative weights and rankings among the sub-criteria. The management group considered MAC (i.e. 0.107) to be the top-ranked sub-criterion, whereas the technical group considered PWS ( 5 0.121) to be the top-ranked sub-criterion. In addition, other sub-criteria were also emerging, including learning culture (LEC),organizational eþ ectiveness (OEF), ® nancial results (FIN) and people involvement (PIN). Themanagement group also stressed the importance of COI ( 5 0.077), BSN ( 5 0.076), LEC( 5 0.071) and CUR ( 5 0.069). On the other hand, the technical group looked into the needsof CUR ( 5 0.082), OEF ( 5 0.077), FIR ( 5 0.068) and PIN ( 5 0.065). Furthermore, thecombined judgements also showed that both respondent groups considered the reliance ofcorporate mission (i.e. COM 5 0.018), sharing of information (i.e. SIN 5 0.020), product and

service processes (i.e. PSP 5 0.026), sharing of knowledge (i.e. SKN 5 0.027) and non- ® nancial

results (i.e. NFR 5 0.029) as generally less dominating sub-criteria when compared withothers in promoting TQM/PM integration.

Level 3: Bene® ts of TQM/PM integration

Table 3 also shows that the ranked priority of the TQM/PM bene® ts was diverted in bothrespondent groups. The management group placed strong emphasis on enhancing corporate

image (ECI). Its relative importance was about two times that of optimizing value addedoperations (that is, OVO 5 0.455/0.229), 2.4 times that of improving eYciency and eþ ec-tiveness (that is, IEE 5 0.455/0.193) and 3.7 times that of strengthening of loyalty and morale(that is, SLM 5 0.455/0.124). The technical group considered IEE ( 5 0.36) as the mostimportant bene® t, followed by SLM ( 5 0.241), ECI ( 5 0.220) and VOV ( 5 0.179). Whilecombining the judgements from both groups, the ranking of ECI ( 5 0.329) was found to bethe ® rst bene® t. The bene® ts of IEE ( 5 0.295) and OVO ( 5 0.206) were in the second andthird places, respectively.

Summary of interview ® ndings

All respondents to the survey were invited to the subsequent personal interviews. Successfulinterviews were conducted with three senior management and technical personnel. Each hadmore than ten years’ working experience in serving the ITSD and other governmentdepartments or organizations in Hong Kong. From the analysis of the interview ® ndings, thecharacteristics of good quality management practices and several barriers that often hinderedgovernment departments in adopting TQM/PM were identi® ed. One key success factor ofTQM/PM integration was management commitment and leadership. Another crucial onewas the maturity level of people in terms of experience and motivation (Pun & Lau,2002). Many staþ members perceived that quality management was equivalent to keepingdocumentation. Training should be provided to correct their attitudes and interpretations.Individual oYcers should have positive attitudes towards continuous improvement and stressquality and performance of their work. The maturity level of people must be high beforeTQM/PM can be integrated eþ ectively. From the interviews, the main barriers for the

768 K.-F. PUN

Tab

le4.

Glo

balpr

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tyof

sub-

crit

eria

rela

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toth

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alof

evalu

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Min

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Man

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ent

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gro

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Glo

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tsa

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tsa

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kin

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ub

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teri

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eights

a

1M

anag

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tco

mm

itm

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(MA

C)

0.1

07

1P

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sati

sfac

tion

(PW

S)

0.1

21

1P

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bei

ng/

sati

sfac

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n(P

WS

)0.0

84

2C

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tin

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us

inn

ova

tion

(CO

I)0.0

77

2C

ust

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(CU

R)

0.0

82

2M

anag

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tco

mm

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(MA

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0.0

83

3B

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76

3O

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77

3F

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71

4L

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4F

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68

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(CU

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70

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5P

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67

6P

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(PE

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86

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66

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(FIR

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60

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55

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56

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54

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54

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Rev

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47

10

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(PW

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0.0

52

10

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integration in government departments included low commitment of individual oYcers andwrong interpretation of quality management concepts. The interviews also found that theformulation of a TQM/PM strategy could help accommodate the sharpening needs ofperformance improvement.

Building of TQM/PM integration model

The empirical study contributes to the identi® cation of various TQM/PM determinants andevaluation criteria for performance improvement in government departments and otherpublic sector organizations in Hong Kong. Evidence shows that results orientation, peopleinvolvement and continuous improvement are the leading evaluation criteria. Promotingpeople well-being and satisfaction, management commitment, ® nancial results and customerfocus are the dominant sub-factors for TQM/PM integration. The integration can bringmany bene® ts, including enhanced corporate image, improved eYciency and eþ ectiveness,and optimization of value added operations in organizations. The ® ndings verify the sharedfocuses and the complementary nature of TQM and PM. Management leadership andcommitment, people development and satisfaction take an enabling role for the integration.Senior management should lead the way, whereas middle management should facilitate theTQM/PM process and front-line operations should follow to attain corporate objectives. Byconsolidating main ® ndings from the study, the author incorporated those determinants intoa generic TQM/PM integration (TPI) model. The model has ® ve categories of evaluationcriteria, including leadership and constancy of purposes, management by processes, people develop-

ment, continuous improvement and results orientation. These criteria are primarily designed forself-assessment of an organization’s performance on an ongoing basis. Built upon the coreconcepts and values, the criteria integrate with each other. A diagrammatic representation ofa system’s framework for the TPI model is given in Fig. 2.

Figure 2. A systems framework of the TPI model.

770 K.-F. PUN

The model is composed of several core enablers and results elements that govern itsoperations. Leadership and constancy of purposes is the driver of the TQM/PM conceptsthat lead the sustained pursuit of customer value and improvement in performance. In otherwords, if the management does not want self-assessment to occur, it will not happen. TheTQM/PM integration rests on systematic management by processes, people developmentand continuous improvement to meet the customer, quality and performance requirements.The enabler elements stress the company’s human resources and key processes on fosteringperformance. The results-oriented measures of progress provide a basis for channellingactions to delivering continuous improvement with the aim of fostering value added opera-tions, improving eYciency and eþ ectiveness, enhancing corporate image and strengtheningpeople’s loyalty and morale.

Self-assessment method for TQM/PM

The TQM/PM criteria are concerned with the predetermined evaluation requirements forthe model and the deployment of organizational eþ orts and resources. They are used tomeasure performance on an ongoing basis, benchmark the business results internally andcompare them externally with other competitors and best-in-class organizations. The scoresof TQM/PM criteria and sub-criteria total 1000 points (see Table 5). The scoring method

Table 5. A score listing of the TQM/PM criteria and sub-criteria

Category Evaluation criteria and sub-criteria Point valuesa

1. Leadership and constancy of purposes (LC) 175

1(a) Corporate mission, vision and values (COM) 201(b) Management involvement (MIN) 351(c) Management commitment (MAC) 801(d) Strategy and policy development (SPD) 40

2. Management by processes (MP) 110

2(a) Product and service processes (PSP) 302(b) Sharing of information (SIN) 302(c) Sharing of knowledge (SKN) 302(d) Implementation of strategy and policy (ISP) 30

3. People development and involvement (PD) 220

3(a) People education, training and development (ETD) 303(b) People well-being and satisfaction (PWS)3(c) People involvement (PIN) 403(d) People empowerment (PEM) 70

4. Continuous improvement (CI) 230

4(a) Learning culture (LEC) 504(b) Continuous innovation (COI) 604(c) Review and update of strategy/policy (RUS) 504(d) Balancing and satisfying stakeholders’ needs (BSN) 70

5. Results orientation (RO) 265

5(a) Customer focus (CUR) 705(b) Financial results (FIR) 705(c) Non-® nancial results (NFR) 305(d) Organizational eþ ectiveness (OEF) 505(e) Social responsibilities (SOR) 45Total score points: 1000

aBased the global priority of combined judgements corresponding to the sub-criteria (see Tables 3 and 4). The values were rounded oþ and scaled up by 1000.


Table 6. Self-assessment dimensions, anticipated outcomes and focal areas

Dimensions Anticipated outcomes Focal areas

Results The results should show positive trends and/or · Organization’s current performancesustained performance. TQM/PM targets · Performance relative to appropriateshould be met or exceeded, and performance comparisons and/or benchmarkswill compare well with others and will have · Rate, breadth and importance of thebeen caused by the approaches. In addition, performance improvementsthe scope of the results should address the · Linkage of results measures to processrelevant areas and action plan

Approach A sound approach includes having a clear · Appropriateness and eþ ectiveness ofrationale, de® ned and developed processes and use of the methodsa clear focus on stakeholder-supporting policy · Alignment with the organizationaland strategy and linked to other approaches needswhere appropriate · Degree to which the approach is

repeatable, integrated and consistentlyapplied

· Reliable information and data· Evidence of innovation

Deployment The strategies, policies and actions should be · Deployment addressing the evaluationdeployed in relevant areas, in a systematic requirementsmanner · Adopted by all appropriate work units

Assessment TQM/PM activities should be undertaken, and · All relevant factors of other threeand review the outputs should be used to identify dimensions

priorities, plan and implement improvement · Subject to regular measurement

stresses the self-assessment of the performance status and improvements. The point valuesof its evaluation criteria and sub-criteria are derived from the empirical ® ndings.

The self-assessment requires dynamic linkages among criteria, and thereby servesboth as a communications tool and a basis for deploying consistent overall performancerequirements. Any user (that is, an organization) can furnish the self-assessment informationrelating to four dimensions advocated by the EQA, namely results, approach, deployment,and assessment and review dimensions (EFQM, 2000). First of all, the results dimensioncovers what the organization achieves in performance. Secondly, the approach dimensioncovers what an organization plans to do and the reasons for it. This refers to how theorganization addresses the evaluation requirements or, in other words, the method(s) beingused. Thirdly, the deployment dimension covers what the organization does to deploy theapproach. This refers to the extent to which the approach is applied to individual evaluationcriteria and sub-criteria. Lastly, the assessment and review dimension covers what theorganization does to assess and review both the approach and the deployment of the approach.This focuses on the monitoring and analysis of the results achieved and ongoing learningactivities. The self-assessment results and their anticipated outcomes and focal areas areelaborated in Table 6.

TPI scoring tools and processes

The TPI model employs scoring matrix checklists (SMCs) and questionnaires to performself-assessment and benchmarking. Senior management are responsible for the design andrevision of the SMCs, taking into consideration all inputs from representatives of stakeholders(including employees, internal and external customers, and the public and society at large).Since each criterion corresponds to a concept that cannot be directly measured, it must be

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translated into a set of indicators and then converted into items of a SMC. Basically, eachquestion addresses a management practice that the users expected to have in place if theyare adopting the principles and concepts underlying TQM/PM. The SMCs can and shouldbe customized to individual users, according to their dimension, sector and environmentwithin which it operates, under the required universal principles. Public and private organiza-tions, health, education or local government institutions, for instance, will all have to usediþ erent checklists that re¯ ect diþ erent cultural backgrounds and the particularities theyface. When designing and revising the SMCs, the focal areas of TQM/PM should thereforebe addressed.

Data collection for self-assessment

It is recommended that the standard SMCs should be designed and used on a regular basis,so that the user can monitor progress over time and anticipate changes. Data collected shouldbe analysed without delay in order to identify improvement opportunities and closely controlthe outcomes of the improvement plans and the way they are being perceived by thestakeholders. The SMCs should be administered throughout the organization, and not justthe opinions of leaders and senior managers but those of everyone should count. Allemployees can and should participate in the process. This allows leaders to have a deeperunderstanding of how strategies and practices have been deployed and how their own skillsand behaviours are perceived and can be improved. Moreover, since it is essential to measureperformance externally, customers, suppliers and other stakeholders should be involved asmuch as possible in the process. Speci® c SMCs can be developed for the purpose of gettingfeedback from outside people, who will certainly have a say on how well they think theorganization is doing and on what they would like improved.

Scoring the performance

The ® rst step in scoring is to use a scoring matrix to allocate a percentage score to each sub-criterion (see Fig. 3). This is achieved by considering each element of the matrix for each ofthe sub-criteria. The scoring records are then used to combine the percentage scores awardedto the sub-criteria to give an overall score, in order to present the self-assessment results in aset of indicators, including the enablers and results criteria and sub-criteria. The maximumscore for each criterion ranges from 110 to 265 points out of 1000 points. Table 7 summarizesthe conversion factors for individual criteria and sub-criteria based on the ® ndings from theempirical study. The scores generated are then recorded in the TPI scores summary sheet.They are taken together to calculate the ® nal score points or the so-called performance indexfor the organization.

An illustrated case for scoring TPI self-assessment is given in Table 8, assuming that auser can achieve 80 per cent of scores in all sub-criteria. For examples, the scores for theEnabler Sub-criterion 1(a): Corporate Mission is determined by the achievement times conver-sion factor (i.e. 80% of scores 3 1.14 5 91 points). For the Enabler Criterion 1: Leadership and

Constancy, the score is calculated from the score obtained times conversion factor (i.e. 800scores 3 0.175 5 140 points). Similarly, the scores for all other enablers and results criteriaand sub-criteria can be calculated in the same fashion, and then the overall performance indexcan be ® nalized. The scoring analysis can help the user utilize its resources and keep upimprovement progress that it may experience. Through regular TPI self-assessments, organ-izations can simulate where they should concentrate their improvement eþ orts in a way thatmaximizes their performance. They can also take into account their starting point and theconstraints that they may have in getting improvements above certain levels in particular areas.


Figure 3. Scoring guide of the TPI self-assessment (source: based on EFQM, 2000).

Adaptation of TPI model

The integration of both TQM and PM cannot be achieved overnight. Various elements andpractices have to be in place, and management must understand the questions underpinningthe integrated system on which self-assessment is being made. What has not been imple-mented cannot be assessed, and zero scoring is self-defeating and de-motivating. Theentire organization or individual departments and functions within the organization can bediscouraged as a result of low scores, or there can be a tendency to score higher against theevaluation criteria of the TPI model. Both over-optimistic and under-pessimistic pictures canbe created, and internal auditors may not have suYcient experience to know what they aretalking about and looking for (Beasley, 1994; Pun et al., 1999). Therefore, senior managementmust take the initiatives to integrate TQM and PM into corporate vision and missions. Theseinclude the strengthening of management commitment, quality awareness and leadershipand the creation of supportive corporate culture. They must identify internal strengths andweaknesses and external opportunities and threats for the organization, and align theintegration eþ orts with corporate culture, mission and strategies. Middle management andfront-line personnel must facilitate the integration, in order: to motivate active employeeparticipation in education and training programmes; support employee suggestion scheme;promote job enrichment, enlargement, rotation and redesign; reinforce quality audits andassessments; and establish records and documentation in the workplace.

The TPI model can provide users with a feasible means to evaluate the eþ ectiveness ofTQM/PM integration. The associated scoring method helps organizations pro® le theirstrengths and weaknesses, and identify improvement opportunities with respect to theevaluation criteria and sub-criteria. The results obtained constitute an integral part of theorganizational performance reviews. They are used to compare with previous performancerecords, target the measure of progress, communicate planned changes and accelerate the

774 K.-F. PUN

Table 7. Conversion factors for criteria and sub-criteria

ConversionTQM/PM criteria and sub-criteria Calculations factors

1. Leadership and constancy of purposes (enabler) 175/1000 5 0.175

1(a) Corporate mission, vision and values 20/175 5 0.1141(b) Management involvement 35/175 5 0.2001(c) Management commitment 80/175 5 0.4571(d) Strategy and policy development 40/175 5 0.229

2. Management by processes (enabler) 110/1000 5 0.110

2(a) Product and service processes 20/110 5 0.1822(b) Sharing of information 30/110 5 0.2732(c) Sharing of knowledge 30/110 5 0.2732(d) Implementation of strategy and policy 30/110 5 0.273

3. People development (enabler) 220/1000 5 0.220

3(a) People education, training and development 30/220 5 0.1363(b) People well-being and satisfaction 80/202 5 0.3643(c) People involvement 40/220 5 0.1823(d) People empowerment 70/220 5 0.318

4. Continuous improvement (enabler) 230/1000 5 0.230

4(a) Learning culture 50/230 5 0.2174(b) Continuous innovation 60/230 5 0.2614(c) Review and update of strategy/policy 50/230 5 0.2174(d) Balancing and satisfying stakeholders’ needs 70/230 5 0.304

5. Results orientation (result) 265/1000 5 0.265

5(a) Customer focus 70/265 5 0.2645(b) Financial results 70/265 5 0.2645(c) Non-® nancial results 30/265 5 0.1135(d) Organizational eþ ectiveness 50/265 5 0.1895(e) Social responsibilities 45/265 5 0.170

improvements. Those factors that contribute to an organization’s success in integrating PMand TQM concepts and inhibiting it must be made explicit. While support from topmanagement is crucial to its success, improvement initiatives often come from middle andlower parts of an organization. Therefore, recognition and encouragement of these initiativeswith continual management reviews are important. During the process, the user must alsoprepare to handle the challenges of resources constraints and resolve other potential problemsthat may arise.

Conclusion

Integrating TQM and PM is a challenging endeavour, but the rewards for those who succeedwill be handsome. Organizations are increasingly dependent on their capabilities in TQMand PM to boost competitive strengths and performance, irrespective of their sizes, natureand location. As greater numbers of ® rms in virtually every industry sector integrate TQM/PM, this will probably become a strategic necessity. The empirical ® ndings aYrm thatintegration of TQM/PM would garner management commitment and people well-being andsatisfaction. Several determinants and CSFs, such as customer focus, ® nancial results,people empowerment, and balancing and satisfying stakeholders’ needs, are facilitating theintegration.


Table 8. An illustrated case for scoring TPI self-assessment

aAssuming that the organization can achieve 80% of scores in all sub-criteria from the TPI self-assessment exercise.

Built upon the empirical ® ndings, the TPI model described stresses the result-orientedself-assessments on ® ve operational performance measures, namely leadership and constancy

of purposes, management by processes, people development, continuous improvement and results

orientation. The model serves three important purposes. Firstly, it is a working tool forintegrating PM with TQM concepts and guiding the implementation of TQM in organiza-

776 K.-F. PUN

tions. Secondly, it helps organizations to improve their management practices and capabilitiesin relation to self-assessments of operational performance measures. Thirdly, it facilitatessharing information of best practices and benchmarking performance within and amongorganizations. The self-assessment process can facilitate organizational learning and alloworganizations to amalgamate improvement strategies, plans and actions. It is anticipated thatthe achievements obtained can help organizations build a solid foundation for steppingtowards continuous performance improvement and seeking possible recognition of nationaland international quality excellence awards (e.g. MBNQA and EQA).

Although the roles of TQM/PM integration are crucial for enabling performanceimprovements, ¯ exible adoption of the model and the scoring method may be needed to suitspeci® c requirements and purposes of organizations. Future studies can validate the keyTQM/PM determinants among various government departments, public and private sectororganizations, separately and collectively. The comparison of ® ndings can help determinewhether the results are signi® cantly diþ erent. Furthermore, continuous performance improve-ment based on the TQM/PM integration in today’s organizations is a never-ending processthat can be expanded to all facets of individual life and societal action, given the diþ erencesin political, legal and economic environments. This is a rich research area to investigate thecomplexities inherent in the activities of individuals, groups and organizations and theirinteractions in society at large.

Acknowledgement

The author would like to thank Mr C. W. Lau at the Department of Public and SocialAdministration of City University of Hong Kong for his assistance in the empirical study andsubsequent data analysis.

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