Lec-21 Contemporary Issues in HRM-II

Good afternoon We continue in the series, on the topic of contemporary issues in HR In the last lecture, we touched upon Kaizen, and we will see a little more about Kaizen in this lecture Kaizen, as we said, means continuous process improvement involving everybody in the working environment Looked at more broadly, however, Kaizen philosophy advocates ongoing improvement not only in working life, but also in personal life, home life and social life The type of improvement that Kaizen signifies is the constant and gradual or incremental kind of improvement, no matter how small, which should be taking place all the time in every process, involving everyone from the ranks of management and the workforce So, please note the key word here, a small incremental, but in exorable in the sense, there should be no stop, it must go on and on and on, the improvement; clear, that embodies, in a sense, the philosophy of Kaizen When a new standard, therefore, is achieved, the management should make certain, that it is maintained and the conditions there are to ensure the attainment of, yeah, even higher standards The Kaizen improvement is a well-defined and long term and long lasting improvement and is the result of a team effort This is the 3rd concept you must internalize and remember, it is a team effort It is process oriented and actually requires little investment, do not require highly automated machinery and so on, but it requires a great human effort to maintain and sustain it Now, let us see Kaizen and innovation See, the Kaizen improvement contrasts sharply with the type of drastic improvement Kaizen, we have said, was incremental, slow gradual improvement, but innovation, alright, is usually a result What follows innovation, is something great and drastic Innovation is a short term, dramatic improvement of the result of a technological breakthrough based on individual ideas and efforts An example of innovation is CNC control machineries in the workshop CNC control machinery is dramatically, has dramatically changed the way, for instance, sheet metal was manufactured and fabricated on the shop floors It can cut down to half a shift what used to take three shifts to manufacture So, this is something dramatic, but it required a huge investment and if you did not have

the orders over a short period of time, alright, then your cost would increase, you will not be able to amortize your cost and then the product will reflect higher cost, so then, it becomes very important to have high volumes But remember, on the other hand, in the case of Kaizen, it is slow, gradual, incremental is due, really due to human effort and in that sense, you do not require to have large investments But the slow and steady is the improvement, not dramatic and fast So, you have to decide now what we have learned from the last 30 years or so, is a slow and steady is winning the race so far, but not on its own, as we will see as we move, move along Innovation also is necessary, it is normally requires a large initial investment, but little effort to maintain since it is usually a one-off phenomenon The top management responsibility then, is to maintain a balance between the two, both Kaizen as well as innovation because both are necessary, you have to strike a balance for the survival and competitive success of an organization So, shall we say, both are necessary, but one is necessary, but not sufficient, you have to have both And each individual organization has to decide what would be the kind of ratios in which you concentrate on the Kaizen approach, as well as the innovation In summary, then the main difference lies in the fact, that the Kaizen process is oriented process, is the Kaizen is process oriented and innovation is result oriented; very high outcomes, dramatically high outputs If you look at the scenario in manufacturing industries across the world, after the World War 2, in the post war U.S. economy, the philosophy of innovation became the order of the day Many technical innovations and new products appeared and led to immediate profits and instant recognition Therefore, as a consequence, the seemingly minor benefits of gradual improvement, as advocated by Kaizen, were not rated as very important Emphasis was therefore, on short term profits and the climate for slow and patient efforts towards long term improvement became unfavorable The Japanese, on the other hand, adopted the policy of Kaizen, which promoted and supported team efforts towards gradual improvement, improvement of the processes gradually, which form the very basis of Kaizen The Kaizen process oriented approaches were efforts for process involvement and improvement, which was properly recognized to be a vital component of improvement So, as we have said, little earlier process orientation then became the key, that if you focus on the process, benchmark the process, continually improve the process, albeit in a very small quantity or very small measure, that is the key to ultimate improvement Kaizen is, therefore as important, if not more important in the long haul as the innovation philosophy Any questions? As you see, one is not sufficient, both are necessary; one is not sufficient, you have

to have both and balanced way Kaizen therefore, is a people oriented approach too, which promotes discipline, participation and involvement, skills development, morale improvement and the communication improvement, both vertically as well as horizontally across the organization; high people orientation Kaizen does not exclude efforts for innovation, as we said, and new ideas and once that is achieved, Kaizen efforts maintains it and improves it Now, what is trying to signify? You say, innovation can merge in with the Kaizen effort very logically, you are having good Kaizen effort, gradual, incremental improvements and then, you have an innovation, which dramatically raises the outcome, but you still need Kaizen because having raised, that outcome to maintain, that dramatically higher level of outcome or performance to sustain it and to again keep on improving it till the next innovation comes, what is it that you require? You required the same lowly, if I may say so, Kaizen to push it along, push it along, so both have a place in the sun Any questions? The Kaizen management practices – a management oriented Kaizen is crucial if morale and momentum are to be kept up The Kaizen practices outlined by many companies focus on the operational elements of the product and service quality, which clearly are management driven We have said earlier in the last lecture, that for quality control, which is total, that is, total quality management, you require champions, it has to be led by senior and top management So, here too and therefore, necessarily becomes a cross functional effort Why cross functional? Because if management has to drive it, management is in charge of all the functions, they will deploy all functions into the effort and hence it becomes cross function Some of the important operational practices, which the Kaizen philosophy incorporates are as follows: total quality control, the father of the TQC, total quality control is Doctor Armand Feigenbaum and the Japanese were the first to discover it You see the irony of this, he was not the Japanese, the Americans did not recognize it, who discovered, so to say, by recognizing it for the hidden potential it had for improving the quality and productivity, it was the Japanese That is why we say the Japanese discovered it, it was there Feigenbaum defines the total approach to quality involving everybody in the process, manufacturing or otherwise, all branches, whether marketing, finance, HR, everywhere To Feigenbaum a simple way of managing a business, managing a business organization needs a customer oriented, cost effective quality management progamme that all the people in a company can relate to and furthermore, commit themselves to You see, he is, in that sense, really the father All these concepts of customer orientation, quality management effectively, people involvement, people commitment, which later came out in all the other tools and techniques, he enunciated those The philosophy of Feigenbaum’s approach reminds us all of the ideals of another quality, that is, Deming, but its philosophy also relates to another Juran, particularly in the advocacy of the four steps of an effective quality control system, which are setting of quality standards, appraising conformance to the standards, acting when the standards are exceeded; acting

means intervening When you exceed you do not sit quiet and rest on the laurels And last, planning for improvement in the standards, that is what the action, which you take Feigenbaum’s philosophy traces the need for quality mindedness throughout the organization This needs a serious programme of quality education and participation aimed at stimulating and building up operator responsibility and interest in quality You see, the people orientation, you are now focusing and addressing each operator, that you have a responsibility, you have to have a commitment to quality; you have to take interest in the quality So, it comes right down to individual operator, essentially a people oriented effort This programme should have the complete support of the top management and its culture should be allowed to develop gradually within the company It has to be nurtured because culture is a thing, which does not develop dramatically and fast A culture can be destroyed also, but again, it is not possible to destroy a culture very fast, it is a slow mature process Feigenbaum’s definition of a total quality control system encapsulates his philosophy, which can be summarized as follows: total quality system, TQS, is the agreed, that is this bilateral agreed, company-wide and plant wide work structure, documented in effective, integrated, technical and managerial procedures for guiding the coordinated actions of the people, the machines and the information of the company and plant, in the best and most practical ways to assure customer quality satisfaction and economic costs of quality So, it is a very broad based and comprehensive definition After Feigenbaum there have been an illustrious line of other Japanese exponents of quality and quality control Professor Ishikawa, pioneer in Japan of certain quality tools, such as, the cause and effect diagrams, also called the fish bone diagram and the movements, such as quality circles, which we talked about a little in the last lecture, is also associated strongly with the company wide quality control And professor Ishikawa strongly believed in the provision of a proper quality control education You see, he went a step further, instead of involving only workmen, trying to get the commitment of individual operators, he said, that the involvement must take the form of active education, educate them, train them, they are not engineers, they do not have that knowledge, but you impart the knowledge to them as an organization, initially to factory foreman and supervisors and subsequently, to grass root level workers in its time And even today, I dare say, it is a revolutionary concept There are not many organizations in our country and elsewhere, who will take the responsibility of educating their workmen at the grass roots level possibly because they have not internalized and they do not believe that that will have a business outcome, which is good That means, in the long run, such education to people in the lowest level down the line will yield economic benefits to the business I do not think they have internalized that and they do not believe in, but this is what professor Ishikawa started And how, how to impart this education, because there was not enough material for that level, pitched for the level, whereby you could educate workmen So, to facilitate the education, he produced himself Down-to-Earth text books for quality

circle members So, he himself wrote these books concentrating on simple statistical techniques for data collection and presentation, which would help in sorting out the administration of possible causes of variation and their inter-relationship What does that all mean? Means, the norms are set, you are having variations, you want to analyze why the variations are coming because wide variations means bad quality So, simple statistical method, which otherwise known only to the engineers in the office, he wrote the simple methods and educated workmen Such as, tools and such as, you know, tools, which we called cause and effect diagram or Ishikawa diagram is called after him or fish bone diagram And an important requirement for an effective application of this technique is open group communication if you want to educate and participation, which Ishikawa viewed as critical We have talked earlier of the closed shop, closed system in relation to communication channels, well here is the opposite Professor Ishikawa believed that in order to be effective in applying the education programme to workmen, you have to adopt very open group communication and participation Ishikawa is also associated with company-wide quality control movement, which started in Japan in the years following the visits of Deming and Juran and which was concerned with company-wide participation in the pursuit of quality and its control from top management to the lower ranking employees This was another revolutionary thought because prior to this movement, quality was supposed to be the responsibility of the quality control department and at best, the quality control manager was the boss, the head honcho for quality Top management for the company, the organization did not consider it necessary, was treated as a specialist department Now, the whole thing has become topsy-turvy, in the sense, quality is a business of everyone, top to bottom and side-to-side, entire organization has to be involved in the quality; any questions? Then, here is another, Kanban, just–in-time systems Kanban in Japanese means signboards or labels, that is, something that is being left behind at a specific stage of the process Say, it is an assembly line or a manufacturing cum assembly line, so you have different processes And the process, from one process to the other, the work is flowing, so something, which is left behind at a specific stage of the process to signify, that a collection of a quantity of parts is taking place Why collection of quantity? Because operation for that part of the process is over, so you collect the parts, take it to the next process When all the parts have been collected, the same Kanban, which means the label or a signboard or a job card, is sent further back to an earlier stage of the same process Why back or to a preceding process? Which time, that signboard becomes an order for more parts So, you see the simplicity of the system, you do not stock parts at each work stage You finish at one week and send the order card or the signboard back, signifying is over So, we require more to do the next process So, just-in-time, when you have finished the process at this work stage, the previous work stage, which is feeding to your work stage, they supply the parts and that is why, you do not carry any inventory at your work stage And imagine a situation in a large factory, where you have several processes running and

work-in-progress or work-in-process; at each stage of the process you have inventories of working If you cut all that down, you have a huge savings in lowering of your inventory cost in the work shop So, Kanban can be viewed as an instruction requiring the operator to perform a given task, that is, to produce more products or move the material Now, when it was first proposed in our country, it was found to be very, very funny because people, manufacturing managers and the people down the line of manufacturing never believed, that this could be done because how could you not have at each work stage, alright, a buffer stock Because your work stage may have more efficient processing, in which case you finish off and then, what do you do, there is a work stoppage So, you have to have a buffer stock, so that at all times you are ensured, that you do not stop your work because you do not have input material And people thought, that it is just not possible to have an assembly line or a processing line where there is no buffer stocks at each stage, so then there will be chaos, there will be work stoppage But now, many Indian companies have been able to achieve it and what is the secret, what is the key to JIT? The key is, that each work station, what they are processing, has such high quality, that no rejects are there The time, in which they are processing, it is exactly as per the benchmark So, as is written down on the process sheet, the processing actually happens every time and all times as per that time and quality, no stoppage You can immediately supply it to the succeeding line and so on So, therefore, you see the secret of Kanban is, you cannot have Kanban unless you improve your quality to some threshold limit, not only in one department, but across the whole factory and then, I say that it also means departments, which are not on the workshop floor: purchase department, procurement department, stores department, issuing department So, the whole total quality management, you have raised the quality of the entire organization to a level where you can introduce just-in-time work floor and of course, the savings in the manufacturing setup is massive because we imagine what are the inventory costs of a large organization The underlying principle is that all the necessary parts are received and delivered promptly, only when they are needed, they are not sitting there before that thereby, cutting down of waste storage space and inventory cost and saving the cost of work in process Any questions? The importance of Kanban communicating procedure has made it synonymous with JIT, just-in-time production systems, first employed by the Toyota motor company in Japan And inherent in the JIT principle is the understanding, that people responsible for a particular process are the suppliers of those responsible for the next process, as we said, and the customers for those of the preceding process Internal customer concept is in-built into this Jidohka, here is another system Taiichi Ohno, the pioneer of Kanban system in Toyota’s plant, combined the Kanban system and extended it with another structural feature, which in Japanese was called Jidohka or autonomation, what does that mean? This means, that an automatic mechanism stops the entire production system whenever a defective

part is found along the process line Imagine, it is an automation technique, where they are scanning all the parts, which are flowing down the line and any defective part, which is scanned, the line is stopped because you do not want that part to finally, go into an assembly and then, found out at the last stage where it is rejected, and there will be large number of these assemblies with this defective part, so nipping the evil in the bud, as they say, alright When the automatic system stops the entire production system, whenever a defective part is found, appropriate adjustment then take place, so that the major problem are prevented from arising in future Now, this of course, is applicable as you have realized only where you already have very high level of quality manufacturer, high level, otherwise what is going to happen? If you automate this, then every few minutes you will have defective parts coming and the whole assembly line stopping So, I would say, this is a refinement, which is luxury of those who have already achieved a high level of quality Poka-Yoke, the Japanese quality specialist, Shigeo Shingo developed the concept of Poka-Yoke, which means defect is equal to zero, found very ambitious That means there should be zero-defect, meaning mistake proofing; mistake proofing There is another term, you may have heard, call fail sating, that is, fail-safe This is in relation to safety, that if there is any failure, at least there is a measure built-in, which makes that failure non-accident that means, no one is hurt or injured; money is wasted, time is wasted, but no one is hurt or injured, fail-safe, so this is mistake proofing Source inspection is aimed actively to identify process error before they become defects So, now, you imagine a situation where you are processing sheet metal, let us say, and making cutouts, they are on a power press Imagine, if the press tool, which you have mounted, if they are not maintained properly and the tool become blunt, then what will happen? The cutouts you are making will fall or will not fit within the tolerance specified on the drawing So, this concept of Poka-Yoke is to identify process error before they become defects So, error in the process is bluntness of the tool, which you are using, you have not been ground, identify, take action What are you doing in effect, the error, which would have, either the defect, which would have come and reflected in the faulty part is eliminated When identification takes place, the process is stopped until the cause is determined and eliminated Monitoring potential error sources takes place at every stage of the process, so that errors, which lead to effect are detected as soon as possible and corrected at the source, rather than at a later stage And of course, then what happens? Even if there is some process defect, it does not ultimately cost the company dear because you do not have huge wastage due to rejection and so on Small group activities, SGA or quality control, which we touched upon and this is just to reiterate, that these are activities of informal groups, which members meet occasionally on a voluntary basis with the main purpose of problem solving And these comprise of people from the management and the workforce, as well as suppliers and subcontractors So, in a sense, is cross-functional, why? Because when you have a problem, after all this is a problem solving groups and these are informal groups, as we say, that means, these people who come together have a high commitment to the work, high commitment to the organization Sometime they do it in their own time after the shift is over, not in company’s time

Because of their enthusiasm and their commitment and they comprise people who are mangers, also suppliers, contractors because the problem, the contribution may come from any source, can come from the suppliers, can come from a defective design, which has been done at the management level and so on So, all this is cross-functional And then, these people work on an equal basis when they come on to the quality circle team No one pulls rank although they may be managers and they may be ordinary workers and they may be suppliers, but they work on equal basis, which strengthens, alright, the team’s spirit, helps in setting up attainment of reasonable targets, improves morale and communication, promotes initiative and specifically, develops the ability to solve problems Over the years there have been many such types of groups, such as, safety group, productivity committee, zero defects movements, quality control circles, mini-think-tanks, et al, so many of them, but essentially, the concept is small group activities for problem solving and done jointly Barriers of rank, barriers of organizational borders, like suppliers, customers, they are lifted and they all work as a team and they produce synergy of these The most widely used name is quality control circle, QC circle, pioneered in Japan by professor Ishikawa, as we saw a little earlier on Initially, these quality circles represented study groups, typically consisting of 6 to 10 people, aiming towards the educational development of their members Generally, the education was to study the quality techniques, like statistical techniques on quality control, study of simple problem solving techniques, like pareto analysis, brain storming session, cause and affect diagram, frequency histogram, control charts, etcetera Study of reports of improvement projects carried out by other quality control circle groups was incorporated as 2nd part of the education Participation in actual projects was the 3rd stage where the implementation of the lesson learnt in the education was achieved So, it was step by step process, first educate, then you observe or other circles have done, then you yourself come into the circle and you do it yourself and then you use the knowledge, which you have gained in the education process Quality circles, control circles are not restricted to manufacturing industries, but also to the service sector, administration, sales, office work, etcetera, etcetera, it is all encompassing Kaizen and Deming, the Deming is a guru of the Japanese quality movement and they really revere him There are many principles in Kaizen that are identical to certain of Deming’s management rules For example, the obsession with never ending quality improvement; the responsibility of the management, not only the quality control department or the workers; the relationship with the suppliers; the process oriented approach, as distinct from the product oriented; total quality attainment, all departments all spheres; striving for long term and sustained benefits, rather than short term profits The PDCA cycle as a philosophy of work plan does check and again take action

The importance of communication and education, development and involvement of all employees in quality related activities So much so, that it is difficult really to distinguish most of the Kaizen principles from the Deming ideals, but this is not surprising because Kaizen represents the basis of Juran business philosophy and the Japanese business philosophy was inspired by Deming’s teaching; that is why he is revered as a guru, any questions on that? You have seen Kaizen benchmarking TQM, the interrelationship between these tools and techniques for overall improvement of quality, thereby cutting cost and thereby tackling the contemporary issues, which basically relate to ruthless competition and struggle in the market place Now, there is another technique called mentoring It is not a new technique, it is as old as the hills, but somehow it was there in hibernation practiced here and there in a few companies Now, again, as the monster of competition has risen up, everywhere cloud hangs low We have various companies delving into the past and bringing out tools and techniques, polishing them up and trying to use them all for the same cause, cutting cost, becoming more competitive, surviving and prospering So, what is mentoring? Mentoring is a relationship where one wiser and more experienced person in the organization assists another person to grow and learn Experience, skills and a genuine desire to help are more valuable assets in mentoring relationship than age or position So, if you have a mentor, it is more important, that he has this attitude, alright, experience to help and a genuine desire, which are more important than what position he has been in before he became a mentor or he is in, as he became mentor Open an assertive communication and trust of both parties are essential So, one of the disadvantages of mentoring, maybe, that it results in perpetuating of old ways at the expense of diversity and development What does it mean? What it means is mentor, after all, is an older, hopefully wiser person who looks after as a friend, philosopher and a guide, younger recruits into the company, to guide them, to mould them into the culture of the company, to warn them to avoid pitfalls, to solve some of their problems as it comes, because he is experienced Usually, he has held senior positions also, but the flip side is, that if you have all the new people who come in, they are molded by wiser and older people of the organization into the same culture, then you have a kind of situation where the fresh winds of change may be shut out close the windows And then it becomes, alright, a self perpetuating kind of culture, which may lose touch with the changes in the environment Fresh air coming in from outside means, what? That means, you are in tune with the environment, which is outside and if you fall out of step and you are not in tune with the environment, that becomes a genuine danger, so that has to be avoided in the mentoring process So, in a mentoring process, organization may choose to do three, three ways of mentoring Leave the mentoring as an informal process, do not have a policy, which is written down,

leave it, let it be known, that those mangers, senior people with a wealth of experience who are so minded and would like to help Well, they may go ahead and kind of adopt some prodigies and give the wise council to them, so that they learn and grow But it is informal, in which case it works randomly and its impact on the individual and the organization will be a matter left to chance and will be largely unrecognized by the organization You may have had few managers, who were excellent mentors, but the organization does not really know, they retire and they go away, it is random So, many organizations, they follow another policy, call help mentoring, so it is not fully informal or random, but formal or semiformal, providing the environment where mentoring is regarded favourably, self-development is encouraged and it is acceptable to take time for mentoring activity So, which is important, that means, it has the sanction and the encouragement of the management So, in that sense, it is management supported and not totally random So, if you are a mentor and acting as a mentor to five or six other junior people, you can ask them to come away in company’s time and talk to them, council them It is not as if that itself is not allowed, it will not be seen, that they are wasting their time coming out of their departments for the mentoring sessions So, it has the management sanction Third way, that management organization scan, do this mentoring process is focused and development by which it means, it is a formal system, design a mentoring tailored to the achievement of the organization’s specific, that means, probably the HR department of that organization is given the role, that we would like to have mentoring programme in our organization So, please make a mentoring scheme, identify older experienced people and when youngsters come into the organization, you allot the youngsters to these wiser and older people, take stock of the mentoring, measure it, see that it is helping and so on So, formal system and this formal system, that is, this approach will harness the benefits of effective, informal mentoring within a formal and managed framework Is that clear? So, here are some of the reasons why organizations have mentoring programmes Induction is one reason, that is, when new people come in to help new recruits, trainees or graduates to settle into the organization, to settle in, to mould themselves, tune themselves with the organizational informal culture, to know the ropes of the organization Then, skills enhancement, to enable skills to be passed on in the workplace by experienced, highly competent staff to others who need to acquire specific skills Then, career development, to help staff in the planning, development and management of their careers and to help them become more resilient in times of change Resilient means what? Resilient is you do not crack up, you do not brake, change comes, turbulence comes, trauma comes, but you can weather the storm, that is resilience in times of change and more self-reliant in their careers and self-directed learners, that is self-motivated Then, affirmative action mentoring can be used to assist women and minority groups to redress the imbalance at the higher level in the organization Sometimes they are discriminated against, provide support and help to overcome barriers

that often block their progress You have heard of the glass ceiling glass ceiling that means, discrimination to minority groups, like women, particularly this refers to women, up to a level, say manager level and no more There is no written policy, but there is an informal barrier, that women cannot raise to the top level of the organization So, affirmative action, alright, is one of the ways, mentoring is one of the ways, alright You can organize this affirmative action and prevent this malice Leadership and management development, that is to encourage the development of competencies more easily gained through example, guided practice or experience than by education, training What does it mean? It means that business is very much an applied science and art If you have a mentor, that is friend, philosopher, guide; your boss also in a sense can, can be that, but usually, it is disassociated, the mentor is disassociated from the person who has your direct performance review, appraisal and rating, see So, if you have such a man, then you adopt him as an ideal He has made his mark in the organization, he obviously has certain style, he has played certain roles, he has certain skills, he enjoys competency, which he will tell you, he will guide you and that way, on the job learning become the powerful motivator for you for self-development, self-learning and the organization gains because in a sense this is very powerful than just education and training programmes They send you to, for management development, clear Education support, to bridge the gap between theory and practice Formal education or training is complimented by the knowledge and the hands-on experience of competent practitioners who are the mentors And then, organizational development and culture change, to share the values, the vision and the mission of the organization, to communicate and work on a one-to-one basis, to develop required changes Because the myths, rituals of the organization, the history, the older people, the mentors, they know about this and they tell their prodigies about it and bring them in culturally into the organization Customer service, to model desired behaviors, encourage the development of competencies, motivate for service quality and above all, to cultivate the right attitudes Staff retention, is one of the last benefits, that is, to prevent attrition of trained personnel who, if they are not fitted into the organization, may get demoralized, leave the organization When they have a mentor they feel they have an anchor, a anchor In times of trouble you can go to them, they will guide them, council them or other times, they will tell them how to develop, how to grow and so on So, mentoring benefits to the organization: increase in moral and motivation; better productivity; discovery of talent; development for leadership for future survival and prospective, that is, the top management team development; communication of values, goals and plans; demonstration of personal and professional standards by the mentor; achievement of excellent service; fostering of shared value and team working, shared value of the people of the organization, which forms the basis of the culture of the organization Enhancement of leadership and people management skills of managers; reenergizing plateaued managers, that means, managers who have kind of reached the end, what we call sometimes promoted to the level of incompetence, that means, you cannot progress further, sometimes mentoring helps to reenergize and progress further Increase in staff satisfaction and building a learning organization We talked about it a bit in the last lecture, that team working is one of the drivers for learning; organization mentoring also contributes towards that So, we end this lecture, alright Thank you very much