Description
Quality Circle is modern management concept designed to bring together all level of workforce in an organization for setting standards of excellence and achieving better results. Developing in post war Japan, quality circles was largely responsible for rebuilding and stabilizing the shattered economy of the country.
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PERFORMANCE EVALUATI ON OF QUALI TY CI RCLES I N
I NDI AN COMPANI ES
R. N. Rai*
ABSTRACT
Quality Circle is modern management concept designed to bring together all level of workforce in an
organization for setting standards of excellence and achieving better results. Developing in post war
J apan, quality circles was largely responsible for rebuilding and stabilizing the shattered economy of
the country. This concept has since gained wide acceptance. Quality circles are a positive and
humanistic approach to productive management. Quality circles which have been popularized by
J apanese firms are being used all over the world because of the benefits that accrue to the firm. A
quality circle involves participation from a small group of employees doing the same type of work.
They meet regularly to identify, analyze and solve the problems that arise during the course of their
work and their association with the organization. Now the market place is highly competitive and it
becoming tougher every minute.
Quality Circle concept has three major attributes - Participation Management, Human Resource
Development Technique, and Problem Solving Technique. It has also been included the study of the
different personalities of people involved in a quality circle and how does quality circles helps in
changing the behavior of the people. The circle encourages each people to develop the best of his
ability. It offers a cooperative group for the individual to belong to. It satisfies the requirement of self-
esteem of an en employee and satisfies his ego with well-earned recognition.
In this research study the author has tried to analyze the performance of quality circles in five Indian
companies as BHEL (Bharat Heavy Electricals Ltd.), SM Creative Electronics Limited (SMCEL),
Bharat Electronic Limited (BEL), BSNL (Bharat Sanchar Nigam Limited) and Amul (Anand Milk Union
Limited) have been considered for the study and data were collected through a questionnaire to
employees in these and asked them to fill up the questionnaire accurately as possible. Data have
been analysed and interpretation and suggestions have been presented in the preceding section.
This study is of the great significance and relevance because Quality Circles is a people – building
philosophy, providing self-motivation and happiness in improving environment without any
compulsion or monetary benefits. It represents a philosophy of managing people specially those at
the grass root level as well as a clearly defined mechanism and methodology for translating this
philosophy into practice and a required structure to make it a way of life. It is bound to succeed where
people are respected and are involved in decisions, concerning their work life, and in environments
where peoples’ capabilities are looked upon as assets to solve work-area problems. The underlying
premise is that productivity will increase for two reasons: because the person best able to decide the
most efficient way to do a job is the person who does it for a living and because employees who have
greater control over the product will be more committed and effective workers.
* Department of Business Management & Entrepreneurship, Dr. Ram Manohar Lohia Avadh University, Faizabad,
Uttar Pradesh.
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1. AN INTRODUCTION AND LITERATURE
REVIEW OF QUALITY CIRCLE PROGRESS
Quality Circles is a term used in
human resources management that refers
to the technique of motivating workers by
allowing them input into decisions
concerning the production process,
thereby increasing productivity and
profits. A quality circle is a participatory
management technique that enlists the
help of employees in solving problems
related to their own jobs. Joel E. Ross and
William C. Ross(1982) define a quality
circle as “a small group of employees doing
similar or related work who meet regularly
to identify, analyze, and solve product-
quality and production problems and to
improve general operations. The circle is a
relatively autonomous unit (ideally about
ten workers), usually led by a supervisor or
a senior worker and organized as a work
unit.” The basic idea of worker
participation was effectively used by many
people in America in 1940s and one of the
most famous users was Walt Disney. Peter
Drucker(1974), in his book Management,
has also reported group activities that took
place in Germany during 1980. The growth
of participatory and work innovative
programs such as quality circles,
participative management, and employee
involvement has taken place in America
since the early 1970s. Frank Squires
(1981), reviewed in Quality magazine, the
origin of statistical quality control
techniques that were achieved through
group participation. In 1925 in New Jersey
AT &T had just acquired Bell Laboratories,
Dr. Shewhart, Dr. Dodge, Dr. Roming &
others share the honor for developing
statistical quality control and the classic
work was done on this subject “The Control
of Quality of the Manufactured Products”
was appeared in 1931 by W.A. Shewhart.
In late 1950s, Sidney Rubenstein started a
program called Participative Management
system and basic was the same as of
Quality Circles. Carl Harshman (1982)
expressed his view that the United States
may experience the most significant
change in the work place since the
Industrial Revolution and the movement
may involve a transformation from the
traditional, bureaucratic style of
management to a more participatory
relationship. This new philosophy, known
as participative management, attempts to
improve the utilization of human resources
by involving individual workers in
decisions affecting their work. As described
above, quality circle is being one of the
employee participation methods, it implies
the development of skills, capabilities,
confidence and creativity of the people
through cumulative progress of education,
training and work experience and
participation.
Participative methods in the
workplace are one way to improve both
work environment for employees and
productivity and quality of the company
(Jacob Mankidy, 1989). A Quality Circle is
a Volunteer group composed of workers
who meet to talk about workplace
improvement, and make presentations to
management with their ideas, especially
relating to quality of output in order to
improve the performance of the
organization, and motivate and enrich the
work of employees. It also provides the
creation of facilitative condition and
environment of work, which creates and
sustains their motivation and commitment
towards work excellence. Howard J. Weiss
and Mark E. Gershon (1989) also describe
quality circles as “the best means today for
meeting the goal of designing quality into a
product.” Employees who participate in
quality circles usually receive training in
formal problem-solving methods such as,
brainstorming, Pareto analysis, and cause-
and-effect diagrams and then are
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encouraged to apply these methods to
either specific or general company
problems. Brainstorming is a group
creativity technique to generate a large
number of ideas for the solution to a
problem. People, and their brains, are the
most prestigious recourses and greatest
assets of an organization, because through
people all other resources are converted
into utilities. Productivity can not be
improved not at the expense of people, but
at the expense of wasted time, lost motion,
unnecessary work, and product of poor
quality. So the most valuable partner in
cutting waste is people on the production
floor who know their jobs better than any
one else. The involvements of people minds
as well as hands are the most important
segment of any production process.
Nobody in the world uses the full capacity
of people. There also many times when
people waste time and the point is that
everyone has great reserve of capabilities
and time. If a person perceives that
working harder is a threat to him, he works
less, thus using less of his brainpowers.
On the other hand, if a person sees
cooperatively can improve communication
and quality, cut waste, and also eventually
give more job satisfaction and enjoyment,
he works more effectively and use more of
his untapped brainpower. This is not just a
theory to many of us but it has been a
reality that has profited both the company
and its people. However, management of
“People Resources” has always been a
vexed problem over since the beginning of
organized human activities. A number of
managerial responses have been developed
to answer this question. The method was
first popularized in the late 1930s
proposed that groups could double their
creative output by using the method of
brainstorming (Osborn Alex Faickney,
1963). Although most commonly found in
manufacturing environments, quality
circles are applicable to a wide variety of
business situations and problems and
these are based on two ideas:
(i) First is that employees can often make
better suggestions for improving work
processes than management , and
(ii) Second those employees are motivated
by their participation in making such
improvements.
After World War II, when many
industries in Japan had been destroyed,
there was no production as such, people
were trying to survive the calamity. At that
it was the need and requirement of mass
production with much faster rate. Thus the
quality circles have been emerged as a
mechanism to develop and utilize the
tremendous potential of people for
improvement in product quality and
productivity (Roger W. Berger and David L.
Shores, 1986). Unfortunately,
communications and closeness of
management and workers were lost, the
quality of goods built was known to be
shabby, the product seldom lasted for
more than a year or so. The people were not
trained to build quality and the nation was
without guidance. At that time Japanese
Government asked US Government to send
someone to teach better quality control
methods and Dr. Edward Deming, a
statistician for the government was sent to
train management people in Japan during
1948. The end of World War II compelled
Japan to change its focus from becoming a
military power to becoming an economic
one. Despite Japan’s ability to compete on
price, its consumer goods manufacturers
suffered from a long-established
reputation of poor quality. The first edition
of Juran’s Quality Control Handbook in
1951 attracted the attention of the JUSE
(Japanese Union of Scientists and
Engineers) which invited Juran to Japan in
1952. Juran arrived in Japan in 1954 he
met with ten manufacturing companies,
notably Showa Denko, Nippon Kogaku,
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Noritake, and Takeda Pharmaceutical
Company and he also delivered many
lectured at Hakone, Waseda University,
Osaka, and Koysan. Dr. Juran another
consultant from US and Dr. Deming gave
lecture series on SQC for JUSE (Japanese
Union of Scientists and Engineers). This is
how the movement in Japan was
coordinated by JUSE and the Quality
Circles were first developed, formalized,
and established in Japan in 1962, and
Karou Ishikawa has been credited with
their creation.
The emphasis of Japanese quality
circles was on preventing defects from
occurring rather than inspecting products
for defects following a manufacturing
process. Japanese quality circles also
attempted to minimize the scrap and
downtime that resulted from part and
product defects. In the United States, the
quality circle movement evolved to
encompass the broader goals of cost
reduction, productivity improvement,
employee involvement, and problem-
solving activities. The Japanese firms then
felt that QCs would provide structural
opportunities for employees to become
actively involved in an interpersonal
process of joint problem solving. Their
success I Japan is shown by the strong
presence of over a million QCs, compared
to about 1,00,000 in the U.S.A. and where
the rate of success has not been consistent
and the results of such programs are
reported to be mixed . it has been also
found that it is the training of participants,
apart from management support, that is
crucial to the QC process. David Hutchins
(1995) has defined quality circle as “A
small group of between three and twelve
people who do the same or similar work,
voluntarily meeting together regularly for
about an hour per week in paid time,
usually under the leadership of of their own
supervisor, and trained to identify, analyse
and solve of the problems in their work,
presenting solutions to the management,
and where possible, implementing the
solutions themselves.”
The above definition throws up a few
principles regarding quality circles:
1. Voluntaries : It is a voluntary process
and no one is forced to join it. The
management only prepares the
necessary ground-work by making the
organization ready as well as providing
awareness of the process to all
concerned. The members make their
own decisions to join or not join the
circles.
2. Regularly : The member must meet on a
regular basis. They must adhere to the
mutually agreed decisions about the
frequency of the meetings. Then only
can really understand the seriousness
of the quality circle.
3. Four Dimensions : Quality Circle is for
dimensional process involving
(i) Problem Identification (What are
the problems?).
(ii) Problem Selection ( Selection of a
problem).
(iii) Problem Analysis (What are the
factors can be involved and what
can be done?).
(iv) Problem Solution (These are the
possible solution of the problem).
This enables people who are involved in
quality circles to have a positive line of
thinking. This system certainly takes
the workers away from ‘complaints’ and
‘pointing to some else’ syndrome and
brings them to a ‘what can we do about
it?’ frame of mind.
4. Self-improvement : Quality Circles
members come from the same work
area. The problem identified relates to
their area of work. They would think on
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what to improve in their area of work
rather than waiting for someone else to
bring improvements.
5. Work-life Improvement : Workers do not
become affective members of an
organization unless they are able to use
some there discretion & freedom at
there work place also. Quality circle
provides a more humanistic approach
to the work relation and people are
treated in human beings who are
engaged in thinking and activities
simultaneously.
6. Synergy : According to principle of
synergy, the sum total of the elements
is greater than the mere arithmetical
addition of the element. synergy of the
individual can be unleashed by the
group thinking process and quality
circle performs this function
7. Sincerity of Purpose : Quality circle
assures personal that the management
is genuinely interested in the
development of its people and in their
contribution through their thinking
power. These circle help re-establish
the sincerity of the management
towards employees.
8. General Application : This concept is not
area or organization specific. it is a
general concept that can be applied in
many situation.
9. Simplicity : The entire process is made
simple enough to be understandable by
any ordinary workman. Complicated
operations will only being frustrations
and failure to the members of the
circle’s operations.
10.Social Responsibility : Quality Circle
provides opportunities and positive
orientations of the individual and hence
it also tends to satisfy social
responsibility in the long term.
Hence quality circle can not be
considered as “just another management
technique” it has deeper undertones and
potentials for both the employees and
organization, if serious, can benefit from it
immensely.
2. BASIC NOMENCLATURES AND GOALS
OF QUALITY CIRCLES:
The concept of Quality Circle is
primarily based upon recognition of the
value of the worker as a human being, as
someone who willingly activists on his job
with his wisdom, intelligence, experience,
Major Attributes of
Quality Circle
Form of Participation
Management
As a Human Resource
Development Technique
As a Problem
Solving Technique
Figure-I: Three Major Attributes of Quality Circle Concept
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attitude and feelings. It is based upon the
human resource management considered
as one of the key factors in the
improvement of product quality &
productivity. Quality Circle concept has
three major attributes presented in
Figure I. In order to achieve success in the
Quality Circle program it is extremely to lay
down objectives or goals. There are a
number of goals that can be accomplished
in Quality Circle program and outlines by
the Figure II.
13. Get more people
involvement and
interested in their work
12. Link of all levels of management
and workers together to achieve
success
11. Team building
10. Problem solving opportunities
9. Safety improvement
8. Improvement in productivity
7. Cost Reduction
6. Job Satisfaction
5.Waste Reduction
4. Improvement in communication
and attitudes
3. Improvement in Quality
2. Mutual Development
1. Self Development
Quality
Circle
Goals
14. Improve participation
15. Reduce absenteeism
and grievances
Figure-II: Quality Circle Goals
The following Figure- III describes the different nomenclature used by various people/
organizations for Quality Circles in USA and India (Sharma D.D., 2001).
Different Nomenclatures of Quality Circle in
USA and India
Human Resource Circles,
Magic Circles, Mac Circles,
Employees Circles,
The Power Minded Circles
Relay Express, Sky-Rocket,
Fault Finders, The Quality Seekers,
Dover’s Best,
MASH(Motivated Awareness Stops
Headaches)
QUIP(Quality United in Progress),
and Error Hijackers
Shriram Fibres Chennai - Employees Participation Circles
TELCO and Eicher -Small Group Activities
(SAGs)
Some Indian Organisations- Productivity Circles
Some PSU- Shop Improvement Teams
JK Synthetics -Thinking at Work Circles
BHEL -Quality Circles & now QCFI (Quality Circle
Forum of India) and QC1, QC2, QC3 etc.
Air India -Jet Quality Circles, 7Aces, Safe Air Quality Circles,
Quality Brothers, Hydro Quality Circles
Century Rayon -Sunray & Vikas
Dharamsi Morarji chemicals Ltd. as Pragati, Smrudhi
JK Paper Mills - Ganga, Bharati etc.
Vallavar-Madaras Motors at Singampunari
USA India
Figure- III : Different Nomenclatures of Quality Circles
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Peter Drucker, in his book on
Management, has described the Japanese
decision making is very systematic and
standardized approach to decision making
process. However Drucker, points out the
following key advantages in this method:
1. The focus is on deciding what the
decision is all about.
2. The Japanese bring about dissenting
opinion. There is no discussion on
answer until there is a consensus.
Many approaches to a problem are
explored.
3. The focus is on alternatives rather than
on the “right solution”.
4. It eliminates selling a decision. It builds
effective execution into the decision
making process.
Two key features of the Japanese
management system (participation and
decision making from the bottom up) are
also predominated in an Quality Circles
operations. Quality circles, which are
known as “small group” activities in Japan,
are generally an inherent part of the
company and there is no separate
organization that exists for this work. Most
of the work is shared by a number of
different departments and committees are
formed to carry out the decisions that are
approved at different levels.
3. A KEY NOTE ON QUALITY CIRCLE
MODEL IN JAPAN AND USA
Before discussing about the Quality
Circles models developed in Japan and
America, let us first briefly demonstrate the
two management styles, Japanese and
Western, which are presented by Figure-IV
(Ingle Sud 1988). The key difference in
Japanese and American model is the role
that the facilitator plays in promoting the
Quality Circle program and training
requirements needed for its implantation
described by Figure-V. This figure explains
the commitment and participation flows
right from the top down to all levels in the
company and there are company-wide
quality circles committees and plant-wide
quality circles promotional committees.
The Facilitator’s role in American industry
is critical. Facilitators, mini-coordinators,
or program chairmen must work hard to
convince both management and workers of
the long range benefits of Quality Circles.
People resist change and these changes in
style poses many problems and erect many
hurdles.
PARTICIPATIVE
MANAGEMENT
COMMITMENT TO QUALITY
QUALITY CIRCLES
JAPANSES MANAGEMENT
PARTICIPATIVE MANAGEMENT
TAYLORISM
QUALITY CIRCLES
NEW WESTERN MANAGEMENT
JAPAN
WESTERN WORLD
Versus
Figure-IV: Japanese versus Western Management Styles
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company needs to understand the types of
people that are employed and the try
implement motivational programs that will
fulfill the company’s need as well as
society’s. There are a number of
motivational theories, but some major
theories that have a profound influence on
Quality Circles activities. Hersey Paul and
Bancard Kennet (1977) have discussed
thoroughly various types of motivational
theories. The relationship between
motives, goals and activity has been
described in Figure-VI . This figure explains
that the strongest motive produces
behavior that is either goal directed or goal
activity. With broad goal such as food, it
4. MOTIVATIONAL ASPECT OF QUALITY
CIRCLES
It is very much true and well known
fact that the people differ not only in their
ability to do the work but also in will to do
the work. The motivation of people depends
on strength of their motives. Motives can
be needs, wants, drives, or impulses within
individuals. Most people work to satisfy
individual, family and also to meet group
and social needs. Men and women are
social animals and like to work with each
other in the society. However, keen
competition and pressure makes people
work harder. Motivational needs vary from
person to person, and company to
Company-wide Quality
Circle Committee
(President/V.P.)
Q.C.
Leaders
(Foreman)
Quality Circle promotional
Committee
(Plant-Wide)
Care-Takers
meeting
Quality Circles
Members
Advisors
Quality Circles
Leaders
Operating Committee
or
Steering Committee
Sub-Circles
Trainer
s
Coordinator
or
Facilitator
Quality Circle
Members
Mini-Circles
Quality Circles
Other
Department
QUALITY CIRCLE MODELS
IN
J APAN U.S.A.
Figure –V: Quality Circle Models for Japan and USA
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Motive
(Hunger)
Goal
(Food)
Behavior
Goal Activity
(Eating Food)
Goal-Directed Activity
(Preparing Food)
Figure-VI: The relationship between motives, goals and activity
should be recognized that the type of food
that satisfies the hunger varies from
situation to situation. A similar example
could be given for an intangible goal. If
individuals have a need for recognition-a
need to be viewed as contributing,
producing people-praise is one incentive
that will help satisfy this need. In work
situations, if the employee’s need for
recognition is strong enough, being praised
by superior may be an incentive to
influence them to continue to do good
work.
Quality circle concept does have a
substantial degree support from behavioral
science discipline. The concept may be
relatively new, but the idea isn’t. The work
of several scientists spread over many
years has cumulatively contributed to this
idea and hence it enjoys a wide variety of
support. Most of their activities take place
in groups, and it is essential that these
groups be motivated properly to reach high
achievements. A number of needs
discussed in motivation theories given by
following behavioral scientists:
Robert Katz skills : for effective
management in organizations, one
needs to have three inter-related but
distinct skills- namely conceptual, HR
Management and Technical Skill.
F.W Taylor’s Scientific Management
Theory : Taylor considers an
organization to be an economic unit
and management to be an economic
process and people are driven by
hunger, security and profitability. If
these needs are taken care of, the
people can work in unison with
machines.
Elton Mayo’s Hawthrone Studies : This
theory reveals that for given certain
basic condition job performance, can be
influenced by external factors such as
work-group satisfaction and
satisfaction from socialization. He
explains that in a group, person
develops certain norms and contains to
perform at the level even if they are not
in conductive conditions.
Kurt Lewin’s Group Dynamics : New
studies began considering man as
member of the group and not as an
individual.
Abraham Maslow’s Need Hierarchy
Theory : The five levels need satisfaction
are Physiological, Safety, Social, Ego,
Autonomy, Self-fulfillment needs.
Douglas Mc Gregor Theory X and Theory
Y : Traditional theory of what people
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and what must be done to manage
them is Theory X where as Mc Gregor
contended that Theory X assumption
are outdated and that employee would
contribute for more organization if an
opposite set of assumptions Theory Y
are to be the guiding force behind
managerial leadership.
Frederick Herzberg Two-factor theory :
This theory was designed to test the
concept that management has two-sets
of needs. His need as an animal to avoid
pain and his need as human to grow
physiologically. He has developed
hygiene or dissatisfiers or maintenance
factors -company polices and
administration, supervision, working
conditions, interpersonal relations,
wages, status, security that are
responsible for negative feelings and he
also determines five factors that stand
out as strong determinants of job
satisfaction and these are called
motivational factors or satisfiers
factors- achievement, recognition,
advancement, the work itself, the
possibility of personal growth and
responsibility.
Chris Argyris Theory : According to him
human nature is at least partially a
function of maturation and immature
people are passive, dependent, have
erratic shallow interest, have short time
perspectives, are in a subordinate
position, and lack awareness itself. He
explains the characteristics of mature
people are increased activity,
independence, deeper and stronger
interest, long-time perspective, equal or
subordinate positions, and awareness
and control of self..
Rensis Linkert Theory : He has
developed four different systems of
management. In system one,
Quality
Circles
Job satisfaction
Mayo
Argyris
McGregor
Likert
Other
Behavioral
Needs
Maslow
Improvement
of Society
Use of
Statistics
Herzberg
Group
Problem
Solving
Kurt Lewin
Robert
Katz
F.W Taylor’s
Figure- VII: A Combined Theory Comprehensive Model of
Quality Circles
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management has no confidence and
trust in the subordinates and
subordinates are not involved in any
decision making. In system two,
management has some confidence and
trust in the subordinates, but still most
of the decisions are made at the top and
few by subordinates and subordinates
are not involved in any decision
making. In system three, the
management has substantial but not
total confidence and trust in
subordinate. Broad and general
decisions are made by the top but
specific decisions are permitted to be
taken at lower levels. In system four,
the management has complete
confidence and trust in subordinates
and workers participation is
encouraged.
All the above theories are combined in
Quality Circles philosophy and is shown in
Figure VII, but the job satisfaction and
teamwork are the two main driving forces
behind all motivational activities.
5. PERFORMANCE EVALUATION
METHODOLOGY FOR QUALITY CIRCLES
IN INDIA
In India many companies, banks,
insurance corporations and government
departments have implemented quality
circles concepts. Many Indian companies
initially adopted quality circles because it
made them look “modern”. Companies like
BHEL, Jyoti, HAL, Kirloskars, Allwyns,
Shri Ram Fibers, TELCO, TISCO, BEL, Jai
Engineering have already operationlised
quality circles. All these companies aim at
solving the quality problems with quality
circles However they have also attempted
the use of quality circles in other areas as
cost reduction, safety, purchase of
materials, design, general improvement etc
(Sharma D.D.2001). Five Indian
companies BHEL (Bharat Heavy Electricals
Limited), SM Creative Electronics Limited(
SMCEL), Bharat Electronic Limited (BEL),
BSNL (Bharat Sanchar Nigam Limited) and
Amul(Anand Milk Union Limited) have
been considered for the study and data
were collected through a questionnaire to
employees in these and asked them to fill
up the questionnaire accurately as
possible. Since it was the request of
researcher to the respondent that their
answers may generate the opportunity for
the improvement of quality circle working
and overall performance of the companies
and being this as an motivational appeal
the employees responded very honestly
with possible accuracy and fairness.
5.1. Techniques used for evaluation of quality
circles:
The quantitative measurement has
been measured in terms of saving-cost
ratio, a ratio defined to actually measure
the impact that the QC has had on the
company or branch as a whole. This is the
ratio in between cost of saving of the
company because of QC program
implemented and their contribution to the
profits as opposed to the cost of running of
quality circle. Unless they can demonstrate
that they are contributing more to the
profits than to the cost, they stand a good
chance of being axed. Evaluation
parameters are present to see if the
objective of the quality circles is being
fulfilled or not.
Cost of saving of the company because of the QC program
Cost of running of quality circle program
Saving-cost Rat io =
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C O M P A N I E S
Sl.
No
Performance
Indictors BHEL SMCEL BEL BSNL AMUL
1.
Establishment Year 1950 1991 1954 2000 1964
2.
Starting number of QC 5 5 3 01 05
3
Number of active QC 1700 15 25 02 02
4.
Average member size in QC 10 4 6-7 35 10
5.
Percentage of employees
who attend the introductory
presentation actually end up
joining the QC programme
80% 70% 20% 10%
NA
6.
Effect on the behavior of the
employees in term of
absenteeism
Decreased Decreased Decreased Decreased No change
7
Average proposal made of
QC
15 10 8 8 10
8.
Percentage of Proposal put
forward
70% 60%
25% 50% 20%
9.
Saving-cost ratio Between
5:1 to 10:1
Between
5:1 to 10:1
Between
2:1 to 10:1
Between
5:1 to 10:1
No idea
10
Effect of QC Very
effective
Moderately
effective
Moderately
effective
Moderately
effective
Not much
effective
This saving-cost ratio provides the
following informations:
(i) The indication of the more profitable is
the running of the quality circles in a
company, if the saving-cost ratio is
high.
(ii) Sign of good performance of QC, if the
ratio is above 2:1.
(iii) Very good performance of QC of the
company, if the A ratio more than 5:1.
(iv) Best working performance for the
Quality Circle and company if the ratio
is above 10:1.
The introduction of an employee to a
quality circle by the company plays the
initial crucial factor in the development of
quality circles in the organistions and their
proper sustenance. If the employee is
properly introduced to the concept of a QC,
one can expect that he will be the part of
the QC for a longer time, so the induction
plays a major role in reducing the employee
turnover.
6. ANALYSIS OF PERFORMANCE
INDICATORS OF QUALITY CIRCLES FOR
SELECTED COMPANIES
Five Indian companies BHEL (Bharat
Heavy Electricals Limited), SM Creative
Electronics Limited( SMCEL), Bharat
Electronic Limited (BEL), BSNL (Bharat
Sanchar Nigam Limited) and Amul(Anand
Milk Union Limited) have been selected for
the appraisal of their quality circles
performances on the basis of data collected
through questionnaires and process of
evaluation adopted as described above. A
conclusive summary is being presented in
the following section of their respective
company wise. Initially, QC’s were adopted
by Indian company just look “modern” but
after a while they become more of liability
than an asset. if not properly maintain and
Table-I: Summarised results of various performance indicators
Performance Evaluation of Quality Circles in Indian Companies 59
Vol. V, No. 1; June, 2009
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used , then tend to deteriorate a poor
acceptance rate 20% by top , brass also
indicates lack of interest on their parts, so
the management plays crucial roles
development and sustains a QC in a
company. A summarized description of
important performance indicators are also
provided with their qualitative and
quantitative measurement values in the
following Table-I and the figures of the
tables are self explanatory about the
Quality Circles performance of the Indian
companies included for the study.
6.1. Quality Circles at BHEL(Bharat Heavy
Electricals Limited):
BHEL is the largest engineering and
manufacturing enterprise in India in the
energy-related/infrastructure sector.
BHEL was founded in 1950s. Its
operations are organised around three
business sectors: Power, Industry -
including Transmission, Transportation,
Telecommunication & Renewable Energy -
and Overseas Business. Today, BHEL has
a wide-spread network comprising 14
manufacturing divisions, 8 service centres,
4 power sector regional centres, 18
regional offices, and a large number of
project sites spread all over India and
abroad. BHEL is one of the nine large
Public Sector Undertakings known as
Navratnas or Nine J ewels of Indian
companies. BHEL offers over 180 products
and provides systems and services to meet
the needs of core sectors like: power,
transmission, industry, transportation, oil
& gas, non-conventional energy sources
and telecommunication. BHEL is very rich
in its history of and perhaps is the best
example of an Indian organization in
harnessing and utilizing human potential
as actually implementing the concept of
worker’s participation in management in
its manufacturing plants throughout the
country. Ramchandrapuram, Hyderabad
unit of BHEL was the initiator of
incorporating quality circle to the Indian
corporate sector and also taken lead of this
movement in India. The chief architect of
this movement was started in year 1980 by
Mr. S. R. Udpa, the General Manager, with
5 quality circles in that Hyderabad unit of
BHEL.
This concept was first sold to the
company’s top level executives, but later it
was felt that this movement will not gain
momentum without the support of middle
level management. Middle level
management was known for using devious
means to scuttle quality circles because it
did not like these circles coming up with
problems about which it had earlier told
the top management that they simply did
not exist, or with solutions, which it had
always impossible. So, the middle
managers were also exposed to the new
philosophy and were made to realize that
the could ‘make or mar’ the movement.
Meetings were also organized to convince
workers of the sincerity of purpose and
procedures for functioning were outlined
and remedies were suggested for various
pitfalls. While initially in Japan, the focus
of Quality Circles was on improving
quality, in BHEL, the managers realized
that such small group activities can also
results in:
(a) Improving human relations
(b) Promoting participative culture
(c) Improving productivity
(d) Promoting jog interest
(e) Inspiring more effective team work
(f) Improving communication
(g) Promoting leadership development
(h) Catalysing attitudinal change
The concept has now become very
popular in all the units of BHEL and by the
year 1998 there were over 1600 quality
circles. Today, BHEL has more than 1700
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quality circles in all BHEL plants involving
about 17000 workers who have tackled
over 600 problems. Over two decades, the
number of Quality Circles in BHEL has
grown to members account for 27.4 per
cent of the company’s workforce.
In 2005, BHEL notched up its highest-
over turnover of Rs.105.20 billions,
crossing Rs. 100 millions mark for the first
time, compared to Rs.88.62 billions of the
pervious years. The turnover growth of over
21% has been achieved on top of 16%
achieved in 2003-2004. Further, this is
highest growth rate archived in last two
decades. According to the reference of
quality circle programmes of BHEL
“Sustained performance by the company
became possible as a result of strategic
management with a blend of appropriate
measures including improvements in
operational efficiencies, benchmarking
against international standards, prudent
financial management, upgrading
manufacturing facilities, and dynamic
HRM policies”.
According to Public Relation Officer of
Hardwar BHEL plant, Quality Circles have
contributed a saving of Rs.20 millions to
the organization. BHEL Trichurapalli an
ISO 9001 company also constituted 60 odd
inter-functional task-force to solve the
problems, each with time bound plans in
the early nineties. Besides this, there were
award for zero-defect performance and
housekeeping. These tasks forces saved
40% time for executing orders and better
control resulted in 25% reduction in
inventories, improved manufacturing
practices as reduction in complaints by
50% and as much as 20% in energy cost
was achieved by effective management of
finance. But inspite of all these, in view of
the employees of this organization the
Quality Circles have developed the sense of
achievement, a sense of responsibility
towards improving the quality of
performance, by establishing the
consistent goals with the company larger
objectives. According to employees
opinions, this provides opportunity for self
development in employees, bring about a
participative culture in work areas and
feeling of full involvement towards
enhancing the total quality and
productivity in company. Today, employees
of this company feel that productivity is
only the way of their life. Delivering the
keynote address on the convention
occasion, the Executive Director of BHEL,
Tiruchi Complex, Mr R.N. Misra, said that
the Rs 800 billions order book of BHEL, to
which a new order gets added every week,
reflects the high confidence that customers
repose in the company. In the open
economy, BHEL could ally misgivings by
prevailing over multi-national companies
in wresting projects and subsequently
turning out to be the lone bidder in
tenders. The BHEL is now into the new
phenomenon of negotiating rates. The
company is living up to the nation’s faith,
Mr Misra said, emphasizing that power
projects should be commissioned in time to
meet customer expectations.
The performance of the company
shown upward trend since the inception of
quality circles and saving-cost ratio was
between 5:1 to 10:1, which shows very
good performance of QC of the company.
Some groups of the Company also awarded
financial incentives for putting forward
very excellent cost-saving proposals. QCs
decreased the number of absentees in the
last five years and employee turnover rate
is very good. Hyderabad BHEL plant was
adjudged the ‘Best Organisation in
promoting Quality Circles’, for the second
consecutive year by QCFI Chapter
Convention. In addition among Public and
Private sector companies, the highest
number (eight) of Prime Minister’s Shram
Awards has been won by 14 BHEL
Performance Evaluation of Quality Circles in Indian Companies 61
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employees. This includes the solitary
Shram Bhushan awarded in year 2005,
which was also the highest award in the
series declared that year.
6.2. Quality Circles at SM Creative Electronics
Limited (SMCEL)
S M Creative Electronics Ltd (SMCEL),
an ISO (9001:2000) certified company,
with its head quarters at Gurgaon
(Haryana), was established in December,
1991 and the Company is currently
engaged in the following major activities:
i) Design, manufacture and marketing of
all important constituents of DC Power
Plants used in telecom installations,
such as–Switch Mode Power Supplies
(SMPS), Telecom DC Power System,
Battery Chargers, Inverters, DC-DC
Converters, Auto-Phase Selectors,
Integrated Power Supply and Site
Infrastructure Management Systems
(SIMS) etc. All these activities, come
under the purview of Telecom Power
Division (TPD).
ii) Strategic Electronic Division (SED) is
another important division which,
along with its Power Technology Group
(PTG) is specially organised to cater to
strategic needs, in terms of a whole
range of electronic components and
complex turnkey Power Solutions, for
organisation like Defense, Satellite
applications both for ground and space
segment, Nuclear Power Plants,
Traction, Avionics and Telecom
industry.
iii) Telecom & Networking Division has
been recently invigorator by
appointment of a highly qualified and
experienced Head of the Division. The
division is organised to support varying
needs of Telecom Operator and
Enterprises through supply,
installation and maintenance of
Telecom and IT systems. It excels in
providing innovative solutions making
use of latest technology. Another
important role of this division is to
supply and execute Lighting and
Earthing projects. Supply of Timing &
frequency standards is another role
that the division is equipped to
undertake. Elements of Telecom
infrastructure, Such as B-TS shelters,
Outdoor Cabinets, precision Air
conditioner etc are also within the
scope of this division.
iv) SMCEL has an all India presence
through its branch offices and service
cells at all important cities, it is equally
well represented abroad with
subsidiaries/ brunches in Singapore,
Srilanka, Bangladesh, Afghanistan,
Africa, France etc. Export to some of
these countries constitutes a
significant segment of company’s
turnover.
v) The company has a strong R&D
department recognized by Govt. of
India. The R&D team is composed of
highly qualified and experienced
Engineers and supported by the latest
design and development tools. The
factory at Baddi is equipped a whole
range of production machinery and test
equipments to maintain the highest
standards of product quality. An after-
sales service department (CSD) is
equipped and staffed to render prompt
support to customers spread all over
India and abroad. First the quality and
then the prompt and effective after-
sales support is what hinds SMCEL
and a wide spectrum of its satisfied
customers.
Not only does the company
concentrate at caring for its customers, it
is equally concerned in ensuring a highly
conducive work environment for its
workforce promotion and retention of
talent is a prime concern of the
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management. The number of Quality
Circles has tripled in the last six years of
the inception of the programme. The
average number of members is quite low,
but it has a positive effect on the saving-to-
cost ratio of the QC as less numbers means
lesser maintenance charges. As shown in
Table-I, the saving-cost ratio is between
5:1 and 10:1, which indicates very good
performance of this company. The
percentage of employees who attend the
introductory psentation The percentage of
employees who attend the introductory
presentation actually end up joining the
QC programme actually end up joining the
QC programme is 70%. The percentage
accepted proposals is 60% reflects upon
the quality of output of the circles, which is
not that much upto the mark. But this
could have also been due to the unrealistic
expectation of the management from the
QC. As mentioned by the respondent, this
was one of the main problems of QC in this
company.
6.3. Quality Circles at Bharat Electronic
Limited (BEL)
Bharat Electronic Limited (BEL) was
established at Bangalore, India, by the
Government of India under the ministry of
Defence in the year 1954 to meet the
specialized electronic needs of the Indian
Defense Services. Over the years, it has
grown into a multi-product, multi-
technology, multi-unit company serving
the needs of customers in diverse fields in
India and abroad. BEL offers products and
services in a wide spectrum of technology
like Radars, Military Communications,
Naval Systems, Electronic Warfare
Systems, Telecommunications, Sound and
Vision Broadcasting, Opto-Electronics,
Tank Electronics, Solar Photovoltaic
Systems, Embedded Software and
Electronic Components. With its expertise
developed over the years, the company also
provides turnkey systems solutions.
Defence continues to be BEL’s prime focus
but the Company has also diversified into
civilian areas. Some of the successful
civilian products include the Electronic
Voting Machines, Solar Powered LED-
Based Traffic Signal Lights, Simputers and
Set Top Boxes. Bharat Electronics Limited
has nine units located at Bangalore(
Corporate Head Office), Panchkula,
Kotdwara, Ghaziabad, Pune, Hyderabad,
Taloja, Machlipattam and Chennai and in
addition to these manufacturing units,
four regional offices in Delhi, Mumbai,
Vishakhapatnam and Kolkata and three
laisoning offices in agra, New York and
Sigapore. It is engaged in the design
development and manufacturing of
sophisticated sate-of-the-art electronic
equipments/components for the use of
defense services, Para-military
organizations and other governmental
users like All India Radio, Doordarashan,
Department of Telecommunications, Police
Wireless, Metrological Department etc.
The company introduced Quality
Control Circles (QCCs) at the corporate
level in a significant way since 1981
(Monappa Arun, 1990). Before introducing
QCCs, the reasons for the failure of the
Zero Defect (ZD) movement initiated in the
Bangalore unit were carefully analysed and
the process pitfalls were identified. Around
3,000 employees were soon involved in
500QCCs with each QCC having
membership ranging from three to twelve.
Grievance procedures were introduced
through which individuals themselves
could take up their grievances to their
respective section/department heads and,
if these were not resolved, the
representatives of the trade unions could
take up the matter with the concerned
Divisional Heads. Trade unions were
advised that this would enable them to
concentrate on larger issues. Even if they
wished to take up matters relating to the
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shop floor, they could do so with the
Divisional Heads without affecting
production activities on the shop floor. The
general grievance regarding the canteen
was taken care of with the provision of new
equipment and better dining halls. The
Annual New Year gifts were given on time
without the usual delay. The procedure for
payment of festival advance was
streamlined and payments made in time.
The management constituted the following
bipartite committees (both statutory and
non-statutory) where representatives
nominated by management and those
elected by the employees were members:
(1) Works Committee
(2) Canteen Management Committee
(3) Labour Welfare Fund Committee
(4) Death Relief Fund Committee
BEL has gained the following
achievements and awards :
Conferred with Navratna status on
June 22, 2007.
BEL was ranked 58th among the top
100 defence companies worldwide for
the year 2006 by Defence News journal.
Prime Minister’s Shram award for 4
employees of BEL for the year 2005.
SODET (Society for Defence
Technologists) Gold Award for
Innovation and SODET Silver Award for
Technology Development for two BEL
engineers.
IETE award for Performance Excellence
in the development of Software.
Six Sigma team from Bangalore stood
first at the 4th CII National Convention
on Six Sigma.
PV SEC Award for Applications by Solar
Energy Society of India (SESI) in
recognition of BEL’s contribution in
promoting the use of solar energy in the
country.
Having been on the path of growth
over the last 10 years, BEL is in the process
of consolidation so as to take off on the
path of intensive and integrative growth,
aiming at a turnover of US $ 2 to 2.5 billion
by the year 2011-12. With a strong focus
on R&D, strategic tie-ups with its partners
to enhance business, benchmarking
through adoption of CII-EXIM Bank
Business Excellence Model to gear up for
competition and continuously enhancing
its infrastructure through upgradation and
modernisation, BEL plans to stay ahead.
The data collected in the survey of
Ghaziabad Unit of BEL. The analysis
shows that in last three years quality
circles has increased from 15 to 25, which
is a good indication quality movement. The
employees participation average as
compared to SMCEL is good. Numbers of
proposals accepted were quite less around
25% inspite of very supportive
management and this reflects on the
output of the QC not being upto mark. But
since saving-cost ratio is also (between 2:1
and 5:1), the only reason may be that all
the accepted proposals had a great impact
on the savings of the organization.
6.4. Quality Circles at BSNL (Bharat Sanchar
Nigam Limited)
BSNL needs no instruction- formed in
October, 2000 from the erstwhile DOT, it is
world’s seventh largest Telecommunication
Communication providing comprehensive
range of telecom services in India. Within a
span of five years it has become one of the
largest public sector unit in India. BSNL
has installed Quality Telecom Network in
the country and now focusing on
improving it, expanding the network,
introducing new telecom services with ICT
application in villages and winning
customer’s confidence. BSNL is the only
service provider, making focused efforts
and planned initiatives to bridge the Rural-
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Urban Digital Divide ICT sector. BSNL is
numero-uno operator of India in all
services in its license area. This company
offers vide ranging & most transparent
tariff schemes designed to suite every
customer.
In BSNL, a new trend was seen in
quality circle programme – lesser number
of circles with same number of total
members. The branch has only two circles,
with an average of around 35 members
each. Also, a circular calling for volunteers
was good enough to generate interest
among the employees as many participated
in the programme. The absenteeism and
grievances, though reduced, were not fully
attributed to the programme perhaps due
to fact that the programme was not
properly supported by the management as
mentioned in one of the problem faced. The
turnover-rate of employees was also
attributed to the fact that a BSNL job was
more secure and hence, people were not
that inclined to leave the job that easily as
in case of other private-sector companies.
The QC drop-out rate was attributed to
transfer and promotions, which can not be
avoided. As in the case of BSNL the saving-
cost ratio was in between 5:1 to 10:1which
is high inspite of less number of proposals
being accepted and also higher number of
employees per circle. But the number of
circles was also less and so it can be
testified that the suggestions that were
accepted very effective and caused
significant cost reduction.
6.5. Quality Circles at Amul (Anand Milk Union
Limited)
Amul (Anand Milk Union Limited) was
formed in 1964, is a dairy cooperative
movement in India. It is a brand name
managed by apex cooperative organization,
Gujarat Cooperative Milk Marketing
Federation Ltg., (GCMMF), which today
jointly owned by 2.41 millions milk
producers in Gujarat. It is based in Anand
town in Gujarat and has been a sterling
example of a cooperative organizations
success in the long term. The Amul pattern
has established itself as a uniquely
appropriate model for rural development.
Amul has spurred the White Revolution of
India, which has made India the largest
producer of milk and milk products in the
world. It is the world’s biggest vegetarian
cheese brand, and this credit goes to Mr.
kurien, who spearheaded the Green
Revolution in India. AMUL is evident event
from the performance of Quality Circle
program .the number Quality Circles has
been decreasing by the years and inspite of
good number of employees being involved
in the program the QC has not been
effective at all the entire blame has been
put on the management, which lacked
proper communication and middle
management support. The response was
cold and the management never bothered
about the program.
7. CONCLUSIONS AND RECOMMENDATIONS
The main objective of the study was to
find out how the behaviour of a person can
affect the performance of QC in India. The
study was based on some questions on this
aspect and an attempt has been
incorporated to analyze the effect that the
QC has had on behaviour vise-versa. It was
found that quality circles have had a
significant impact on the reduction in the
absenteeism and grievances but have a
minimal impact on the reduction of
turnover-rate of the employees. This
because of the fact that the percentage of
employees involved in the programme were
very less in number. This gives no relation
between the turnover-rate and the effect
that the quality circles have had on them.
The researcher also asked the
respondents to rate the problem faced with
Quality Circles programme in the company
Performance Evaluation of Quality Circles in Indian Companies 65
Vol. V, No. 1; June, 2009
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and thus the identified main problem areas
and their suggested solutions for these
companies are as follows:
1. Lack of Middle Management support :
This is one of the greatest pitfalls in an
evolving Quality Circle programme.
Many middle managers often remain
silent on the issue of QCs (as seen in
the case of BHEL) and are either
indifferent or hostile. It should be
attempt to convert the hostile managers
into indifferent managers and
indifferent managers into enthusiastic
supporters of the program for being
success of QCs. This can done by
getting the top managers to include
support for the circles as a part of the
evaluation process for the managers.
One can also provide proper training
and orientation for the uninvolved
managers and present them with the
advantages of the programme to entire
them into joining one. Outsider may
also be invited to share their
experiences of being part of a quality
circle. Financial rewards for better
quality circle performance can also get
many to join the circles.
2. Poor Communication : This factor arises
because of incorrect and incomplete
regarding the working of quality circles.
The reports that are circulated must
give due credit to the members of the
quality circles who assist in problem-
solving as a QC depends heavily on
open and consistent recognition of
achievement. They must also not give
any undue credit to those not involved
in the programme at all.
The credit must also be timely and not too
early or too late.
3. Unrealistic Expectations : If the
management expectations become too
high then the facilitator of the QC must
make him understand that quick,
dramatic results were not promised
that they should not be demanded by
the management. The top-boss always
wants quick and great results as such
results give a huge boost to the
programme. But such results are very
rare and a QC requires time to come up
with productive results.
4. Conflict with other programs : Some
companies organize many programmes,
which run well for a while, but are later
disbanded. Such programmes may
result is reduction of employees for
participation in a QC programme as
QCs are not as attractive and showy as
other programmes. They depend on
long-term trust and voluntary
cooperation.
5. Transfers and excessive turnovers : A
transfer of the key leader in a circle may
shunt the growth of the QC and it may
kill the circle permanently, specially if
the successor to that job was opposed
to the concept from the very beginning.
Quality Circles are not limited to
manufacturing firms only. They are also
applicable for variety of organisations
where there is scope for group based
solution of work related problems. Quality
Circles are relevant for factories, firms,
schools, hospitals, universities, research
institutes, banks, government offices etc.
The results of the experiment of Quality
Circles in Indian industries are
encouraging. The reasons for this, it has
been said, can be seen in the firm
commitment and continual supportive
guidance by the top and senior managers
to the Quality Circles Program. A word of
caution: Indian industries have still a long
way to go before catching up with world
class quality. As our organizations are
improving the quality of our products, the
foreign competitors are also continuing to
improve their product quality.
66 Management Insight
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REFERENCE:
Cole, Robert E. (1999), Managing Quality
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Drucker F. Peter (1974), Management: tasks,
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Grenier, Guillermo J . (1988), Inhuman
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Weiss, Howard J ., and Mark E. Gershon
(1989), Production and Operations
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Amul Homepage:http:/www.amul.com/
coin.html.
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history.asp.
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about.html.
doc_432910863.pdf
Quality Circle is modern management concept designed to bring together all level of workforce in an organization for setting standards of excellence and achieving better results. Developing in post war Japan, quality circles was largely responsible for rebuilding and stabilizing the shattered economy of the country.
Performance Evaluation of Quality Circles in Indian Companies 47
Vol. V, No. 1; June, 2009
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PERFORMANCE EVALUATI ON OF QUALI TY CI RCLES I N
I NDI AN COMPANI ES
R. N. Rai*
ABSTRACT
Quality Circle is modern management concept designed to bring together all level of workforce in an
organization for setting standards of excellence and achieving better results. Developing in post war
J apan, quality circles was largely responsible for rebuilding and stabilizing the shattered economy of
the country. This concept has since gained wide acceptance. Quality circles are a positive and
humanistic approach to productive management. Quality circles which have been popularized by
J apanese firms are being used all over the world because of the benefits that accrue to the firm. A
quality circle involves participation from a small group of employees doing the same type of work.
They meet regularly to identify, analyze and solve the problems that arise during the course of their
work and their association with the organization. Now the market place is highly competitive and it
becoming tougher every minute.
Quality Circle concept has three major attributes - Participation Management, Human Resource
Development Technique, and Problem Solving Technique. It has also been included the study of the
different personalities of people involved in a quality circle and how does quality circles helps in
changing the behavior of the people. The circle encourages each people to develop the best of his
ability. It offers a cooperative group for the individual to belong to. It satisfies the requirement of self-
esteem of an en employee and satisfies his ego with well-earned recognition.
In this research study the author has tried to analyze the performance of quality circles in five Indian
companies as BHEL (Bharat Heavy Electricals Ltd.), SM Creative Electronics Limited (SMCEL),
Bharat Electronic Limited (BEL), BSNL (Bharat Sanchar Nigam Limited) and Amul (Anand Milk Union
Limited) have been considered for the study and data were collected through a questionnaire to
employees in these and asked them to fill up the questionnaire accurately as possible. Data have
been analysed and interpretation and suggestions have been presented in the preceding section.
This study is of the great significance and relevance because Quality Circles is a people – building
philosophy, providing self-motivation and happiness in improving environment without any
compulsion or monetary benefits. It represents a philosophy of managing people specially those at
the grass root level as well as a clearly defined mechanism and methodology for translating this
philosophy into practice and a required structure to make it a way of life. It is bound to succeed where
people are respected and are involved in decisions, concerning their work life, and in environments
where peoples’ capabilities are looked upon as assets to solve work-area problems. The underlying
premise is that productivity will increase for two reasons: because the person best able to decide the
most efficient way to do a job is the person who does it for a living and because employees who have
greater control over the product will be more committed and effective workers.
* Department of Business Management & Entrepreneurship, Dr. Ram Manohar Lohia Avadh University, Faizabad,
Uttar Pradesh.
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1. AN INTRODUCTION AND LITERATURE
REVIEW OF QUALITY CIRCLE PROGRESS
Quality Circles is a term used in
human resources management that refers
to the technique of motivating workers by
allowing them input into decisions
concerning the production process,
thereby increasing productivity and
profits. A quality circle is a participatory
management technique that enlists the
help of employees in solving problems
related to their own jobs. Joel E. Ross and
William C. Ross(1982) define a quality
circle as “a small group of employees doing
similar or related work who meet regularly
to identify, analyze, and solve product-
quality and production problems and to
improve general operations. The circle is a
relatively autonomous unit (ideally about
ten workers), usually led by a supervisor or
a senior worker and organized as a work
unit.” The basic idea of worker
participation was effectively used by many
people in America in 1940s and one of the
most famous users was Walt Disney. Peter
Drucker(1974), in his book Management,
has also reported group activities that took
place in Germany during 1980. The growth
of participatory and work innovative
programs such as quality circles,
participative management, and employee
involvement has taken place in America
since the early 1970s. Frank Squires
(1981), reviewed in Quality magazine, the
origin of statistical quality control
techniques that were achieved through
group participation. In 1925 in New Jersey
AT &T had just acquired Bell Laboratories,
Dr. Shewhart, Dr. Dodge, Dr. Roming &
others share the honor for developing
statistical quality control and the classic
work was done on this subject “The Control
of Quality of the Manufactured Products”
was appeared in 1931 by W.A. Shewhart.
In late 1950s, Sidney Rubenstein started a
program called Participative Management
system and basic was the same as of
Quality Circles. Carl Harshman (1982)
expressed his view that the United States
may experience the most significant
change in the work place since the
Industrial Revolution and the movement
may involve a transformation from the
traditional, bureaucratic style of
management to a more participatory
relationship. This new philosophy, known
as participative management, attempts to
improve the utilization of human resources
by involving individual workers in
decisions affecting their work. As described
above, quality circle is being one of the
employee participation methods, it implies
the development of skills, capabilities,
confidence and creativity of the people
through cumulative progress of education,
training and work experience and
participation.
Participative methods in the
workplace are one way to improve both
work environment for employees and
productivity and quality of the company
(Jacob Mankidy, 1989). A Quality Circle is
a Volunteer group composed of workers
who meet to talk about workplace
improvement, and make presentations to
management with their ideas, especially
relating to quality of output in order to
improve the performance of the
organization, and motivate and enrich the
work of employees. It also provides the
creation of facilitative condition and
environment of work, which creates and
sustains their motivation and commitment
towards work excellence. Howard J. Weiss
and Mark E. Gershon (1989) also describe
quality circles as “the best means today for
meeting the goal of designing quality into a
product.” Employees who participate in
quality circles usually receive training in
formal problem-solving methods such as,
brainstorming, Pareto analysis, and cause-
and-effect diagrams and then are
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encouraged to apply these methods to
either specific or general company
problems. Brainstorming is a group
creativity technique to generate a large
number of ideas for the solution to a
problem. People, and their brains, are the
most prestigious recourses and greatest
assets of an organization, because through
people all other resources are converted
into utilities. Productivity can not be
improved not at the expense of people, but
at the expense of wasted time, lost motion,
unnecessary work, and product of poor
quality. So the most valuable partner in
cutting waste is people on the production
floor who know their jobs better than any
one else. The involvements of people minds
as well as hands are the most important
segment of any production process.
Nobody in the world uses the full capacity
of people. There also many times when
people waste time and the point is that
everyone has great reserve of capabilities
and time. If a person perceives that
working harder is a threat to him, he works
less, thus using less of his brainpowers.
On the other hand, if a person sees
cooperatively can improve communication
and quality, cut waste, and also eventually
give more job satisfaction and enjoyment,
he works more effectively and use more of
his untapped brainpower. This is not just a
theory to many of us but it has been a
reality that has profited both the company
and its people. However, management of
“People Resources” has always been a
vexed problem over since the beginning of
organized human activities. A number of
managerial responses have been developed
to answer this question. The method was
first popularized in the late 1930s
proposed that groups could double their
creative output by using the method of
brainstorming (Osborn Alex Faickney,
1963). Although most commonly found in
manufacturing environments, quality
circles are applicable to a wide variety of
business situations and problems and
these are based on two ideas:
(i) First is that employees can often make
better suggestions for improving work
processes than management , and
(ii) Second those employees are motivated
by their participation in making such
improvements.
After World War II, when many
industries in Japan had been destroyed,
there was no production as such, people
were trying to survive the calamity. At that
it was the need and requirement of mass
production with much faster rate. Thus the
quality circles have been emerged as a
mechanism to develop and utilize the
tremendous potential of people for
improvement in product quality and
productivity (Roger W. Berger and David L.
Shores, 1986). Unfortunately,
communications and closeness of
management and workers were lost, the
quality of goods built was known to be
shabby, the product seldom lasted for
more than a year or so. The people were not
trained to build quality and the nation was
without guidance. At that time Japanese
Government asked US Government to send
someone to teach better quality control
methods and Dr. Edward Deming, a
statistician for the government was sent to
train management people in Japan during
1948. The end of World War II compelled
Japan to change its focus from becoming a
military power to becoming an economic
one. Despite Japan’s ability to compete on
price, its consumer goods manufacturers
suffered from a long-established
reputation of poor quality. The first edition
of Juran’s Quality Control Handbook in
1951 attracted the attention of the JUSE
(Japanese Union of Scientists and
Engineers) which invited Juran to Japan in
1952. Juran arrived in Japan in 1954 he
met with ten manufacturing companies,
notably Showa Denko, Nippon Kogaku,
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Noritake, and Takeda Pharmaceutical
Company and he also delivered many
lectured at Hakone, Waseda University,
Osaka, and Koysan. Dr. Juran another
consultant from US and Dr. Deming gave
lecture series on SQC for JUSE (Japanese
Union of Scientists and Engineers). This is
how the movement in Japan was
coordinated by JUSE and the Quality
Circles were first developed, formalized,
and established in Japan in 1962, and
Karou Ishikawa has been credited with
their creation.
The emphasis of Japanese quality
circles was on preventing defects from
occurring rather than inspecting products
for defects following a manufacturing
process. Japanese quality circles also
attempted to minimize the scrap and
downtime that resulted from part and
product defects. In the United States, the
quality circle movement evolved to
encompass the broader goals of cost
reduction, productivity improvement,
employee involvement, and problem-
solving activities. The Japanese firms then
felt that QCs would provide structural
opportunities for employees to become
actively involved in an interpersonal
process of joint problem solving. Their
success I Japan is shown by the strong
presence of over a million QCs, compared
to about 1,00,000 in the U.S.A. and where
the rate of success has not been consistent
and the results of such programs are
reported to be mixed . it has been also
found that it is the training of participants,
apart from management support, that is
crucial to the QC process. David Hutchins
(1995) has defined quality circle as “A
small group of between three and twelve
people who do the same or similar work,
voluntarily meeting together regularly for
about an hour per week in paid time,
usually under the leadership of of their own
supervisor, and trained to identify, analyse
and solve of the problems in their work,
presenting solutions to the management,
and where possible, implementing the
solutions themselves.”
The above definition throws up a few
principles regarding quality circles:
1. Voluntaries : It is a voluntary process
and no one is forced to join it. The
management only prepares the
necessary ground-work by making the
organization ready as well as providing
awareness of the process to all
concerned. The members make their
own decisions to join or not join the
circles.
2. Regularly : The member must meet on a
regular basis. They must adhere to the
mutually agreed decisions about the
frequency of the meetings. Then only
can really understand the seriousness
of the quality circle.
3. Four Dimensions : Quality Circle is for
dimensional process involving
(i) Problem Identification (What are
the problems?).
(ii) Problem Selection ( Selection of a
problem).
(iii) Problem Analysis (What are the
factors can be involved and what
can be done?).
(iv) Problem Solution (These are the
possible solution of the problem).
This enables people who are involved in
quality circles to have a positive line of
thinking. This system certainly takes
the workers away from ‘complaints’ and
‘pointing to some else’ syndrome and
brings them to a ‘what can we do about
it?’ frame of mind.
4. Self-improvement : Quality Circles
members come from the same work
area. The problem identified relates to
their area of work. They would think on
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what to improve in their area of work
rather than waiting for someone else to
bring improvements.
5. Work-life Improvement : Workers do not
become affective members of an
organization unless they are able to use
some there discretion & freedom at
there work place also. Quality circle
provides a more humanistic approach
to the work relation and people are
treated in human beings who are
engaged in thinking and activities
simultaneously.
6. Synergy : According to principle of
synergy, the sum total of the elements
is greater than the mere arithmetical
addition of the element. synergy of the
individual can be unleashed by the
group thinking process and quality
circle performs this function
7. Sincerity of Purpose : Quality circle
assures personal that the management
is genuinely interested in the
development of its people and in their
contribution through their thinking
power. These circle help re-establish
the sincerity of the management
towards employees.
8. General Application : This concept is not
area or organization specific. it is a
general concept that can be applied in
many situation.
9. Simplicity : The entire process is made
simple enough to be understandable by
any ordinary workman. Complicated
operations will only being frustrations
and failure to the members of the
circle’s operations.
10.Social Responsibility : Quality Circle
provides opportunities and positive
orientations of the individual and hence
it also tends to satisfy social
responsibility in the long term.
Hence quality circle can not be
considered as “just another management
technique” it has deeper undertones and
potentials for both the employees and
organization, if serious, can benefit from it
immensely.
2. BASIC NOMENCLATURES AND GOALS
OF QUALITY CIRCLES:
The concept of Quality Circle is
primarily based upon recognition of the
value of the worker as a human being, as
someone who willingly activists on his job
with his wisdom, intelligence, experience,
Major Attributes of
Quality Circle
Form of Participation
Management
As a Human Resource
Development Technique
As a Problem
Solving Technique
Figure-I: Three Major Attributes of Quality Circle Concept
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attitude and feelings. It is based upon the
human resource management considered
as one of the key factors in the
improvement of product quality &
productivity. Quality Circle concept has
three major attributes presented in
Figure I. In order to achieve success in the
Quality Circle program it is extremely to lay
down objectives or goals. There are a
number of goals that can be accomplished
in Quality Circle program and outlines by
the Figure II.
13. Get more people
involvement and
interested in their work
12. Link of all levels of management
and workers together to achieve
success
11. Team building
10. Problem solving opportunities
9. Safety improvement
8. Improvement in productivity
7. Cost Reduction
6. Job Satisfaction
5.Waste Reduction
4. Improvement in communication
and attitudes
3. Improvement in Quality
2. Mutual Development
1. Self Development
Quality
Circle
Goals
14. Improve participation
15. Reduce absenteeism
and grievances
Figure-II: Quality Circle Goals
The following Figure- III describes the different nomenclature used by various people/
organizations for Quality Circles in USA and India (Sharma D.D., 2001).
Different Nomenclatures of Quality Circle in
USA and India
Human Resource Circles,
Magic Circles, Mac Circles,
Employees Circles,
The Power Minded Circles
Relay Express, Sky-Rocket,
Fault Finders, The Quality Seekers,
Dover’s Best,
MASH(Motivated Awareness Stops
Headaches)
QUIP(Quality United in Progress),
and Error Hijackers
Shriram Fibres Chennai - Employees Participation Circles
TELCO and Eicher -Small Group Activities
(SAGs)
Some Indian Organisations- Productivity Circles
Some PSU- Shop Improvement Teams
JK Synthetics -Thinking at Work Circles
BHEL -Quality Circles & now QCFI (Quality Circle
Forum of India) and QC1, QC2, QC3 etc.
Air India -Jet Quality Circles, 7Aces, Safe Air Quality Circles,
Quality Brothers, Hydro Quality Circles
Century Rayon -Sunray & Vikas
Dharamsi Morarji chemicals Ltd. as Pragati, Smrudhi
JK Paper Mills - Ganga, Bharati etc.
Vallavar-Madaras Motors at Singampunari
USA India
Figure- III : Different Nomenclatures of Quality Circles
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Peter Drucker, in his book on
Management, has described the Japanese
decision making is very systematic and
standardized approach to decision making
process. However Drucker, points out the
following key advantages in this method:
1. The focus is on deciding what the
decision is all about.
2. The Japanese bring about dissenting
opinion. There is no discussion on
answer until there is a consensus.
Many approaches to a problem are
explored.
3. The focus is on alternatives rather than
on the “right solution”.
4. It eliminates selling a decision. It builds
effective execution into the decision
making process.
Two key features of the Japanese
management system (participation and
decision making from the bottom up) are
also predominated in an Quality Circles
operations. Quality circles, which are
known as “small group” activities in Japan,
are generally an inherent part of the
company and there is no separate
organization that exists for this work. Most
of the work is shared by a number of
different departments and committees are
formed to carry out the decisions that are
approved at different levels.
3. A KEY NOTE ON QUALITY CIRCLE
MODEL IN JAPAN AND USA
Before discussing about the Quality
Circles models developed in Japan and
America, let us first briefly demonstrate the
two management styles, Japanese and
Western, which are presented by Figure-IV
(Ingle Sud 1988). The key difference in
Japanese and American model is the role
that the facilitator plays in promoting the
Quality Circle program and training
requirements needed for its implantation
described by Figure-V. This figure explains
the commitment and participation flows
right from the top down to all levels in the
company and there are company-wide
quality circles committees and plant-wide
quality circles promotional committees.
The Facilitator’s role in American industry
is critical. Facilitators, mini-coordinators,
or program chairmen must work hard to
convince both management and workers of
the long range benefits of Quality Circles.
People resist change and these changes in
style poses many problems and erect many
hurdles.
PARTICIPATIVE
MANAGEMENT
COMMITMENT TO QUALITY
QUALITY CIRCLES
JAPANSES MANAGEMENT
PARTICIPATIVE MANAGEMENT
TAYLORISM
QUALITY CIRCLES
NEW WESTERN MANAGEMENT
JAPAN
WESTERN WORLD
Versus
Figure-IV: Japanese versus Western Management Styles
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company needs to understand the types of
people that are employed and the try
implement motivational programs that will
fulfill the company’s need as well as
society’s. There are a number of
motivational theories, but some major
theories that have a profound influence on
Quality Circles activities. Hersey Paul and
Bancard Kennet (1977) have discussed
thoroughly various types of motivational
theories. The relationship between
motives, goals and activity has been
described in Figure-VI . This figure explains
that the strongest motive produces
behavior that is either goal directed or goal
activity. With broad goal such as food, it
4. MOTIVATIONAL ASPECT OF QUALITY
CIRCLES
It is very much true and well known
fact that the people differ not only in their
ability to do the work but also in will to do
the work. The motivation of people depends
on strength of their motives. Motives can
be needs, wants, drives, or impulses within
individuals. Most people work to satisfy
individual, family and also to meet group
and social needs. Men and women are
social animals and like to work with each
other in the society. However, keen
competition and pressure makes people
work harder. Motivational needs vary from
person to person, and company to
Company-wide Quality
Circle Committee
(President/V.P.)
Q.C.
Leaders
(Foreman)
Quality Circle promotional
Committee
(Plant-Wide)
Care-Takers
meeting
Quality Circles
Members
Advisors
Quality Circles
Leaders
Operating Committee
or
Steering Committee
Sub-Circles
Trainer
s
Coordinator
or
Facilitator
Quality Circle
Members
Mini-Circles
Quality Circles
Other
Department
QUALITY CIRCLE MODELS
IN
J APAN U.S.A.
Figure –V: Quality Circle Models for Japan and USA
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Motive
(Hunger)
Goal
(Food)
Behavior
Goal Activity
(Eating Food)
Goal-Directed Activity
(Preparing Food)
Figure-VI: The relationship between motives, goals and activity
should be recognized that the type of food
that satisfies the hunger varies from
situation to situation. A similar example
could be given for an intangible goal. If
individuals have a need for recognition-a
need to be viewed as contributing,
producing people-praise is one incentive
that will help satisfy this need. In work
situations, if the employee’s need for
recognition is strong enough, being praised
by superior may be an incentive to
influence them to continue to do good
work.
Quality circle concept does have a
substantial degree support from behavioral
science discipline. The concept may be
relatively new, but the idea isn’t. The work
of several scientists spread over many
years has cumulatively contributed to this
idea and hence it enjoys a wide variety of
support. Most of their activities take place
in groups, and it is essential that these
groups be motivated properly to reach high
achievements. A number of needs
discussed in motivation theories given by
following behavioral scientists:
Robert Katz skills : for effective
management in organizations, one
needs to have three inter-related but
distinct skills- namely conceptual, HR
Management and Technical Skill.
F.W Taylor’s Scientific Management
Theory : Taylor considers an
organization to be an economic unit
and management to be an economic
process and people are driven by
hunger, security and profitability. If
these needs are taken care of, the
people can work in unison with
machines.
Elton Mayo’s Hawthrone Studies : This
theory reveals that for given certain
basic condition job performance, can be
influenced by external factors such as
work-group satisfaction and
satisfaction from socialization. He
explains that in a group, person
develops certain norms and contains to
perform at the level even if they are not
in conductive conditions.
Kurt Lewin’s Group Dynamics : New
studies began considering man as
member of the group and not as an
individual.
Abraham Maslow’s Need Hierarchy
Theory : The five levels need satisfaction
are Physiological, Safety, Social, Ego,
Autonomy, Self-fulfillment needs.
Douglas Mc Gregor Theory X and Theory
Y : Traditional theory of what people
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and what must be done to manage
them is Theory X where as Mc Gregor
contended that Theory X assumption
are outdated and that employee would
contribute for more organization if an
opposite set of assumptions Theory Y
are to be the guiding force behind
managerial leadership.
Frederick Herzberg Two-factor theory :
This theory was designed to test the
concept that management has two-sets
of needs. His need as an animal to avoid
pain and his need as human to grow
physiologically. He has developed
hygiene or dissatisfiers or maintenance
factors -company polices and
administration, supervision, working
conditions, interpersonal relations,
wages, status, security that are
responsible for negative feelings and he
also determines five factors that stand
out as strong determinants of job
satisfaction and these are called
motivational factors or satisfiers
factors- achievement, recognition,
advancement, the work itself, the
possibility of personal growth and
responsibility.
Chris Argyris Theory : According to him
human nature is at least partially a
function of maturation and immature
people are passive, dependent, have
erratic shallow interest, have short time
perspectives, are in a subordinate
position, and lack awareness itself. He
explains the characteristics of mature
people are increased activity,
independence, deeper and stronger
interest, long-time perspective, equal or
subordinate positions, and awareness
and control of self..
Rensis Linkert Theory : He has
developed four different systems of
management. In system one,
Quality
Circles
Job satisfaction
Mayo
Argyris
McGregor
Likert
Other
Behavioral
Needs
Maslow
Improvement
of Society
Use of
Statistics
Herzberg
Group
Problem
Solving
Kurt Lewin
Robert
Katz
F.W Taylor’s
Figure- VII: A Combined Theory Comprehensive Model of
Quality Circles
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management has no confidence and
trust in the subordinates and
subordinates are not involved in any
decision making. In system two,
management has some confidence and
trust in the subordinates, but still most
of the decisions are made at the top and
few by subordinates and subordinates
are not involved in any decision
making. In system three, the
management has substantial but not
total confidence and trust in
subordinate. Broad and general
decisions are made by the top but
specific decisions are permitted to be
taken at lower levels. In system four,
the management has complete
confidence and trust in subordinates
and workers participation is
encouraged.
All the above theories are combined in
Quality Circles philosophy and is shown in
Figure VII, but the job satisfaction and
teamwork are the two main driving forces
behind all motivational activities.
5. PERFORMANCE EVALUATION
METHODOLOGY FOR QUALITY CIRCLES
IN INDIA
In India many companies, banks,
insurance corporations and government
departments have implemented quality
circles concepts. Many Indian companies
initially adopted quality circles because it
made them look “modern”. Companies like
BHEL, Jyoti, HAL, Kirloskars, Allwyns,
Shri Ram Fibers, TELCO, TISCO, BEL, Jai
Engineering have already operationlised
quality circles. All these companies aim at
solving the quality problems with quality
circles However they have also attempted
the use of quality circles in other areas as
cost reduction, safety, purchase of
materials, design, general improvement etc
(Sharma D.D.2001). Five Indian
companies BHEL (Bharat Heavy Electricals
Limited), SM Creative Electronics Limited(
SMCEL), Bharat Electronic Limited (BEL),
BSNL (Bharat Sanchar Nigam Limited) and
Amul(Anand Milk Union Limited) have
been considered for the study and data
were collected through a questionnaire to
employees in these and asked them to fill
up the questionnaire accurately as
possible. Since it was the request of
researcher to the respondent that their
answers may generate the opportunity for
the improvement of quality circle working
and overall performance of the companies
and being this as an motivational appeal
the employees responded very honestly
with possible accuracy and fairness.
5.1. Techniques used for evaluation of quality
circles:
The quantitative measurement has
been measured in terms of saving-cost
ratio, a ratio defined to actually measure
the impact that the QC has had on the
company or branch as a whole. This is the
ratio in between cost of saving of the
company because of QC program
implemented and their contribution to the
profits as opposed to the cost of running of
quality circle. Unless they can demonstrate
that they are contributing more to the
profits than to the cost, they stand a good
chance of being axed. Evaluation
parameters are present to see if the
objective of the quality circles is being
fulfilled or not.
Cost of saving of the company because of the QC program
Cost of running of quality circle program
Saving-cost Rat io =
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C O M P A N I E S
Sl.
No
Performance
Indictors BHEL SMCEL BEL BSNL AMUL
1.
Establishment Year 1950 1991 1954 2000 1964
2.
Starting number of QC 5 5 3 01 05
3
Number of active QC 1700 15 25 02 02
4.
Average member size in QC 10 4 6-7 35 10
5.
Percentage of employees
who attend the introductory
presentation actually end up
joining the QC programme
80% 70% 20% 10%
NA
6.
Effect on the behavior of the
employees in term of
absenteeism
Decreased Decreased Decreased Decreased No change
7
Average proposal made of
QC
15 10 8 8 10
8.
Percentage of Proposal put
forward
70% 60%
25% 50% 20%
9.
Saving-cost ratio Between
5:1 to 10:1
Between
5:1 to 10:1
Between
2:1 to 10:1
Between
5:1 to 10:1
No idea
10
Effect of QC Very
effective
Moderately
effective
Moderately
effective
Moderately
effective
Not much
effective
This saving-cost ratio provides the
following informations:
(i) The indication of the more profitable is
the running of the quality circles in a
company, if the saving-cost ratio is
high.
(ii) Sign of good performance of QC, if the
ratio is above 2:1.
(iii) Very good performance of QC of the
company, if the A ratio more than 5:1.
(iv) Best working performance for the
Quality Circle and company if the ratio
is above 10:1.
The introduction of an employee to a
quality circle by the company plays the
initial crucial factor in the development of
quality circles in the organistions and their
proper sustenance. If the employee is
properly introduced to the concept of a QC,
one can expect that he will be the part of
the QC for a longer time, so the induction
plays a major role in reducing the employee
turnover.
6. ANALYSIS OF PERFORMANCE
INDICATORS OF QUALITY CIRCLES FOR
SELECTED COMPANIES
Five Indian companies BHEL (Bharat
Heavy Electricals Limited), SM Creative
Electronics Limited( SMCEL), Bharat
Electronic Limited (BEL), BSNL (Bharat
Sanchar Nigam Limited) and Amul(Anand
Milk Union Limited) have been selected for
the appraisal of their quality circles
performances on the basis of data collected
through questionnaires and process of
evaluation adopted as described above. A
conclusive summary is being presented in
the following section of their respective
company wise. Initially, QC’s were adopted
by Indian company just look “modern” but
after a while they become more of liability
than an asset. if not properly maintain and
Table-I: Summarised results of various performance indicators
Performance Evaluation of Quality Circles in Indian Companies 59
Vol. V, No. 1; June, 2009
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used , then tend to deteriorate a poor
acceptance rate 20% by top , brass also
indicates lack of interest on their parts, so
the management plays crucial roles
development and sustains a QC in a
company. A summarized description of
important performance indicators are also
provided with their qualitative and
quantitative measurement values in the
following Table-I and the figures of the
tables are self explanatory about the
Quality Circles performance of the Indian
companies included for the study.
6.1. Quality Circles at BHEL(Bharat Heavy
Electricals Limited):
BHEL is the largest engineering and
manufacturing enterprise in India in the
energy-related/infrastructure sector.
BHEL was founded in 1950s. Its
operations are organised around three
business sectors: Power, Industry -
including Transmission, Transportation,
Telecommunication & Renewable Energy -
and Overseas Business. Today, BHEL has
a wide-spread network comprising 14
manufacturing divisions, 8 service centres,
4 power sector regional centres, 18
regional offices, and a large number of
project sites spread all over India and
abroad. BHEL is one of the nine large
Public Sector Undertakings known as
Navratnas or Nine J ewels of Indian
companies. BHEL offers over 180 products
and provides systems and services to meet
the needs of core sectors like: power,
transmission, industry, transportation, oil
& gas, non-conventional energy sources
and telecommunication. BHEL is very rich
in its history of and perhaps is the best
example of an Indian organization in
harnessing and utilizing human potential
as actually implementing the concept of
worker’s participation in management in
its manufacturing plants throughout the
country. Ramchandrapuram, Hyderabad
unit of BHEL was the initiator of
incorporating quality circle to the Indian
corporate sector and also taken lead of this
movement in India. The chief architect of
this movement was started in year 1980 by
Mr. S. R. Udpa, the General Manager, with
5 quality circles in that Hyderabad unit of
BHEL.
This concept was first sold to the
company’s top level executives, but later it
was felt that this movement will not gain
momentum without the support of middle
level management. Middle level
management was known for using devious
means to scuttle quality circles because it
did not like these circles coming up with
problems about which it had earlier told
the top management that they simply did
not exist, or with solutions, which it had
always impossible. So, the middle
managers were also exposed to the new
philosophy and were made to realize that
the could ‘make or mar’ the movement.
Meetings were also organized to convince
workers of the sincerity of purpose and
procedures for functioning were outlined
and remedies were suggested for various
pitfalls. While initially in Japan, the focus
of Quality Circles was on improving
quality, in BHEL, the managers realized
that such small group activities can also
results in:
(a) Improving human relations
(b) Promoting participative culture
(c) Improving productivity
(d) Promoting jog interest
(e) Inspiring more effective team work
(f) Improving communication
(g) Promoting leadership development
(h) Catalysing attitudinal change
The concept has now become very
popular in all the units of BHEL and by the
year 1998 there were over 1600 quality
circles. Today, BHEL has more than 1700
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quality circles in all BHEL plants involving
about 17000 workers who have tackled
over 600 problems. Over two decades, the
number of Quality Circles in BHEL has
grown to members account for 27.4 per
cent of the company’s workforce.
In 2005, BHEL notched up its highest-
over turnover of Rs.105.20 billions,
crossing Rs. 100 millions mark for the first
time, compared to Rs.88.62 billions of the
pervious years. The turnover growth of over
21% has been achieved on top of 16%
achieved in 2003-2004. Further, this is
highest growth rate archived in last two
decades. According to the reference of
quality circle programmes of BHEL
“Sustained performance by the company
became possible as a result of strategic
management with a blend of appropriate
measures including improvements in
operational efficiencies, benchmarking
against international standards, prudent
financial management, upgrading
manufacturing facilities, and dynamic
HRM policies”.
According to Public Relation Officer of
Hardwar BHEL plant, Quality Circles have
contributed a saving of Rs.20 millions to
the organization. BHEL Trichurapalli an
ISO 9001 company also constituted 60 odd
inter-functional task-force to solve the
problems, each with time bound plans in
the early nineties. Besides this, there were
award for zero-defect performance and
housekeeping. These tasks forces saved
40% time for executing orders and better
control resulted in 25% reduction in
inventories, improved manufacturing
practices as reduction in complaints by
50% and as much as 20% in energy cost
was achieved by effective management of
finance. But inspite of all these, in view of
the employees of this organization the
Quality Circles have developed the sense of
achievement, a sense of responsibility
towards improving the quality of
performance, by establishing the
consistent goals with the company larger
objectives. According to employees
opinions, this provides opportunity for self
development in employees, bring about a
participative culture in work areas and
feeling of full involvement towards
enhancing the total quality and
productivity in company. Today, employees
of this company feel that productivity is
only the way of their life. Delivering the
keynote address on the convention
occasion, the Executive Director of BHEL,
Tiruchi Complex, Mr R.N. Misra, said that
the Rs 800 billions order book of BHEL, to
which a new order gets added every week,
reflects the high confidence that customers
repose in the company. In the open
economy, BHEL could ally misgivings by
prevailing over multi-national companies
in wresting projects and subsequently
turning out to be the lone bidder in
tenders. The BHEL is now into the new
phenomenon of negotiating rates. The
company is living up to the nation’s faith,
Mr Misra said, emphasizing that power
projects should be commissioned in time to
meet customer expectations.
The performance of the company
shown upward trend since the inception of
quality circles and saving-cost ratio was
between 5:1 to 10:1, which shows very
good performance of QC of the company.
Some groups of the Company also awarded
financial incentives for putting forward
very excellent cost-saving proposals. QCs
decreased the number of absentees in the
last five years and employee turnover rate
is very good. Hyderabad BHEL plant was
adjudged the ‘Best Organisation in
promoting Quality Circles’, for the second
consecutive year by QCFI Chapter
Convention. In addition among Public and
Private sector companies, the highest
number (eight) of Prime Minister’s Shram
Awards has been won by 14 BHEL
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employees. This includes the solitary
Shram Bhushan awarded in year 2005,
which was also the highest award in the
series declared that year.
6.2. Quality Circles at SM Creative Electronics
Limited (SMCEL)
S M Creative Electronics Ltd (SMCEL),
an ISO (9001:2000) certified company,
with its head quarters at Gurgaon
(Haryana), was established in December,
1991 and the Company is currently
engaged in the following major activities:
i) Design, manufacture and marketing of
all important constituents of DC Power
Plants used in telecom installations,
such as–Switch Mode Power Supplies
(SMPS), Telecom DC Power System,
Battery Chargers, Inverters, DC-DC
Converters, Auto-Phase Selectors,
Integrated Power Supply and Site
Infrastructure Management Systems
(SIMS) etc. All these activities, come
under the purview of Telecom Power
Division (TPD).
ii) Strategic Electronic Division (SED) is
another important division which,
along with its Power Technology Group
(PTG) is specially organised to cater to
strategic needs, in terms of a whole
range of electronic components and
complex turnkey Power Solutions, for
organisation like Defense, Satellite
applications both for ground and space
segment, Nuclear Power Plants,
Traction, Avionics and Telecom
industry.
iii) Telecom & Networking Division has
been recently invigorator by
appointment of a highly qualified and
experienced Head of the Division. The
division is organised to support varying
needs of Telecom Operator and
Enterprises through supply,
installation and maintenance of
Telecom and IT systems. It excels in
providing innovative solutions making
use of latest technology. Another
important role of this division is to
supply and execute Lighting and
Earthing projects. Supply of Timing &
frequency standards is another role
that the division is equipped to
undertake. Elements of Telecom
infrastructure, Such as B-TS shelters,
Outdoor Cabinets, precision Air
conditioner etc are also within the
scope of this division.
iv) SMCEL has an all India presence
through its branch offices and service
cells at all important cities, it is equally
well represented abroad with
subsidiaries/ brunches in Singapore,
Srilanka, Bangladesh, Afghanistan,
Africa, France etc. Export to some of
these countries constitutes a
significant segment of company’s
turnover.
v) The company has a strong R&D
department recognized by Govt. of
India. The R&D team is composed of
highly qualified and experienced
Engineers and supported by the latest
design and development tools. The
factory at Baddi is equipped a whole
range of production machinery and test
equipments to maintain the highest
standards of product quality. An after-
sales service department (CSD) is
equipped and staffed to render prompt
support to customers spread all over
India and abroad. First the quality and
then the prompt and effective after-
sales support is what hinds SMCEL
and a wide spectrum of its satisfied
customers.
Not only does the company
concentrate at caring for its customers, it
is equally concerned in ensuring a highly
conducive work environment for its
workforce promotion and retention of
talent is a prime concern of the
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management. The number of Quality
Circles has tripled in the last six years of
the inception of the programme. The
average number of members is quite low,
but it has a positive effect on the saving-to-
cost ratio of the QC as less numbers means
lesser maintenance charges. As shown in
Table-I, the saving-cost ratio is between
5:1 and 10:1, which indicates very good
performance of this company. The
percentage of employees who attend the
introductory psentation The percentage of
employees who attend the introductory
presentation actually end up joining the
QC programme actually end up joining the
QC programme is 70%. The percentage
accepted proposals is 60% reflects upon
the quality of output of the circles, which is
not that much upto the mark. But this
could have also been due to the unrealistic
expectation of the management from the
QC. As mentioned by the respondent, this
was one of the main problems of QC in this
company.
6.3. Quality Circles at Bharat Electronic
Limited (BEL)
Bharat Electronic Limited (BEL) was
established at Bangalore, India, by the
Government of India under the ministry of
Defence in the year 1954 to meet the
specialized electronic needs of the Indian
Defense Services. Over the years, it has
grown into a multi-product, multi-
technology, multi-unit company serving
the needs of customers in diverse fields in
India and abroad. BEL offers products and
services in a wide spectrum of technology
like Radars, Military Communications,
Naval Systems, Electronic Warfare
Systems, Telecommunications, Sound and
Vision Broadcasting, Opto-Electronics,
Tank Electronics, Solar Photovoltaic
Systems, Embedded Software and
Electronic Components. With its expertise
developed over the years, the company also
provides turnkey systems solutions.
Defence continues to be BEL’s prime focus
but the Company has also diversified into
civilian areas. Some of the successful
civilian products include the Electronic
Voting Machines, Solar Powered LED-
Based Traffic Signal Lights, Simputers and
Set Top Boxes. Bharat Electronics Limited
has nine units located at Bangalore(
Corporate Head Office), Panchkula,
Kotdwara, Ghaziabad, Pune, Hyderabad,
Taloja, Machlipattam and Chennai and in
addition to these manufacturing units,
four regional offices in Delhi, Mumbai,
Vishakhapatnam and Kolkata and three
laisoning offices in agra, New York and
Sigapore. It is engaged in the design
development and manufacturing of
sophisticated sate-of-the-art electronic
equipments/components for the use of
defense services, Para-military
organizations and other governmental
users like All India Radio, Doordarashan,
Department of Telecommunications, Police
Wireless, Metrological Department etc.
The company introduced Quality
Control Circles (QCCs) at the corporate
level in a significant way since 1981
(Monappa Arun, 1990). Before introducing
QCCs, the reasons for the failure of the
Zero Defect (ZD) movement initiated in the
Bangalore unit were carefully analysed and
the process pitfalls were identified. Around
3,000 employees were soon involved in
500QCCs with each QCC having
membership ranging from three to twelve.
Grievance procedures were introduced
through which individuals themselves
could take up their grievances to their
respective section/department heads and,
if these were not resolved, the
representatives of the trade unions could
take up the matter with the concerned
Divisional Heads. Trade unions were
advised that this would enable them to
concentrate on larger issues. Even if they
wished to take up matters relating to the
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shop floor, they could do so with the
Divisional Heads without affecting
production activities on the shop floor. The
general grievance regarding the canteen
was taken care of with the provision of new
equipment and better dining halls. The
Annual New Year gifts were given on time
without the usual delay. The procedure for
payment of festival advance was
streamlined and payments made in time.
The management constituted the following
bipartite committees (both statutory and
non-statutory) where representatives
nominated by management and those
elected by the employees were members:
(1) Works Committee
(2) Canteen Management Committee
(3) Labour Welfare Fund Committee
(4) Death Relief Fund Committee
BEL has gained the following
achievements and awards :
Conferred with Navratna status on
June 22, 2007.
BEL was ranked 58th among the top
100 defence companies worldwide for
the year 2006 by Defence News journal.
Prime Minister’s Shram award for 4
employees of BEL for the year 2005.
SODET (Society for Defence
Technologists) Gold Award for
Innovation and SODET Silver Award for
Technology Development for two BEL
engineers.
IETE award for Performance Excellence
in the development of Software.
Six Sigma team from Bangalore stood
first at the 4th CII National Convention
on Six Sigma.
PV SEC Award for Applications by Solar
Energy Society of India (SESI) in
recognition of BEL’s contribution in
promoting the use of solar energy in the
country.
Having been on the path of growth
over the last 10 years, BEL is in the process
of consolidation so as to take off on the
path of intensive and integrative growth,
aiming at a turnover of US $ 2 to 2.5 billion
by the year 2011-12. With a strong focus
on R&D, strategic tie-ups with its partners
to enhance business, benchmarking
through adoption of CII-EXIM Bank
Business Excellence Model to gear up for
competition and continuously enhancing
its infrastructure through upgradation and
modernisation, BEL plans to stay ahead.
The data collected in the survey of
Ghaziabad Unit of BEL. The analysis
shows that in last three years quality
circles has increased from 15 to 25, which
is a good indication quality movement. The
employees participation average as
compared to SMCEL is good. Numbers of
proposals accepted were quite less around
25% inspite of very supportive
management and this reflects on the
output of the QC not being upto mark. But
since saving-cost ratio is also (between 2:1
and 5:1), the only reason may be that all
the accepted proposals had a great impact
on the savings of the organization.
6.4. Quality Circles at BSNL (Bharat Sanchar
Nigam Limited)
BSNL needs no instruction- formed in
October, 2000 from the erstwhile DOT, it is
world’s seventh largest Telecommunication
Communication providing comprehensive
range of telecom services in India. Within a
span of five years it has become one of the
largest public sector unit in India. BSNL
has installed Quality Telecom Network in
the country and now focusing on
improving it, expanding the network,
introducing new telecom services with ICT
application in villages and winning
customer’s confidence. BSNL is the only
service provider, making focused efforts
and planned initiatives to bridge the Rural-
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Urban Digital Divide ICT sector. BSNL is
numero-uno operator of India in all
services in its license area. This company
offers vide ranging & most transparent
tariff schemes designed to suite every
customer.
In BSNL, a new trend was seen in
quality circle programme – lesser number
of circles with same number of total
members. The branch has only two circles,
with an average of around 35 members
each. Also, a circular calling for volunteers
was good enough to generate interest
among the employees as many participated
in the programme. The absenteeism and
grievances, though reduced, were not fully
attributed to the programme perhaps due
to fact that the programme was not
properly supported by the management as
mentioned in one of the problem faced. The
turnover-rate of employees was also
attributed to the fact that a BSNL job was
more secure and hence, people were not
that inclined to leave the job that easily as
in case of other private-sector companies.
The QC drop-out rate was attributed to
transfer and promotions, which can not be
avoided. As in the case of BSNL the saving-
cost ratio was in between 5:1 to 10:1which
is high inspite of less number of proposals
being accepted and also higher number of
employees per circle. But the number of
circles was also less and so it can be
testified that the suggestions that were
accepted very effective and caused
significant cost reduction.
6.5. Quality Circles at Amul (Anand Milk Union
Limited)
Amul (Anand Milk Union Limited) was
formed in 1964, is a dairy cooperative
movement in India. It is a brand name
managed by apex cooperative organization,
Gujarat Cooperative Milk Marketing
Federation Ltg., (GCMMF), which today
jointly owned by 2.41 millions milk
producers in Gujarat. It is based in Anand
town in Gujarat and has been a sterling
example of a cooperative organizations
success in the long term. The Amul pattern
has established itself as a uniquely
appropriate model for rural development.
Amul has spurred the White Revolution of
India, which has made India the largest
producer of milk and milk products in the
world. It is the world’s biggest vegetarian
cheese brand, and this credit goes to Mr.
kurien, who spearheaded the Green
Revolution in India. AMUL is evident event
from the performance of Quality Circle
program .the number Quality Circles has
been decreasing by the years and inspite of
good number of employees being involved
in the program the QC has not been
effective at all the entire blame has been
put on the management, which lacked
proper communication and middle
management support. The response was
cold and the management never bothered
about the program.
7. CONCLUSIONS AND RECOMMENDATIONS
The main objective of the study was to
find out how the behaviour of a person can
affect the performance of QC in India. The
study was based on some questions on this
aspect and an attempt has been
incorporated to analyze the effect that the
QC has had on behaviour vise-versa. It was
found that quality circles have had a
significant impact on the reduction in the
absenteeism and grievances but have a
minimal impact on the reduction of
turnover-rate of the employees. This
because of the fact that the percentage of
employees involved in the programme were
very less in number. This gives no relation
between the turnover-rate and the effect
that the quality circles have had on them.
The researcher also asked the
respondents to rate the problem faced with
Quality Circles programme in the company
Performance Evaluation of Quality Circles in Indian Companies 65
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and thus the identified main problem areas
and their suggested solutions for these
companies are as follows:
1. Lack of Middle Management support :
This is one of the greatest pitfalls in an
evolving Quality Circle programme.
Many middle managers often remain
silent on the issue of QCs (as seen in
the case of BHEL) and are either
indifferent or hostile. It should be
attempt to convert the hostile managers
into indifferent managers and
indifferent managers into enthusiastic
supporters of the program for being
success of QCs. This can done by
getting the top managers to include
support for the circles as a part of the
evaluation process for the managers.
One can also provide proper training
and orientation for the uninvolved
managers and present them with the
advantages of the programme to entire
them into joining one. Outsider may
also be invited to share their
experiences of being part of a quality
circle. Financial rewards for better
quality circle performance can also get
many to join the circles.
2. Poor Communication : This factor arises
because of incorrect and incomplete
regarding the working of quality circles.
The reports that are circulated must
give due credit to the members of the
quality circles who assist in problem-
solving as a QC depends heavily on
open and consistent recognition of
achievement. They must also not give
any undue credit to those not involved
in the programme at all.
The credit must also be timely and not too
early or too late.
3. Unrealistic Expectations : If the
management expectations become too
high then the facilitator of the QC must
make him understand that quick,
dramatic results were not promised
that they should not be demanded by
the management. The top-boss always
wants quick and great results as such
results give a huge boost to the
programme. But such results are very
rare and a QC requires time to come up
with productive results.
4. Conflict with other programs : Some
companies organize many programmes,
which run well for a while, but are later
disbanded. Such programmes may
result is reduction of employees for
participation in a QC programme as
QCs are not as attractive and showy as
other programmes. They depend on
long-term trust and voluntary
cooperation.
5. Transfers and excessive turnovers : A
transfer of the key leader in a circle may
shunt the growth of the QC and it may
kill the circle permanently, specially if
the successor to that job was opposed
to the concept from the very beginning.
Quality Circles are not limited to
manufacturing firms only. They are also
applicable for variety of organisations
where there is scope for group based
solution of work related problems. Quality
Circles are relevant for factories, firms,
schools, hospitals, universities, research
institutes, banks, government offices etc.
The results of the experiment of Quality
Circles in Indian industries are
encouraging. The reasons for this, it has
been said, can be seen in the firm
commitment and continual supportive
guidance by the top and senior managers
to the Quality Circles Program. A word of
caution: Indian industries have still a long
way to go before catching up with world
class quality. As our organizations are
improving the quality of our products, the
foreign competitors are also continuing to
improve their product quality.
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