HUMAN RESOURCE

MANAGEMENT
UNIT -5
Promotion
 Employee Promotion means the ascension of an
employee to higher ranks.
 It involves an increase in salary, position,
responsibilities, status, and benefits. This aspect of
the job drives employees the most—the ultimate
reward for dedication and loyalty towards an
organization.
 In theory, a promotion requires more work and
effort in a job.
Promotion
 Based on organizational policies, these promotion-
based decisions are taken on different aspects.
 length of service,
 experience,
 seniority,
 performance, etc.
 Job promotions are essential because it motivates
employees to continue working for an organisation.
Often, promotions are permanent, but sometimes a
company may offer temporary promotions based
on requirements.
 A job promotion has a motivational value because
it increases the power and status of the employee in
the organisation.
Objectives of Promotion
 Principles of Employee Promotion
 Promotion results in employee satisfaction on the one hand and
encouragement to the employees on the other hand if the policies for
promotions are framed in a systematic manner. Here are some
principles that help in the preparation of sound promotional policies:
 The Human Resource Manager (HRM), must specify the way to fulfil
higher positions in the company, i.e. internal or external recruitment.
 After deciding how to fill the higher positions, the criteria or basis for
fulfilling the positions are to be set, i.e. seniority or merit or the
combination of two.
 The HRM must specify the promotional policy with regard to whether
the promotion of the employees is against vacancies or non-
vacancies.In most of the entities, promotion of employees is based on
non-vacancy, i.e. when they complete a specified term in a particular
designation. As against, promotion against vacancies are affected when
any high-level employee resigns or retires from his positions; then the
subordinates get a chance of promotion.
 Principles of Employee Promotion

 Frequent promotions must be avoided as it increases the

overall cost to the organisation, as well as frequent changes in
the job, is likely to make the employee stagnant.
 Before making any promotion job analysis and performance
appraisal must be done, as it will help the employer to know
the efficiency of the employee in the present job profile as well
as to know whether he/she is able to fulfil the job requirements
or not if he/she is promoted.
 Labour unions are to be involved while framing the policies of
employee promotion, as their consent is equally important, in
the form of agreement.
 If the promotions are based on competence, then the openings
for promotions are to be declared conspicuously at various
places, to see who are interested and those employees who
have an interest will apply to it accordingly.
Types of Promotion
 1. Horizontal Promotion:
 This kind of promotion rewards an employee with a pay
increase but little to no change in responsibilities. It is
also regarded as an up-gradation of an employee. In
the educational sector, an example of this is the move
from lecturer to senior lecturer.
 2. Vertical Promotion:
 This refers to an upward movement of employees with a
change in skills and experience. It brings a change in
salary, responsibility, status, benefits, etc. In the
marketing industry, this can be the promotion of a
marketing supervisor to the marketing manager.
Types of Promotion
 3. Dry Promotion:
 A Promotion that employees aren’t particularly fond of.
This promotion refers to an increase in responsibilities
and status without the benefits. It means no increase in
pay or any financial benefits for that matter.
 4. Open and Closed Promotion:
 Open Promotion is a situation wherein every individual
of an organization is eligible for the position. Closed
Promotion is a situation wherein only selected team
members are eligible for a promotion.
Transfer
 Transfer is a process of placing employees in
positions where they are likely to be more effective or
where they are to get more job satisfaction.
 In transfers, there is no change in the responsibility,
designation, status or salary. It is a process of
employee’s adjustment with the work, time and place.
Transfer may also be made as a disciplinary action.
 According to Edwin Flippo, a transfer, “is a change in
job where the new job is substantially equal to the old
in terms of pay, status and responsibilities”.
 Characteristics
 Transfer means a change in job assignment. It refers to a
horizontal or lateral movement of an employee from one job to
another in the same organization without much change in his
status or pay package.
 Transfer causes a shift of individual from one job to another
without there being any marked change in his responsibilities,
skills and other benefits.
 Transfers must be ordered based on certain company-specific
principles or dogma. Transferring an employee without adhering
to policies or norms may lead to deteriorated industrial relations.
The management might think of issuing transfer orders, treating
each case on its own merit.
 Even if management takes the right decisions, some employees
may take exception to them. Thus, management must frame a
transfer policy and follow the same.
 Reasons for employee transfers:

 Some positions require distinctive skills, competency, and expertise from the
transferred employees.
 The transfer is also affected when there is a shortage of employees in one
department of the organization due to high demand, and there are surplus
employees in another department. So, the workers are shifted from one
department to another.
 It is also initiated when there are some clashes between the superior and
subordinate or between two workers.
 To break the monotony of the work, employees are transferred, as the
employee productivity of an employee decreases by doing the same job
again and again.
 An employee may request the human resource department, to transfer him
to another location, due to health issues because the climate is not suitable
for his/her health.
 Female employees commonly request a transfer when they get married,
and they have to live with their spouses.
 Essentials of Transfer Policy
 (a) Circumstances when transfers can be made.
 (b) Responsibility for initiating and approving the transfers
should be fixed.
 (c) Training should be given to an employee so that he can
perform his new job satisfactorily.
 (d) The area or unit of transfer must be indicated in the transfer
policy.
 e) The basis of transfer should be specified. It may be seniority
or ability or both.
 (f) The amount of pay to be received by the transferee on the
new job should be specified.
 (g) Whether the employee’s seniority is to be kept intact during
his transfer or not must be clearly laid down in the transfer
policy.
 Types
 Shift Transfer
 It is not a part of rotational shift but it is actual transfer of
employees from one shift to another. Employees working in
second shift often complain about the lack of social life.
Thus, in order to maintain work life balance organization
transfer the employee to another shift to help them in
participates in their private and social life.
 Rotation Transfer
 Enhancement of job experience is the reason behind job
rotation transfer. It is also called as versatility transfer. The
management improves the versatility of the employees by
their lateral movement from one job to another. This transfer
helps in job enlargement of the employee.
 Types
 Replacement Transfer:
 This takes place to replace a new employee who
has been in the organization for a long time and
thereby giving some relief to an old employee
from the heavy pressure of work.
 Remedial Transfer:

 Moving an employee to a lower-level position

within the company, such as demotion, to address
performance or conduct issues without serious
disciplinary action.
 Production Transfer
 In order to stabilize the employment in the company and
avoidance of lay off, an employee may be transferred from
one department to another department.
 Penal Transfer
 Management may use transfer as an instrument to penalize
employees' involved in undesirable activities in the
organisation. Employee transfer from one's place of
convenience to a far-flung and remote area is considered as
a penalty to the employee.Such transfer is also known as
downgrading as it may include reduction in authority,
compensation and duties.
Employee Separation
 Employee Separation is the discontinuation of his
employment contract with the company. The termination
of employees services can be either Voluntary or
Involuntary. This can take the form of Retirement, Resignation,
Layoff, etc.
 The companies and employees must specify valid reasons
behind their separation. The process may be upsetting for
both, company and its employees.
 Hence, the employee separations should be well planned
and reasonable. One must have a good experience post
separation. As employees feedback builds the company’s
image among prospecting candidates.
 Layoff
 A layoff, also known as employee reduction, is the
downsizing of an organization’s workforce by
suspension or permanent termination of a worker
or group of workers by the employer. Layoffs to
an employee are not given due to their
performance or breach of duty.
 People are usually laid off because of a
decrease in revenue rate, decline in sales, or some
other kind of financial trouble.
 Reasons for Layoff
 Cost reducing measures
 This could be due to fewer sales or no financial backing by investors in the
company. And of the ways a company can save money is by eliminating some
employees and allocating that fund for something else.
 Mergers
 When two companies or two branches of the same company combine. During a
merger, the company may choose to lay off a few employees because there
might be duplicate positions within the branch or organization.
 Loss of fund
 Loss of investors or sales can lead to loss of a company’s funds, making them
unable to stay in the financial position to pay employees.
 Technological advancements
 With the increase in the advancement of technology, automation has become
very common in business. Hence, due to that, some employers may lay off
employees to decrease position redundancies.
 Company relocation
 Some stakeholders may decide to relocate the company to a different part of
the country, in that case, the employees who are unable to relocate are laid off.
 Resignation
 Many people see resigning from a job as a professional and
courteous way to pursue employment separation. This can help
employees maintain a professional relationship with their employer
even when leaving the company. Different types of resignation
include:
 Forced resignation: There may be some challenging situations where
an employer may ask an employee to resign or the company may
require to let them go. This option gives employees the opportunity
to leave their current role without the employer terminating them,
which can work favorably for them when they wish to find a new
job.
 Voluntary resignation: A voluntary resignation happens when an
employee chooses to leave a company for their own benefit.
Employees typically provide a notice period before their last day
of work, which helps the employer to find a replacement.
 Dismissal

 What is Dismissal?
 Dismissal is the act of removing or terminating the job or employment of
an employee. Dismissal is when a person working in a company is
dismissed from his or her duties. Dismissal is sometimes also termed as
firing or sacking of the employee.
 Importance of Dismissal
 Job termination or dismissal is an important part of human resources
management. People are employed with a company and have to abide
by company policies, responsibilities and work culture. Sometimes people
neglect the rules and regulations in an organization and have to be
removed or dismissed. It is to sack or fire employees who cause a risk to
the business or set a bad example for the other employees. Dismissal of
employees are done if the are caught doing a fraud, neglect duty, leak
confidential information behave inappropriately etc. Dismissal of wrong
or bad employees is essential to maintain a good, safe, trustworthy and
positive environment at workplace.
Types of Dismissal
Types of Dismissal
 Depending on the reason of termination, there are
broadly two types:
 1. Fair dismissal – It is when a company is fair or
justified in removing an employee from the job. If the
employee is proven on charges of theft, habitual
negligence of duty, disorderly behaviour, bribery,
incapability, financial regularities or subordination, then
the job of the employee can be terminated. Since the
company has valid reasons to remove the employee, it
is referred as fair dismissal. Companies usually give
orders with a notice period or can be an immediate
termination as well.
Types of Dismissal
 2. Unfair dismissal – It reasons includes maternity
reasons, taking part in union activites, whistle-
blowing, discrimination on grounds of age, gender,
race, religion, nationality etc. It can also be due to
economic reasons when an employee had to be
laid-off. It is also called as unjustifiable dismissal.
Since the reasons are unclear, it becomes unfair for
the employee and hence referred as unfair
dismissal.
 Retrenchment
 Retrenchment means cutting down expenditures by
relieving employees to become financially solvent. In
HR, termination is very common when an employee
does not perform up to the mark or does not follow the
professional code of conduct.
 Retrenchment is another way of terminating the
employees where the reason is not the employee’s
performance but the company’s financial position. When
an organization is forced to downsize the number of
employees to balance losses in the operation of a
business, it is called retrenchment.
 Voluntary retirement?

 What is voluntary retirement?

 Generally, the retirement age is considered to be 60 years. When a person
crosses this milestone, they can retire from work obligations and spend the
golden years of retirement pursuing their hobbies and interests. However, in the
case of voluntary retirement, a person retires in their 40s or 50s.
 What is the voluntary retirement scheme?
 The voluntary retirement scheme is used by organisations as a way to cut down
the number of employees. It is also referred to as the golden handshake and is
a cordial way for companies to let go of some of their employees. Many big
enterprises from the private and public sector resort to the scheme. However, in
order to make sure that no company misuses it, the Industrial Disputes Act of
1947 mandates certain stipulations that all organisations must follow under the
voluntary retirement scheme.
 It is essential to note that even though the method is used as a way to decrease
the workforce, the scheme differs from a regular termination. The final decision
to opt for voluntary retirement lies with the employee. An employee who has
worked with a company for a minimum of 10 years and is over the age of 40
can also apply for VRS.
 What are the features of voluntary retirement scheme?
 Here are some highlights of the scheme:
 The scheme offers the employee their provident fund (PF) as well as
gratuity.
 The compensation paid to the employee is tax-free up to a prescribed
amount.
 The employee can opt for benefits such as counselling, rehabilitation, etc.
to facilitate a smooth transition into retirement.
 The scheme is predominantly used by public and private sector companies.
 What are the criteria for voluntary retirement scheme?
 To be eligible for this scheme, the following criteria must be met:
 The employee should be at least 40 years old.
 The employee should be working with the company for at least 10 years.
 The scheme can be applicable to all employees of a company. The only
exceptions are directors of a company or a co-operative society.
What are the benefits of voluntary
retirement scheme?
 What are the benefits of voluntary retirement scheme?
 Voluntary retirement scheme offers a host of benefits for the company as well
as the employee. For instance:
 It is a simple, effective, and empathetic way to let go of employees and reduce
the workforce strength of an organization.
 Since the human resource team of the company has to convince the trade unions
about the need for implementing voluntary retirement, the process is
transparent with no discrepancies. The scheme is also voluntary, so there are no
objections from the trade unions either.
 Voluntary retirement can reduce the company’s overall costs. When payroll
costs are lowered, the money can be directed to several other operations to
boost productivity.
 The company provides rehabilitation like training to impart new employability
skills to their employees. This helps them get another job in the future.
 As the rules and regulations of the scheme have been clearly indicated under
the Industrial Disputes Act of 1947, there are no inconsistencies in the process
and both the employee and the employer benefit from it.
 Grievance
 A grievance is a concern, problem or complaint that an
employee raises with an employer.
 According to Dale Yoder “A grievance is a written complaint
filed by an employee and claiming unfair treatment.”
 Keith Davis defines it as “any real or imagined feeling of
personal injustice which an employee has concerning his
employment relationship.”
 According to Jucius “a grievance is any discontent or
dissatisfaction, whether expressed or not, whether valid or not
arising out of anything connected with the company which an
employee thinks believes or feels to be unfair, unjust or
inequitable.”
Causes of Grievances
Grievance redressal procedure
 The employee makes a formal, written complaint. A
company may provide a form (online or on paper), or
the employee may write something up by email or
freehand. Regardless, grievances are formal complaints
and are generally written. An employee can present a
verbal complaint, but then the HR person/supervisor
would write down the employee’s statement, creating a
formal document.
This document will be the guiding document throughout
the procedure. While the employee will (most likely) be
interviewed as part of later steps, the employee should
include as much information as possible, including names
and dates (approximate dates should be accepted.)
 Informal grievances
 If an employee has a grievance at work, it is generally recommended
that they raise this first informally. A concern or complaint could be
taken up with either their boss, line manager, team leader, someone
from HR, or even someone from payroll, for example, where the matter
relates to a salary discrepancy. However, the employer should take the
matter seriously, even if a grievance is made verbally on an informal
basis, so as to maintain a good working relationship with the employee
and avoid a formal grievance procedure. At the conclusion of an
informal grievance, the employer should also follow up on the matter
shortly after.
 They should ask the employee if the problem is now resolved for them.
If the answer is in the negative, the employer will need to explore what
has happened subsequently and why the informal procedure has not
been effective, together with what else can be done. The employee
should also be reminded that they may need to put the matter in
writing, so that a formal grievance procedure can be instigated.
 Formal grievances

 If an employee has a serious or ongoing grievance at

work, they should be encouraged to put this in writing.
In this way, the employer can instigate its formal
grievance procedure to deal with the matter
appropriately.
 Once a written complaint has been made, the
employer is duty bound to follow a formal grievance
procedure, investigating the matter in full, and
providing the employee with a written outcome and
the right of appeal.
 Grievance Redressal Process
 Document the issue/complaint:
 The employee should make an initial effort to resolve the
grievance with their immediate supervisor. The first step is to
write a letter to the grievance redressal committee/concerned
department head/supervisor containing all relevant details of
the issue. The supervisor’s decision is final unless it is
unreasonable, arbitrary, or irrational.
 Problem identification:
 A supervisor should identify the problem and assess the
situation.
 Collecting the information:
 When the problem has been identified, the supervisor should
collect all relevant information about the grievance before
developing a plan of action.
 Grievance Redressal Process
 Analyze:
 To find the root of the problem, the supervisor must study
various aspects such as the employee’s history, frequency
of occurrences and management practices.
 Decision making & Implementation:
 The management work out several alternative courses of
action, and the consequences of each course on the
employee and the administration are evaluated. A final
decision is reached based on which course of action will
benefit all parties concerned and is implemented.
 Take Action:
 If a grievance refers to a higher authority under this
procedure and the outcome does not meet their
expectations, both parties can agree to appoint an
arbitrator.
Disciplinary action
 When an employee has acted inappropriately at work
or they have gone against company policy, employers
can respond by taking disciplinary action. Embarking on
a formal disciplinary procedure may become necessary
to ensure that any unacceptable or improper behavior
at work, or poor performance matters, that cannot be
resolved informally, are appropriately addressed.
 Regardless of the type of misconduct or behavior,
employers must fact lawfully and follow a strict legal
process when conducting a disciplinary procedure to
avoid the risk of tribunal claims for unfair dismissal.
 What is disciplinary action?
 When you hire an employee, you expect them to maintain a certain
level of performance and comply with employer policies, procedures,
and laws. Employee disciplinary actions are corrective actions a
company takes in response to an employee failing to meet
performance expectations or having behavioral problems.
 The purpose of disciplinary action is to correct the behavior of the
employee while documenting the issues in case the problem arises
again in the future. In other words, the primary goal of disciplinary
action is not to punish the employee.
 The role of Human Resources during workplace disciplinary action
varies on the organization and available resources.
 For example, in some companies, HR is only involved in more serious
disciplinary actions. In other organizations, they may be involved in all
disciplinary meetings. In both cases, HR is responsible for outlining
disciplinary action policy and formalizing procedures for responding to
actions that go against the company’s rules. Generally, these policies
are outlined in the employee handbook.
 Types of Disciplinary Action

 1.Verbal warnings are usually given when there is a

minor offence of misconduct; in case verbal warning
fails to produce the desired result the organization
resorts to a warning in written form for stricter action.
These warnings do not produce any effect on the
employee’s status or wages in the organization.
 2.Written Notice: When warning does not work and
the employees continue with the same misconduct, it
becomes necessary to issue a written notice implying
certain punishment.
 3. Suspension:
 Suspension means the stop of an employee from work,
usually without pay, for a certain period.
 It is used for serious crimes or misconduct under investigation.
 The length of suspension differs from the weight of the
violation and from the company policies.
 4. Demotion:
 Demotion means the employee is no longer at the top but is
at the bottom of the hierarchy.
 It could be the result of several reasons like performance
problems or repeated violations of rules.
 Often, demotion is coupled with a cut in salary or benefits.
 5. Probation:
 Probation is a time frame where an employee’s performance is
rigorously tested.
 It is a last chance and is followed by more severe disciplinary action,
e.g., termination.
 Employees on probation can be asked to follow certain conditions or
objectives.
 6. Termination:
 Termination is the most severe form of disciplinary action, and it entails
removing the employee from the company permanently.
 It is usually employed for grave misbehaviour, recurrent violations of
company rules or performance problems that cannot be rectified.
 Termination may be immediate or may be accompanied by the notice
period, as specified in the employment contracts and labour laws.
Conflict
 an active disagreement between people with opposing
opinions
 Workplace conflict — though fairly common — is an
uncomfortable situation that can quickly escalate to a
major problem if left unaddressed. It can result in
increased workplace stress, decreased job satisfaction,
higher rates of absenteeism, lower productivity, and poor
morale and quality of work.
 But conflicts are inevitable. The idea is not to try to
prevent them completely but to resolve and manage
them effectively. When people use appropriate
strategies to address issues, they’re able to keep their
differences from getting out of hand.
 What is conflict management?

 Conflict management is the set of techniques required

to identify and resolve conflict in the workplace. Since
conflict is a normal part of any work environment,
conflict management's goal is to detect and minimize
the negative effects of conflict rather than eliminating
it completely.
 Conflict management is used to handle conflicts with
fairness and efficiency. In doing so, you can avoid poor
communication between colleagues, decrease
workplace tension to improve productivity, and also
keep the morale of employees high.
 Steps to a positive resolution of conflict

 Ask to meet with the person you are in conflict with to discuss the
issue. Designate a private meeting place.
 Identify the problem and clarify the issue. State the problem and focus
on the facts. Stay calm.
 Identify the impact(s) of the issue. What outcomes do you want to see?
 Listen to the other person's point of view. Listening is the most power
tool to resolve an issue but can also be the hardest.
 Confirm you heard what was said. People need to be heard. Confirm
that you understand the other person's point of view. Ask questions. Once
they are heard, they will be more open to listening to you.
 Problem solve and evaluate potential solutions together. Ask the
person you are in conflict with for ideas to resolve the issue.
 Compromise and agree on a plan.
 If unresolved, determine next steps. This may include meeting with a
supervisor or HR business partner who can help facilitate a constructive
conversation and provide support toward problem resolution.
 What are Industrial Relations?
 Industrial Relation is one of the important problems for the success of a firm.
The termindustrial relations refer to the whole field of relationship that
exists because of necessary collaboration of men and women in the
employment process of modern industry. Industrial relations is nothing but an
“Employment Relationship” In an industrial setting. It includes all the laws,
rules, regulation, agreements awards of court, customs, traditions, as well as
policy framework laid by the government. Thus, IR involves a study of the
conditions of work, mainly the level of wages, Security of employment,
Social conflict, Cultural interactions legal aspects of disputes under laws etc.

 The term “Industrial Relations (IR)” also known as a “labour Management Relations”
or “labour relations”. The term „Industrial Relations‟ comprises of two terms:
 1. Industry: It refers to “Any productive activity in which an individual or a group of
 individuals is are engaged”.
 2. Relations: It means “The relationships that exist within the industry between the
 employer and his workmen”..
 Nature of IR
 Industrial relations are concerned with the relationship between
management and workers.
 Industrial relations safeguards the interest of employees.
 Industrial relations are concerned with the system, rules, and
procedures used by unions and employees to determine the
reward for effort and other conditions of employment,
safeguard the interests of the employees and their employer
and regulate how employers treat their employees.
 Industrial relations maintain a balance with employee
expectations, employer associations, trade unions, and other
social and economic institutions of societies.
 Industrial relations help in resolving disputes, conflicts, and
controversies between labour and management.
 Importance of IR
 Promotes Democracy: Industrial relations means employing collective
bargaining to resolve issues faced by workers. This collective
bargaining is generally employed through cooperation and mutual
agreement amongst all the affected parties, i.e., democracy,
management, and employees unions. This enables an organisation to
establish industrial democracy, which eventually motivates the workers
to perform their best to the growth and prosperity of the organisation.
 High Morale: Good industrial relations enhance the morale of the
employees and motivate the workers to work more efficiently.
 Avoid Conflicts Between Management And Union: Industrial relations
minimize issues between unions and management. This is because
industrial relations incorporate setting up machinery to resolve issues
faced by management and employees through mutual agreement to
which both these parties are bound. This results in ignoring any unfair
practices that could lead to major conflicts between employers and
trade unions.
Importance of IR
 Minimizes Wastage: Satisfactory Industrial relations
are maintained on the basis of co-operation and
recognition of each other in the department. It helps to
minimize wastage of material, manpower, and costs.
 Economic Growth And Development: Good and
harmonious industrial relations result in increased
efficiency and hence prosperity, which in turn minimise
turnover and other tangible benefits to the
organisation. This promotes economic growth and
development.
 Approaches to IR- Unitary-:

 Under unitary approach, industrial relations are

grounded in mutual co- operation, individual
treatment, team-work, and shared goals. Work place
conflict is seen as a temporary aberration, resulting
from poor management, from employees who do not
mix well with the organizational culture.
 Pluralistic
 The pluralistic approach opposes the unitary system
and believes that the trade union must be
recognized and be there. Their presence is significant
because they protect the interest of employees.
Management will handle and resolve any concern with
the trade union if it arises.
Marxist
 Marxist: Also known as the 'Radical Perspective', the
Marxist approach is based on the proposition that
the economic activities of production,
manufacturing, and distribution are majorly
governed by the objective of profit. Marxists, like
the pluralists, regard conflict between employers
and employees as inevitable.
 Just-in-Time (JIT)
 The just-in-time (JIT) inventory system is a management strategy
that aligns raw-material orders from suppliers directly with
production schedules.
 Companies employ this inventory strategy to increase efficiency
and decrease waste by receiving goods only as they need them
for the production process, which reduces inventory costs. This
method requires producers to forecast demand accurately.
 This practice’s origin comes from Kaizen, a Japanese term
meaning “change for the better.” Originating in Japan, the
business philosophy looks to continuously improve operations
and involve all employees, from assembly line workers to the
CEO. Like JIT, the goal is to reduce waste and improve quality.
How Does Just-in-Time Inventory Work?

 The just-in-time (JIT) inventory system minimizes inventory

and increases efficiency.
 JIT production systems cut inventory costs because
manufacturers receive materials and parts as needed for
production and do not have to pay storage costs.
Manufacturers are also not left with unwanted inventory if
an order is canceled or not fulfilled.
 One example of a JIT inventory system is a car
manufacturer that operates with low inventory levels but
heavily relies on its supply chain to deliver the parts it
requires to build cars on an as-needed basis.
Consequently, the manufacturer orders the parts required
to assemble the vehicles only after an order is received.
The success of the JIT depends upon:

 steady production,
 high-quality workmanship,

 no machine breakdowns,

 and reliable suppliers

 Benefits of TQM
 Less product defects. An objective of TQM is to create products and
services correctly the first time. This means that products ship with fewer
defects, reducing product recalls, future customer support overhead and
product fixes.
 Satisfied customers. High-quality products that meet customers' needs
result in higher customer satisfaction. High customer satisfaction, in turn,
can lead to increased market share, revenue growth via upselling and
word-of-mouth marketing initiated by customers.
 Lower costs. As a result of less product defects, companies save money
on customer support, product replacements, field service and creating
product fixes. The cost savings flow to the bottom line, creating higher
profit margins.
 Well-defined cultural values. Organizations that practice TQM develop
and nurture core values around quality management and continuous
improvement. The TQM mindset pervades across all aspects of an
organization, from hiring to internal processes to product development.
 Examples of TQM

 Automobile manufacturer Toyota exemplifies TQM. The adoption of

TQM and Kaizen at Toyota led to higher product and work quality at
all levels of the organization. Toyota adopted a related practice called
statistical quality control in 1949. In 1951, Toyota launched the Creative
Idea Suggestion System, which was based on a suggestion system used
at Ford.
 In 1965, Toyota was awarded the Deming Application Prize for major
advances in quality improvement. In 1994, the "Toyota Group Executive
TQM Training Course" was established, providing TQM training for new
executives. Toyota's TQM initiatives continue to the present day. In 2011,
Toyota announced that its Creative Idea Suggestion System had
generated more than 40 million suggestions to date.
 Another example of TQM occurred at Tata Steel, a steel-making
company based in India and a subsidiary of Tata Group. Tata Steel
adopted TQM in the 1980s. The company was awarded the Deming
Application Prize in 2008. Tata Steel used TQM methodologies to gain
a deep understanding of customers. They sought to ensure value
creation in a system that covered customers and suppliers.
 KAIZEN
 Kaizen is a Japanese business philosophy that focuses
on gradually improving productivity and making a work
environment more efficient.
 Kaizen supports change from any employee at any
time.
 Kaizen translates to change for the better or continuous
improvement.
 Kaizen's small changes can involve quality control, just-
in-time delivery, standardized work, the use of efficient
equipment, and the elimination of waste.
 The Kaizen methodology underscores that small changes
now can have big future impacts.
 KAIZEN PRINCIPLES
 Kaizen involves five key principles: know your customer, let
it flow, go to gemba (or the real place), empower people
and be transparent.
 These five principles lead to three major outcomes:
elimination of waste (also referred to as economic
efficiency),
 good housekeeping,
 and standardization.
 Ideally, kaizen becomes so ingrained in a company's
culture that it eventually becomes natural to employees.
 The basic idea of kaizen is that people who perform
certain tasks and activities know the most about them.
Empowering those people to effect change is the best
strategy for improvement.
Examples
 Toyota is a famous example of a company using
kaizen to sustain its success. Another commonly
known example of kaizen in action involves Ford
Motor Company, which embraced kaizen to cut the
time it took to complete various manufacturing
processes.
What Are Quality Circles?

 Quality Circles, also known as QC or Kaizen Circles,

are small groups of employees who voluntarily
come together to identify, analyze, and solve
quality-related problems within an organization.
Originating in Japan in the 1960s, this concept has
since spread worldwide as an effective means of
improving quality and productivity.
 Objectives of a Quality Circle

 The primary objectives of Quality Circles are:

 Problem Solving: To identify and resolve quality issues,
defects, or process inefficiencies.
 Continuous Improvement: To develop a culture of continuous
improvement by encouraging employees to take ownership
of quality-related challenges.
 Skill Development: To enhance the problem-solving,
communication, and teamwork skills of participating
employees.
 Increased Employee Engagement: Engaging employees in
decision-making and quality improvement efforts leads to
higher job satisfaction.
Structure of a Quality Circle
 Quality Circles typically consist of the following
elements:
 Team Members: Comprising 6-12 employees from
various levels and departments of the organization.
 Team Leader: Facilitates meetings, ensures discussions
stay on track, and acts as a liaison with management.
 Meetings: Regularly scheduled meetings where team
members discuss and address quality issues.
 Problem-Solving Tools: Quality Circles use various
problem-solving tools and techniques, such as the PDCA
(Plan-Do-Check-Act) cycle and fishbone diagrams.
 Process of Quality Circles

 Quality Circles follow a structured process:

 Identification of Problems: Team members identify quality-
related problems and define their scope.
 Data Collection and Analysis: Data is gathered and analyzed
to understand the root cause of the problems.
 Generation of Solutions: The team brainstorms and generates
potential solutions to the identified problems.
 Selection and Implementation: The best solution is chosen, and a
plan is formulated for implementation.
 Review and Evaluation: The results of the solution's
implementation are reviewed, and adjustments are made as
needed.
 Standardization: Successful solutions are standardized into
existing processes to ensure continuous improvement.
 Benefits of Quality Circles
 There are numerous benefits of Quality Circles:
 Improved Quality: QC teams are dedicated to finding and
fixing quality issues, leading to better product or service
quality.
 Cost Reduction: Organizations can reduce waste and
operational costs by identifying and rectifying inefficiencies.
 Enhanced Employee Morale: Involvement in QC activities boosts
employee morale, as they feel valued and engaged in making
a difference.
 Higher Productivity: As QC teams tackle process bottlenecks,
productivity increases, leading to more efficient operations.
 Innovation: QC teams often come up with innovative solutions to
longstanding problems, driving organizational innovation.