Introduction

People are the greatest assets of an organization, because, through people all other resources are
converted into utilities. However, management of ‘People Resources’ has always been a vexed
problem ever since the beginning of organized human activities. A number of managerial
responses have been developed to answer this question. Participate methods in the workplace are
one way to improve both the work environment for employees and productivity and quality for
the company.

Quality Circle is one of the employee participation methods. It implies the development of skills,
capabilities, confidence and creativity of the people through cumulative process of education,
training, work experience and participation. It also implies the creation of facilitative conditions
and environment of work, which creates and sustains their motivation and commitment towards
work excellence. Quality Circles have emerged as a mechanism to develop and utilize the
tremendous potential of people for improvement in product quality and productivity.

Origin of Quality Control Circle

After the Second World War Japanese economy was in the doldrums. Seeing this disastrous
effect of war, Americans decided to help Japan in improving the quality standards of their
products. General Douglas Mac Arthur who, at that time, was the commander of the
occupational forces in Japan took up the task of imparting quality awareness among Japanese to
help them improve their products and the reliability of manufacturing systems including men,
machine and materials. Thus, by 1975, they were topping the world in quality and productivity.
This astonishing and unique achievement in modern history became an eye – opener to the
world. Industrialists and politicians from all over the world started visiting Japan to know how
they have achieved such magical results in such a short span. The answer to this was painstaking
and persevering efforts of the Japanese leaders and workers and the development and growth of
the philosophy of small working groups. This resulted in the Quality Circle concept being
accepted all over the world as a very effective technique to improve the total quality of work life.

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Definition

Quality Control Circles (QCC) is a time proven method of problem solving utilizing people with
first-hand knowledge of the job or process to make improvements. It is a small group of 6 to 12
employees doing similar work who voluntarily meet together on a regular basis to identify
improvements in their respective work areas using proven techniques for analyzing and solving
work related problems coming in the way of achieving and sustaining excellence leading to
mutual upliftment of employees as well as the organization. It is way of capturing the creative
and innovative power that lies within the work force.

A quality circle is a participatory management technique that enlists the help of employees in
solving problems related to their own jobs.
It is said that 95% of the problems in workshops can be solved through quality control tools. The
Japanese have experienced this. The quality control tools useful for QCCs are Pareto Diagrams,
Cause-and-Effect Diagrams, Stratification, Check Sheets, Histograms, Scatter Diagrams, Graphs
and Control Charts. Also, logical thinking and experience are a must for solving problems.

Although most commonly found in manufacturing environments, quality circles are applicable to
a wide variety of business situations and problems. They are based on two ideas: that employees
can often make better suggestions for improving work processes than management; and that
employees are motivated by their participation in making such improvements. Thus,
implemented correctly, quality circles can help a small business reduce costs, increase
productivity, and improve employee morale. Other potential benefits that may be realized by a
small business include greater operational efficiency, reduced absenteeism, improved employee
health and safety, and an overall better working climate. In their book Production and
Operations Management, Howard J. Weiss and Mark E. Gershon called quality circles "the best
means today for meeting the goal of designing quality into a product."

The interest of U.S. manufacturers in quality circles was sparked by dramatic improvements in
the quality and economic competitiveness of Japanese goods in the post-World War II years. 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
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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.

Background

Quality circles were originally associated with Japanese management and manufacturing
techniques. The introduction of quality circles in Japan in the postwar years was inspired by the
lectures of W. Edwards Deming (1900-1993), a statistician for the U.S. government. Deming
based his proposals on the experience of U.S. firms operating under wartime industrial standards.
Noting that American management had typically given line managers and engineers about 85
percent of the responsibility for quality control and line workers only about 15 percent, Deming
argued that these shares should be reversed. He suggested redesigning production processes to
more fully account for quality control, and continuously educating all employees in a firm—from
the top down—in quality control techniques and statistical control technologies. Quality circles
were the means by which this continuous education was to take place for production workers.

Deming predicted that if Japanese firms adopted the system of quality controls he advocated,
nations around the world would be imposing import quotas on Japanese products within five
years. His prediction was vindicated. Deming's ideas became very influential in Japan, and he
received several prestigious awards for his contributions to the Japanese economy.

The principles of Deming's quality circles simply moved quality control to an earlier position in
the production process. Rather than relying upon post-production inspections to catch errors and
defects, quality circles attempted to prevent defects from occurring in the first place. As an added
bonus, machine downtime and scrap materials that formerly occurred due to product defects
were minimized. Deming's idea that improving quality could increase productivity led to the
development in Japan of the Total Quality Control (TQC) concept, in which quality and
productivity are viewed as two sides of a coin. TQC also required that a manufacturer's suppliers
make use of quality circles. Quality circles in Japan were part of a system of relatively
cooperative labor-management relations, involving company unions and lifetime employment
guarantees for many full-time permanent employees. Consistent with this decentralized,
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enterprise-oriented system, quality circles provided a means by which production workers were
encouraged to participate in company matters and by which management could benefit from
production workers' intimate knowledge of the production process. In 1980 alone, changes
resulting from employee suggestions resulted in savings of $10 billion for Japanese firms and
bonuses of $4 billion for Japanese employees.

Active American interest in Japanese quality control began in the early 1970s, when the U.S.
aerospace manufacturer Lockheed organized a tour of Japanese industrial plants. This trip
marked a turning point in the previously established pattern, in which Japanese managers had
made educational tours of industrial plants in the United States. Lockheed's visit resulted in the
gradual establishment of quality circles in its factories beginning in 1974. Within two years,
Lockheed estimated that its fifteen quality circles had saved nearly $3 million, with a ratio of
savings to cost of six to one. As Lockheed's successes became known, other firms in the
aerospace industry began adopting quality circles. Thereafter quality circles spread rapidly
throughout the U.S. economy; by 1980, over one-half of firms in the Fortune 500 had
implemented or were planning on implementing quality circles.

In the early 1990s, the U.S. National Labor Relations Board (NLRB) made several important
rulings regarding the legality of certain forms of quality circles. These rulings were based on the
1935 Wagner Act, which prohibited company unions and management-dominated labor
organizations. One NLRB ruling found quality programs unlawful that were established by the
firm, that featured agendas dominated by the firm, and addressed the conditions of employment
within the firm. Another ruling held that a company's labor-management committees were in
effect labor organizations used to bypass negotiations with a labor union. As a result of these
rulings, a number of employer representatives expressed their concern that quality circles, as
well as other kinds of labor-management cooperation programs, would be hindered. However,
the NLRB stated that these rulings were not general indictments against quality circles and labor
management cooperation programs, but were aimed specifically at the practices of the companies
in question.

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Concept

The concept of Quality Circle is primarily based upon recognition of the value of the worker as a
human being, as someone who willingly activises on his job, his wisdom, intelligence,
experience, 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:

1. Quality Circle is a form of participation management.

2. Quality Circle is a human resource development technique.
3. Quality Circle is a problem solving technique.

The concept and pragmatic applications of quality control circle programs prevalent in Japanese
industries. The quality control circle programs are explained as a system model within the
identifiable macro and micro settings and with various actors, from government to individuals.

Features

 Improvements are based on many, small changes rather than the radical changes that
might arise from Research and Development
 As the ideas come from the workers themselves, they are less likely to be radically
different, and therefore easier to implement
 Small improvements are less likely to require major capital investment than major
process changes
 The ideas come from the talents of the existing workforce, as opposed to using R&D,
consultants or equipment – any of which could be very expensive
 All employees should continually be seeking ways to improve their own performance
 It helps encourage workers to take ownership for their work, and can help reinforce team
working, thereby improving worker motivation
 Company-wide quality control
 Emphasis on education and training
 QCC activities
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  Application of statistical methods
 The quality control audit
 Nation-wide quality control promotion activities

Mechanism

Quality Control Circle normally takes a problem-based approach to improve the quality of their
work. They identify problems in their workplace, usually related to product quality and referred
to as ‘themes’, and together they set about finding a solution. They use quality control concepts
and techniques, and try to be creative in seeking solutions. QC Circles are also about the quality
of our working life. We all have a natural desire to develop our latent abilities and display them
to good effect. QC Circle activities give employees the opportunity to fulfil this desire by gaining
knowledge, solving problems, and achieving goals. Discussions at QC Circles also help us
understand our co-workers better, to develop good relationships, and, in all, to make our work
place more pleasant, more cheerful and more dynamic.

Figure: Mechanism of QC Circles

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The operation of quality circles involves a set of sequential steps as under:-

Success Factors
Feigenbaum establishes 10 Principles of Participation for employee-involvement programmes
including Quality Circles:

 Successful programmes require genuine management involvement and full understanding

throughout all levels of management concerning the multifaceted purposes served by the
programme

 Employee suggestions must receive serious consideration and be implemented whenever

sound and relevant

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  They should have long-term continuity in contributing to the organization – interest and
value often fade in short-term programmes

 All staff have a role - office staff are as important as production staff

 Programme organization must be clear and simple

 While initial preparation is key and may involve selection of leaders and participants –
participation should be voluntary

 Involvement sessions, to be effective, must be purposeful and not a “waste of time” from
the point of view of participants

 Issues addressed in these programmes must be kept fresh, relevant to current

organizational issues and up-to-date

 Leadership of involvement sessions should be from, and oriented to, line operations in
the organization rather than only from staff – so as to ensure direct operating participation

 Of most importance is the fact that these programmes are not a substitute for a total
companywide quality control programme in all functions or departments

Without total organizational commitment and an overall quality control programme, initiatives
such as Quality Circles cannot succeed in isolation.

Conclusion
Quality Circles are not limited to manufacturing firms only. They are applicable for variety of
organizations 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.