INTERNAL CUSTOMER JOB SATISFACTION AND ROLE OF …

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Internal customer satisfaction and role of tqm practices

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Far East Journal of Psychology and Business

Vol. 6 No. 2 February 2012

INTERNAL CUSTOMER JOB SATISFACTION AND ROLE OF TQM PRACTICES

Dr. Aamir Ijaz Institute of Quality and Technology Management

University of the Punjab, Lahore, Pakistan Email: ijazaamir@

Dr. Kee, D.M.H University of Sains Malaysia, Malaysia

Email: daisy@usm.my

S. M. Irfan COMSATS Institute of Information Technology, Lahore, Pakistan

Email: irfansyed36@

ABSTRACT

In Pakistan, industry both in manufacturing and industrial sector is facing a number of internal as well as external challenges to sustain and maintain their survival. Quality is the only way that enables them to face these challenges by utilizing the available talent to gain the competitive edge. This study aims to investigate the relationship between total quality management (TQM) practices and internal customer (employees) satisfaction at workplace. TQM focuses on delivering quality and innovative product or services at the lowest cost first time and every time to their external customers (directly affected by company's products) but it cannot be achieved without the satisfaction of internal customers' means employees of the organization. Five most common and basic TQM practices were selected from the available literature; Leadership role, training and education, empowerment, reward and recognition, employees involvement and cooperation and teamwork for this study. Only ISO implemented service and manufacturing organizations were selected for this study. The questionnaire includes 23 items representing six construct that includes five constructs representing TQM practices and one construct representing internal customer satisfaction. The study sample of this study was comprised of 243 respondents working at officer, managerial and supervisor level positions. Data was analyzed using the most advanced data analysis tools; structural equation modeling (AMOS 16.0) and SPSS 16.0. Results of this study provide a strong relationship among TQM practices and internal customer satisfaction.

Key words: TQM Practices, Internal Customer Satisfaction, Structure Equation Modeling, Job Satisfaction Paper Type: Research Paper

INTRODUCTION

During the last couple of decades, it has been explored in a number of studies that total quality management (TQM) had benefited the organizations in improving quality of products and services, increased market share, high sales volumes, reduced costs, increased efficiency and

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effectiveness, and improving business competitiveness (Rajagopal et al. 1995; Youssef et al., 1996; Zhang et al., 2000; Chapman & Al-Khawaldeh, 2002). Today, TQM has been successfully implemented in many organizations around the globe to gain sustainable advantages and since 1980's it has become globally implemented management technique (Trappey, 1995). Quality gurus like Deming, Juran, Crosby, Feigenbaum, Ishikawa, Tauguchi and Shingo had set the foundation and develop guiding principles of quality management for the Japanese industry in order to gain order to gain sustainable advantages through TQM philosophy in order to meet customer expectations and perceptions. TQM is not limited to gain competitive advantage and organizational effectiveness but it also helps to provide superior quality products to their customers and increased organizational performance (Ahire et. al, 1996).

TQM is a combination of both technical "hard" side of TQM and the management system especially focusing on employee's management mean "soft" side of TQM (Wilkinson, 1992; Evans and Lindsay, 1996). Technical aspect of TQM is comprised of quality tools and techniques like QFD, FMEA, SPC etc. whereas the people factors like employee involvement, commitment, teamwork, leadership, customer focused etc. It is evident from the literature that several gurus in the field of TQM believed that the `soft' aspects of TQM are critical for the success of an organization (Juran, 1964; Ishikawa, 1985; Deming, 1986; Dale and Cooper, 1992; Cruickshank, 2000) and major reasons of failure of TQM implementation in many of the organizations is due to the reason that `soft' side of TQM were not rightly addressed (Lowery et al., 2000; Wilkinson et al., 1998; Cruickshank, 2000) .

It is also evident from the literature that, organizations focusing on `soft' elements of TQM can outperform than their competitors (Powell, 1995). Employees are considered as an asset for the organization that helps to deliver innovative and quality product or services for them and contribute in organizational performance. It requires effective management of people by creating an environment that provides motivation, increased commitment and satisfaction among the employees. Number of studies explored that there is an association between TQM practices and HRM functions (Sinclair and Zairi, 1995; Wilkinson et al., 1998) and also there is a significant relationship among TQM practices and job satisfaction (Guimaraes, 1996, 1997; Noorliza and Zainal, 2000; Boselie and Wiele, 2002; Boon et al., 2005, 2007b).

In Pakistan, survival of the industry is becoming more and more critical as the local industry in Pakistan is facing dozen of issues that are considered as a barrier for their growth which include; energy crisis, political instability, economy crisis, heavy taxes, cheap Chinese product and worst natural disasters during the last one decade and had put adverse effects on the local industry. Effective implementation of TQM principles in this worst situation is the only way that provides the local industry a road map of success. Japanese, Korean and Chinese industries are evident that TQM guiding principles provide them a road map of success. Hundreds of organizations in Pakistan during the last one decade both in manufacturing and service sector have successfully implemented the ISO 9000 series standards and now quality is considered as a part of strategic planning.

This study aims to investigate the linkage between TQM practices and employees job satisfaction in Pakistani organizations. Studied organizations have implemented TQM practices to some extent but majority of these organizations have implemented ISO systems in order to

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Far East Journal of Psychology and Business

Vol. 6 No. 2 February 2012

make their systems effective and efficient and it is considered to be the first step towards their success. In TQM implemented environment, everything is documented that enables everyone to understand their roles and responsibility for organizational objectives. Uniqueness of this study is that no such study is conducted on this topic before. This study will help to assess the employee's perceptions about the effective implementation of TQM practices as an input that leads towards employees job satisfaction as an output.

LITERATURE REVIEW

TQM has a rich history that enables the Japanese companies to gain marvelous success within a very short span of time between 1950's and 1980's; Japanese industry recognized themselves by providing high quality products at lowest cost and considered as a global leader in electronics and automobiles. Founder of this philosophy was the Dr. Edward Deming, who first visited Japan in 1950's to address the Japanese and since then the success of Japanese is still continue. A number of other countries were benefited by implemented this philosophy to achieve a landmark for their industry, Korean industry can be a one example. Abdullah Kaid Al-Swidi, Rosli Mahmod (2011) pointed out that studies provides evidences that TQM is a universal approach and it has been successfully implemented in almost all types of organizations like manufacturing, services, SME's, higher education and public service organizations.

According to Okland (1995), TQM is an approach that enables the organizations in order to improve their competitiveness, increased effectiveness for the whole organization. TQM can be defined as a systematic approach consisting of guiding principles that helps the organizations to gain excellences in business through continuous improvement in all aspects (Short and Rahim, 1995; Boon et al., 2005). TQM is both a philosophy and set of guiding principles that helps the organizations to effectively manage all its resources and benefit to all the stake holders (Dale, 1999). According to ISO 9000, quality management is set of eight guiding principles which include: customer focus, leadership, involvement of people, process approach, system approach, continual improvement, factual approach to decision making and mutually beneficial supplier relationships.

TQM practices involve; employee involvement, customer focus, teamwork, reduction of reworks, supplier relationships and continuous improvement in all aspects (Yang, 2005). However, number of definitions has been provided in the literature but no single definition can cover the whole aspects of TQM (Eriksson and Hansson, 2003).

Another view point is about TQM comprised of two aspects; `hard' production/ operation oriented and `soft' employee's related elements (Wilkinson et al. 1997). `Soft' side of TQM that focuses on employees related issues become more important when it is considered in the context of HRM (Tari and Sabater 2006) and number of studies witnessed that TQM practices are positively related with the HRM (Wilkinson et al., 1998). Number of studies claimed that TQM practices have a significant impact on organizational performance but it is important that it first affect the `soft' performance (employee's satisfaction) before it affect the `hard' aspect of performance (Prajogo and Brian, 2010). Literature on TQM practices has proved empirically that effective implementation of TQM leads organizations towards increased performance (Flynn et al., 1994; Samson and Terziovski, 1999; Anderson and Sohal, 1999; Millen et al., 1999; Prajogo

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and Sohal, 2004) and increased job satisfaction among employees (Harber et al., 1991; Guimaraes, 1996; Boon et al., 2007b). TQM practices are found to have a significant impact on employee's job satisfaction (Harber et al., 1991) and it also helps to create a healthy working environment in the organization (Poister and Harris, 1997). Major reason of selecting the five TQM practices namely; leadership role, training and education, reward and recognition, employees empowerment and cooperation and teamwork for this study is that these practices are also closely related to HRM practices and can be found in HRM and TQM literature.

Leadership Role

It has been recognized in number of studies that leadership plays a critical role in effective implementation of TQM in the organization (Flynn et al., 1994) and leadership plays a significant role by effectively implementation of TQM and how it drives towards organizational performance (Zakuan et al., 1997). Leadership role at all levels in the organizations is critical in creating a healthy working environment which motivates the employees for gaining the sustainable advantages. Employee's involvement is a key motivator among employees job satisfaction as it creates an environment in the organization where employees are involved and participate in decision making activities. More involvement of employees in their jobs helps to increase employee's commitment and performance (Lawler et al. 1998, O'Driscoll and Randall 1999, Rodwell et al. 1998).

Training and Education

Training and development programs help to increase employee's knowledge and skills as well as provide opportunities for the individual growth. It has been observed that training and a development program increase job satisfaction and has a positive impact on employee's job satisfaction (Marie, 1995; Saks, 1996). Similarly, it helps to increase employee's ability to perform their duties and tasks assigned by the organization (Choo & Bowley, 2007).

Reward and Recognition

Reward and recognition plays a significant role in employee job satisfaction. Employees' contributions in increasing organizational performance or any other contribution that distinguish from others in the organization are shared within the organization like employee of the month, cash rewards for higher sales, etc. impose positive impact on their attitude, behavior, and self satisfaction and it also helps to increase motivation among other worker by increased competition.

Employees Empowerment

Organizations are adopting such strategies and philosophy that enables the employees to perform their jobs more efficiently and effectively. Employee's empowerment is a strategy adopted by most of the organizations, which enables the employees to make their own decision at job in order to smooth functioning of their jobs and take responsibility of their results. Empowerment is defined by Conger and Kanungo (1988, p-747) as: `a process of enhancing feelings of self efficacy among organizational members through the identification of conditions that foster

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