Well-designed HR Policies Improve TQM Initiatives

Question:
What can Granite Rock Co., a 380-employee manufacturer of road-construction materials, teach larger organizations about quality human resources management?

Answer:
Just about everything they need to know. As a 1992 winner of the Malcolm Baldrige National Quality Award, the Watsonville, California-based company knows all about quality and how to obtain it. But as Laura Junod, personnel representative, explains, “We didn’t restructure our personnel policies because of any TQM process. Instead, quality happened because we were people-focused.” In other words, quality was the result of well-designed HR policies, not the motivator for them.

Everything that the quality consultants tell HR people to do, Granite Rock has done and done well. From communication and employee recognition to training and team building, each one of the small firm’s HR practices is a study in perfection.

Employee development:Granite Rock has eliminated conventional performance reviews in favor of Individual Professional Development Plans (IPDP), which may be its most original contribution to HR development. Every year, each worker sits down with his or her supervisor and maps out a series of goals for the coming year in such areas as skill development and actual job accomplishments. The IPDP process is voluntary, but at last count, more than 75% of all employees, including the union members making up two-thirds of its work force, had chosen to participate. Instead of emphasizing past performance, the IPDP allows the employees to set developmental goals in conjunction with the firm’s needs. It’s through this process that the company’s quality plans and HR systems come together.

Once the employee and manager agree on the goals outlined in the IPDP, management reviews the plan confidentially at a roundtable meeting. By reviewing these documents, managers can determine what types of education and training their workers need to reach their goals. The company uses the IPDP strictly for employee and organizational development; compensation decisions are made separately.

This emphasis on employee development would be just talk if it weren’t for the tremendous investment that the company makes in training. Each year, it spends more than $1,000 per employee on various training programs.

Through its Graniterock University, the organization covers the cost of internal and external seminars. These seminars include topics ranging from interpersonal skills to business law. The organization has brought high-caliber business consultants, such as Tom Peters, in to speak to employees.

Granite Rock covers all costs of employee education, whether it involves taking a course at the local community college or attending a professional conference 2,000 miles away. Moreover, employees receive paid time off to attend the courses.

Communication and recognition: Placing so much emphasis on training requires that the company communicate regularly with employees about the developmental opportunities being offered. Granite Rock does this in a variety of ways. First there’s Tuesday Facts, a weekly news bulletin that the company faxes to all 13 locations.

There also is RockTalk, a glossy, three-color employee newsletter that’s published quarterly. Furthermore, the organization frequently mails out letters from the president with employee paychecks.

These are more than just communication vehicles. They serve as a means of worker recognition, which the company takes seriously. Other ways of recognizing employees include:

• Recognition Day—An annual celebration at each location in which individual employees and teams are recognized publicly for their accomplishments

• Incentive Recognition Awards—An annual monetary award for excellence above and beyond normal job duties

• Seniority Recognition Program—A program in which every employee receives a card and small gift on the anniversary of his or her date of hire.

Labor relations:One of the distinctive features of Granite Rock’s human resources program is that the program makes no distinctions between exempt and nonexempt employees. The organization has 15 separate labor contracts, but all employees are able to participate in any human resources program, from the IPDP to training.

The organization surveys union members about their opinions right along with salaried employees. Union members participate in the employee-suggestion program, and they can attend the Front-Line Leadership Training regardless of whether or not they have any supervisory responsibility.

The access to training is especially important, according to the company’s management, because it undermines the us-against-them mentality of employees and management in many union shops. White-and blue-collar workers attend the same training sessions, hear the same ideas and live in the same lodging when they travel. This way, it’s easier for them to identify and solve problems together.

Skeptics might disregard Granite Rock’s success in human resources as the luck of a small organization. As Junod explains, however, “We’ve done all this with just a three-person personnel department. A larger company with more staff and resources could do even more.”