Total Quality Management in Trouble

Total Quality Management in Trouble?

An analysis of TQM practice in the UK, attendant ethical, legal and economic issues and rising incidences of occupational stress.

A paper presented to the graduate/ undergraduate students in the Comenius University Faculty of Management, Bratislava, Slovak Republic in November 2001

Bibliography

Ciampa D (1992) Total Quality - a user’s guide for implementation. Addison-Wesley.

Collard R (1990) Total Quality - success through people. IPM

Karasek R and Theorell T (1990) Healthy Work. Basic Books (Harper Collins)

Legge, K (1995) Human Resource Management - rhetorics and realities. Macmillan.

Louise Di Mambro et al (Eds) Civil Court Practice (2001). Butterworth.

Warwick Business School The people management implications of leaner ways of working 1996. IPD

Palumbo FA, Herbig, PA. Salarymen and Sudden Death Syndrome. Employee Relations Vol 16 No.1, pp 54-61. MCB University Press.

Cooper CL & Marshall J (1976). Occupational sources of stress: a review of the literature relating to coronary heart disease and mental ill health. Journal of Occupational Psychology 49: 11-28.

Wickens PD (1993) Lean production and beyond: the system, its critics and the future. Human Resource Management Journal 5(2) : 33-49.

Wickens PD (1987) The Road to Nissan. London: McMillan.

Barbara Bailey Reinhold (1996). Toxic Work: How to Overcome Stress, Overload and Burnout and Revitalise your Career. Dutton.

Introduction

According to the UK government's Health and Safety Executive's (HSE) research published in November 2001, around five million UK employees say their job is "very stressful", with around 500,000 suffering stress to the extent that it makes them ill. According to the HSE, 6.5 million working days are lost to stress each year at a cost to UK industry of £3.8 billion. The HSE says that stress is the second biggest cause of occupational ill health, and is the biggest cause of absence among non-manual workers. In Japan, the mother of Total Quality Management (TQM), stress from overwork kills over 10,000 Japanese a year. In the UK, whilst TQM was becoming the standard management system of the 90s, HSE had estimated millions of working days a year were being lost in Britain because of stress- related illnesses, and furthermore, up to 60 per cent of all absences from work had been caused by stress. In 1997, as TQM was gaining more impetus and had been implemented by over 2/3s of the UK's 500 largest companies, the incidence of occupational stress was on the increase.

The devastating recession of the late 80s and early 90s in the West and the UK in particular had driven many organisations to search for and utilise management systems that would enable the optimum use of manpower and TQM was seen as the method to guarantee this. Now again in 2001 another global slowdown is apparent and managers are keener than ever before to implement more efficient management systems for 'leanness and competiveness. This drive for efficiency has has manifested itself in vast reductions in operational costs mainly via head-count reductions, coupled with the adoption of TQM designed to increase employees' productivity. Now, over 75% of UK employers regard TQM as the leading management system of the 2000s.

What TQM Seeks to Do

In outline, what TQM seeks to do is to devolve management of the organisation to employees laterally. By that process the system drives a greater and more flexible utilisation of the capacity of the employee. Psychologically, TQM is designed to be motivational, in that it increases the responsibilities of the employees in the organisation and widens the scope of their duties. However, the reality is that the natural outcome of the organisational TQM system is to drive the employee to work harder and longer hours thereby increasing the potential for incidences of stress-related illness.

Objectives, Relevance and Practical Utility of the Paper

In the context of the track record of TQM and its apparent causal link to occupational stress, this paper will assess whether organisational TQM practice might constitute a legally unsafe system of work and also whether its practice does deliver the positive economic results sought by those adopting it. This assessment will have special regard to the recent changes in work practices in the UK and the emerging European countries whereby TQM practice has become, or is becoming dominant in organisations whilst stress levels in employees are rising to yet greater levels under its adoption. The paper will also assess the employer’s legal liability to its employees under a TQM system.

As many Central and Eastern European countries are moving towards EU membership, there will need to be an awareness of EU work safefy requirements and the attendant legal obligations of employers towards their employees in respect of workplace practices that are safe for their health. Indeed preliminary legislation required to secure this will be a pre-condition for entry into the EU by these countries. Furthermore, as compensation awards against UK organisations for work-induced injury caused by stress mount in size and frequency, organisations in other European countries can learn some very important lessons in that regard.

Research Methods

The legal aspects of this paper were developed from a survey of the relevant law mainly in the UK concerning employer’s liability for occupational mental illness, or stress. For the purpose of the paper, the UK is used as a model as it is a leading economy within the European Union. As such, like the other EU countries it's occupational health priorities are required to be in line with EU thinking (notably the Social Chapter provision of the Maastricht Treaty) and relevant EU directives (eg., the 'working time directive') and treaties regarding the welfare of citizens which affect EU members (eg., regarding human rights, etc).

My assessment of the history and practice of 'organisational' TQM (TQM as an organisation-wide system of management) in other countries and the UK will be based on a survey of the relevant literature from which I will show the:-

a) the causal link (historical and current) between TQM practice and high incidences of employee stress

b) how TQM practice might constitute a legally ‘unsafe’ system of work

c) the legal liability of employers using the TQM system for occupational stress in employees

d) what employers using TQM might do to limit or negative their legal liability for injury to their employees caused by the adoption of organisational TQM

e) how TQM might be made 'safe' and therefore more effective for organisations adopting it.

Mental Health and Stress in the Workplace

- a review of the UK law

In 1994 in the UK, a Social Worker, John Walker, took his employers to court for work-induced stress and won his case. Mr Walker’s case was the first of its kind to be won in the UK whereby the courts have recognised that the scope of an employee’s actionable injury against the employer includes mental illness. Mr Walker’s circumstances at work were as follows.

From 1970 until 1987, he was employed as a social worker by Northumberland County Council. During his time with the Council he suffered 2 nervous breakdowns. As a result, he was medically retired and in the first case of its kind, he took the Council to court and in 1996 achieved a record out of court settlement of £175,000 in compensation from his former employer.

Implications of the Landmark Case of Walker v Northumberland County Council

The legal position on liability

A recent guide for employers sponsored by the UK Department of Health, accepts the likelihood of an increase in claims similar to Mr Walker’s in the future. Indeed, along the lines of the Walker case, in April 1995, Bloomsbury Health Authority made an out of court settlement of £5,600 to a doctor who alleged that his working in excess of 100 hours a week had caused him stress-related illness. The doctor claimed that his employer’s were in breach of their legal duty of care and the Court of Appeal held that the employers could not lawfully require him to work such hours whereby it was reasonably foreseeable that his health would be damaged.

The cases of Walker and Johnstone and others following make it clear that theUK courts have now clearly recognised that the employer’s common law duty of care extends to the mental health of its employees.

This year, as reported in www.workplace.net, an ex-employee of Mercury Communications in the UK was awarded £325,000 in compensation in a compensation claim at Winchester High Court. Mercury was found guilty of failing to protect the health of an employee after 47-year-old Jeffrey Long was subjected to a bullying 'vendetta' by his line manager Simon Stone. This bullying had led to Long suffering a serious mental disorder. The bullying followed an investigation by Long into stock irregularities at the company's Leeds store, run by Stone. After seeing Long's confidential report, which was critical of Stone, he began a vendetta against Long. The vendetta resulted in Long being suspended pending a disciplinary hearing, which cleared Long of any wrongdoing. He was however, demoted and later made redundant. At around the same time, an ex-teacher was awarded £100,000 after being forced to retire through work-related stress. The case is yet another reminder for HR departments in both the public and private sectors to implement policies to deal with stress at work.

The UK Legal Standard of Care of the Employer to the Employee

Employers in the UK have a legal duty to take care that their employees do not suffer harm whilst in their employ. This legal duty is emanates from both common law and legislation. The legal standard of care required for the performance of that duty is to be measured against the yardstick of reasonable conduct of a person in the employer’s position. What is reasonable depends on:-

1. the reasonable foreseeablity of the risk of injury

2. the seriousness of the consequences for the person to whom the duty is owed of the risk actually happening

3. the cost and practicability of preventing the risk of injury.

The practicability of the remedial measures will take into account the resources and facilities at the disposal of the employer owing a duty of care and the purpose or value of the activity which has given rise to the risk. However, the UK courts have made it reasonably clear that political or profit-related expediency will not be a defence for an employer failing to prevent the risk of injury to an employee under an unsafe system of work. With regard to what is reasonable conduct for an employer, the court will not distinguish between private and public organisations.

UK employers therefore must compensate their employees where their breach of their duty of care towards the employee causes mental or physical injury. The decided cases show that the employer will be liable in instances where it:-

a) pursues such systems of work that cause employees to work long hours whereby it is reasonably foreseeable (the test is by the standards of ‘the reasonable organisation’) that the mental health of the employee would be affected. For example, reasonable foreseeability of injury to employees by an unsafe system of work would extend to the use of a system of management (like TQM) which the employer is aware, or should be aware, historically results in overwork and stress in employees.

b) does not reduce the possibility of the employee ‘breaking down’ under the strain where the employee’s job requires long hours and entails onerous work

c) does not heed the implied duty under its employment contract that the employer will do nothing likely to injure the health of its staff and in the case of workers who are particularly susceptible to stress or have suffered mental illness, fail to recognize that they are owed an even greater duty of care by the employer.

Total Quality Management (TQM) System and Stress

Total Quality Management (TQM/ the Japanese way) today is a widely used system of management by over 75% of UK organisations. The system goes hand in hand with delayering/ downsizing strategies intended to increase the organisation’s overall efficiency. TQM, and TQM systems - delayering/ downsizing; Just in Time (JIT); business process re-engineering (BPR) - are now the leading systems management systems employed by large UK organisations.

These systems are thought to increase the organisations’ competitive edge and in that regard they (BPR and TQM) are the most common management initiatives in the UK. A recent report sponsored by the Institute of Personnel & Development (IPD) found 59 per cent of UK organisations reported BPR activity in 1995 and in 1993 over two-thirds of the UK's 500 largest companies had introduced a TQM programme and this trend is continuing.

TQM practice is characterised by the promotion of flexible and versatile working among all an organisation’s staff . Its objectives are to enable an organisation to get the most from its workers by the adoption of a flat management structure driven by the ideal of continuous improvement , which coincidentally, provides for an increase in workloads at all levels. In this sense TQM seeks to eliminate spare capacity and increase the involvement/ workload and responsibility/ involvement of all members of the organisation.

With regard to the effect of TQM’s continuous improvement method on organisational members, TQM specialist and academic, the writer and TQM specialist, Ron Collard observes that, traditionally, issues of quality and product inspections have been restricted to manufacturing processes within organisations. In a TQM system, however, quality is an issue for all members of the organisation and indeed all parts of the process - offices, sales force, finance department, etc.. Collard observes that the implications of a TQM programme are:-

a) reduction in staff numbers (downsizing/ delayering/JIT) - this is especially relevant to those who were previously responsible for directly overseeing others

b) changes to a flatter management style (team-working; cross-functional teams) - where management responsibility is devolved to an increase in team-workingstructures

c) less control of tasks by individuals (everyone in the organisation is responsible for ‘quality’) - TQM’s participative approach becomes such that individual responsibility for tasks is taken away and becomes dispersed in a team or teams structure.

In a TQM system, organisational roles are flexible and are geared toward capacity, skill and aptitude rather than position in a hierarchy. This encourages a feeling among employees of not being in control, which is known to be a stress contributor. As TQM breeds an achievement culture in an organisation, employees are encouraged by it to take on more work and to correspondingly increase their working hours. These factors, however, are the very things that contribute to high levels of stress in employees. Under TQM systems, managers find themselves working as executives more and more and executives/ workers find themselves having to manage their own constantly evolving workloads as well as project teams (cross-functional management - where a worker with a relevant skill, knowledge or experience is assigned to lead a project team).

However, It seems clear that recent TQM initiatives are not reducing stress in employees, but contributing to it as the trend in the UK for high stress levels in employees is on the increase. For example in November this year, the UK Health and Safety Executive (HSE) launched a new guide on how small firms can tackle stress among their employees. The guide, published to coincide with National Stress Awareness Day which outlines the causes of stress and explains how bosses can deal with them. Elizabeth Gibby, Head of HSE's Psychosocial Issues Policy Unit, said: "Work-related stress is a serious problem for Britain. The Health and Safety Commission has made it one of its top priorities, and we have a detailed programme of work that should put us well on the road to reducing it."

As occupational stress levels continue to rise in Britain, Professor Cary Cooper and Jill Earnshaw (both of the University of Manchester) predict that stress litigation will be the biggest emerging legal fields of the 21st century. So far their predictions are on target. To support their view, they had sent questionnaires to around 200 firms of solicitors in England and Wales having large personal injury departments and about 100 employer’s law departments. The results showed that the majority of their respondents specified the main factors that cause stress to be long working hours and work overload, both inherent qualities of TQM systems. It is also interesting to note that a study sponsored by the UK Chartered Institute of Personnel and Development (IPD) in 1996 indicates that lean management systems such as TQM are not having the desired impact on employees. Preliminary results from the study also warned that short-sighted cost-cutting additionally may damage competitiveness in the medium-to-long term.

The IPD says the results of the study shows that : ''Too many organisations are unable to differentiate 'fat' from 'muscle'. The result of this is that the organisation becomes 'anorexic' rather than 'fit' with a workforce unable and even unwilling to make the most of new opportunities as they arise ". In addition, attempts to develop leaner management systems by de-layering, downsizing, business process re-engineering (BPR) and TQM frequently fail to live up to expectations. However, those adopting TQM choose to ignore this fact. The IPD’s (1996 sponsored research) study’s project manager (Angela Barron) said that while companies and management gurus agreed that the workforce was crucial to organisational success, they still tended to overlook the human factor in their strategic planning and research. As a result, these ‘lean’ management systems can be harmful to both employer and employee instead of being helpful. Organisations have not yet fully understood and have devised ways of dealing with the potential adverse impact of such systems on staff. Notwithstanding, this view by the IPD of the inherent dangers to employees as well as the organisation’s success under ‘lean’ systems like TQM, in 1997 well over half of UK companies restructured and opted for a downsizing approach, either by de-layering, offering early retirement, or by making redundancies.

As far as the efficiency and ‘safety’ of TQM and other similar management systems are concerned, evidence in the USA indicates that lean systems often fail to deliver the improved economic and organisational performance expected of them. In the United States between two-thirds to three-quarters of all downsizings are unsuccessful from the start.

Furthermore, between 50-70 per cent of re-engineering initiatives fail to achieve their aims and a survey of 880 UK managers found only eight per cent believed TQM to be very successful . The IPD suggests that lean systems are far from fulfilling the promises of enhanced competitiveness and business success made by many of their advocates. It concludes that this has been caused by the neglect of the human factors involved. As a result, the inevitable upheaval caused when organisations try to become leaner, coupled with management's tendency to confuse leanness with opportunistic meanness and job-shedding with increased efficiency, employees tend to view such systems negatively". Consequently, employees are often left feeling stressed and demotivated when lean systems like TQM are introduced.

Matching TQM Features with Stress Contributors

To fully understand how TQM as a currently pervasive system of management in the UK contributes towards occupational stress, it is necessary to examine the system in more detail.

The Essentials of TQM

TQM might be defined as a basis for all strategy, planning and activity in a company that uses the system . It requires the total dedication of all the employees in the organisation towards customer satisfaction in every way possible. Traditional management systems, worked in hierarchical mode generally, where the organisation looked like a pyramid and employees reported to line managers whose function was to oversee their work and general progress. Under this system, the employee’s responsibility was to discharge his tasks to his manager’s satisfaction and as such was not involved in, or responsible for overseeing the work of colleagues in other departments of the organisation. The TQM system provides a direct contrast to this as under it , the employee’s responsibility increases significantly. Here all employees are involved in improving the organisation’s ability to deliver a ‘quality’ service ultimately to the organisation’s end customer.

This involves employees in not only doing the kind of tasks which they were singularly responsible for in a hierarchical management system, but to be involved in doing several other tasks related to enhancing the organisation’s ‘quality’ output and thereby assuming the new responsibility of being responsible for the work of others. The effect of the TQM system therefore is that employees, regardless of inclination or qualification and aptitude, are driven by the TQM culture (as has been shown in studies on Japanese work culture) and either succumb to its pressure by increased output in the short-term, or fail to cope and as a result, the system fails (as has been the case in many TQM implementations in the 90s).

A TQM system typically consists of :-

a) ‘Just in Time’ (JIT) methods - ways of speeding up activity flows; pinpointing and eliminating activities that do not add value for the customer; the groupage of tasks into work centres or project teams; the altering of the method of planning and scheduling work,

b) Organisation Development/ Business Process Re-Engineering practices - the measuring of the work climate; minimisation of barriers to teamwork; the development of management skills; business process re-engineering (redesign of the organisation structure); increasing employee involvement in decision-making,

c) Traditional Quality Systems - e.g., ISO 9000, drawn from Quality Control, Quality Assurance and Reliability Engineering ‘hard’ systems (as opposed to ‘soft’ systems - people) ,

d) The Encouragement of Employees - to view the organisation as their own and thereby to give greater commitment in terms of activity and output to the organisation.

TQM - origins, historical perspective, hidden dangers

After the second world war, Dr W Edwards-Deming challenged the widely held belief that improving quality added to costs and attempted to explain his ‘quality’ philosophy to organisations throughout the USA and Europe. His initial failure to convince his audience took him to post-war Japan where he persuaded Japanese organisations to take up his ideas which involved bringing the customer into the workplace and creating a closer link between the worker and the supplier - which was the method of Total Quality Management as it is known by today.

The Japanese adopted Deming’s methods and achieved great success to the extent that in the 1970’s American industrial leaders found it increasingly difficult to keep adequate market share against foreign competitors (who were in main, the Japanese). These competitors were producing consistently higher-quality products and were able to get them to market in far less time the comparable US organisations, and at lower cost. From researches done by US organisations, it was found that the Japanese manufacturing systems were not any different that those employed in the West, however, their management systems was profoundly different. US businessmen found that the Japanese had embraced JIT; they had drawn their employees at all levels into the decision-making process as far as work processes were concerned; employees were versatile and often worked in cross-departmental teams; those employees who had direct knowledge of a product had more influence than those who did not. There was a culture that encouraged people to continuously improve, to hold quality and time improvement as sacred and to focus first and foremost on the customer. It is interesting that little emphasis was given to the fact that the Japanese workers worked far longer hours than their American counterparts.

Furthermore, the Japanese having just endured a crushing defeat in war by the Americans were on the whole a nation united by a ‘siege’ culture where traditional healthy working patterns were seen as a luxury that could not be afforded. This kind of scenario proved ideal ground for the introduction of TQM with its team culture and increased responsibility/ output at all levels in workplace. From the 1970s onwards, however, US organisations saw TQM as standard to aspire to and the system became widespread. In the meantime, in Japan, the cracks in TQM as a system of management were becoming apparent.

TQM can kill you

That TQM is bad for your health is evident in the report of researchers Palumbo and Herbig whereby the phenomenon of Karoshi (death by overwork) in Japan is explained. Karoshi refers to a condition in which psychologically unsound work processes are allowed to continue in a way that disrupts the worker’s normal life rhythms, leading to a buildup of fatigue in the body and accompanied by a worsening of pre-existent high blood pressure and a hardening of the arteries, finally resulting in a fatal breakdown. Over 10,000 workers die each year from Karoshi. The victims in their prime working years die from a subarachnoidal hemorrhage, heart failure, cerebral hemorrhage or myocardial infarction. They are found in every occupational category, however, the white-collar male office worker and middle manager is the most susceptible. The incidence of Karoshi in modern Japan goes hand in hand with Japanese working culture based on TQM which encourages long working hours (seen as a gesture of loyalty to the organization) and the use of overtime as a way of keeping headcount levels down.

In that regard, some Japanese organisations make it clear that vacations are not welcome and that overtime may be voluntarily required without pay - compliance is a ritual of obedience and subservience for the worker. It is sad to note that this kind of practice is becoming routine in the UK. Employees who do not comply find themselves risking job security, promotion and being branded as disloyal. Palumbo and Herbig’s research shows that , although the average Japanese worker put in over 225 hours per year more than his American counterpart, and 500 hours per year more than his German counterpart, he is less productive. Increased competition, a sluggish domestic economy, and a growing shortage of workers, has caused organisations to demand higher productivity from streamlined, stressed out staff unable to cope with that kind of demand and falling ill as a result.

Against this background, the Japanese Ministry of Labour set out, as early as 1988, to reduce working hours and to phase out the six-day work week. It also sought to encourage firms to give employees two and three-week vacations. This government campaign, urging people to take more time off, has been regarded cynically by employees. Palumbo and Herbig report that the number of weekly holidays is still low because the number of companies that have gone over completely to the five-day work week is still very small. Furthermore, It would appear also that the Ministry itself has failed to practice what it has been preaching: at evenings and weekends, the Ministry headquarters is often full of workers despite their own Ministry's directive to reduce their working hours. When banks closed on Saturdays, in an effort to move to a five-day week, bank employees were told that they were expected to make up the lost time by adding on more hours each day within the week. The researchers say that more than 50 per cent of the paid holidays to which the Japanese are entitled are not utilized. Two and three hours of commuting each day further aggravates the problem.

Many salarymen (the term salaryman refers to the male Japanese office worker and manager who typically works for large Japanese corporations) leave at the onset of dawn and only return late at night and the last commuter train out of Tokyo is always full of dozing workers. Palumbo and Herbig also report that high caffeine drinks, such as Regain and Emperor Essence, provide instant energy for round-the-clock work. Coffee consumption is growing rapidly (a proven indicator of stress). A $700 million a year industry has grown around soft drinks loaded with caffeine and sugar to keep salarymen going.

The stress eradication business - health clubs - has become a booming industry in Japan as well as being reflective of the growing concern about mounting stress among office workers and businessmen. Still, leisure is still regarded as a luxury by many. Many salarymen have become so addicted to work that they are at a loss about how to spend their time when holidays are forced on them. Karoshi victims are known to labour for weeks without adequate rest, then collapse and die without warning. Some Karoshi victims have worked 80 straight days and more than 100 hours of overtime for months at a time. A Japanese survey indicates that two out of every three workers fear dying of overwork.

Palumbo and Herbig report that the Karoshi hotline receives more than 300 calls a day, even though it covers less than half the country. It is acknowledged by all that Karoshi brought on by tiredness and stress, is a recognized social problem. Recently, more companies have been willing to make out-of-court settlements with victims' families for fear of bad publicity.

Palumbo and Herbig report that the Japanese National Council for victims and the trade unions are pressuring the Japanese government for stronger overtime laws and enforcement. Furthermore, in July 1992, Tokyo labour regulators ruled that overwork killed Jun Ishii, 47, an executive. His firm Mitsui, had sent him to Moscow ten times in the prior ten months, for a total of 103 days. His spouse was awarded compensation. Mitsui co-operated fully with the government's investigation and made a payment of $240,000. With the favourable ruling on this case, regulators have expanded Karoshi compensation to salarymen. Major companies such as Matsushita Electric Industrial Company and Toray Industries, Inc. have increased the number of required holidays and begun to re-examine their work rules.

Warnings for the UK?

However, despite all this happening in Japan, in the UK there is a keenness by employers and government to maintain higher working hours. These working hours continue to be far longer than the UK's European counterparts and the lessons from Japan are largely ignored although the UK continues to have one of the highest levels of occupational stress in Europe. In their fervour to embrace ‘the Japanese way/ TQM’ so as to boost productivity and minimize operating costs, UK organisations have ignored the fact that at the time of TQM’s adoption in Japan, post-war Japan was living in circumstances bordering on poverty, many were bound by the moral and cultural obligation of self-sacrifice for the country, with a daily need for food, clothing, and shelter, all of which were in short supply. The pressing need for all these basic necessities outweighed all other needs. At the time, national income was one-twentieth of its present level.

UK organisations also choose to ignore the cruel cost to the Japanese of TQM in terms of the tens of thousands of human lives being lost now through stress at work. Furthermore, today, Japanese companies are beginning to change their management practices, moving away from the strictures of TQM. However, this change is sluggish as it is mainly driven by its younger generation who are beginning to assume positions of leadership within Japanese organisations.

The rise of the new generation of Japanese born in affluence, is changing work habits and transforming the consumption-driven economy. These Japanese young people are much less ready to put off their own personal ambitions and sacrifice their lifestyle for the company. Of these new breed, only 3 per cent of the 250 managers questioned in a recent study were in favour of traditional employment practices - i.e. job security, guaranteed level of pay, long hours, transferring employees, etc. The vast majority indicated that efforts should be made to reduce working hours and that personal freedom should be respected. Many want to start their own business. Women too, see their role evolving.

In April 1990, the Japanese government began a $2 million study to determine whether working in a Japanese office can really kill you. However the government is not keen to use the word Karoshi officially. It claims that: "The relationship between circulatory diseases and fatigue has not been proved" from a study which was included 'in a Labour Ministry project called "Comprehensive Measures for Job Related Illnesses". The government, and most Japanese companies, rarely acknowledge Karoshi and offer no special compensation to survivors.

TQM Practice in the UK

It is well-known that the highest operational cost for any company is manpower and therefore it is not surprising that the TQM methods relating to downsizing’/ delayering/ business process re-engineering methods (all resulting in people-leaner organisations) have been favoured strategies for this purpose. The strategies result in a flatter management structure and a virtual elimination of ‘middle managers’. In this scheme of things, the new ‘flatter’ organisation’s management duties are absorbed by the remaining managers and their reportees. These changes have affected all kinds of organisations, private as well as public. Private organisations have seen an increase in performance-related pay and assessment schemes. In the public sector, the increases in privatisation as a result of the government’s revenue shortfalls (coupled with Charter/ Performance Level schemes), have shaken the previously cosy world of the public servant who is now under as much pressure as his colleagues in the private sector as Mr Walker’s case aptly demonstrated.

The result of all this is that increasingly managers and workers feel more insecure than before and often willingly take on more work as a result. What this means is that, more so than pre-90s, senior managers have a greater workload and their reportees have taken on those duties that were previously performed by their ‘middle’ management colleagues. Professor Karen Legge identifies the stress contributing factors in TQM implementations and use in the UK. The system creates role conflict (a known stressor) between workers and managers and this in turn contributes towards impaired communications between the two groups. The reason for this is that under TQM systems, both groups have responsibility for ‘quality’ and as such might take such action as is necessary to ensure ‘quality’ output in a relevant area of work. This creates an inherent ambiguity with regard to the responsibilities of the two groups. According to recent research , the progress of TQM in the UK is characterised by a system of ‘management by stress’including the following key elements:-

a) a rewritten contract announcing that a new relationship exists between the company and its workforce

b) interchangeability - whereby the workers are required or induced to be capable of doing several jobs

c) drastic reduction of employee classifications so that employers have increased control to assign workers as they see fit

d) less meaning for seniority or job titles

e) detailed definition of every job routine which gives employers increased control over how jobs are done

f) workers are required to participate in increasing their own workload

g) workers have more responsibility without more authority for jobs previously performed by managers.

TQM as a Legally Safe System of Work

Employees in all organisations throughout the World, regardless of size, are affected by stress, from both external and internal sources. Positive stress is a necessary force to achieve optimum performance and in general, people re-act badly with either to little or too much stress. Stress can be positive, or beneficial when it motivates, encourages desired change or inspires employees towards goals they deem worthy and desired. The "stress" people complain about is the negative stress that makes them function less well and gives them a feeling of tension or pressure. Negative stress (generally referred to as ‘stress’) is experienced when an individual feels that the demands placed on him or her exceeds the resources the individual has personally to meet them. "Stressors" can be events, situations, people or demands the individual perceives to be the source of stress. The instinctive response to stress is essentially biological, a primitive reaction of "fight or flight". This state changes the body by releasing chemicals to cope with the situation. In the short term the individual survives.

However, if the individual is in a constant (chronic) state of stress illness damage occurs. This can be compared with an engine running at its optimum continually, with no service breaks, when pushed further it becomes less reliable then breaks down rapidly.

The symptoms of stress include: performing better, acting faster,

running harder and thinking quicker. So not all stress is bad, however, too much stress can be negative and result in:-

  • low morale
  • aggression
  • bad decisions
  • disorganisation
  • hair loss
  • eye twitches
  • neck stiffness
  • sleepiness
  • increased tiredness
  • increased palpitation
  • increased smoking
  • stomach upsets
  • eating disorders
  • physical sickness (headaches, increased blood pressure).

Indeed, the long term effects of stress can result in ulcers, heart attack, nervous breakdown, weight gain or loss, and dependence on alcohol, pills, drugs, smoking and even death. Stress therefore is clearly identifiable as it triggers off a number of noticeable changes in the bodily processes of which the most common are:-

  • increase in heart rate and excessive sweating which may be coupled with breathlessness (also known as panic attacks)
  • insomnia
  • constant tiredness
  • high blood pressure
  • frequent crying or desire to cry
  • nervous twitches
  • inability to sit still without fidgeting
  • muscle or tension headaches
  • constant irritability
  • apathy
  • difficulty in making decisions
  • loss of sense of humour
  • poor concentration
  • excessive concern about physical health
  • withdrawal and day dreams
  • excessive and rapid mood swings
  • anxiety
  • inability to feel sympathy for others
  • suppressed anger.

Cooper and Cartwright, in their research on workplace mental health for the UK Department of Health, conclude that where stress is a result of occupational pressures, organisational indicators are poor time-keeping; an increase in accidents and mistakes; poor quality output; an uncooperative attitude in routine work behaviour (an increase in pettiness and office politics). Worker’s personal appearance may also deteriorate. The researchers find that stress at work is primarily caused by:-

a) uncertainty in the workplace (unclear job descriptions, worries about job

security, etc.)

b) lack of control over the way work is organised and paced

c) high workload.

All these are attendant features of the TQM system. Indeed TQM is specifically geared to create flexible workers who may serve the organisation diversely in cross-functional teams (where project teams are constituted on a task rather than departmental basis); where traditional job functions become fuzzed in favour of a ‘fitness-for -the-task’ oriented culture; where it is increasingly difficult for people to ‘know where they stand’ in relation to their colleagues and the organisation in general. Furthermore, as has already been noted, TQM is designed so that everyone is included in the drive for quality (quality being what the end customer reckons it to be) so that in a TQM system high workloads are the order of the day.

A recent survey by the Institute of Management, confirmed that "UK Managers are working longer hours and their workload is increasing" and further that "41% work at least 50 hours per week and 13% worked longer than 60 hours per week". 75% of those surveyed confirmed "that their workload had increased by 35%." All this is happening when TQM becomes the standard management practice for over 75% of employers in the UK. In 1997, the majority of significant UK employers are implementing and refining TQM systems of which downsizing, job flexibility, BPR, JIT are important constituents. So the trend continues to move relentlessly toward the Japanese management model (the ‘Japanese Way’) whereby employees necessarily work longer hours, have more responsibility, are subject to more change in their working environment than ever before and have less autonomy over their duties at work. All these factors however are known stressors.

A 1992 survey by MIND (the UK Mental Health Charity Organisation) highlights other organisational conditions causing stress as:-

a) pressure to perform ( in a TQM system, everyone contributes towards the organisation’s drive for ‘quality’. This involves increased use of teamworking as a management tool, where interpersonal skills are at their most tested; and also a deterioration of the worker’s feeling of autonomy ‘control’ over her work);

b) fear of redundancy (in a TQM system there is a never-ending quest for ‘quality’ which takes the form of ‘continuous improvement programmes (CIPs). These CIPs become pervasive throughout the organisation and focus on the ever-increasing leanness (leanness = competitiveness) of the organisation. As labour costs are the highest charge on any organisation’s balance sheet, ‘downsizing’ or BPR strategies and practices go hand in hand with any TQM system creating a climate of fear among workers which results in stress);

c) recession (precipitated the need for ‘leanness’ coupled with a reduction in operational costs and more productivity = the TQM/ Japanese Way!)

d) change / pace of change (TQM involves constant change at all levels in the organisation whether this involves downsizing, JIT, CIPs or quality audits. As computer technology continues to evolve and to offer organisations opportunities to increase their operational speed and to decrease their labour costs, the 90s have been characterised by constant and fast change in work practices in organisations);

e) increased workload against reduction of staff (again a necessary feature of the TQM system. The mother of TQM’s (Japan) organisations are characterised by high levels of overwork in respect of all staff)

excessive hours (a feature of the TQM system, which encourages workers to work longer hours due to increased responsibility and a desire to ‘show’ commitment to the organisation)

f) maintaining quality (TQM encourages the relentless quest for ‘quality’ which is elusive, because in a TQM system it is frustrating to achieve as, quality is defined by the customer).

In addition to the impact of the organisation’s "environment" on the individuals role in the organisation, the "person's role at work" is acknowledged as the major source of stress among workers generally.

This includes:-

  • role conflict
  • lack of job clarification
  • conflicts of role boundaries
  • responsibility for people.

With regard to these 4 factors above, their presence in a TQM system of work is vividly shown up in the following example.

Nissan’s Sunderland Plant in the UK is a model for the ‘Japanese Way’/ TQM in progress. At Nissan, teams are necessarily cross-functional and roles are subserved to the goal of the team: ‘ a team begins with a group of individuals whose individual contributions are recognised and valued and who are motivated to work in the same direction to achieve clear, understood and stretching goals for which they are accountable. The best team results come with positive leadership and tough goals’.

Furthermore, at Nissan, peer/ quality checking consists of the ‘neighbour’ check system. Here workers are encouraged to identify their internal customers. Those, for example, in previous production processes, who have failed to deliver a ‘quality system/ product’ to the next production team. Workers are encouraged to identify the defects caused by other workers and to identify those responsible for the errors. The objective of this system appears to be to bring peer pressure on those ‘letting down’ the team. This seems to encourage competition between teams and to create a climate of mistrust and non-co-operation. Quality faults are exposed in meetings between the responsible teams and generally result in a ‘witch-hunt’ and ‘ticking off’ of those responsible rather than a learning exercise.

At Nissan, as everyone is concerned with quality, workers have the power to stop the production line to deal with processing problems or defects. However, this was found to generate a significant amount of stress. The main reason for this is that it was difficult for workers to decide or assess when the line should be stopped as this could result in reciprocal stoppages of their own processes (where the stoppage also revealed deficiencies in their own work). Also, many had difficulty in deciding what constituted a ‘line-stopping’ event.

At Nissan, the TQM/ JIT system sought to control absenteeism. Under that system, cover for absentees is provided by team members, not additional staff. This was found to have the effect of putting pressure on absentees to remain at work. TQM is found to serve to encourage long working hours and minimum vacation. In the context of the TQM system’s focus on team-working and autonomous cross-functional working groups, individuals are finding it more and more difficult to perceive and achieve traditional career development. Again, career development is another area with high "stress impact". Examples of this include, over and under promotion (where workers are promoted who lack the technical or interpersonal skills for the job - easy to do in a TQM system as the above example of Nissan shows); status (or lack of it.

Not being able to reckon one’s position in the organisation), lack of security (a TQM system is one that is dynamically and continuously evolving in a continuous quest for ‘quality’) and frustrated or thwarted ambition (in a TQM system team-working is the order of the day and personal achievements are difficult to perceive and as such personal ambitions - for promotion, etc. - are more difficult to achieve. Interpersonal relationship issues at work are crucial determinants of stress levels. TQM, with its emphasis on team-working, highlights this issue.

Whether we get on with others, the support we get from management, the organisation and social support from clients and others all have a crucial effect on stress levels. In that regard, a lack of autonomy is a major contributor to stress and reduced performance. This was illustrated in a 1994 survey by Staffordshire University (as more than 75% of UK companies engage and refine TQM systems) which found that: "More than half of Britain's workforce complains about being bullied, intimidation. Daily verbal abuse and public humiliation are the most common forms".

To add to this, a Harris Research survey in 1994, found that "37% of British office workers, compared with a European average of 29%, do not feel appreciated at work, 53% against 69% overall have confidence in the ability of their managers and only 65% compared with 73% in Europe, felt their job is secure" .

TQM and Employer’s Liability for Occupational Stress

Recent research by Comcare (Australia) show that the most common cause of stress-related absences are classified as "workplace conflict situations". The Comcare research breaks down the incidence of these situations as follows: interpersonal conflict (24%), work pressures and deadline (24%), anxiety caused by organisational change (22%), and verbal or physical abuse (17%). All of these factors are significantly increased when a TQM system is adopted.

The research suggests a way forward for organisations to help combat stress in workers. Bearing in mind the seminal cases of Walker and Johnstone, this may seem a sensible way for an organisation to proceed in order to minimise liability for stress induced illness.

Organisations can help to reduce perceived stresses amongst their staff by:-

Regularly consulting with employees for de-stressing measures

Ensuring all employees have tasks and duties matched to their

capabilities and training

Informing employees of organisational changes, plans and successes

Providing adequate training for supervisors in resolving work

conflicts

Providing flexible working arrangements to fit in with family and social commitments

Training employees in stress-management skills for example:-

  • Learning to breathe properly and do regular breathing exercises
  • Relaxation skills
  • Enforced breaks at work
  • Diet training - sound nutrition is essential for every aspect of good health
  • Sleep management - regular sleep rejuvenates the body and mind
  • Doing moderate exercise regularly
  • Enjoying more social activities.

Under UK health and safety regulations, which came into force in January 1993, with regard to stress-induced illness, all employers must undertake a suitable and sufficient assessment ‘of the risks to the health and safety of the employees to which they are exposed whilst they are at work’. The purpose of the assessment is to identify the measures that need to be taken so as to comply with the relevant statutory provisions. There is a further requirement that the employer will provide such health surveillance as is appropriate having regard to the risks identified in the assessment.

In addition, as far back as 1995, The Health and Safety Executive issued their booklet ‘Stress at Work. A Guide for Employers (1995) (HS(G)116) which provided advice for employers with regard to stress-induced illness. The guide pointed out the nature and causes of occupational stress and gave guidance on good practice. It also pointed out that section 2 of the Health and Safety at Work Act 1974 requires employers to ensure as far as this is reasonably practicable that workplaces are safe and healthy (this includes mental health) and also draw attention to the assessment requirements (above). More guides have been issued since then.

It seems clear that in cases where workers are in highly stressful occupations, such as the rescue and medical services and social work, the employer must be particularly mindful of the mental strain and trauma of the job and take steps accordingly. Similarly, workers at risk of violent attacks are entitled to be treated sympathetically when they have been traumatized by such an event.

Professor Tom Cox of Nottingham University has recently completed research for the Health and Safety Executive into work-related stress. He concludes there are many factors that will probably indicate which workers are more likely to suffer from stress. Factors such as relationships at home, satisfaction with work, lifestyle, health and social status, hazardous working conditions and type of personality are all implicated in stress disorders.

With regard to what employers can do to avoid liability for an employee’s occupational stress, the case of Ray Petch is instructive. Ray Petch, a former assistant secretary at Customs and Excise, unsuccessfully sued his employer for negligence after his mental breakdown. His employer was held not to be negligent because it had sent him on sick leave after his breakdown, moved him to a less onerous post when he first returned and then finally retired him early on medical grounds when it became clear that he could not cope with the work. Furthermore, it had not been reasonably foreseeable that his workload would have caused him to have a breakdown.

However, it would seem to me that had a system of work, like TQM, been in force prior to Mr Petch’s breakdown, the defendants would have been found liable. That is because, bearing in mind the track record of TQM for occupational stress in Japan and its inherent stress-contributive character (encouragement of overwork, constant change, lack of autonomy & control, long hours) , it would have been reasonably foreseeable that injury would have been caused to the plaintiff by working under that system. My view is that, in light of the above, where a company adopts TQM as a system of management, injury by stress to an employee becomes foreseeable. It will be recalled that under the common law and health regulations, there is a duty upon the employer to ensure that its system of work is safe to the extent that the employee suffers no mental or physical damage whilst working within it. The standard of care in that regard is that of a reasonable employer with foresight of injury.

It would seem to me that having regard to the researches done by the IPD and significant others in the UK with regard to TQM and stress, a reasonable employer would be aware of the risk of injury to its employees by the adoption of such a system. Furthermore as knowledge of Karoshi is now widespread in business, academic and professional circles - Karoshi being the extreme effect of a TQM system - a reasonable employer would also be aware of the unsafeness of TQM as a management system. In terms of balancing the magnitude risk of injury to the employee against the practicality of doing something to avert it, current and dominant research both in the UK and Japan indicates that TQM is bad for productivity and the success of the organization. Therefore, there cannot be a very strong economic argument for pursuing its adoption and continuance (where it is operating as a system of management). TQM has been shown to contra-indicate the very results it seeks to obtain.

TQM Adoption and Practice - the way forward

In theory, it is a wonderful management tool, capable of achieving spectacular results for organisations. In practice though, it does not reckon the human factor and fails dismally though ignoring the human need for consistency in working practices; autonomy; status; reasonable working hours; to work within their capacity and to be appreciated for the level of the contribution that they are able to make.

With regard to the practicality of dismantling TQM, or not using it at all, the organization may proceed by using an alternative management style based on the traditional hierarchical basis whereby employees have discrete job responsibilities and tasks. Assuming that TQM is being used in an organization, once the employer becomes aware that the employee is beginning to suffer from occupational stress, it must take reasonable steps straight away to protect the employee to avoid liability. However, this may be too late under a TQM system where the adoption and use of the system itself may be deemed to have precipitated the stress-related illness in the employee. Therefore, the best solution would appear to be not to implement a TQM system in the first place. Where this may be inevitable for whatever reason, the employer may wish to consider taking proactive steps to protect its liability to the employee for stress-related illness.

For example, pre-employment screening and psychometric tests may be one way to assess whether a job candidate is able to withstand the particular stresses in the job or the TQM system of management. The employer ought to warn any prospective candidate about such possible stresses. Once in the job, employers must ensure that no one is having to work so hard that they cannot cope. The TQM system may be adapted to ensure that management review processes include competency tests and that employees lacking in relevant skills may receive appropriate training or assistance. If any employee suffers a breakdown the employer must ensure that it takes expert medical advice about how that employee should be rehabilitated back to work. Employees who complain about being unable to cope should be listened to most sympathetically and the employer should do something quickly to negative the problem as the employer might well be liable for the employee’s resultant stress-related injury.

As a dramatic way of reducing the size of a potential award to an employee for stress-related injury, one of the country's leading employment lawyers is advising corporate clients to sack employees suffering from work-related stress, even where the dismissal is found to be unfair.

Some UK lawyers have suggested that dismissing sick employees could be the cheaper option to changing harsh management practices. However, recent changes in the amount that UK Employment Tribunals may award, have risen and a claim for unfair dismissal by an employee would not necesarily present a cheaper option. Again, a dissatisfied employee may claim for higher award through the courts. In any event, even if dismissal were legally 'fair', I cannot see how this would help organisations in the long run as there is now greater realisation that working conditions that lead to poor mental health in employees are ultimately bad for the organisation’s productivity and as such good business sense would dictate that they are to be avoided.

As over 75% of employers in the UK are using TQM, a known stress inducing management system - as such an ‘unsafe system of work’, an employee suffering from stress in a TQM managed organisation might be well able to plead res ipsa locquitur (res) (the thing speaks for itself) successfully in the event of occupational stress injury. Where res applies, the court will draw the inference that the defendant was negligent without the need to hear detailed evidence to support this in terms of what the defendant did or did not do.

The first condition for res to be satisfied is that the defendant must be in control of the thing which caused the injury to the plaintiff. This would not be difficult to show in the case of a TQM system which can only be implemented and sustained by the managers of the organisation. The second condition to be satisfied is that the injury must be of a nature that it would not have occurred in the ordinary course of events without negligence. For example, if the employee suffering from occupational stress would not have normally been subject to it under a previous management system, then the second condition would be satisfied. Another reason might be the fact that TQM is a dangerous practice known to cause serious stress injury in employees and despite this was implemented by the employer.

The third condition that must be satisfied is that there must be no (other) explanation for the accident. This is almost a redundant consideration as it is the very basis upon which res is pleaded in the first case.

Summary and Conclusions

Organisations can lose signficant sums via compensation claims for TQM stress-related illness. Secondly, TQM is not an effective management system for increasing organisational effectiveness. Ethical issues supported by UK and emerging EU law create an unavoidable duty upon employees to use such systems of

that are safe for the health of their employees. This aspect of safety now clearly relates to both the mental and physical well-being of employees. In that context, where a system of work is used that a reasonable employee would foresee that by using it harm (mental or physical) would come to its employees, then that employer would be liable to compensate the employees for that harm when it occurs. However, the liability of the employer is weighed up in the main against the cost and practicability of averting the harm by using an alternative system, or by removing the employee from the potentially injurious situation.

In the context of the above, I have argued that TQM is an unsafe system of work and any employer using it is at risk of a costly claim for compensation for injury once an employee develops occupational stress under its practice. Furthermore, it is to be noted that TQM can be dismantled or substituted relatively easily in an organisation. In addition, research demonstrates that there are practically nil cost savings to the employer by using TQM as a system of work. Therefore, in light of the foregoing, its use would not, in my view, be able to be justified by an organisation seeking to rely upon the defence against a claim from an employee that its practical utility and the cost connected with removing it outweighed the magnitude of the risk of injury to the employee.

TQM is not 'efficient'

That TQM is an unsafe/ inefficient system of work is demonstrated by the recent research on its practice done in the USA and Japan and recent reviews of its practice in the UK (research on Nissan). I have shown that as more and more organisations in the UK move towards TQM management systems, occupational stress levels are rising to the detriment of employers. Additionally, research in Japan (the mother of the TQM system) shows that TQM Stressors are unlikely to be temporary reactions to change among employees. That is because, the TQM Stressors there have evolved to Karoshi (death by overwork) which is killing over thousands of Japanese each year and is prompting the Japanese to change their working practices as a matter of some urgency. .

I recommend therefore that organisations using TQM, should, for legal, ethical as well as commercial reasons, investigate other methods of management as a matter of some urgency. With the lessons of the stress-inducing properties of TQM in mind, alternative management systems should be put in place which reflect current research on how stress-free working environments may be achieved for the benefit of the organisations and its employees. There are obvious lessons to be learnt here for organisations in those developing countries which are seeking to emulate ‘successful’ working practices of their more affluent neighbours.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.