A quality circle is a participatory management technique that enlists the help of employees in solving problems related to their own jobs. A quality circle is defined as “a small group of employees doing similar or related work who meet regularly to identify, analyze, and solve product-quality and production problems and to improve general operations. The circle is a relatively autonomous unit (ideally about ten workers), usually led by a supervisor or a senior worker and organized as a unit.”


Employees who participate in quality circles usually receive training in formal problem-solving methods – such as brainstorming, Pareto analysis, and cause-and-effect diagrams – and then are encouraged to apply these methods to either specific or general company problems.  After completing an analysis, they often present their findings to management and then handle implementation of approved solutions,


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 business reduce costs, increase productivity, and improve employee morale. Other potential benefits that may be realized by a business include greater operational efficiency, reduced absenteeism, improved employee health and safety, and an overall better working climate. 


The interest of US 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 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. 


A number of requirements for a business contemplating the use of quality circles are outlined below:

First, the business owner should be comfortable with a participative management approach. It is also important that the business have good, cooperative labor-management relations, as well as the support of middle managers for the quality circle program. The business owner must be willing and able to commit the time and resources needed to train the employees who will participate in the program, particularly the quality circle leaders and facilitators. It may even be necessary to hire outside facilitators if the time and expertise does not exist in-house. 


Some businesses may find it helpful to establish a steering committee to provide direction and guidance for quality circle activities. Even if all these requirements are met, the business will only benefit from quality circles if employee participation is voluntary, and if employees are allowed some input into the selection of problems to be addressed. Finally, the business owner must allow time for the quality circles to begin achieving desired results; in some cases, it can take more than a year for the expectations to be met.


But successful quality circles offer a wide variety of benefits for businesses. For example, they serve to increase management’s awareness of employee ideas, as well as employee awareness of the need for innovation within the company. Quality circles also serve to facilitate communication and increased commitment among both labor and management. In enhancing employee satisfaction through participation in decision-making, such initiatives may also improve a business’s ability to recruit and retain qualified employees. 

In addition, many companies find that quality circles further teamwork and reduce employee resistance to change.  Finally, quality circles can improve a business’s overall competitiveness by reducing costs, improving quality, and promoting innovation.


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