Towards a human-oriented metrology for
improvement and change
Su Mi Dahlgaard-Park
Su Mi Dahlgaard-Park is
based in the Department of
Service Management, Lund
University, Sweden.
DOI 10.1108/13683040910943018
Summary
Purpose – An overall aim with a new human-oriented TQM metrology is to help managers in giving
answers to the questions of what to measure, how to measure and why? It is the purpose of this paper to
give input to answering these questions. In doing so the measurement problems are to be discussed in
relation to the context in which the measurements are applied. Some common risks or failures are also to
be discussed when more complex or advanced measurements are used such as LISREL or PLS
measurements.
Design/methodology/approach – The main methodology is to re-interpret measurements from three
company cases by having a special focus on understanding the importance of the human-oriented
dimension of TQM and Change Management. The European Excellence Model (EFQM) is used as the
reference framework for understanding what to measure, how to measure and why?
Findings – The measurements support the view that establishing measurements related to the human
dimension of TQM and Change gives new opportunities for understanding the results achieved or not
achieved.
Research limitations/implications – Because the research is based on a combination of theory and
case studies it is believed that the findings can be generalized to most companies working under the
laws of free competition. The specific measurement examples should not be copied but should be
adapted carefully to other contexts and cultures.
Practical implications – The case companies analysed are two relatively big global industrial
companies and a big national and government-owned service company (Post Denmark). Case studies
from small- and medium companies have not been analysed here but several materials from these kinds
of companies support the conclusions in the paper.
Originality/value – This is the first paper towards a human-oriented metrology for improvement and
change. The main value of establishing performance measurement systems with a balanced focus on
tangibles and intangibles (the human dimension) is that this kind of measurement is a necessity for
understanding the root causes of the results achieved or not achieved.
Keywords Performance measures, Motivation (psychology), Leadership, Employees
Paper type Research paper
1. Introduction
Literally, metrology means the theory or science of weights and measurements (Webster’s
New World Dictionary), and it is derived from the two Greek words Metro, which means
measure or measurement, and Logy, which means science. The classical quality metrology
has focused mainly on tangible measurements such as length, width, weight, strength, etc.
The main purpose of these measurements is to help in deciding if an item is acceptable or
defect – i.e. answering the question does the item comply with its specifications? In relation
to defect identification the classical metrology has played and is still playing an important
role. But for the identification of the causes behind defects we usually need other type of
measurements. The same is true with identification of opportunities for waste reductions.
With the evolution of quality from inspection and quality control to the management
VOL. 13 NO. 1 2009, pp. 3-22, Q Emerald Group Publishing Limited, ISSN 1368-3047 j MEASURING BUSINESS EXCELLENCE j PAGE 3
 philosophy called Total Quality Management (TQM), where the most important principle is
continuous improvements, new types of measurements are needed.
Several of the measurements suggested in the TQM age (1988-) have been measurements
based on people’s subjective evaluations of intangible systemic factors, such as leadership,
as well as intangible results, such as employee- and customer satisfaction. This has been a
natural extension of the measurement framework from the area of the classical quality
metrology. We may say that TQM combines the classical measures with new ones in order
better to understand the causes behind the various results. This view, which stress the
importance of identifying and understanding the causes behind results, is shared by Ewans
(2008):
Measurements provide critical data and information about key processes, outputs and results.
When supported by sound analytical processes that project trends and infer cause-and-effect
relationships, measurements provide an objective foundation for learning, leading to better
customer, operational, and financial performance. A company’s success depends increasingly
on the knowledge, skills, and motivation of its workforce. Employee motivation and success
depends increasingly on having opportunities to learn and practice new skills. These can be
fostered by employee motivation, and teamwork.

But many companies have experienced problems with these new types of human oriented
measurements which ideally combines measurements about management and other key
processes (systemic causes) with the effect human motivation and commitment. One of the
problems is to decide what is important to measure, why and how? Another problem is how
to interpret the measurements, which sometimes may be very difficult.
What we will do in this paper is to present and discuss some models and cases
illustrating human oriented measurements in the context of TQM and its related
philosophies such as Six Sigma Quality and Lean Production (Dahlgaard and
Dahlgaard-Park, 2004). We will also when appropriate focus on discussing the
principles and guidelines for establishing measurements, which aim to support quality
improvements. An overall aim with a new human oriented TQM metrology is to help
managers in giving answers to the questions what to measure, how to measure and why?
It is the purpose of the paper to give input to answering these questions. In doing so we
will try to discuss the measurement problems in relation to the context in which the
measurements are applied, and we will discuss some common risks or failures when
more complex or advanced measurements are used.

2. The European Excellence Model – a measurement framework

Companies/organizations have visions and missions, which they explicitly or implicitly try to
achieve. A simple but not an easy mission, which any company should try to achieve, is to
satisfy both their customers and their stakeholders. Here the stakeholders are (Conti, 1997):
B the shareholders (owners);
B the employees;
B business partners; and
B the society.
In order to achieve that mission companies may need a business model and a measurement
framework, which can help in understanding the changes/improvements they are doing and
the results they are achieving, and what they shall do in order to improve future results. In this
article we will use the European Excellence Model as a reference model in our discussion of
what to measure, how and why? The model is seen in Figure 1.
The model consists of nine criteria. The first five criteria are the enabler criteria:
1. Leadership.
2. People.
3. Policy & Strategy.

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Figure 1 The European Excellence Model (the EFQM Model)

4. Partnerships & Resources.

5. Processes.
The four criteria on the right of the enabler criteria are the result criteria:

6. People results.
7. Customer results.
8. Society results.
9. Key performance results.
Conti (1997) calls the first four criteria for systemic factors. We may also call these four
factors for management processes because these criteria traditionally ‘‘belong to’’ top- and
middle management. In criterion 5 we have all the processes where people are producing
and delivering products and services to satisfy today’s as well as tomorrow’s customers i.e.
production- and service processes. Criterion 5 also comprises the various support
processes.
The Model is based on the following eight fundamental concepts:
1. Results orientation.
2. Customer focus.
3. Leadership and constancy of purpose.
4. Management by processes and facts.
5. People development and involvement.
6. Continuous learning.
7. Innovation and improvement.
8. Partnership development and public responsibility.
The European Foundation for Quality Management (EFQM) stresses in their training material
that an assumption behind the model is that the results of the organization are achieved
through excellent performance in the enabler criteria. An organization achieving excellence
in the enablers will experience sustainable developments through improved customer,
people, society and financial results. That sounds logical and easy, but reality or practice is
not always that easy. There is among others no consensus on how to start up and how to

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 continue with the implementation of the EFQM Excellence model. Companies are struggling
with a lot of problems and many companies skip the model because the model seems too
complex to understand and too time consuming to implement. One reason for that is that
many companies need guidance on what to measure, why and how, especially related to the
enabler side of the model.
What is important to understand is that you cannot measure everything you are doing on the
enabler side. The main rule is that enabler activities should only be measured when they
have been decided and planned either as part of the yearly strategic planning process
(Policy Deployment) for achieving strategic business goals or as a specific decided
improvement project. In these cases you need enabler activity measurements in order to
understand why you get or don’t get the planned results. See more on that in the next
section.
Another reason behind implementation problems is linked to the management paradigms.
Although it is stressed by EFQM that the model is based on the eight fundamental concepts
shown above, the actual implementation approach will vary depending on the interpretation
and understanding of the model, and the existing management paradigm often determines
the character and direction of the interpretation. For instance, if the existing and dominant
(Dahlgaard-Park, 2003, 2008) management paradigm is a rational and measurement
oriented one, the model will be interpreted favouring those aspects, while other aspects
such as people and culture, which are rather irrational and intangible aspects will be more or
less undermined or ignored.
Hence a major problem, when implementing the model, is to balance the human oriented
approach with a fact and measurement based approach. This problem is related to a
tendency to focus mainly on tangible and objective aspects while underestimating the more
intangible and subjective aspects. An unbalance where the human dimension is
underestimated while tools and techniques are prioritised in implementation processes
can be one of the main causes of TQM failures. The consequence of that is not only failure
with implementation, but people’s contribution may not be maximised because people
development and involvement are far from being fulfilled.
The critics of the European Excellence Model do not mean that I reject the model as
such. The critics I have come up with is the same for other quality award models as for
example the Malcolm Baldrige Quality Award model. The point is that the model in the
future should be used more like a business/management control model where the main
aim is improvements in order to achieve the mission above – to satisfy customers,
owners and other stakeholders. Under this condition we regard the model as one of the
best management control models, which definitely can help companies in deciding on
what shall be measured, why and how, in order to improve competitiveness and financial
performance (Dahlgaard-Park, 2003, 2008).

3. Policy deployment, the PDSA-cycle and measurements

From both theory and practice we know that goal setting should be done in an atmosphere of
dialogue, where subordinates are invited to argue with their leaders, and the leaders are
expected to listen and to understand subordinates’ arguments about what is possible, and
what is not possible, and why? Goal setting should be done in a process like the so called
‘‘catch-ball process’’ in the yearly Policy Deployment.
The Policy Deployment process consists of two interdependent processes:
1. The process of establishing measurable goals (what to achieve).
2. The process of planning on how to achieve the goals and what measurements are
important related to how – i.e. measurement of key performance indicators (the KPIs)
related to the enabler side of the Excellence Model.
Referring to the model in Figure 1, the planning process consists of two interrelated phases,
where the first phase is to establish the plan for the criterion Processes, and the second
phase is to establish the plan for the criterions belonging to the Systemic Factors of the

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model. These two interdependent phases are done through Policy Deployment with Catch
Ball first at the corporate level, then at the division level, then at the department level. Each
level establishes the relevant key performance indicators and plans, which will contribute to
the achievement of the company’s overall vision/mission, the higher level’s critical success
factors and key performance indicators. However, we will not go deeper into the discussion
on the kind of key performance indicators and plans, which have to be established on the
lower levels of the organization. In the following we will in the discussions follow the structure
of the overall Excellence (TQM) Model in Figure 1.
The key words during any Policy Deployment process are cause-effect relationships. We
may say that TQM is a scientific management philosophy (Wruck and Jensen, 1994), where
the PDSA-cycle is implemented and rotated continuously in all functions of the company in
order to assure improvements, learning and new knowledge creation. Each rotation follows
the traditional scientific process as shown below:
1. Plan:
B Analyse the set of causes.
B Establish the goals.
B Establish a plan (the hypothesis), which is expected to lead to the goals.
B Establish a measurement system.
2. Do:
B Plan for implementation and measurements.
B Implement the plan (a test of the hypothesis about cause-effect relationships).
3. Study:
B Compare goals and results.
B Identify gaps (positive as well as negative gaps).
B Analyse the causes for significant positive as well as negative gaps.
4. Action:
B For good results (positive gaps as well as expected results): Standardize the causes,
which had a good effect.
B For bad results (negative gaps): Improve the plan and rotate the PDSA cycle again.
Relating the establishment of a measurement system to the PDSA-cycle has the advantage
of continuously been able to evaluate the cost and benefits of the measurement system. A
simple rule tells us that the cost of maintaining a measurement should never exceed the
effect ( ¼ the value) of the measurement. To apply this rule, we should distinguish between
two different situations:
1. A measurement is established for standardisation purposes (assure a status quo), i.e. a
stable and predictable output.
2. A measurement system is established in order to support cause-effect analyses used for
improvements.
It is the second situation, which is in the focus of this article. We may say that if no
improvements, then all measurements for other purposes than standardization should be
stopped. We may also say that the more improvements the more costs can be used for
measurements. But the effects should also be looked at from the other way around. It is the
measurements, which should facilitate improvements. If no improvements, then we have a
signal that the measurements are not good enough.
The following case examples shown in section 4, 5 and 7 may help to clarify the issues
about understanding the cause-effect relationships in the planning process, and about
the potential value of establishing a measurement system. All three cases give
contributions to understand cause-effect relationships from enablers to results of the

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 European Excellence Model in Figure 1. Hence the cases also give contributions to
answering the questions what to measure, why and how related to the difficult enabler
side of the model in Figure 1.

4. Measurements for assessing and improving leadership and employee result –

Post Denmark case
The successful transformation of Post Denmark’s company culture in the period 1998 to
2004 from a bureaucratic commanding and control culture to a human oriented TQM and
Excellence culture was guided by an ambitious educational programme and complemented
by self-assessment measurements of more than 500 managers’ perceptions (mindsets) of
selected key performance indicators inspired by the European Excellence Model
(Dahlgaard-Park and Dahlgaard, 2004).
The measurements were established by using a self-assessment questionnaire consisting of
about 100 statements related to the 5 enabler and 4 result criteria of the European
Excellence Model (EFQM model). The statements were regarded as highly important key
performance indicators of the respective EFQM criteria. One statement example from the
Leadership criterion was ‘‘leaders’ attitudes are based on openness, trust and respect’’ and
another example was ‘‘leaders always show recognition when people have done a good
job’’. Most people will agree that these statements are good performance indicator
examples related to the Leadership criterion.
The respondents of the questionnaire (top and middle managers) were asked to indicate
their degree of agreement of each statement in relation to his/her company on a
seven-point Likert scale (1 ¼ Highly Disagree, 7 ¼ Highly Agree). In addition to
agreement item, respondents are also asked to rate the importance of each statement
(1 ¼ Least important, 7 ¼ Most important). The measurements on agreement can be
interpreted as performance measurements of the areas behind the statements and the
measurements on importance reflect the respondents’ needs (see Dahlgaard-Park and
Dahlgaard, 2004).
The final version of the questionnaire was made in a close co-operation with the company’s
management group, which was responsible for the start up of the Quality Journey and the
continued process of implementation. This new questionnaire approach was used in Post
Denmark for the first time at the end of 1997. After two years of hard work with education,
training and improvements, the questionnaire was used again at the end of 1999. In both
cases all managers at levels 1 and 2 were invited to participate in the assessment together
with a sample of managers from level 3. The number of respondents and response rates are
shown in Table I.
The results from the first self-assessment measurements in 1997 showed very
unsatisfactory results with many big gaps between importance and agreement
(Dahlgaard-Park and Dahlgaard, 2004). The results were presented for the managers
during five days internal education programs, and it was very easy to reach a consensus
that Leadership, People Management, Processes and People Results should have the
highest focus during the first one to two years of the quality journey. It was believed that
the main causes for many poor results had to be found behind the criteria Leadership,
People, Processes and People results, and by the understanding of the causal
relationships between these criteria and the other criteria too. An example from the
criteria People Results is provided in Figure 2, which shows the average measurements
on importance and agreement for each of the self-assessment statements related to

Table I Overview of the two questionnaire studies

Year 1997 1999

Number of respondents 558 565

Response rate (%) 79 66
No. of statements 96 99

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Figure 2 People Results 1997

People Results. As can be seen all statements contain large gaps between the averages
which indicate that there are good opportunities for improvement. Some of the largest
gaps identified were related to ‘‘employee satisfaction’’, ‘‘personnel turnover’’ and
‘‘number of sick days per employee’’.
To understand these measurements a diagnostic self-assessment process was initiated
focusing on identifying causes and improvement areas that might have had an influence on
these results. These potential causes and improvement areas were identified by simple but
useful team work techniques such as discussion, dialog, brainstorm, affinity and fishbone
diagrams together with the self-assessment measurements from the enabler side of the
EFQM Excellence Model in Figure 1. Figure 3 shows as an example the results from the
enabler Leadership.
The biggest leadership gaps between importance (the needs) and agreements (the
practice) were related to the following statements: 5. Leaders’ attitudes are based on
openness, trust and respect, 6. Leaders always show recognition when people have done a
good job, 7. Leaders use significant resources for employees’ education and training.
As a result of the first self-assessment survey in Post Denmark, the following enabler
criterions were identified as strategic improvement areas:
B Leadership.
B Policy & Strategy.
B People.
B Processes.

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 Figure 3 Leadership Results 1997

It was believed that improvements in these enablers would have immediate effects on
customer and employee results, and later also effects on key performance results. The
strategic improvement plan was presented for the employees under the umbrella concept
called ‘‘Total Involvement in Quality’’ (TIQ) process. Some of the following critical
improvement areas within the enabler criteria were identified (Dahlgaard-Park and
Dahlgaard, 2004):
B Leadership: The managers should have more attention to personal core values such as
trust, openness, respect etc. (they should be better role models for their colleagues and
employees).
B Policy and strategy: There was a need for improvements in the yearly strategic planning
process. Employees should be more involved in this process.
B People: There was a need for a better evaluation of people’s competencies and
achievements, and better recognition of people.
B Processes: There was a need for more people involvement, better process
measurements, ownership, and information on best practises.

During the period from 1997 to 1999 several improvement activities were initiated ranging
from establishing employee satisfaction measurements, customer satisfaction
measurements, process measurements, to Lean Production, self-directed teams and
employee involvement activities parallel with company-wide training and education

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programmes. In 1999, an improved version of the questionnaire was used again. Figure 4
shows the measurements for People Results and Figure 5 shows the remarkable
improvements in the three biggest gaps from 1997.
In summary, the Post Denmark case illustrates how a breakthrough in peoples’ attitudes
and organisational culture may happen and hence become the foundation for a new
culture focusing on change, continuous improvements and everybody’s participation. One
of the main methods used in the case was the establishment of simple measurements
based on a self-assessment approach using questionnaires together with education and
training of all employees. The simple statements in the self-assessment questionnaire
related to the result side of the excellence model in Figure 1 complemented the
company’s hard measurements (e.g. hard measurements on sickness, absence,
employee satisfaction, employee turnover). Most of the simple self-assessment
statements related to the enabler side of the excellence model were quite new
measurements but a few complemented the company’s hard measurements especially
the company’s process measurements.
Some of the main advantages of using the questionnaire approach for self-assessment have
been the following:
B The managers got relatively fast a common language – the language of the European
Excellence Model – and hence a common understanding, which helped in the
communication and the early implementation.

Figure 4 People Results 1999

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Figure 5 Improvement in employee satisfaction, personnel turnover and number of sick days per employee between 1997
and 1999

B The survey approach is less time and other resource consuming compared to the
traditional award approach. Hence resources are used for improvements instead of
assessments.
B The survey approach is not trapped by the standard weights of the different criteria in the
model, which often is the case when the traditional award approach is used for
assessment. The employees determine the weights ( ¼ the importance measurements) in
this approach.
B The survey approach gives the possibility to analyse the measurements in a new way (the
diagnostic approach), which may give insights to the understanding of how people think
or feel.
B One of the prioritising methods used with the survey approach is to use the gaps between
the measured importance and agreement with the statements. The statements with the
highest gaps are the first candidates for improvement. This strategy is easy to understand
and accept, and hence consensus on what to improve first is easily achieved.
Because all managers at the level 1 and 2 plus a sample of managers from
management level 3 have participated in the questionnaire self-assessment it has been
easy to reach a consensus on what to improve first. It is hard to reject the
measurements because the results are summations of the managers’ own perceptions.
When for example an enabler measurement shows that the importance is evaluated with
a very high importance and the agreement is very low then the managers become a
little bit shameful. Because of that an intrinsic motivation is created easily to change the
situation i.e. to reduce the gap.
The methodology with measurements on both importance and agreement has helped the
managers to identify the vital few. This aspect is important, because you have to focus on the
vital few if you shall have success with the quality journey. The measurements from the
questionnaire self-assessment are regarded as reliable indicators of both the enabler criteria
of the EFQM Excellence Models as well as the result criteria. Because of that the method is
regarded as a valid and reliable tool for diagnosing the status quo and for deciding on the
areas, which should be improved first.

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Another remarkable method, which Post Denmark carried out was a massive and systematic
training and education program for all employees. Some of the main positive effects of this
company-wide training and education program can be summarised as follows:
B The training and education programmes were designed based on the outcome of
self-assessment. This means that the course contents were designed by the current
situation and to overcome the actual company problems.
B Together with the self-assessment process, the education program created a shared
understanding, which provided a step stone for building shared vision, mission and
company culture directed for continuous improvement.
B Contrast to earlier approaches, which were often fragmental in several aspects, the
education programmes were rather holistic in its contents and systematic where all
employees were participated. All employees received why, how and what knowledge
acquirements in three levels of personal, team and organizational levels in accordance to
the ‘‘4P’’ quality strategy based on ‘‘People First’’ and ‘‘People make Quality’’ philosophy.
This provided a solid foundation for further TIQ movement.
Improvements in performance results such as employee turnover, employee absenteeism,
employee satisfaction, the quality of deliveries and the financial results have been achieved.
The negative trend in several results has been stopped and reversed to a positive trend. Post
Denmark has also become the best in Europe on the time it takes for an international mail to
arrive at the addressee and also on customer satisfaction (measurements carried out in 2002).
The managers’ mental models of the situation have been dramatically changed to the
positive, and at the end of 1999 Post Denmark received the Danish Human Resource Award
for their committed attention to improving the working conditions for their employees. Post
Denmark was also awarded with the Danish Quality Award in 2004 and the European
Excellence Prize in 2006. Post Denmark is today regarded as one of the best-managed post
companies in Europe.
A main cause for receiving these awards is that Post Denmark top management group from
the start of their quality journey regarded the people dimension as the area, which should be
improved first. It was from the beginning understood that a sustainable quality improvement
strategy to follow was the ‘‘4P strategy’’.
According to this strategy, organizational excellence is a result of building excellence into
‘‘the 4Ps’’ in the following order (see also Dahlgaard-Park and Dahlgaard, 2004):
1. people;
2. partnership;
3. processes; and
4. products.
To do that is an important aim of leadership.

5. Measurements for assessing and improving leadership in innovation and product

development – the Grundfos case
An international manufacturing company (Grundfos, Denmark) with about 12,000
employees has invested a lot of money in its Technology Centre during the 1990s. The
top management wanted to evaluate the performance of the centre and decided in 1999 to
run a so-called self-assessment survey, where a random number of managers, team leaders
and team members from various innovation and new product development projects were
invited to participate.
A questionnaire was developed based on a comprehensive literature analysis and the
company’s experiences with innovation and new product development (see Martensen et al.,
2007). The total sample of managers and employees selected was 260, which was the
number of questionnaires sent to managers and employees working with innovation/New
Product Development. The number of respondents was 161, which is equal to a response

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 rate of 62 per cent. The questionnaire was designed by using the European Excellence
model in Figure 1. The final version of the questionnaire was made in a close co-operation
with the company’s management group. The questionnaire consisted of about 80
statements ( ¼ key performance indicators), which were regarded as highly important for
having success with innovation and new product development. An example of a leadership
statement is Management’s behaviours are based on core values such as openness, trust
and respect.
Respondents were asked to evaluate each statement according to their perception of how
well the organization performs on each statement and how important they in general find the
statement. A Likert scale ranging from 1 to 5 was used. On the ‘‘importance’’ scale, a ‘‘1’’
indicates that the statement according to him/her is of very minor importance, while
statements that score ‘‘5’’ are perceived as having very great importance. On the
performance scale, a ‘‘1’’ indicates that the respondent fully disagrees with the statement,
while a score of ‘‘5’’ means that the respondent fully agrees with it.
By using a simple approach gaps between importance and agreement were analysed (see
Martensen et al., 2007). The biggest gaps were regarded as most interesting to analyse
because it is assumed that the biggest gaps are signals from the respondents about where
to improve first. Therefore the first step in the simple approach is to rank the statements
according to the size of the gaps. Table II shows the leadership statements for the three
biggest gaps and the average measurements of Importance (I), Agreement
(P ¼ Performance) and the gaps between importance and agreement (I – P).
One of the recommendations to the company was these three statements/areas should be
addressed, discussed and analysed and a plan should be designed for improving the
leadership in the technology centre. But suggestions for improvements based only on
average measurements are usual not enough because there may be great variations behind
such statements especially when the respondents come from different departments or
different hierarchical levels. Here all respondents came from the same department – the
technological department – but respondents consisted both of leaders and team members.
Hence more detailed analyses of the variation between leaders and team members were
analysed in the next step, and some of the results are shown in Figures 6 and 7.
By comparing the leadership average measurements in Figures 6 and 7 it is seen, that there
is a relative high agreement on the importance measurements between leaders and team
members, but on several of the agreement measurements there are significant differences.
Leaders had especially on the first six statements a significant lower perception on the
agreement scale than the team members. Maybe the leaders have the best background to
evaluate these questions or maybe they don’t understand the needs and experiences of
their project team members? The answer to these questions can only be found through open
and honest dialogue between the leaders and the team members.
An interesting difference between leaders and team members is seen for the following
statement: Employees’ motivation and commitment have increased during the last four
years. The perception of the team members on the agreement scale was significantly lower
than leaders’ perceptions; the team members have here the biggest gap between

Table II Identification of statements with the three biggest gaps related to leadership
Statements (KPIs) (I,P) Gap ¼ (I-P)

The organization is characterized by an innovative culture (time to

think freely and follow up on own ideas, learn of experiences, risk
willingness etc.), entrepreneurship (4.51, 3.30) 1.21
Important information is shared quickly and accurately to the right
persons – up, down and sideways in the organization (4.47, 3.45) 1.02
Creating, acquiring and transferring of new knowledge and skills are a
part of the company culture (4.49, 3.52) 0.97

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Figure 6 Leader’s self-assessment of results

agreement and importance. So if management really want to listen to ‘‘the voice of the team
members’’, then it seems clear, that improvement of motivation and commitment should
have a high priority when top management decide on the overall strategic plan for
improvements.
We will in the following assume that motivation and commitment of team members have been
selected as one of the critical success factors to improve. The issue then is what are the main
factors for building highly motivated people and then how to improve people’s loyalty,
motivation and commitment? These issues will be dealt with in section 6 and further on in
sections 7 and 8.

6. Understanding and measuring the factors behind people commitment –

the Danfoss case
Danfoss, with about 22,000 employees, is one of Denmark’s largest industrial companies. In
1999, a research project was started up with the aim of identifying the factors that are most
critical for people’s loyalty and commitment. The theory behind the model estimation, as
presented in the previous sections, was that people commitment and loyalty depend on the
following three latent variables (Dahlgaard-Park and Dahlgaard, 2003):
1. top management, middle management and colleagues’ practice of core values;
2. top management, middle management and colleagues’ practice of core competencies;
and
3. people’s personal attitudes.
The theory used also said that the first two latent variables are highly influenced by top
management, middle management as well as by colleagues, and people’s personal
attitudes are influenced by the same two latent variables.

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 Figure 7 Team members’ self-assessment of results

A total of 331 middle managers from ten different divisions were invited to fill out a
questionnaire with 82 questions for evaluating and understanding people commitment. The
following 17 manifest variables were identified as the most valid in the estimation of a model
explaining middle managers’ commitment.
Core values:
B The company’s atmosphere is open and positive.
B My nearest leader recognizes and appreciates my work.
B My nearest leader shows me trust and respect.
B My nearest leader treats me fair.
B My nearest leader motivates through his/her own efforts and behaviour.
Core competencies:
B Management is engaged in continuous improvements.
B My nearest leader is competent in his specialty.
B In my department, we participate actively in the planning of tasks.
Personal attitudes:
B I talk well with most people in my department.
B I focus on people’s positive sides.

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B I trust people until there is a clear reason not to do so.
B I respect my colleagues.
Commitment/loyalty:
B I realize myself through my work.
B I try continuously to mobilize and utilize all my skills and capabilities in my job.
B I make it a point of honour to do my best in my job.
B I work in the company because it will be too troublesome to change job.
B I am glad for going to work.
Several structural equation models were estimated to show the relations between the latent
variable commitment and the other three latent variables (see Dahlgaard-Park, 2001). The
result of the data analysis (using Amos 4 and Lisrel) is shown in Figure 8, which is the model
with the highest degree of explanation.
From the model in Figure 8 we see clearly the importance of the Core Value factor. There is a
strong direct relation with Core Competencies, and through Core Competencies and
Personal Attitudes there is strong indirect impact on the result factor Commitment/Loyalty.
Also there is a significant direct relation between Core Values and Commitment. So the
model supports clearly the hypothesis that the Core Value dimension should not be ignored
when trying to understand people’s commitment. The model’s degree of explanation was as
high as 0.82.
The data analysis showed that if Core Values increased by 1 point then the expected
increase on Core Competencies were 0.88 ( ¼ the impact score), and the impact score from
Core Competencies on Personal Attitudes were 0.57. The impact score from Personal
Attitudes on Commitment was 0.72. The figure also shows that the direct impact score from
Core Values on Commitment is 0.28.
All these estimated relations should be analysed in more depth in order to understand the
indications of possible cause-effect relationships. People in the company should discuss
the above 17 manifest variables (and their measurement results) one by one in each
category. It is through such a discussion people gradually may understand the root
causes behind the results of the statistical analyses. In the discussion there is usually a
need for a theory to support or reject people’s arguments. Deming (1993) highlighted this
point in his concept of Knowledge about Knowledge as part of his Theory of Profound
Knowledge.
The findings in the study indicate that the analysed company should have a high focus on
people’s Core Values when they recruit new employees as well as when educating and
training their existing managers and other employees. Another indication is that a focus on
Core Competencies is not enough. Programs for recruitment as well as for education and
training should have a balanced focus on both Core Values and Core Competencies in order
to change people’s personal attitudes and commitment. If core values are ignored there is a

Figure 8 The estimated commitment model

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 high risk that each individual’s potential core competencies will not be utilized efficiently and
effectively, and the potential effects on Personal Attitudes (þ behaviours) and Commitment
will not be experienced.
But how can the company use such new information for measuring and improvement? In
relation to the Human Dimension of TQM it is often difficult to find the answers to the
questions what to measure, how and why? The findings in the above empirical example may
give the company help in answering these questions. The above manifest variables are all
key performance indicator candidates to be discussed for inclusion in a yearly employee
satisfaction survey.

7. Some suggestions on measuring employee satisfaction

The internal customer/supplier relationship is all-important in TQM. Being able to satisfy
external customers depends on having satisfied internal customers. Or, as Imai (1986)
puts it:
When you talk about quality, you immediately tend to think about product quality. Nothing could
be further from the truth. In TQM, the main interest is in ‘‘human quality’’. To instil quality into
people has always been fundamental to TQM. A firm that manages to build quality into its
employees is already half way towards the goal of making quality products. The three building
blocks of any business are hardware, software, and ‘‘humanware’’. TQM starts with
‘‘humanware’’. Only when the human aspects have been taken care of can the firm start to
consider the hardware and software aspects. To build quality into people is synonymous with
helping them to become KAIZEN-conscious.

One of the main key performance indicators of ‘‘human quality’’ is employee satisfaction,
which should be measured and balanced in the same way as customer satisfaction. What
to measure is of course different compared with customer satisfaction measurements
because the level of employees’ satisfaction is dependent on how the company have
succeeded in balancing the biological (material), mental and spiritual needs of the
employees (Dahlgaard-Park, 2001). While customers’ satisfaction until now mainly has
depended on how the company has succeeded in satisfying extrinsic material needs
employee satisfaction depends today more and more on how the company is able to
satisfy people’s intrinsic needs (mental and spiritual). This observation should be
regarded when companies decides to measure employees’ satisfaction by using
employee satisfaction surveys.
From my previous research, partly presented in this article, the questions (measurements)
from employee satisfaction surveys can be grouped in the following main groups
(Dahlgaard-Park, 2001):
1. Top management practices of core values and competencies:
B clear information about company’s vision and mission statement;
B open information about positive and negative results;
B provide open and trustworthy company culture; and
B provide necessary frameworks for employee well-being (pysical, psychological and
spiritual).
2. Middle management practices of core values and competencies:
B clear information about departmental goals;
B involvement of people in departmental planning;
B positive and negative feedback;
B recognition and motivation;
B fair and trustworthy treatment of people;
B competent and inspiring leadership; and
B provide necessary education and training.

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3. Colleagues’ practices of core value and competencies:
B trustworthy and respectful relationship;
B positive and negative feedback;
B open communication;
B sharing joy and sorrow;
B inspiring and competent colleagues;
B responsible and committed colleagues; and
B helping and supporting others (reaching out).
4. Job content:
B autonomy and responsibility;
B variety;
B meaningfulness;
B personal development; and
B learning.
5. Daily working conditions:
B targets for and definition of tasks;
B time frameworks; and
B physical working environment.
6. Rewards and conditions of employment:
B proper reward system;
B flexibility of working time; and
B job security.
The actual questionnaire should not be too comprehensive. Experience has shown that there
shouldn’t be more than 30-40 questions.
Regarding how to measure it is suggested that the areas measured should be formulated
as simple statements, and both agreement (performance) and importance should be
measured (as shown in the case examples from Post Denmark and Grundfos). Having
done that it is easy to prioritise areas for improvements (the vital few) and it will also
support the understanding about what is important to measure in the future and why. By
following these suggestions it is my belief that companies will be able to change existing
performance systems towards a Human Oriented Metrology for Improvement and
Change.

8. Conclusion
Several of the measurements discussed in this article have been measurements based
on people’s subjective evaluations of intangible systemic factors, such as leadership, as
well as intangible results, such as employee motivation and satisfaction. This is a natural
extension of the measurement framework from the area of the classical quality
metrology, where more tangible measures were suggested such as length, width,
weight, strength etc.
A new human-oriented TQM metrology for improvement and change has to combine the
classical measures with new ones in order to better understand the causes behind the
various results. For that reason there is an urgent need to establish new types of
measurements, which usually are based on people’s subjective evaluations. Such
subjective evaluations are most easily measured quantitatively by using more or less
well-designed questionnaires. The main benefit of quantifying the intangible systemic
factors (the enablers) and the intangible results is that people can better analyse and

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 communicate such measurements. However, such type of measurements may be
misleading or misunderstood unless people, who understand the context where the
measurements come from, carefully check them. This is especially true if the subjective
measurements are used to estimate various latent variables in so-called causal models by
using advanced statistical methods such as PLS, Lisrel etc., which most people have
difficulty to understand.
Unfortunately, it seems to be the exception that the statistical experts, who have estimated
these models, discuss the limitations of such models. Especially there is a need to be critical
if statistical correlations between the latent factors of such models are considered, without
any discussion of the theory used when constructing these models. Such correlations may
be so-called nonsense correlations, which may be misleading in the process of
understanding the root causes behind the measurements.
Another argument for being careful to accept the correlations as measures of
cause-effect relations is that such measurements are usually averages of many
people’s perceptions of past experiences of a given context. What managers usually are
more interested in is to evaluate the effects of future improvement programmes, and such
effects can only be evaluated when considering the present and future contexts.
Statistical correlations of the past may be unreliable for evaluating the effects of future
improvement programmes. The effects of such programs are a function of managers’
understanding of the present context – including people’s resistance to change – and
how the improvement program is implemented, with or without people involvement. Here
it is believed that the Policy Deployment approach presented in section 3 of this paper
combined with the PDSA cycle is more reliable to use than various statistical correlations
estimated by more or less complex computer models. By using such kind of approaches
you create quite new causes in a proactive way, and that is the key when trying to make a
real breakthrough in performance. Measurements needed for such proactive
improvements or breakthrough may be quite different than the measurements created
by analysing correlations based on past and maybe less important causes. It is such kind
of measurements which are important when designing an effective performance
measurement system and when discussing a new human oriented metrology for
improvement and change.
The above critical comments should not be misunderstood. It is my experience and belief
that the use of statistical analyses may be a valuable supplement to people’s intuition,
theoretical knowledge and practical experiences. What I say is that any result including
results from advanced statistical analyses should always be questioned and discussed
before they are used for decision-making. This is the best way to assure learning and to
prevent against misunderstandings and wrong management decisions.

Here, at the end of this article, it is interesting and important to reconsider Juran’s basic
diagram for creating breakthrough in results (Juran, 1964, p. 7). He used the basic diagram
shown in Figure 9 to discuss the difference between control and breakthrough and to
highlight that before you get Breakthrough in Performance you need:
B breakthrough in attitudes:
B breakthrough in knowledge-diagnosis capability; and
B breakthrough in cultural patterns (implementing new and better management standards).

In between these breakthroughs you need education and training in simple improvement
tools such as Pareto Analysis and Organization of Steering and Diagnostic Arms. The latter
is related to the core of this article – establishing a new performance measurement system
which can support management and other employees when they embark on the journey for
managerial and performance breakthrough. Referring to Figure 9, and other references in
this article, it is concluded that a new human oriented metrology for improvement and
change is needed if companies shall have sustainable success when they embark on their
journeys towards performance breakthrough.

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Figure 9 The basic diagram (for breakthrough in results)

References
Conti, T. (1997), Organizational Self-Assessment, Chapman & Hall, London.

Dahlgaard-Park, S.M. (2001), The Human Dimension in TQM – Learning, Training and Motivation,
Linköping University, Linköping.

Dahlgaard-Park, S.M. (2003), ‘‘Management control theories and the European Business Excellence
Model’’, The Asian Journal on Quality, Vol. 4 No. 1.

Dahlgaard-Park, S.M. (2008), ‘‘Reviewing the European Excellence Model from a management control
point of view’’, The TQM Journal, Vol. 20 No. 2, pp. 98-119.

Dahlgaard-Park, S.M. and Dahlgaard, J.J. (2003), ‘‘Toward a holistic understanding of human
motivation: core values – the entrance to people’s commitment?’’, The International Journal of AI
(Artificial Intelligence) and Society, Vol. 17 No. 2, pp. 150-80.

Dahlgaard-Park, S.M. and Dahlgaard, J.J. (2004), ‘‘The 4P Quality strategy for breakthrough and
sustainable development’’, European Quality, Vol. 10 No. 4.

Deming, W.E. (1993), The New Economics, MIT – Center for Advanced Engineering Study, Cambridge,
MA.

Ewans, J.R. (2008), Quality and Performance Excellence – Management, Organization, and Strategy,
5th ed., Thomson, South Western, Cincinnati, OH.

Imai, M. (1986), Kaizen, McGraw-Hill, New York, NY.

Juran, J.M. (1964), Managerial Breakthrough – A New Concept of the Manager’s Job, McGraw-Hill,
New York, NY.

Martensen, A., Dahlgaard, J.J., Dahlgaard-Park, S.M. and Grönholdt, L. (2007), ‘‘Measuring and
diagnosing innovation excellence – simple contra advanced approaches – a Danish study’’, Measuring
Business Excellence, Vol. 11 No. 4.

Wruck, K.H. and Jensen, M.C. (1994), ‘‘Science, specific knowledge and total quality management’’,
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VOL. 13 NO. 1 2009 MEASURING BUSINESS EXCELLENCE PAGE 21
 Further reading
Dahlgaard, J.J. and Dahlgaard-Park, S.M. (2006), ‘‘Lean production, Six Sigma quality and company
culture’’, The TQM Magazine, Vol. 18 No. 3.

Dahlgaard, J.J., Kristensen, K. and Kanji, G.K. (1998, 2002), Fundamentals of Total Quality
Management, NelsonThornes, London.

Dahlgaard-Park, S.M. and Dahlgaard, J.J. (2003), The Human Dimension: Critical to Sustainable Quality,
in Quality into the 21st Century, International Academy for Quality, ASQ Quality Press, Milwaukee, WI.

Ishikawa, K. (1985), What Is Total Quality Control: The Japanese Way, Prentice-Hall, Inc., Englewood
Cliffs, NJ.

Juran, J.M. (1989), Juran on Leadership for Quality – An Executive Handbook, The Free Press, Collier
Macmillan, London.

Juran, J.M. and Gryna, F.M. (1980), Quality Planning and Analysis – From Product Development through
Use, McGraw-Hill, New York, NY.

Oakland, J. (1999), Total Organizational Excellence – Achieving World-Class Performance, Butterworth

Heinemann, Oxford.

About the author

Su Mi Dahlgaard-Park can be contacted at: sumi.park@msm.lu.se

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