Is Quality Improved By Employee Incentives And Training?

In this article, we'll be discussing the benefits of cross-functional integration and transparency with external partners, specifically suppliers.

We have found that organisations that have established training for their suppliers have a tendency to reap greater financial benefits from high quality efforts. A common language is provided by training that helps suppliers understand how defects and other types of setbacks such as delays impact the end customers, and results ultimately in increased financial benefits and focus that is unified on customers.

The very same concepts on common language, transparency and understanding the impact quality has also should hold true with the employees of the organisation. Therefore, in this article, we'll be taking a closer look at the relationship between incentives and training.

Training Employees and the Effect on Financial Value

Training programmes from GBS Corporate Training help with developing competencies, to ensure that employees fully understand their role in helping to create quality for customers and for a quality-focused culture to be established. Therefore respondents were asked whether they had undergone a quality-related formal training or not. Although a formal training programme is not offered by a majority of organisations, an increasing number of organisations (43%) now are investing in training programmes compared to 2013 (32%).

Although there may be intrinsic value in quality training being offered, there still are many questions that are unanswered like: what training should be provided and who should be receiving the training?

Which People Need Training?

Most respondent organisations (56%) offer (through either training or compensate for external training) staff quality management training that are involved in quality actives early half of respondent organisations (44%) offer quality-related training as well to employees, which is likely driven by needing to provide the organisation with a quality-focused culture.

To understand where training resources should be focused - in terms of ROI for organisations - we ran analyses against employee offered training and quality's financial benefits for an organisation.

Although conventional wisdom would be increasing quality training for all employees in order to develop a culture of quality and shared perspective, it was indicated by the analysis that there was a drop-off in financial benefits for those organisations offering all employees quality training. Instead, the biggest increase in financial benefits comes when training is provided for those who specifically ask for training and for quality-related staff.

Which Training Topics Matter the Most?

The training for most organisations is focused on quality fundamentals, quality tools, quality management principles, ISO, and auditing. However, not many organisations have training for more customer-value concepts like customer experience, lean and Net Promoter Score (NPS). In order to understand what types of training helps to increase financial benefits coming from quality, and we analysed against the kind of training provided and the financial benefits from the organisation's quality.

We discovered that nearly all of the kinds of training that the survey discussed correlated with improved financial benefits. But organisations providing training on such customer-value concepts like Six Sigma, lean, NPS, and customer experience were a lot more likely to enjoy greater financial benefits. That makes sense when you consider the relationship between financial benefits and customer value. Organisations that make use of quality as their competitive differentiator - to enhance brand image and for the customer's benefit - are the ones that reap the greatest financial benefits.

Conclusion

Training is used by the best organisations to drive commitment to quality and to teach employees to better understand what their role in quality is - including driving value and the impact on end customers. However, organisations have to consider what the purpose is of their quality efforts prior to making any decisions on types of training, incentives, ad which employees should be targeted for training. If the goals of the organisations are to create a culture of quality throughout the organisation, then casting a very wide net on measures that are tied to training and having all employees training on the quality fundamentals and the impact on customers can reap a majority of the benefits. However, if the quality is specifically being leveraged by the organisation to provide potential price premiums and customer value, then it needs to consider getting training incorporated that is focused on the customer's experience as well as other related concepts such as NPS and lean.

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