EFQM Model

Published by James Taylor

Executive Summary

The report details the results from a study on the effectiveness of the EFQM Model in the service industry. The report targets the management of the Squire Hotel Group and is exclusively intended for the organization’s decision making process. It is guided by the fact that the model has gained popularity among leading organizations in Europe. The benefits of using the model in a changing business environment are explored with an emphasis on the model’s ability to improve organizational performance. Specifically, the report ascertains the viability of the model in the service industry and its effectiveness in managing the customer experience. The study employs data sourced from past studies and interviews in coming up with its results and recommendations. The results of the report are to be used in making a decision whether the organization should go on with plans to incorporate the model in its management styles. In addition, the report details the recommendations that should be in place to ensure the successful implementation of the EFQM model.

Introduction

The EFQM Excellence Model has in the recent past become an integral part of most organizational growth across Europe (Johnson, Clarke & Shulver, 2012). Promoted by the European Foundation for Quality Management, the approach is vital in driving organizations towards competitiveness. As thus it provides the relevant and suitable management systems that can make an organization successful in its operations. This it does by providing measurement tools for organizations to establish their positions on the path to excellence (Lovelock & Wirtz, 2011). In addition, the model helps in the identification of gaps and loopholes and the actual sealing of these gaps.

Past research has identified a positive correlation between improved organizational performance and the use of the EFQM Model in these organizations (Maulins, 2009). Squire Hotel Group is definitely no exception in this correlation. The report hopes to identify ways in which the EFQM Model can be integrated in the organisation to effect positive performance and bridge gaps that may be identified in the course of operations. This report, therefore, details the results of research conducted ion other organisations and especially those in the service industry. Leading service organizations were studied to identify whether they had incorporated the EFQM Model and the extent to which the model was used in these organizations. In addition, the success of this model is also analyzed by way of linking past performance with current performance after the integration of the EFQM Model.

Method

Data for the report was sourced from other leading service organisations. In these regard, the financial reports of the organizations were analyzed to identify the current performance and then gauging these performance against past performance. It was then assumed that the change in performance, whether negative or positive, between the former and current performance was exclusively due to the integration of the model. Trends were then identified to draw a linkage between this change and the use of the EFQM Model in these organizations.

In addition to the data from financial reports, managers in leading organizations were interviewed to assess the uptake of the model in the organisations. Again, the organizations in the service industry were given more emphasis because they formed the bulk of the study. The managers were asked of the motivation behind the incorporation of the model in organizations that already had the model in operation. In organisations that didn’t have the model in force, the management was interviewed to find the reasons why they had not considered integrating the model in their operations.

Most importantly, the organisations that used the model in their operations were also studied to track the changes in performance and their linkage to the EFQM model. Sampling method was used to reduce the size of the dataset and enhance accessibility of these organizations. The organizations were then studied over time with an emphasis on the areas that benefited from the EFQM model. In this regard, actual performance was measured to identify any improvements directly associated with the model. Areas of improvement were also noted for further study and to prove that the changes were due to the use of the model (Kelemen, 2002). Essentially, a measure of these improvements was used to establish whether the model was of any use. In addition, the areas of improvement were extrapolated to gauge their effectiveness and importance in the context of the Squire Hotel Group.

Results

The use of the EFQM Model was associated with an increase in the satisfaction among customers in the sampled organizations. Customer satisfaction is a vital aspect in the success of organizations in the service industry and especially those that depend on referrals from other customers. It was noted that organizations that employed the EFQM model had better levels of satisfaction among their customers as compared to those that did not (Fitzsimmons, 2006). Although the levels of satisfaction are not exclusively derived from the use of the model, it was evident that the model at least had an impact on the customers’ satisfaction. In fact, organizations that did not use the model were reported to have lower levels of customer satisfaction.

The success of the management within the sampled organizations was also attributed to the use of the model. In addition to successful management styles in the organizations, the EFQM model was also attributed to the success of individual managers and the development of leaders within the organizations. Ultimately, the end result is the improvement in management performance amongst the sampled organizations. The managers interviewed portrayed a sense of leadership and a strong will to lead others. It was assumed that the change in the leadership styles was attributed to the use of the EFQM model. The model was particularly useful in cultivating management styles that emphasized on the right measurement tools and therefore enhancing great performance (Van Looy, 2003). Organizations in the current era require not only managers but leaders to help them grow in terms of their performance. Most importantly are the organizations within the service industry that rely so much on leaders for expansion. In a highly competitive service industry, individual organizations can only bank on the expertise and leadership styles of their managers to outdo the other rival organizations (Greef et al, 2004). Measures of improved leadership amongst the managers included the satisfaction of the employees and the motivation of the staff. Effectively, all these led to improved performance in the dispensation of duties amongst the staff.

Past studies (Vanden Berghe & Verweire, 2004) have attributed the model to development of a common sense of purpose within organisations. This research was no exception and yielded similar results. The team of researchers embarked on an assessment of the beliefs amongst the employees of the sampled organizations. It turned out that most of the employees in the same organization had similar ambitions and objectives for the company. The goal of the organization was well understood among the staff and there was likelihood that it formed part of their daily goals. The beauty of the EFQM model is that it partitions the goals of the company into tasks that can be measured every other day (Wiggins, 2010). This way, the organization is able to measure the daily performance and ascertain how far the company is from attaining its goals.

In addition to cultivating a common sense of purpose among employees (Despres, 2011), the EFQM model also helped in achieving high levels of staff satisfaction (Peters & Waterman, 2006). This can be measured from the positive attitude that employees have towards their jobs and the willingness to report to work on a daily basis. In fact, employees in organisations that had the model were seen to have a high affinity for work than their counterparts in other organizations. The model is influential in that it makes employees want to be part of the organization’s growth by individualizing performance (Wood & Brotherton, 2008). In addition, the model drums up support for competition among employees therefore improving individual and collective performances in an organization.

According to the Institute for Quality Assurance, (1990) the EFQM model is also beneficial in the sense that it manages changes within an organization by standardizing the processes of change. In this respect, organisations that use the model are more likely to have constant change. The model anticipates all the changes that may occur within an organization and helps in their standard management (Peris et al, 2015). For instance, changes in the staff structure in the organization are harmonized. Essentially, the benefits that employees derive from the company are also standardized to ensure fairness and equality in the management of employees. The end result is an increased employee satisfaction and motivation levels that lead to higher performance. Changes in the execution of duties are also harmonized and standardized to ensure the smooth flow of operations. For instance, if the procedure for serving clients changed in an organization, the EFQM model would be effective in harmonizing the changes and ensuring a smooth transition. In this way, the organisations will have little to worry about the customer experience and their satisfaction.

The effectiveness of the EFQM model in organisations is evidenced through the motivation amongst all the stakeholders (Campbell, 2015). Primarily, this motivation can be seen in the employees as they conduct their daily chores. In addition, the customers are also motivated to get products from the organization and this can be demonstrated through the attachment that these clients have on the company. Satisfied clients have the tendency to keep in touch with the organization and suggest areas of improvement in service delivery. There is a high level of engagement amongst the stakeholders in improving the performance of the organisations. In this way, it is not the reserve of the management alone to grow and develop the organization but a combined effort.

Organisations that embrace the model understand the role that each stakeholder plays in achieving organizational performance goals. Essentially, all the stakeholders portray high engagement levels in the execution of roles and the growth of the organization through performance. In the service industry, the involvement of the various stakeholders is vital in ensuring continuity of performance growth (Parker, 2012) and the eventual expansion of the organization. Squire Hotel Group can bank on the EFQM model to improve the involvement of its different stakeholders and to ensure that engagement is maintained at high levels. It is only through such engagements that the organisation can keep in touch with the stakeholders and get more feedback.

There is also an upward flow of ideas and input from the workers to the managers (International Union of Public Transport, 2000). In this regard, the model dissuades the traditional top to bottom approach of management and encourages feedback from the employees regarding their daily operations. In the service industry, feedback is more important than input and especially feedback that involves the customer experience (Petersen, 1999). It is therefore important that organisations provide avenues for disbursement of this feedback from the customers. The staff at the lowest levels of the management hierarchy forms an important link between the customers and the managements. By providing for a link between the two, the EFQM model ensures that managers act on the feedback they get from both the customers and the staff. The end result is a dynamic organisation that is sensitive and responsive to the suggestions of its stakeholders. In addition, the feedback is important in maintaining growth of the organization as important suggestions are acted upon to come up with a better organisation.

The use of the EFQM model was also observed to be useful in efficient and effective management of data (Gaster, 2003). Data in this respect ranges from raw data to information that is collected within the operational spheres of the organization. Data from the staff to the managers is effectively and efficiently utilized to make the organization better. In the same fashion, information from the managers is effectively disseminated to the staff to help in the daily operations. The EFQM model is vital in ensuring that any data transfer is acted upon and that results are achieved (Singh, 2004). This is done through the measurement tools that the model incorporates thereby providing little room for inaction.

It is not in doubt that the service industry thrives to a large extent through the use and exchange of data. By providing an efficient and effective data handling mechanism, the EFQM model therefore ensures that organisations are able to project their growth and development (Singh, 2010). Organisations that incorporated the EFQM model were found to have dynamic and efficient data handling mechanisms. This was measured through the problem solving channels of the organisations and the responsiveness of the organisations to opinions and queries form the customers. The reverse of this outcome is also true; that organisations that do not have the model had poor data handling mechanisms. In effect, most of the problems pointed out went unsolved and the customer satisfaction levels were relatively lower.

The EFQM experience is notable in improving pride amongst the different stakeholders and an effectual desire to be associated with the company. The result of this desire and pride is the improved performance of the organisation in terms of both finances and social development (Loffler, 2004). The development of the company is measured through the social development of the staff and such indicators as their psychological well being. By providing channels for problem solving, the model cushions the employees from being affected by social problems in the course of their duties. This is enhanced by the model through the holistic approach that it incorporates in solving the problems. The model further recognizes the value of having a healthy and vibrant workforce in steering organizational growth. The study found a relatively higher sense of pride and desire amongst organisations that embraced the model as compared to the ones that did not have the model in place. Employees in organisations that had the model in place were much more likely to portray strong desire to work for the companies compared to their counterparts in the other organisations.

The study further found out that the model was attributable to the reduction of recurring problems within organizations. The holistic approach employed by the model in solving problems gives them a permanent solution and prevents situations of ‘fire-fighting’ (Bernando, 2012). In this respect, problems once solved are not likely to reoccur therefore saving the organisation important time to concentrate on the company’s performance. For instance, the standardization of the solutions such as employee welfare ensures that equality and fairness is achieved thus reducing the number of complaints. Moreover, the use of policy and standard procedures in problem solution provides guidelines under which the management must solve problems. This way, the managers cannot rely on their emotions to solve problems but must embark on logical conclusions before coming up with a solution.

The model is also notable in the manner in which it prioritizes problems based on their importance and the urgency required. In so doing, problems that have direct and immediate implications on the organization’s performance are given preference in problem solving (Nejati, 2013). It was observed that organizations using the model in their daily management had low likelihoods for recurrence of problems as compared to their rivals that didn’t have the model. Eventually, the former companies had better organizational performance than the latter. Studies conducted in the past have shown that recurrence of problems within an organization is dependent on the management styles employed in the organization. Holistic management practices were observed to have better results in terms of minimizing the risk of recurrence of these problems. By providing a holistic approach in problem solving, the EFQM model provides assurance that problems are rarely likely to reoccur.

Finally, the study identified a relationship between the use of the model and high innovation levels in organizations. This is particularly important in the service industry that relies on the innovation to come up with better services for the customers. The EFQM model provides efficient channels of data collection and action therefore providing insights on the best ways to serve the customers (Baporikar, 2016). For instance, customers may prefer certain services in different times of the year and based on their locations. The organisations must be able to identify these needs for them to remain effective. The model provides the organizations with the best channels of collecting this information. Through this, the model improves the creativity of both the staff and the management by asking questions on how best to fill the gaps identified in the course of their operations. Eventually, the organisations can remain afloat and be able to meet the needs of the customers through creativity and innovation.

Conclusions

Generally, the EFQM model stands out as the single most important model in attaining excellent results in an organization. In the service industry, a niche of the Squire Hotel Group, the model is useful in ensuring sound decisions and good financial performance. Although the model has its weaknesses including the limitation to proof and not mere testimony, its importance in organizational management cannot be overlooked (Beecroft, Duffy & Moran, 2003). Clearly, the benefits of the model outdo the weaknesses by far thus making it the single most important management model in the service industry.

Recommendations

The number one recommendation of this report is the unequivocal implementation of the EFQM model within the Squire Hotel Group.

The organisation should first identify its general way of work prior to the implementation. This step is useful in ensuring that the model is implemented in the way that the organisation functions.

The organisation should profile its leadership team based on the different regions of operations. This is useful in ensuring the short term success of the EFQM implementation process.

The organisation should also identify the competencies needed in the future to identify the need of the model in addressing such competencies. The achievement of these competencies can then be measured with time to identify the long-term effectiveness of the model.

The organization must also devise measurement methods to assess the effectiveness of the model. This can be done through the comparison of identified indicators in the short term and long term operations of the organization.

The organisation should also set performance goals especially financial and economic goals to gauge against the model’s effectiveness. Doing so will help in stretching the model to perform at its optimal best while pushing the management to achieve the set goals.

The organisation should also sensitize the stakeholders on the importance of the model before implementation. This will help in forming a positive attitude towards the model and prevent employees from viewing the model as a spying model out to harass them.

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