The European Foundation for Quality Management (EFQM) Excellence Model was introduced in 1991 as the framework for organizational self-assessment and as the basis for judging entrants to the European Quality Award, which was awarded for the first time in 1992 . A number of factors have encouraged many western countries to introduce quality awards. Among these were: the importance of quality for competitiveness, and contribution of benchmarking and self-assessment techniques to improving performance . The award models are used extensively throughout the world by leading companies and can thus be used for international benchmarking comparisons.
The EFQM Excellence Model is a non-prescriptive framework that recognizes there are many approaches to achieving sustainable organizational excellence. Excellence can be defined as the outstanding practice in managing the organization and achieving results based on fundamental concepts, which include: results orientation, customer focus, leadership and constancy of purpose, processes and facts, involvement of people, continuous improvement and innovation, mutually beneficial partnerships, and public responsibility. Behaviors, activities or initiatives based on these concepts are often referred to as Quality Management..
The EFQM Excellence Model is a practical tool that can be used in a number of different ways:
- As a tool for Self-Assessment
- As a way to Benchmark with other organizations
- As a guide to identify areas for Improvement
- As the basis for a common Vocabulary and a way of thinking
- As a Structure for the organization’s management system
The EFQM Excellence Model is a non-prescriptive framework based on 9 criteria. Five of these are ‘Enablers’ and four are ‘Results’. The ‘Enabler’ criteria cover what an organization does. The ‘Results’ criteria cover what an organization achieves. ‘Results’ are caused by ‘Enablers’ and ‘Enablers’ are improved using feedback from ‘Results’. The Model, which recognizes there are many approaches to achieving sustainable excellence in all aspects of performance, is based on the premise that:Excellent results with respect to Performance, Customers, People and Society are achieved through Leadership driving Policy and Strategy, that is delivered through People, Partnerships and Resources, and Processes.
The EFQM Model is presented in diagram form below. The arrows emphasize the dynamic nature of the Model. They show innovation and learning helping to improve enablers that in turn lead to improved results.
Let us first present a brief summary of the criteria under the ‘enablers’ group of EFQM Excellence Model.
- Leadership: It is expected from the top leadership of excellent organizations that they would create management systems in their organization and would strive for their proper implementation and further improvement. They would take the employees of the organization in confidence and would directly interact with their customers, suppliers, and society at large. These leaders should be instrumental in bringing about organizational changes as and when required. They should emerge as role models for the employees of their organization.
- Policy and Strategy: Excellent organizations must have a long-term strategic plan keeping in view the expectations of its various stakeholders. These plans should be reviewed continuously for proper implementation and updated if needed. These strategies should be based on tracking the external environment and monitoring the strengths of the organization regularly.
- People: It is desirable that organization manage their human resource requirements effectively by identifying the competencies of their people and further improving these to derive maximum advantage. There should be proper channels pf communication between the top management and the employees so as to know their problems and expectations. The employee‘s good performance should be recognized and rewarded.
- Partnership and Resources: External partners, such as suppliers, should be involved in improving the coordination requires for more satisfaction of the customers. The organization must help these partners in their problems and create a synergy between them. Excellent organizations should have well defined systems for managing their finances, buildings, equipment, and materials. Outdated technology should be id3entified in their operation and replaced with latest technology whenever the need be. Proper use of information technology should be made and it should be ensured that tacit knowledge of the organization is translated in to knowledge management systems.
- Processes: Various processes should be well defined and well documented. The process should be reviewed for further improvement regularly. The organization should design and develop its products and services on the basis of the expectations of the customers. Long-term relationships should be established with the customers.
Let us now present a brief summary of the criteria under the ‘results’ group of EFQM Excellence Model.
- Customers results: How does the customer perceive the organization? The organization is expected to establish procedures to know about the customer‘s perceptions of itself.
- People results: What are the perceptions of the employees of the organization about the organization? Thus, systems have to be established to monitor, understand, predict, and improve the perceptions of the employees.
- Society results: What has the organization achieved for the society at large? What does the society perceive about the organization? Thus, systems have to be established to monitor, understand, predict, and improve the perceptions of the society.
- Key performance results: Key performance outcomes or results are the results as planned by the organization. These outcomes can be financial or non financial. What the organization is achieving with respect to its planned performance is to monitored and analyzed.
An attempt is made hereunder to analyze each criterion of the EFQM Excellence Model in the light of Human resources and capabilities that generate future sustainable competitive advantages.