The Malcolm Baldrige National Quality Award is named after Malcolm Baldrige, who was Secretary of Commerce from 1981 until 1987. Baldrige was known for his focus on efficiency and effectiveness, and the award was developed to recognize and reward those qualities in business. The Malcolm Baldrige National Quality Award is an award managed by the National Institute of Standards and Technology (NIST), which is a branch of the Department of Commerce. On August 20, 1987, Congress signed Public Law 100-107 into law, establishing the award. The award created a private-public partnership including the Foundation for the Malcolm Baldrige National Quality Award, and the award was established in 1988. The award was established in response to a perception that the United States was beginning to face significant challengers from foreign nations in terms of product and process quality in business. Furthermore, they recognized that quality has a significant impact on business, so much so that they recognized that inefficient business practices can cost up to 20% of revenue (101 Stat. 724, Public Law 100-107, 1987). Other countries had already implemented hybrid business awards that combined public and private interests and had seen improvements in productivity as a result of those awards. As a result, the United States chose to institute the Malcolm Baldrige National Quality Award (NIST, 2010).
The goals of the program are straightforward and aimed at improving business. The first goal is to provide an incentive for American businesses to improve quality and productivity. The second goal is to recognize those companies that improve their quality, thereby providing other companies with a positive example. The third goal is to establish the guidelines and criteria that business, industry, government, and other organizations can use when evaluating their quality improvement efforts. The fourth and final goal is to provide guidance to organizations that are seeking to improve their quality performance. All of these goals are reflected in the criteria that the NIST uses to determine who qualifies for the award (101 Stat. 724, Public Law 100-107, 1987).
Description and Analysis of Criteria for Performance
The awards focus on three broad areas of industry: businesses and non-profits, education, and health care. Each of the three areas has very specific criteria for performance. The criteria are non-specific, so that they can be adapted to a variety of different businesses and situations. In fact, the criteria do not even take a specific approach to improved performance, instead allowing each individual to choose an individual approach to quality improvement. These approaches include, but are not limited to Lean, Six Sigma, balanced scorecard, and ISO 9000 (NIST, 2012). What this means is that the criteria are goal-oriented, rather than procedure oriented, allowing for flexibility in approach. There is a recognition that the appropriate method for an individual organization depends on the organization's size, what the organization does, the organization's customers and suppliers, and the available workforce (NIST, 2012). However, the criteria do focus on the following results: products and processes, customers, workforce, leadership and governance, and finance and markets (NIST, 2012). Moreover, the results demand a balance between the different elements of a business, so that improvement in one area is not the result of performance declines in another area. Likewise, the results examine both short-term and long-term goals, to ensure that one is not compromised for the other (NIST, 2012).
The criteria are broken-down into an organizational profile, followed by seven categories. The organizational profile provides an opportunity to describe the business, including: what the business does, the regulatory environment, mission statement, goals, governance rules and relationships, suppliers, and core competencies (NIST, 2013). The preface also provides an opportunity to examine the business's organizational situation, including: strengths, weaknesses, opportunities, and threats; competitors; strategic challenges; and preparation for disruptive technologies (NIST, 2013). Category 1 focuses on leadership. It examines: the role of senior leadership, and governance and societal responsibilities (NIST, 2013). Category 2 focuses on strategic planning by looking at customer-driven excellence, operational performance improvement and innovation, and organizational and personal learning (NIST, 2013). Category 2 is broken down into the following discrete units: strategy development and strategy implementation (NIST, 2013). Category 3 focuses on customer focus and examines: the voice of the customer and customer engagement (NIST, 2013). Category 4 looks at the measurement, analysis, and knowledge of management by examining organizational performance and information technology (NIST, 2013). Category 5 examines the workforce focus. It looks at: the workforce environment and workforce engagement (NIST, 2013). Category 6 looks at operations focus by examining work processes and operational effectiveness (NIST, 2013). Category 7 examines results by focusing on: product and process results, customer-focused results; workforce focused results; leadership and governance results; and financial and market results (NIST, 2013).
Discussion of the Scoring System
The scoring system breaks each of the seven categories down into percentages and then awards points on the basis of the percentage. Therefore, a perfect score would total 700 points or 700% of the available points in all categories. There is a scoring system for process which is used for categories 1-6, with a different scoring system used for results. Each category is then examined to look at overall percentages and points.
The scoring system for process is relatively simple. A score range of 0 or 5% means that either: no systemic approach is evident; little or no deployment of the systemic approach is evident; an improvement orientation is not evident; or no organizational alignment is evident (Steel, 2013). A score range of 10, 15, 20 or 25% means that: the beginning of a systemic approach is evident; the approach is in the early stages of deployment in most areas; early stages of transition from reactiveness are evident; or the approach is aligned with other work areas for joint problem solving (Steel, 2013). A score range of 30, 35, 40, or 45% means that: an effective, systematic approach responsive to the basic requirements of the item is evident; the approach is deployed but in the early stages; the beginning of a systematic approach to evaluation and improvement of key processes is evident; or the approach is in the early stages of alignment with organizational needs (Steel, 2013). A score range of 50, 55, 60, or 65% means that: an effective, systematic response to the overall requirements is evident; the approach is well deployed; a fact-based evaluation process is in place; or the approach is aligned with the organization's overall needs (Steel, 2013). A score range of 70, 75, 80, or 85% means that: an effective, systematic approach to the organization's overall requirements is evident; the approach is well-deployed with no significant gaps; fact-based evaluation and learning are a key part of the management process; or the approach is integrated with future needs. Finally, a score range of 90, 95, or 100% means that: an effective, systemic approach that is fully responsive to all of the firm's requirements is evident; the approach is fully deployed; fact-based evaluation and learning are a key part of the entire organizational structure; or the approach is well integrated into current and future needs (Steel, 2013).
The scoring system for results breaks down results into the same percentage groupings as process. Briefly, a score range of 0 or 5% means that there are no results or poor results (Steel, 2013). A score range of 10, 15, 20 or 25% means that there are few results or early positive results (Steel, 2013). A score range of 30, 35, 40, or 45% means that more results are reported and positive results are reported, but in early stages (Steel, 2013). A score range of 50, 55, 60, or 65% means that there are overall good performance results (Steel, 2013). A score range of 70, 75, 80, or 85% means that the results reported are in the good to…