MALCOLM BALDRIGE NATIONAL QUALITY AWARD 1

How are the Baldrige Award process criteria beneficial to companies that won the award and

those that do not win? Discuss the criteria’s set to qualify for the award and how these

criteria’s are implemented, monitored and evaluated.

Sivakumar Nadaraja (SP21087)

Universiti Tenaga Nasional

Operation Management (MGTM623)

August 2, 2010

Dr. Daram
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How are the Baldrige Award process criteria beneficial to companies that won the award and

those that do not win? Discuss the criteria’s set to qualify for the award and how these

criteria’s are implemented, monitored and evaluated.

The Malcolm Baldirge National Quality Award (MBNQA) was established in 1987.

The award is intended to improve quality of companies in the United States of America

(USA) and as a reward and recognition for the awarded companies. This award was named

after former Secretary of Commerce Malcolm Baldrige and the award was created when the

Congress pass the Malcolm Baldrige National Quality Improvement Act. The award is

broken into three categories covering manufacturing, service and small businesses. Education

and Health Care were added in 1999. The award is to recognize companies that establish and

demonstrate high quality standards and is given to no more than two companies for each

category.

The purpose Baldrige was formed as from NIST website.

• “helping to stimulate American companies to improve quality and productivity for the

pride of recognition while obtaining a competitive edge through increased profits;

• recognizing the achievements of those companies that improve the quality of their

goods and services and providing an example to others;

• establishing guidelines and criteria that can be used by business, industrial,

governmental, and other organizations in evaluating their own quality improvement

efforts; and

• providing specific guidance for other American organizations that wish to learn how

to manage for high quality by making available detailed information on how winning

organizations were able to change their cultures and achieve eminence.”

source: http://www.baldrige.nist.gov/Improvement_Act.htm
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When companies apply for the Malcolm Baldrige award, they have to go through a

rigorous process with many stipulations for entry. An independent board of examiners

researches the organization and follows specific criteria for this evaluation.

When applying for an award, the organization cannot be doing so just to win, but

needs to buy into the entire philosophy of quality improvement. It is in this way that the

organization will get the most benefit. Total quality improvement will show in all aspects of

the organization including increased productivity, employee morale, customer satisfaction,

and improved profitability.

Benefits to Companies that Won

According to Guy Schoenecker, president of BI who won the MBNQA in 1999,

primary benefit is an ongoing return on investment (ROI). He said the ROI is possible due to

the fact that, MBQNA enabled them to clean up working processes and making

communication easier by having fewer levels of management thus helping them become

more effective and the employees more productive, which ultimately improves customer

satisfaction. He also added that working towards MBNQA helps BI drive waste out of the

company.

By working toward achieving MBNQA and wining it, it gives the companies a solid

frame work on driving towards continuous excellence in business to remain competitive

among the companies of same sector. Another great advantage of earning the MBNQA is the

opportunity to meet and share ideas with other Award recipients. From my point of view

achieving MBNQA not only drives an organization to becoming more efficient and quality
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focused but it also gives a third-party endorsement to increase reputation and improved

market image.

Benefit to Companies that Does Not Win

MBNQA also benefits companies that do not win by giving valuable feedback report

of 50 or more pages noting strengths and opportunities for improvement. The application

feedback helps companies to prioritize scarce resources on the highest leverage areas for

improvement. By having these feedbacks the company knows on its strength and weaknesses

and thus working effectively on the weakness rather than frivolous matters.

Branch-Smith Printing Division, 2002 Award Recipient in Small Business, whom first

applied for MBNQA and didn’t win noted the below.

“Over the years, we have found one of the greatest benefits of applying is maintaining

a performance improvement discipline based on a system that is both highly regarded

and works. It takes a great commitment to remain focused and to recognize that the

opportunities for improvement identified through third party feedback can be

implemented.”

This proves that by having a third party feedback, the companies can be more focused

to resolve those identified problems and ensures that all member of the company are

marching in the same directions. As a matter of fact this creates a habitual pattern and can

become the culture of the companies to strive excellence towards quality and customer

satisfaction.
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Criteria’s Set to Qualify, Implemented & Monitored

As the Criteria booklet states, the Criteria are designed to help provide organizations

with an integrated approach to organizational performance management that results in the

delivery of ever-improving value to patients/customers/students, the improvement of overall

organizational effectiveness and capabilities, and organizational and personal learning. The

Criteria are built upon a set of core values and concepts. These core values are embedded in

the seven Baldrige Categories:

1. Leadership — Examines how senior executives guide the organization and how the

organization addresses its responsibilities to the public and practices good citizenship.

2. Strategic planning — Examines how the organization sets strategic directions and

how it determines key action plans.

3. Customer and market focus — Examines how the organization determines

requirements and expectations of customers and markets; builds relationships with

customers; and acquires, satisfies, and retains customers.

4. Measurement, analysis, and knowledge management — Examines the management,

effective use, analysis, and improvement of data and information to support key

organization processes and the organization’s performance management system.

5. Workforce focus — Examines how the organization enables its workforce to develop

its full potential and how the workforce is aligned with the organization’s objectives.

6. Process management — Examines aspects of how key production/delivery and

support processes are designed, managed, and improved.

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7. Results — Examines the organization’s performance and improvement in its key

business areas: customer satisfaction, financial and marketplace performance, human

resources, supplier and partner performance, operational performance, and

governance and social responsibility. The category also examines how the

organization performs relative to competitors.

Figure 1: Baldrige Criteria for Performance Excellence Framework (source - http://quality-management-

tools.com/Baldrige.htm)

Each criteria has weighted score and the maximum score attainable is 1000. The

seven criteria’s can be used to assess management system and identify major improvement

are. The model fits well in organization taking continuous improvement philosophy.
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Table 1: Weightage of Each Criteria

No. Criteria Points

1 Leadership 120
Senior Leadership 70
Governance and Social Responsibilities 50
2 Strategic Planning 85
Strategy Development 40
Strategy Deployment 45
3 Customer and Market Focus 85
Customer and Market Knowledge 40
Customer Relationships and Satisfaction 45
4 Measurement, Analysis, and Knowledge Management 90
Measurement, Analysis, and Improvement of Organizational Performance 45
Management of Information, Information Technology, and Knowledge 45
5 Workforce Focus 85
Workforce Engagement 45
Workforce Environment 40
6 Process Management 85
Work Systems Design 35
Work Process Management and Improvement 50
7 Business Results 450
Product and Service Outcomes 100
Customer-Focused Outcomes 70
Financial and Market Outcomes 70
Workforce-Focused Outcomes 70
Process Effectiveness Outcomes 70
Leadership Outcomes 70
TOTAL 1000 1000

These weightage are used by the examiners to determine the companies performance

in each criteria. Applications for the award are evaluated by an independent Board of

Examiners composed of primarily private-sector experts in quality and continuous

improvement from all sectors of the economy. Examiners look for achievements and

improvements in all seven categories of the Baldrige Criteria for Performance Excellence.

Organizations that pass an initial screening are visited by teams of examiners to verify

information in the application and to clarify questions that come up during the review. Each
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Baldrige Award applicant receives a written summary of strengths and areas for improvement

in each area addressed by the Baldrige Criteria. The review process follows up to four stages:

1. Independent review by at least six examiners. If score is low, the examiners’

evaluations will be consolidated into a feedback report with strengths and

opportunities for improvement and sent to corresponding applicant.

2. Consensus review. If exceed the score set by the Panel of Judges, a team of examiners

discusses each Item during a teleconference to agree upon strengths, opportunities for

improvement, and a score. If consensus score does not meet the next threshold set by

the Panel of Judges, applicant will receive a feedback report based on the consensus

review.

3. Site visit. Applicants that score well receive a site visit from a team of examiners. The

teams clarify and verify the contents of your application and provide a site visit report

to the Panel of Judges.

4. Judges’ review. The Panel of Judges convenes to discuss each organization that

received a site visit and to identify which applicants, if any, they recommend to

receive the Award. The Department of Commerce has final say on the actual

recipients, which are subject to background checks to make sure they would be fitting

role models for the Award. The examiner team that made the site visit produces a

feedback report that is sent to the applicant.

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References

(1999). Criteria for Performance Excellence: Malcolm Baldrige National Quality

Award ... (p. 52). DIANE Publishing. Retrieved from
http://books.google.com/books?id=EcNrlYomTrsC&pgis=1.

Russo, C. W. (1995). ISO 9000 and Malcolm Baldrige in training and education: a
practical ... (p. 344). Charro Publishers. Retrieved from
http://books.google.com/books?id=jxBKAAAAYAAJ&pgis=1.

Spechler, J. W. (1993). Managing quality in America's most admired companies (p.

422). Berrett-Koehler Publishers. Retrieved from
http://books.google.com/books?id=4r70FFjwfu0C&pgis=1.

An interview with Guy Schoenecker, president of BI <www.google.com>

Malcolm Baldrige National Quality Award. July 25, 2010 <www.wikipedia.com>

The Baldrige Criteria July 25, 2010 < http://www.baldrige.com/criteria/the-baldrige-criteria/>

Mission and milestone: The Baldrige Award at age 20, July 25, 2010
<http://www.reliableplant.com/Read/5124/baldridge-award>

Malcolm Baldrige Award Presentation - Saint Luke's Hospital July 25, 2010
<www.saintlukeshealthsystem.org/.../malcolm_baldrige_award_presentation.htm>