Old Wine in New Bottles Tastes Better: A Case Study of TQM Implementation in the IRS

Abstract

Joseph Juran is an author, lecturer, and corporate advisor on Total Quality Management (TQM). Juran (1964) has had experience in universities, industry, and government agencies, and he believes that the principles of TQM can be applied with equal success in any of these settings. Swiss (1992), however, argued that orthodox principles of TQM, as taught by Juran, Deming, and others, must be modified to be successfully implemented in government. He suggested that there is a need for output goals and measurements, employee empowerment, feedback from customers, and continuous improvement efforts. This case study of TQM implementation in the Internal Revenue Service (IRS) analyzes one government agency's approach and explores other issues. Were there improvements in productivity and customer service in the IRS after TQM implementation? If so, were the changes the result of TQM? Is TQM a change or simply reinforcement and expansion of existing, positive practices of the traditional art and science of public administration? The Decision to Adopt TQM in the Internal Revenue Service In the early months of 1985, processing fell behind at the Internal Revenue Service Centers when nearly 180 million tax returns and supplemental documents arrived. The cause of many problems was a complete computer system conversion at 10 service centers. As the problems were resolved, the service centers caught up and processed 6 million returns per week in April 1985 - the fastest processing rate the centers had ever accomplished (Internal Revenue Service, 1986). Early that year, there was national, adverse publicity of problems with erroneous notices, lost tax returns, and enormous increases in taxpayer correspondence. More problems resulted from the drive for productivity at any cost - in this case, the cost was quality service to taxpayers (Federal Quality Institute, 1992). In 1986, the IRS began a journey from crisis to quality. The decision to implement TQM was an agency decision in response to the demands of the customers that the agency was designed to serve. The most important of these customers were Congress and the taxpaying public. When taxpayers related their concerns to congressional representatives, and when executive oversight agencies reported that the agency was delivering poor service, the agency was encouraged to develop strategies to improve the quality of service. Within this political context, the agency chose to implement TQM. Employee resistance was apparent when the IRS began quality and customer service training. Some employees and managers gave reasons why they would be unable to attend their scheduled training. Some employees who attended training explained that it seemed inappropriate to call taxpayers customers. Other employees believed that TQM was just another trend that upper level management would advocate and then abandon in favor of a newer trend. Other employees believed that TQM would make no difference because quality service had always been their objective (Mani, 1994). Resistance to change is a common problem in organizations that adopt the total quality management philosophy (Juran, 1964). This resistance may be even greater in public sector organizations where standard operating procedures are clearly specified and regulate both policy and practice. This resistance may be lessened if decision makers believe that TQM includes changes that will lessen existing problems and help prevent problems in the future (Cohen and Brand, 1993). Implementation of TQM in the Internal Revenue Service Demonstrated commitment of top-level management is critical to the successful implementation of TQM (Krone, 1991). This commitment has been apparent at all stages of implementation in the IRS - both in organizational structure and in quality training. The first changes in organizational structure began at the top level in the national office. In 1986 the commissioner of the IRS instituted the Commissioner's Quality Council, which included the associate commissioners, two regional commissioners, the assistant commissioner for human resources and management support (ex-officio), and the executive secretary (ex-officio). …