Quality circles, small groups of employees working voluntarily toward performance improvement, have become a popular business strategy in the past decade. When effective, the quality circle may be linked directly to the increased productivity of the work group. The quality circle process may be divided into four components: identification and study of the problems, presentation of solutions to management, implementation of the solution, and evaluation of the implemented solution. Quality circles may be viewed as the managerial application of small group communication research. Small group communication research indicates that group productivity rests on (1) goal specification, (2) coworker resources, and (3) task demands. However, without skilled communicators as quality circle members, much of the total energy of the group may be misallocated, drained by ineffective information processing, the hostilities of unresolved conflict and reticent participation. The vital link between the effectiveness of the quality circle and increased productivity is communication skill within the small group itself, the origin of new information input. Thus, the productivity of quality circles is determined largely by communication variables. (HTH)