Challenges Posed to Performance Management by TQM Gurus: Contributions to Individual Employees Versus Systems-Level Features

There is a plethora of literature to suggest that even in quality-oriented organizational contexts, the approach driving performance appraisal is fundamentally in conflict with Total Quality Management (TQM) precepts, which put heavy emphasis on systems-level features of performance management. This inconsistency arguably impedes the transition to a stable Total Quality (TQ) environment, or even actively encourages regression to traditional ways. In response to this inconsistency, this paper discusses the contributions of individual employees towards organizational performance versus systems-level features, based on a wide-ranging literature survey and an empirical study of a sample of EFQM-affiliated organizations. The results indicate that most performance appraisal systems fail to meet TQ expectations in practice, and that they contradict TQM assumptions about the relatively low importance of individual employees as a source of variation in organizational performance. In this paper, we argue that performance management should be based on both systems-level features and contributions from individual employees, as these tend to complement each other. Our findings suggest that individual employees-as a basis for competitive advantage in the new millennium-will retain a critical role in providing a potential source of quality improvement. Thus, our research findings will provide a new insight into how quality-driven organizations not only cope with apparent mismatches between TQM precepts and the performance appraisal system used in practice, but also attempt to utilize the latter system to the advantage of both the organization and its employees.