The compatibility of performance appraisal systems with TQM principles – evidence from current practice

Purpose – This paper aims to address the question whether or not quality‐driven organisations have, in practice, tended to adjust their performance appraisal systems to integrate total quality management (TQM) requirements. Design/methodology/approach – To do so, the findings of an initial literature survey suggested the combined use of quantitative and qualitative methods for empirical research. The quantitative element consists of a postal questionnaire survey of 64 UK‐based, quality‐driven organisations on the topic of performance appraisal in the context of TQM. Key informants from ten of these organisations were subsequently interviewed in order to gather detailed information on the reasons behind their initial responses. Findings – The results indicated that only a minority of the respondents were satisfied with their TQM programmes. But this comparative lack of success did not lead them to eliminate performance appraisal altogether, as advocated by Deming and others because of the role of systems‐level causes of performance variation. Research limitations/implications – One important question concerns the notion (expounded in much of the quality literature) that a vast proportion of the variance in individual performance is caused by systems‐level features. There is, however, little hard evidence for this view. Practical implications – By acquiring the relevant knowledge and understanding of contextually‐appropriate performance appraisal and management, practitioners would be able to translate and mediate TQM requirements into performance appraisal criteria to maintain the integrity of organisational change initiatives aimed at long‐term business excellence. Originality/value – The research provides a starting‐point for both TQM scholars and managers, and it can serve as a road‐map and a challenge to quality‐driven organisations.