A Contrast of HRM and TQM Approaches to Performance Management: Some Evidence*
| DOI | http://doi.org/10.1111/j.1467-8551.2005.00452.x |
| Author | Robert Van Der Meer,Ebrahim Soltani,Terry M. Williams |
| Published date | 01 September 2005 |
| Date | 01 September 2005 |
A Contrast of HRM and TQM Approaches
to Performance Management: Some
Evidence
*
Ebrahim Soltani, Robert van der Meer, Terry M. Williams
Department of Management Science, Strathclyde Business School, Graham Hills Building 40 George Street,
Glasgow, G1 1QE, UK
Corresponding author email: e.soltani@strath.ac.uk
Using a survey, this paper provides information about the current state of performance
management (appraisal) from a sample of UK-based EFQM-affiliated organizations. It
particularly focuses on several critical issues of performance management in the context
of TQM including: the effectiveness of TQM programmes; the rationale for
performance management; degree of internal consistency between TQM assumptions
and performance management systems; and the relationship among performance
management, effectiveness of TQM programmes, employee satisfaction and overall
organization performance. Although the fundamental precepts advocated by founders of
TQM appear to be in conflict with performance management practices, however, the
article argues that, rather than being contradictory, both can add value to the
operations of the other in the interest of the organization as a whole. More precisely,
the paper explains how a successful TQM strategy requires a rethinking and changing
the organization’s performance management system, otherwise it is highly likely to
result in a disaster. To conclude, the survey evidence is used, combined with previous
literature, to discuss the implications of these results for designing a contextually
appropriate performance management for TQM and in the interest of the future
research on TQM and HRM.
Introduction
The decades of the 1980s and 1990s may be
remembered for producing more desire to adop-
tion and implementation of Total Quality
Management (TQM) approaches than in the
whole of the preceding years of the twentieth
century combined. Application of these quality
management approaches by a wide range of
organizations including large and small, public
and private, loc al and multinatio nal, resulted in
radical and widespread shifts in the global
economy. Such enthusiasm towards TQM hap-
pened to coincide with the emergence of perfor-
mance measurement frameworks of TQM such as
the Malcolm Baldrige National Quality Award
(MBNQA) and European Foundation for Quality
Management (EFQM) framework. This, in turn,
was followed by other performance management
systems; namely balanced scorecard and HR
scorecard. Balanced Scorecard provides a clear
description as to what companies should measure
in order to balance the financial perspective, and
the HR Scorecard shows how HR impacts
*
This study was supported by a current ESRC-funded
postdoctoral award, and by a Grant-in-Aid of Research
from the Ministry of Science, Research and Technology
(MSRT) of Iran. We also would like to express our
appreciation for thoughtful comments concerning ear-
lier draft of this article to the two anonymous reviewers.
This paper was developed from a presentation at the
10th International Conference on Industry, Engineering
and Management Systems (IEMS) in Florida, USA,
15–17 March 2004.
British Journal of Management, Vol. 16, 211–230 (2005)
DOI: 10.1111/j.1467-8551.2005.00452.x
r2005 British Academy of Management
business performance. These advances in measur-
ing performance and TQM outcomes and their
effects on work organization have been enthusias-
tically reported by many authors and researchers
(e.g. Becker, Huselid and Ulrich, 2001; Bititci,
Carrie and McDevitt, 1997; Capon, Kaye and
Wood, 1995; Kaplan and Norton, 1996; Neely,
1998; Neely, Bourne and Kennerley, 2000; Sinclair
and Zairi, 1995; Wilkinson, 1993) who comment
on the future of performance management and
measurement issues in business organizations.
Running parallel to this more generalist TQM
and performance measurement, there has been an
increasing plethora of the work examining the
importance of a contextually appropriate perfor-
mance appraisal system in organizations. Here,
the major focus of enquiry for several authors
(e.g. Freeman, 2002; Knouse, 1996; Long, 1986;
Petrick and Furr, 1995; Randell, 1994; Seddon,
2001; Segall, 1989; White and Nebeker, 1996;
Wilson and Western, 2000) has been examining
why, in such a volatile environment, performance
appraisal systems tend not to incorporate goals
and the direction or strategic needs of the busi-
ness, or the personal aspirations of the employees
and their future development. For example, it is
noted that: ‘In almost every major survey, most
employees who get appraisals and most super-
visors who give them rate the process a resounding
failure’ (Schellhardt, 1996); or at a macro level,
despite the increased use of various organizational
measurement frameworks (e.g. balanced score-
card) it is claimed that 70% of such initiatives
would fail (Neely and Bourne, 2000).
In particular, it is becoming a commonplace
statement that ‘appraisal of performance, merit
rating and annual review’ impede the transition
to a stable total quality (TQ) environment – the
third of Deming’s (1986) seven deadly diseases.
Performance appraisal, Deming notes, funda-
mentally and actively encourages regression to
traditional ways. Performance appraisal, we are
told by many TQM and human resource manage-
ment (HRM) specialists (e.g. Cardy, 1998; Dem-
ing, 1986; Ghorpade, Chen and Caggiano, 1995;
Knouse, 1996; Prince, 1996; Scholtes, 1993;
Wilkinson et al., 1998) are unfair, since they hold
the worker responsible for errors that may be the
result of faults within the system; promote
worker behaviour that compromises quality;
create a band of discouraged workers who cease
trying to excel; rob the workers of their pride in
workmanship, to name just a few. This prevents
the full and effective utilization of all TQM
initiatives. However, the extent to which it has
recently changed and, in particular, the extent to
which the rhetoric referred by Fisher (1995) has
been replaced by reality, is important to address.
Focus the appraisal on development rather than
control, assessment of performance against be-
havioural standards and competencies, drawing
performance feedback from colleagues and sub-
ordinates, and focus the process on people’s
potential rather than skills deficits are among the
major shifts in recent years in performance
management.
This paper explores this apparent contradic-
tion, arguing that, despite some revisions in
performance management practices over the last
two decades (see Becker, Huselid and Ulrich,
2001; Kaplan and Norton, 1996; Neely, 1998),
the current performance management systems are
not still contextually appropriate for TQM. It
also offers an explanation of why this is the case.
In doing so, signs of changes in performance
management systems are considered in the
context of TQM. The initiatives that organiza-
tions might take to tackle this apparent conflict
are outlined in the second section of this article,
drawing on guidance from the TQM and HRM
specialists. The third section considers the re-
search methodology and analysis of the empirical
data – an apparent shortfall in the current
literature on TQM and performance manage-
ment – which might encourage an organization to
adopt such guidance. Specifically, it highlights
some main categories of reason why performance
appraisal which forms the basis for a wide range
of decisions in an organization, appears in
important parts of TQM literature of things-
not-to-do.
On the one hand, much of the improvement in
the performance management, it is argued, rests
on an effective training, clear communication of
the objectives and importance of feedback
information from a variety of stakeholders in
the organization. The adoption and implementa-
tion of such prescriptions, however, will deliver
only limited consistency between appraisal sys-
tem and the organizational context. Less atten-
tion, on the other, has been paid to an adequate
conceptualization of the central problem of
performance management (Cardy, 1998; Deming,
1986; Ghorpade, Chen and Caggiano, 1995;
212 E. Soltani, R. van der Meer and T. M. Williams
To continue reading
Request your trial