Total quality or performance appraisal: Choose one

Many teachers of total quality, following the lead of W. Edwards Deming, suggest that TQM and performance appraisal are incompatible. Indeed, Deming lists “evaluation of performance, merit rating and annual review” as the third of his “Seven Deadly Diseases.” Why can't TQM and performance appraisal co‐exist? At the center of the case against performance appraisal are the fundamental values and principles of TQM. TQM requires customer‐consciousness, systems‐thinking, an understanding of variation, an appreciation of teamwork, a mastery of improvement methods, and an understanding of the process of personal motivation and learning. These very requirements of TQM are subverted by performance appraisal. TQM requires us to understand, control, and improve processes for the benefit of the customer. Performance appraisal aims at controlling an individual's behavior to the satisfaction of his or her manager. The two approaches represent a fundamental choice for leaders: one or the other; not both.