TQM and Performance Appraisal: Complementary or Incompatible?

Despite the scholarly interest in performance management as a key determinant of the effectiveness of enterprise process improvement methods such as total quality management (TQM) and its derivatives, few empirical studies have explicitly explored the practice of performance management systems in TQM‐focused organizations. In order to redress this imbalance, this study aims to describe how organizational and managerial forces led to a performance management systems failing to embrace the core principles of process improvement methods such as TQM. Using a qualitative study of six large UK‐based automobile and auto parts manufacturers, our results illustrate how manager‐controlled, individual‐focused, past‐oriented, long‐cycle, and narrowly defined performance appraisal (PA) systems can intervene to underline the ultimate potential of TQM. The paper concludes with the discussion of implications for theory and practice of TQM and human resource performance management.