During the past decade, public agencies and business firms experimented with various forms of employee involvement and participative management (Ledford et al., 1989). Many of these initiatives could not be sustained because they often were stand-alone programs that focused on immediate questions and short-term results rather than long-range, strategic issues confronting the organization. Crisis management of this character actually seems to exacerbate problems and delays adoption of genuine approaches to productivity.
As productivity concerns deepened in the eighties, a recognition emerged that organizational leaders must accept responsibility for the management of people the way they do for the management of money. Needed was not merely employee involvement but, more important, management involvement-integrating quality of worklife groups, productivity teams, quality circles, and the like into the entire organization as part of a larger improvement effort.
This understanding of what has been called Japanese-style management has led to the adoption of total quality management (TQM)(1) in over 3,000 corporations and 40 governments in the United States (Milakovich, 1991, pp. 197-198). Recent studies, in fact, reveal that 76 percent of companies now see quality as a major goal and 80 percent of the Fortune 1,000 firms have quality improvement programs (American Society for Training and Development, 1991; Lawler et al., 1992). In the late 1980s, the national government created the Federal Quality Institute to promote quality initiatives, and by 1992, over two-thirds of federal agencies were using some form of TQM (U.S. General Accounting Office, 1992). There is a growing realization that quality is as important in service industries as in manufacturing firms, and that quality awareness should permeate organizations from top to bottom.
The success of this trend relies on improving performance and eliminating obstacles to that improvement. In TQM, the entire organization is considered a system of interlocking processes--the institution, rather than the employee, is the object of management. Yet most of those using TQM persist in managing performance through individual employee ratings--a practice antithetical to TQM (see Booz, Allen, and Hamilton, 1990; Conference Board, 1991 and 1989; Gabor, A., 1990, chap. 9; and Usilaner and Leitch, 1989). This is especially ironic because personnel ratings have created tension, defensiveness, and avoidance on the part of both managers and employees and usually do not improve performance.(2) Yet psychologically and interpersonally destructive organizational practices are seldom discarded merely because they are dysfunctional. They must, instead, be driven out by something better.
According to TQM, problems do not originate with employees, but from a lack of understanding of the work processes. The TQM objective is to analyze processes to identify barriers to quality, satisfy internal and external beneficiaries of the work performed ("customers"), and create an atmosphere of continuous improvement. If shoddy goods and services are delivered, the problem rests with management practices, which performance appraisal only serves to reinforce.
In this article, I examine performance appraisal, a managerial function that has been recognized as the most serious obstacle to the successful implementation of TQM, in the context of total quality management (Moen, 1989, p. 62). I also explore the experience of public and private organizations with personnel evaluations in a total quality environment and comment on past and future trends in quality, productivity, and performance.
In order to obtain systematic data, I compiled and analyzed previous pertinent studies, many of which were widely scattered (cf., McLean et al, 1990) among technical publications and specialty journals (e.g., Klein, 1989; Daley, 1992; Moen, 1989)(3) and unpublished papers by government officials and private consultants (e. …