EMERALD_IJOPM_IJOPM XXXXXXXXXX
Managing performance in
quality management
A two-level study of employee perceptions
and workplace performance
Lilian M. de Menezes
Cass Business School, City, University of London,
London, UK, and
Ana B. Escrig
Department of Business Administration and Marketing,
Universitat Jaume I, Castellón de la Plana, Spain
Abstract
Purpose – The purpose of this paper is to address potential effects of the control element in quality
management. First, behavioural theories on how elements of performance management can affect
organisational performance are examined. Second, theoretical models on how perceptions of work conditions
may impact well-being and performance are considered. Direct and indirect pathways from performance
management to productivity/quality are infe
ed.
Design/methodology/approach – Matched employee-workplace data from an economy-wide survey in
Britain and two-level structural equation models are used to test the hypothesised associations.
Findings – The use of practices in workplaces is inconsistent with a unified performance management
approach. Distinct outcomes are expected from separate components in performance management and some
may be contingent on workplace size. For example, within quality planning, strategy dissemination is
positively associated with workplace productivity; targets are negatively associated with perceptions of jo
demands and positively co
elated with job satisfaction, which in turn can increase workplace productivity.
With respect to information and analysis: keeping and analysing records, or monitoring employee
performance via appraisals that assess training needs, are positively associated with workplace productivity
and quality.
Originality/value – This paper illustrates how control in quality management can be effective. Although
the merits of performance management are subject to ongoing debate, arguments in the literature have tended
to focus on performance appraisal. Analyses of economy-wide data linking performance management
practices, within quality management, to employee perceptions of work conditions, well-being and aggregate
performance are rare.
Keywords Performance, Performance management, Quality management, Quality, Productivity,
Employee perceptions of work conditions
Paper type Research pape
1. Introduction
Although for over 30 years management scholars have been striving to understand
performance differentials between organisations, there is some consensus that management
practices explain a share of observed variations in performance (Bloom et al., 2016; Nisa
et al., XXXXXXXXXXBromiley and Rau (2014, 2016) argued that managers replicate practices o
activities that are perceived to be successful and amenable to transfer between
organisations. Unsurprisingly, across the globe, as organisations attempt to address
performance gaps, business excellence models and improvement initiatives are
implemented. Quality management practices are now part of the daily routine in most
organisations. Yet, while some practices have been found to be directly associated with
performance, others are thought to be mediated through employee-decision making and
effort (Bender et al., XXXXXXXXXXIn this context, how to efficiently manage performance remains a
key question which has implications for management, employees and societies.
International Journal of Operations
& Production Management
Vol. 39 No. 11, 2019
pp XXXXXXXXXX
© Emerald Publishing Limited
XXXXXXXXXX
DOI XXXXXXXXXX/IJOPM XXXXXXXXXX
Received 15 March 2019
Revised 25 July 2019
23 September 2019
Accepted 13 October 2019
The cu
ent issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/ XXXXXXXXXXhtm
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From an operations management perspective, performance management translates the
organisational strategy into the reality of work units and ultimately to the employee
(Melnyk et al., 2004; Franco et al., XXXXXXXXXXDisseminating the organisational strategy, setting
targets and monitoring are means to engage the workforce with strategic objectives and
encourage problem-solving attitudes for learning and continuous improvement (e.g. Neely,
2005; Prajogo and McDermott, 2005; Franco et al., 2007; Bourne et al., 2013; Koufteros et al.,
2014). Together, these practices are core to any improvement initiative and reflect two main
stages in the quality management cycle: quality planning and information and analysis
(Mellat-Parast et al., 2011; Laosirihongthong et al., XXXXXXXXXXPerformance management systems
are, therefore, required to support continuous improvement (DeNisi and Murphy, 2017) and,
ideally, ensure that all subsystems in an organisation work optimally towards the desired
goals (Biron et al., 2011).
Several scholars have described how quality management underscores the use of a
process-based performance management system. In particular, Linderman et al. (2003)
explained the importance of setting and achieving targets in Six Sigma: set goals are means
to motivate workforce participation in learning activities and to develop behaviours that
lead to sustainable improvements. Nevertheless, as Soltani and Wilkinson XXXXXXXXXXobserved,
eviews of the extant literature on quality management and, specifically on managing
performance in organisations, imply that the effects of performance management on
individual workers and organisational performance are unknown. Mixed findings have been
eported and, in fact, performance management remains the most controversial aspect of
quality management.
Performance management is
oadly defined as a regular process of identifying,
measuring and developing performance of the workforce in alignment with strategic
objectives (Aguinis, XXXXXXXXXXThis process-based approach has often been portrayed as a
managerial style that seeks to maximise employee contribution via strict control and greate
demands, which negatively affects well-being (Sprigg and Jackson, 2006; Soltani et al., 2008;
Franco and Doherty, XXXXXXXXXXStatements that performance management practices can be
counterproductive are not new, neither in management thinking nor within quality
management. For a start, Deming XXXXXXXXXXargued against performance metrics and
appraisals, in his view, these practices were even detrimental to continuous improvement.
Later, several authors (e.g. Duncan and Van Matre, 1990; Linderman et al., 2006) counte
argued that Deming’s conclusions were at odds with the evidence from research on
motivation and signalling, which demonstrates the importance of setting goals fo
performance at different levels in organisations.
Recent publications not only underline a renewed interest in performance management
(e.g. Capelli and Tavis, 2016; Pichler et al., 2018), but also provide further insights into this
debate, by highlighting limitations of the accumulated evidence on outcomes from
performance management. Within human resource management (Tweedie et al., 2019) and
psychology (DeNisi and Murphy, 2017), comprehensive literature reviews demonstrate that
out of various practices underlying performance management, the focus has been on
employee-performance appraisals. Accordingly, it is mostly the role and variations in the
design of a single practice for employee performance that have been subject to scrutiny.
Studies have tended to examine employee performance, rather than at higher levels, and
much of what is known about potential effects of performance management practices
follows from theories of individual-behaviour applied to a small number of organisations.
Consequently, large empirical studies on how performance management practices may
impact aggregate performance and different dimensions of employee well-being are needed
(Soltani andWilkinson, XXXXXXXXXXWithin operations management, it is also important to remind
ourselves that management practices can affect perceptions of working conditions and
employee attitudes, which can influence performance at the group-level (Ukko et al., 2007;
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Managing
performance in
quality
management
de Leeuw and van den Berg, 2011; Saunila et al., XXXXXXXXXXConsidering that awareness of
organisational objectives and key performance indicators can enable a better understanding
of targets and prompt the desired responses from employees (Ketokivi and Castaner, 2004),
it may not be surprising that performance management has also been linked to
improvements in employee-job satisfaction (e.g. Opstrup and Pihl-Thingvad, XXXXXXXXXXThis is
important since, at various levels of analysis, job satisfaction has been positively associated
with performance (Bryson et al., 2017).
Given conflicting observations on the effects of performance management, there may
e direct and indirect pathways to performance. The present study takes inspiration from
esearch on how employees’ perceptions of management practices can affect employee
well-being and/or organisational performance, and on how models that address
interpretations of work conditions (e.g. Bakker and Demerouti, 2017) can be applied in
a management context. Thus, considering that employees interpret management practices
as work conditions and react to these perceptions, different pathways to performance in
workplaces are hypothesised. The focus is on how performance management may lead to
different reactions from employees and, ultimately, may impact aggregate performance.
Two-level structural equation models are developed in order to empirically test direct and
indirect links. Following the recent literature on outcomes of management practices
(e.g. Wood and Ogbonnaya, 2018), the workplace level is taken as the higher unit of
analysis. Since implementations of policies can vary between different sites within an
organisation, the workplace level is appropriate to observe and measure management
practices (Gerhart et al., 2000).
The present study adds to the understanding of the management practices-
performance nexus, and helps to clarify potential implications of the most controversial
element in quality management, which is performance management. The next section
describes the background and theoretical perspectives that lead to the hypotheses and
conceptual model to be tested. The empirical study is reported in Section 3. Results
are presented in Section 4 and implications are discussed in Section 5, thus leading to
the conclusions.
2. Background and hypotheses
2.1 Performance management in quality management
For decades, scholars and practitioners have attempted to identify success factors in
quality management (e.g. Hietschold et al., XXXXXXXXXXAmong key factors, quality planning
(developing strategic objectives into action plans, setting targets to be achieved by the
improvement effort and communicating strategic directions or priorities) and information
and analysis (monitoring of performance against targets to ensure progress and to
continually identify areas for improvement) are inherent to any improvement initiative.
Unsurprisingly, they are reflected in the criteria for quality certifications and awards (e.g.
EFQM Excellence Model, Malcolm Baldrige National Quality Award), and are implicit in
definitions of performance management (e.g. Biron et al., XXXXXXXXXXIndeed, most empirical
studies of quality management and performance have considered quality planning and
information and analysis, while specifying sets of practices presumed to enable
performance (e.g. E
ahimi and Sadeghi, 2013; Laosirihongthong et al., XXXXXXXXXXAccording
to Prajogo and McDermott (2005, p. 1115), quality planning and information and analysis
“reflect well the beginning (planning) and ending (evaluation) phases of strategic
management processes”. In summary, from a quality management perspective,
performance management is about decision making based on facts, how objectives and
action plans are developed and deployed, and how data are assessed to monitor progress
and drive improvements (Mellat-Parast et al., 2011; Hietschold et al., XXXXXXXXXXAccordingly,
Table I defines performance management in the context of this study.
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2.2 Pathways from performance management to performance
Quality management relies on the expectation of learning, dissemination and replication of
good practice. People want to know where they stand, and thus an organisation’s ability to
disseminate its strategy and orchestrate its resources, as implied in quality planning, is
fundamental in pursuit of better performance. Scholars (Koufteros et al., 2014; Pavlov et al.,
2017) have argued that the Resource Orchestration Theory