Performance contracts and quality management : an integrated view

Abstract

There are many views about the meaning and importance of performance measurement of employees and of organizations. This thesis is concerned with many of these views but is most concerned with performance contracts and quality management and the relationship between them. The whole concept of the measurement of performance is sometimes questioned and in some cases regarded as being both subjective and futile. Van de Ven and Ferry (1980) argued that: "Whether the difficulties associated with assessing the performance of complex organizations can be met by a single set of measurement instruments and process guidelines has still to be proven." Glover and Kelly (1987) contended that measuring the performance of individual jobs can also be difficult: "Performance is hard or impossible to measure with many jobs and occupations, think for example of the differences between the work of architects, surgical appliance fitters, design engineers, criminals, politicians, street traders and musicians. There is often a conflict between volume and quantity of output in the long-term and the short-term such as when profits come before investment and vice-versa." Similarly, Van De Yen and Morgan (1980) argued with regard to organizational performance that: "Performance is a complex construct that reflects the criteria and standards used by decision makers to assess the functioning of an organization. As this definition suggests, performance is a value judgement on the results desired from the organization at different levels of analysis--and--often change over time." However, the demand for measurement of performance, whether it comes from the first level of supervision or from a shareholders' meeting, does tend to mean that attempts be made to measure performance (Talley, 1991).