Abstract: organizations. Should this not be enough to demonstrate the value of TQM? Unfortunately not. TQM has come under increasing criticism from many business gurus for delivering lackluster economic returns. A recent issue of Business Week had this comment about TQM: “What’s as dead as a pet rock? Little surprise here: It’s total quality management. TQM, the approach of eliminating errors that increase costs and reduce customer satisfaction, promised more than it could deliver and spawned mini-bureaucracies charged with putting it into action.” The Economist, Fortune, Newsweek, Wall Street Journal, and USA Today, among others, have featured articles that question whether TQM has created significant economic value. These articles suggest that many firms have become disillusioned or disappointed with TQM, and that TQM could well be a fad that is fast losing popularity. Unrealistic expectations, quick-fix mentality, and competition from other tools are some reasons many firms have soured on TQM. Some firms may have adopted TQM with inflated expectations of what it could deliver. TQM was expected to have all the answers. It was expected to turn lead into gold. It was a sure bet to reverse poor performance. When TQM did not deliver the hoped-for results, it was deemed a failure. Furthermore, contrary to the TQM philosophy, many firms adopted TQM seeking instant and swift gratification. Often TQM efforts were

Abstract: Progress/January 1999 47 EOPLE ARE OUR MOST IMPORTANT asset.” “You can only manage what you measure.” Most executives would readily subscribe to these time-honored maxims, but few put either into practice. Fewer still put both into practice, and therein lies the opportunity. Effective people management is required for building and sustaining competitive advantage, and effective people measurement is a critical tool for effective people management. In fact, high-performing companies tend to be better at people management and measurement than other organizations. One of the findings of a recent Quality Progress/Metrus Group study is that a significant relationship exists between the use of people metrics and return on assets. However, even among industry leaders, people measurement and management are not significant strengths, compared to the proficiency these companies demonstrate in the measurement and management of operational performance, product and service quality, and financials. More than 800 responses