Cashing in on Quality? Pay incentives and the quality culture

Abstract

A paper explores the relationship between total quality management (TQM) and financial incentives in British manufacturing industry. In particular, it examines the view of some of the most influential quality management gurus that there is an incompatibility between incentive pay and TQM. Drawing on survey and case study evidence, it shows that TQM is being implemented in the presence of financial incentives. Furthermore, those organizations which had such incentives did not appear to have less success in implementing TQM. On the basis of the evidence, it is concluded that it is not possible to rule out a role for financial incentives in implementing TQM, although incentives are only likely to form one element in a broader implementation strategy.