What is the relationship between quality and productivity?

Quality experts such
as W. Edwards Deming have stated that quality is positively associated with productivity because
as the quality of a product or service increases, there is less need for correcting work or
fixing mistakes, so productivity improves. However, many experts disagree with Deming's view and
instead believe that as quality improves, the cost of production goes up. The result is higher
prices and reduced productivity. 

Other experts believe that quality can only
be increased through Total Quality Management (TQM), a process that requires an overhaul of
systems and behaviors. The idea is to make organizations more competitive through improving the
quality of the product or service and to improve the organization's ability to meet the
customer's needs through continuous improvement of the process. TQM is a process that aims to
improve productivity, quality, and customer satisfaction. Therefore, to increase both quality
and productivity, an organization can use a process of continuous improvement that addresses
both goals simultaneously.

Source:

Kontoghiorghes, C. (January 2003). "Examining the association between quality and
productivity performance in a service organization." Quality Management Journal,
Vol. 10 (1).