This research was triggered by more competitions with changing demands making every company do its best to win the competition by improving its quality. This research aims to analyze the effects of TQM on employee performance and service quality on the Grand Inna Garuda Yogyakarta Hotel and Jambuluwuk Boutique Malioboro Hotel. The data were collected through questionnaires distributed to the employees of Grand Inna Garuda Yogyakarta Hotel and Jambuluwuk Boutique Malioboro Hotel. The sample of the research was 34 respondents selected through purposive random sampling. The obtained data were analyzed using SPSS 22. The analysis included reliability test, validity test, multiple linear regression test, T test, F test with determination coefficient. The findings reveal that 1) TQM has significant and positive influence on the employee performance; 2) TQM has positive and significant influence on the quality service, and 3) the employee performance influences positively and significantly on the service quality.