Following reforms in the Taiwanese healthcare system, hospitals are facing an increasingly competitive healthcare market. Hospital administrators, in response to this competition, are placing increasing importance on improving the quality of healthcare in order to ensure patient satisfaction. How can service quality (SQ) be improved in healthcare settings? This study explored how total quality management (TQM) influences employee perceptions of SQ. A cross-sectional study was performed, for which a sample was drawn from five regional hospitals in central Taiwan. This study used questionnaires to investigate employee perceptions of TQM and SQ in five regional teaching hospitals in Central Taiwan. A total of 300 questionnaires were distributed, of which 226 valid questionnaires were returned. The findings of this study revealed that TQM influenced employee perceptions of SQ. Therefore, hospital managers should use TQM strategy to influence employee perceptions of SQ. When promoting a TQM strategy, hospital managers should develop a clear vision for quality management within their organizations combined with distinct quality improvement policies and initiatives.