Organizational Performance and Quality Management: An Analysis of Workforce Development Organizations in Texas
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Research Question: Do workforce development organizations with a commitment to quality achieve higher performance levels than workforce development organizations that do not display the same commitment to quality?
Purpose: The purpose of this ARP is two-fold. First, the literature on the Quality Movement is reviewed. Second, the link between quality practices and organizational performance of entities funded by the Texas Workforce Commission (TWC) is investigated. The research purpose is explanatory; a formal hypothesis is identified.
Methodology: Unobtrusive research is conducted in the form of analysis of existing data. The unit of analysis is the workforce development organization, which is funded by TWC. The workforce development organization can be either a Local Workforce Development Board or one of the Board's contractors. Both types of organizations are eligible for membership into the Enterprise. The Enterprise accepts membership applications from workforce development organizations that are interested in promoting quality management and continuous improvement in their organizations. Membership into the Enterprise is voluntary. The Enterprise serves workforce development organizations nation-wide. The initiation of Enterprise membership displays a commitment to quality by the applying organization. For this study. membership to the Enterprise is a proxy for a workforce development organization committed to quality. The population of workforce development organizations is separated into two groups: organizations that belong to the Enterprise and organizations that do not belong to the Enterprise.
Job Training Partnership Act (JTPA) performance is a determinant of Enterprise membership. The workforce development organizations' performance results for Program Year 1997, which began July I , 1997 and ended June 30, 1998, is used for this study. JTPA performance for a local workforce development area can be tracked to both the Board and its contractor. There are nine JTPA performance standards included in this study. The performance standards are indicators of organizational performance.
Each workforce development organization is provided performance expectations from the Texas Workforce Commission for each of the nine performance measures annually. Two figures can be used to describe any of the nine performance measures: predicted (expected) outcome and actual outcome. For the purpose of this study, the performance measure is manipulated to yield one figure: percent difference. The percent difference is calculated by subtracting the actual outcome from the predicted outcome and then dividing the difference by the predicted value [(actual - predicted)/predicted]. A tenth variable, derived by adding the percent differences of the nine manipulated performance measures, is also included. The mean percent difference of each of the performance measures is compared between the Enterprise organizations and the non- Enterprise organizations.
Findings: The literature supports the theoretical framework that organizations with a commitment to quality achieve higher performance than organizations that do not display the same degree of quality. The empirical evidence also mildly supports this study's hypothesis. Approximately one-third of the performance outcomes demonstrate administrative significance (≥ 10%) that Enterprise members out-perform non-Enterprise organizations. Overall, eight of the ten dependent variables demonstrate a positive relationship between organizational performance and quality management.