Investigating the effects of innovation and employee performance on the relationship between total...
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Investigating the effects of innovation and employee performance on the relationship between total quality management practices and firm performance: An empirical study of Turkish firms Esin Sadigoklu, Cemal Zehir Quality Management José Gámez Belmonte Desirée Suárez Santana
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Esin Sadigoklu, Cemal Zehir
Transcript of Investigating the effects of innovation and employee performance on the relationship between total...
Investigating the effects of innovation and employee performance on the relationship between total quality
management practices and firm performance: An empirical study of Turkish firms
Esin Sadigoklu, Cemal Zehir
Quality Management
José Gámez BelmonteDesirée Suárez Santana
Index
1. Introduction: TQM practices2. TQM factors3. Research model and hypothesis4. Research methodology5. Results of the analysis6. Discussion and implications7. Conclusions
1. Introduction: TQM practices
• Relationship between TQM practices and firm performance mixed results
- Replication research: generalizations and knowledge cause-and-effect relationships
- Consistent research: result of methodologies strength and generality of research
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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1. Introduction: TQM practices
• Improvements in quality AND innovativeness COMPETITIVENESS
• Incremental improvement and breakthrough innovation may coexist in a company
• Effect of TQM practices:- On various types of performance measures: differ, BUT- On employee performance: no empirical evidence
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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1. Introduction: TQM practices
• Effect of employee fulfillment: - On firm performance: no empirical evidence
• Future studies:
- Direct and indirect effects of TQM practices on
- Correlation between
Employee performance
Innovation
Diverse performance measures
Quality and innovation
Innovation and firm
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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2. TQM factors
• Leadership
• Training
• Employee management
• Information and analysis
• Supplier management
• Process management
• Customer focus
• Continuous improvement
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 1: TQM practices are positively related to innovation performance.
• Leadership have to encourage employees to participate in decision making innovative ideas improving products.
• Empowerment, employee involvement, teamwork and employee success of organizational innovations.
• Customer focus search for new customer needs new products.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 2: TQM practices are positively related to employee performance
• Employee performance refers to employee satisfaction, absenteeism, tardiness, commitment, motivation and effort.
• Participative leadership consider employees as valuable assets that can direct their goals to the organization´s goals.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 3: TQM practices are positively related to firm performance.
• Teamwork practices increase employees´ knowledge of their jobs improving firm performance in terms of quality and costs.
• Effective suppliers-buyers improve the process.
• Continuously improving quality reduces:
scrap rework costs Waste Non value added activities
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 4: Employee performance is positively related to innovation performance.
• Satisfied and motivated employees will contribute to improving quality.
• Leaders should motivate them to produce new products by focusing on customers needs and expectations.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 5: Innovation performance is positively related to firm performance.
• Firms introduce new products meet changing and rising expectations improve customers satisfaction and loyalty.
• Innovative firms have higher:
Market share Growth rates Profits
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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3. Research model and proposed hypothesis
Hypothesis 6: Employee performance is positively related to firm performance.
• In TQM, employee• Involvement in decision making • Performance improvement
• When things go bad, the employees are given a necessary training or transferred to other positions.
• Employees retention improve organizational effectiveness in term of costs and keeping valuable historical knowledge and skills.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
Highly valued
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3. Research model and proposed hypothesis
Model of the relationship between TQM practices and measures
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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4. Research methodology
• Cross-sectional survey methodology
• Unit of sample: plant level
• Turkish firms with ISO 9001:2000
• Subjective data were requested
Introduction Theoretical backgroung
Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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4. Research methodology
• Bi-variate correlation of TQM factors with each other and with measures of firm performance
• The TQM index equals the aggregate of the means of all TQM factors:
• Model and hypotheses were tested via path analysis
• Goodness of fit of the model
Introduction Theoretical backgroung
Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• Different types of firms
• Respondents: Regular employees and managers at low,
medium and high levels
• Companies of all sizes
• Regional, national, international and global market
• Private and public sector
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• Homogeneity of the data for sampling adequacy
- If KMO measure > 0,7 and
- result of Barlett’s test < 0,05 (probability associated to the statistic)
Data are homogeneous and adequate for principal component analysis
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• TQM factors and performance measures for EXPLORATORY FACTOR ANALYSIS (EFA)
explained 67,08% of the total variance
eigenvalue greater than 1
TQM factors
Performance measures
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• RELIABILITY OF THE MODEL: CRONBACH’S ALPHA
Reliability of the TQM index=0,97
Alpha values of all TQM factors and performance measures:
higher than 0,7
SATISFACTORY RELIABILITIES
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• RELIABILITY OF THE MODEL
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• VALIDITY OF THE MODEL
All TQM practices and performance measures are
statistically significant at a significance level equal to 0,001
Content validity
• Retained items: those with a factor loading value of at least 0,5
ALL OF THEM
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• VALIDITY OF THE MODEL
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• VALIDITY OF THE MODEL
Convergent validity: Test of each item’s path coefficient
Each item’s coefficient= 2* its standard error
High convergent validity
Discriminant validity
Correlation coefficients between TQM factors and performance measures < Reliability
coefficients
Discriminant validity
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• VALIDITY OF THE MODEL
Criterion-related validity
Bi-variate correlation of the TQM index with
- Employee performance=0,65 (associated p-value<0,001)
- Innovation performance=0,39 (associated p-value<0,001)
- Firm performance=0,66 (associated p-value<0,001)
Strong criterion-related validity
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• VALIDITY OF THE MODEL
- r values among TQM practices ≤ 0,8
the obtained results are close to the true values
- VIF values of the TQM variables < 3
- Normality assumption is satisfied
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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5. Results of the analysis
• TEST OF THE MODEL
- Goodness-of-fit statistics used in the range of recommended values
- No deleted items (all the coefficients were significant)
- Measurement and structural model fit the data
- All the paths in the model are supported
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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6. Discussion and implications
• TQM practices are positively correlated with all performance measures:
Employee performance Innovation performance Firm performance
• Firms that excel in one area are likely to excel in other areas as well.
• Costumer focus, teamwork and information and analysis practices help the firm determine customers needs.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
Effectiveness Efficiency
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6. Discussion and implications
Managerial implications:
• Leaders can commit resources in order to implement TQM practices to become more competitive in the market.
• Firms can combine:
Continuous improvement Breakthrough innovation
• Managers can measure the effects of TQM practices in order to evaluate the effectiveness them.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
Performance Competitiveness
Improving
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6. Discussion and implications
Research implication:
• Strategic planning is one of the key factors of TQM.
• Future studies can use multiple methods and informants to eliminate method bias and improve the ability of the findings to be generalized.
• The indirect relationship among TQM practices and relationship between each TQM practice and various performance measures can also be investigated.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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6. Discussion and implications
Research limitations:
• Respondents of the study might have been motivated to give desired data that made their firms look better.
• Most of respondent were low level manager or employees that may not have evaluated correctly the current levels of firm performance.
• The study did not use objective measures of performance because subjective measurement allowed us to compare firms in different industries.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
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7. Conclusions• Importance of continued efforts towards implementing TQM
practices in firms.
• Positive impact of TQM
• Continuous improvement and process management can be combined with breakthrough innovation.
• Employee performance improves innovation and firm performance
• Firms should focus and satisfy employees needs to improve performance, market share and competitiveness.
Introduction TQM factors Research model and hypotheses
Research methodology
Results of the analysis
Discussion and implications Conclusions
Innovation Performance Employee performance Firm performance
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