Assessing Organizational Efficiency and Workforce Diversity

Abstract

This study applied an output-oriented variable returns-to-scale (VRS) data envelopment analysis (DEA) technique to New York City (NYC) agencies to illustrate its usefulness in assessing and estimating organizational efficiency with respect to workforce diversity. Financial, personnel, and labor inputs of 38 agencies were analyzed in relation to the level of workforce diversity achieved by each decision-making unit (DMU). The Simpson index of diversity (D = 1 − Σ p2) was used to measure the level of age, ethnic, and gender diversity in each agency. The findings suggest that the majority of the agencies have inefficient human resource (HR) recruiting and hiring processes (constant returns-to-scale [CRS] > 1.000 and Σλ > 1.000). The findings also suggest that the inefficient agencies would exhibit decreasing returns-to-scale (DRS) if the level of inputs were to be increased.