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Total Quality Management & Business Excellence

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The effect of TQM practices on employee satisfaction and loyalty in government

C. C. Chang , C. M. Chiu & C. A. Chen
a a b a

Department of Information Management, Nanya Institute of Technology, Chung-Shang E. Rd., Chungli, Taoyuan, Taiwan, R.O.C
b

Department of Information Management, National Sun Yat-sen University, Lienhai Road, Kaohsiung, 80424, Taiwan, ROC Available online: 14 Dec 2010

To cite this article: C. C. Chang, C. M. Chiu & C. A. Chen (2010): The effect of TQM practices on employee satisfaction and loyalty in government, Total Quality Management & Business Excellence, 21:12, 1299-1314 To link to this article: http://dx.doi.org/10.1080/14783363.2010.530796

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Total Quality Management Vol. 21, No. 12, December 2010, 12991314

The effect of TQM practices on employee satisfaction and loyalty in government

C.C. Changa , C.M. Chiub and C.A. Chena
a Department of Information Management, Nanya Institute of Technology, Chung-Shang E. Rd., Chungli, Taoyuan, Taiwan, R.O.C; bDepartment of Information Management, National Sun Yat-sen University, Lienhai Road, Kaohsiung 80424, Taiwan, ROC

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Employee satisfaction and loyalty had been veried to be critical to a service-oriented organisations survival and success. Previous research also established the importance of total quality management practices in building operational performance and customer satisfaction. This study integrates total quality management practices by introducing employee training, employee empowerment, teamwork, employee compensation, and management leadership into a theoretical model for studying employee satisfaction and loyalty within the context of government. The results of this study show that employee empowerment, employee compensation, teamwork and management leadership are signicant positive predictors of employee satisfaction; and employee loyalty can be enhanced through employee satisfaction. Keywords: total quality management; government; employee satisfaction; employee loyalty; service quality

Introduction In recent years, increased attention has been paid to employee satisfaction and loyalty in the management literature. Many studies indicate that loyal employees represent value to a company and loyal employees are more committed to the continuous improvement of service quality (Jun, Cai, & Shin, 2006; Hart & Thompson, 2007). While considerable attention has been paid in the past to research issues related to empirical associations among total quality management (TQM) practices, organisational performance and customer satisfaction, literature on issues of understanding the impact of TQM practices on employee satisfaction and loyalty has emerged only very slowly and in a more scattered way. As this review has shown, the relationship between TQM implementation and performance has been undertaken and the relationship is signicant (Samson & Terziovski, 1999). With the rise of the emphasis on citizen service, the government has become a serviceoriented organisation. In order better to understand the nature of employee satisfaction and loyalty and anatomise its antecedents in government, we refer to the TQM practices, which aim to explain the direct and indirect effects between employees in the presence of satisfaction and loyalty. In subsequent years, numerous studies were carried out on manufacturing rms. To our knowledge, the present study is one of the few studies to attempt to identify the key attributes for successful TQM implementation in government.

Corresponding author. Email: kiwi.tw@gmail.com

ISSN 1478-3363 print/ISSN 1478-3371 online # 2010 Taylor & Francis DOI: 10.1080/14783363.2010.530796 http://www.informaworld.com

1300 C.C. Chang et al. With seven year efforts of TQM implementation since 2000, Taiwans Taipei City Government (TCG) tried to enhance the service quality through employee satisfaction and loyalty. The practices held by TCG under this period covered TQM training courses, employee empowerment, improvement teams, employee compensation, and management leadership. As members of TCG committee to promote TQM for seven years, the authors perceived that TCG should be an appropriate background to study the effects of TQM practices described above. As a result, this study takes TCG employees as the research population to empirically investigate the effects of TQM practices on employee satisfaction and loyalty. Theoretical background and hypotheses Governments in many countries have been experiencing process re-engineering, which has been attempting to change the structure, management and even the culture of public administration (Ustuner & Coskun, 2004). These types of process re-engineering have embodied various approaches, including quality management, privatisation and benchmarking (Carroll, 1996; Auluck, 2002). To enhance the capacity of government and to create an ideal environment for investment and economic growth, the government has undergone a series of re-engineering processes, including the civil service (Mengesha & Common, 2007). The government is preparing its own customer satisfaction measurement system which imitates those of prot organisations to improve civil service quality. The majority of research in Heskett, Jones, Loveman, Sasser and Schlesinger (1994) has focused on the service prot chain stipulations that there are strong relationships between the service quality, productivity, employee capability, satisfaction and loyalty in the service organisations. However, available research data lacks analysis of all the linkages in the service prot chain in governments. To better understand the nature of employee satisfaction and enhance its potential prot role in government, we refer to the human resource management (HRM) perspective, which aims to explain service prot chain in government in the presence of TQM projects. The related works reported in the literature indicated that TQM projects improve service quality through technical and interpersonal skills (Rust, Zahorik, & Keiningham, 1996). However, the organisation has often faced a number of problems in the introduction of TQM, including a lack of senior management understanding of TQM, departments failing to follow through agreed actions and objectives, lack of support to teamwork and a failure to match up improvement projects to the skills and resources in the project teams (Wilshaw & Dale, 1996). These studies appear to contradict one another; some have been said to demonstrate a training advantage, some a team advantage. There is no general consensus on which essential TQM practices are better for human capital creating. Common sense seems to indicate TQM practices importance, but we lack empirical support. In TQM literature, employee involvement, empowerment, and top management leadership and commitment are identied as crucial elements of a successful TQM programme (Bowen, Siehl, & Schneider, 1989). The papers in Ugboro and Obeng (2000) provide extensive discussions, and top management leadership and employee empowerment are considered two of the most important principles of TQM. Hackman and Wageman (1995) noted that teamwork and employee training are also critical as organisations deploy TQM. Training employees in problem solving and statistical process control, have been described in the literature, and will promote continuous quality improvement (Deming, 1986). Compensation is another important principle of TQM. The use of a

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Total Quality Management 1301 compensation plan in which pay is based on an individuals achieving quantiable goals was associated with the more effective TQM programme. The primary objective of this study is to develop an empirical model for establishing associations among TQM practices, employee satisfaction, and employee loyalty. In particular, we are interested in the isolation of antecedent TQM practices that would positively impact government employees satisfaction. The underlying premise is that government employees loyalty is likely to be inuenced by the level of their job satisfaction, and thus maintaining a loyal workforce is a prerequisite for a successful TQM implementation. Our research model does not include the effects of TQM practices to loyalty because numerous studies suggest that TQM practices that would directly inuence employees job satisfaction (Jun et al., 2006; Ooi, Bakar, Arumugam, Vellapan, & Loke, 2007). Summarising the preceding arguments, the purpose of this research aims to understand and prescribe how employee satisfaction and loyalty can be inuenced by a set of TQM practices associated with HRM, particularly for employee training, employee empowerment, teamwork, employee compensation and management leadership. Summarising the preceding arguments, the research model is proposed in Figure 1.

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Employee satisfaction and loyalty Employee satisfaction is the gratication or pleasurable emotional state resulting from the valuation of their job (Locke, 1976; Moorehead & Grifn, 1998). Employee satisfaction has traditionally been dened as an important motivator for employee performance (Mak & Sockel, 2001). Although business ethicists have theorised frequently about the virtues and vices of employee loyalty, the concept of loyalty remains loosely dened (Hart & Thompson, 2007). Employee loyalty was viewed broadly as an employees feeling of attachment or concept deals with the behaviour of the employees to an organisation (Meyer & Allen, 1991). It has been widely argued in the operations management,

Figure 1. Conceptual model of the relationship between the constructs.

1302 C.C. Chang et al. TQM, HRM and service literature that improving employee satisfaction and loyalty leads to higher service productivity and prots. Employee satisfaction and loyalty are seen as critical to the capability of service organisations to respond effectively to customer needs (Silvestro, 2002). Numerous researches indicate that employee satisfaction is positively related to employee loyalty to their companies (Brown & Peterson, 1993; Griffeth, Hom, & Gaertner, 2000; Hom & Kinicki, 2001). Evidence from those research results suggest that the organisation must satisfy employees to make them loyal. There have been some studies in literature dealing with the value as the mediating variable between satisfaction and loyalty. The ndings of other studies on value and satisfaction provide support for linking value to satisfaction, not satisfaction to value (Babin, Lee, Kim, & Grifn, 2005; Jones, Reynolds, & Arnold, 2006). These studies appear to contradict one another. So we did not put the mediating variable perceived value in our research model because this study intended to put the emphasis on TQM practices and its inuence on employee satisfaction and loyalty. This research, therefore, proposes that there should also be a linkage between employee satisfaction and loyalty in government organisations. We thus formally hypothesise:
H1: Employee satisfaction has a positive impact on employee loyalty.

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Employee training The research indicated that training is shown to positively impact on employees productivity, which results in higher levels of employee satisfaction (Choo & Bowley, 2007). Employee training provides opportunities for the employees to broaden their knowledge and skills to engage in more efcient teamwork and achieve individual growth and development. Numerous studies observe that workers who receive training report higher levels of job satisfaction than those who do not, and the development of competencies through various training programmes has a positive impact on employee satisfaction (Marie, 1995; Saks, 1996). Several studies also have reported on the benets of training, such as realising the rewards of increased skillsets, motivation, higher productivity and knowledge transfer of their employees (Oosterbeek, 1998; Pate & Martin, 2000). In particular, employee training increases an employees ability to perform tasks (Choo & Bowley, 2007). Training employees has also been found to result in facilitating the updating of skills, increasing professionalism and increasing employee commitment and satisfaction to the organisation (Bateman & Strasser, 1984; Bushardt & Fretwell, 1994). The different research studies also argued that a lack of training has been attributed to shorter employment tenure, frustration and job dissatisfaction (Pugh, 1984). Therefore, it is important to make clear the casual linkage between employee training and satisfaction, whether the employee training will increase employee satisfaction or not. We thus formally hypothesise:
H2: Employee training has a positive impact on employee satisfaction.

Employee empowerment The denitions and constructs of empowerment has been offered by Conger and Kanungo (1988, p. 747), who dene empowerment as a process of enhancing feelings of selfefcacy among organisational members through the identication of conditions that foster powerlessness, and through their removal by both formal organisational practices and informal techniques of providing efcacy information. Lawler (1994) referred to employee empowerment as one of the most important tenets of TQM. Thus, in TQM organisations, employee empowerment is operated by encouraging employees to respond to quality-

Total Quality Management 1303 related problems and giving them the resources and authority to do so. The research also indicated that empowered employees have higher levels of job satisfaction and performance primarily because of their involvement in goal setting and in making decisions that affect their work (Ugboro & Obeng, 2000). Sternberg (1992) recognised that empowerment positively inuences employee attitude and behaviour. Many research results found that the empowerment programme provides employees with a positive job experience and leads to higher employee satisfaction (Koberg, Boss, Semjem, & Goodman, 1999; Seibert, Silver, & Randolph, 2004). Therefore, the following hypothesis is proposed:
H3: Employee empowerment has a positive impact on employee satisfaction.

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Teamwork Teamwork means working together, and typically involves groups of interdependent employees who work cooperatively to achieve a common goal (Parker & Wall, 1998). Teamwork can still be a source of employee autonomy, meaningfulness, bonding with team members, and satisfaction (Denison & Hart, 1996; Mitchell et al., 2001). An effective team working together towards a common goal can enhance the motivational properties of work and increase job satisfaction (Grifn, Patterson, & West, 2001). Although, research on teamwork has shown that the job satisfaction of team members is determined by multiple factors such as the composition of the team, group processes within the team, and the nature of the work itself (Gladstein, 1984; Campion, Medsker, & Higgs, 1993), because these factors operate in combination, there is no simple process through which teamwork inuences job satisfaction. Therefore, employee satisfaction cannot accurately predict if teamwork will be included. Consequently, we thus formally hypothesise:
H4: Teamwork has a positive impact on employee satisfaction.

Management leadership The relationship between leadership behaviour and job satisfaction has also received a great deal of attention in past research. Prior research has examined the relationships between management leadership and job satisfaction. The research nding reported a positive relationship between leadership behaviour and job satisfaction (Hinkin & Tracey, 1994). As leaders take care to help and support the contact employees and are concerned about their needs, these employees will feel more satised (Church, 1995; Hallowell, Schlesinger, & Zornitsky, 1996). Such leader supportive behaviour has been found to be related to employee job satisfaction (Netemeyer, Boles, Mckee, & Mcmurrian, 1997). Leaders set service standards by their own behaviours and management styles (Lytle, Hom, & Mokwa, 1998), so management leadership is a critical ingredient in creating and maintaining an effective and positive service orientation. However, other research studies found no relationship between management leadership and employee satisfaction (Downey, Sheridan, & Slocum, 1975; Hampton, Dubinsky, & Skinner, 1986). Therefore, the present study intends to test the following hypothesis:
H5: Management leadership has a positive impact on employee satisfaction.

Employee compensation Employee compensation systems are most frequently considered as one of the key factors inuencing employee satisfaction (Wageman, 1995; Carson, Carson, Roes, Birkenmeier,

1304 C.C. Chang et al. & Phillips, 1999). Prior research has shown that employee compensation has a positive inuence on employee job satisfaction (Brown & Mitchell, 1993; Oliver & Anderson, 1994; Livingstone, Roberts, & Chonko, 1995). Employee compensation often consists of nancial and non-nancial rewards for individuals and teams who contribute to TQM efforts (Blackburn & Rosen, 1993). Employee rewards are a positive reinforcement, ensuring that the excellence of service is the main priority of the rm (Cone, 1989). However, managements compensation is not always linked to achieving quality goals. Researchers in the area of services have indicated that, in order to ensure quality, the organisation should reward its employees on the basis of their behaviour rather than their results (Hartline & Ferrell, 1996). Therefore, employee compensation is also crucial in determining employee satisfaction. The following hypothesis is proposed:
H6: Employee compensation has a positive impact on employee satisfaction.

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Research method Sample The city government of Taipei is the major research environment for testing this model and for investigating the antecedents of employee loyalty and satisfaction in government. In the capital of Taiwan, Taipei City Government (TCG) has approximately 11000 administrative employees and 2.62 million residents (about one third of London or Hong Kong). As the government district units vary considerably, it is advantageous to sample each subpopulation independently. Stratication is the process of grouping members of the population into relatively homogeneous subgroups before sampling. Then random sampling is applied within each subpopulation. The stratied sampling improves the representativeness of the sample by reducing sampling error. A stratied sampling plan was conducted: 13 out of the 39 TCG district units which provided direct administrative service to the citizens were selected randomly in advance. Then one-third of the rst line service-providing employees were selected randomly from each of the above units as the respondents. A total of 200 employees of the TCG actually participated in the survey. The respondents were requested to complete the survey in a covering letter from the research team, that explained the scope of the study and a standardised, self-administered questionnaire was attached. The questionnaires were distributed and collected in a given unit by one of its employees, who was commended to support this study. In this way, anonymity and a condential treatment of the answers were guaranteed. A total of 167 fully completed and usable questionnaires were returned within a week, which corresponds to a return rate of approximately 83.5%. The demographic characteristics of sample described in Table 1.

Measurement Special care was taken to ensure that the scales reected the studys context, while maintaining the similarity of items, which were all assessed on a ve-point scale, anchored at 1 Strongly disagree, 3 Neutral, and 5 Strongly agree. All of the variables were measured as latent, reective constructs (see Table 2) that are captured indirectly with direct measurement items. Employee loyalty was measured with the scales developed by Davis-Blake, Broschak and George (2003). Employee satisfaction was measured using the Minnesota Satisfaction Questionnaire (short form, 1967) and the scales developed by Homburg and Stock (2004, 2005). Five types of TQM practice were identied

Total Quality Management 1305

Table 1. Demographic characteristics of sample. Sample composition Men Women Over 51 years 4150 years 3140 years 2130 years Less than 20 years Graduate degree Some graduate work University or college degree Some university or college Secondary school or less Less than 1 year 15 years 610 years Over 10 years Less 1 year 15 years 610 years Over 10 years 19.6% 80.4% 0.6% 18.5% 39.9% 31.0% 10.1% 10.7% 41.7% 35.7% 11.9% 0.0% 11.3% 31.5% 18.5% 38.7% 14.3% 47.0% 14.9% 23.8%

Demographic variable Gender Age

Education

Government work experience

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Department work experience

Table 2. Constructs

Measurement. Items 4 4 3 3 3 3 3 References Davis-Blake et al. (2003) Homburg and Stock (2004, 2005) Weiss, Dawis, England and Lofquist (1967) Spreitzer (1995) Lytle et al. (1998) Jun et al. (2006) Jun et al. (2006) Lytle et al. (1998)

Employee loyalty Employee satisfaction Employee empowerment Employee training Teamwork Employee compensation Management leadership

(Spreitzer, 1995; Lytle et al., 1998; Jun et al., 2006): (1) employee compensation; (2) employee empowerment; (3) teamwork; (4) management leadership; and (5) employee training.

Data analysis and results Structural equation modelling (SEM) was adopted for the causal relationships data analyses between the constructs. SEM analysis was chosen over regression analysis, because SEM can analyse all of the paths in one analysis (Barclay, Thompson, & Higgins, 1995; Gefen, Straub, & Boudreau, 2000). The Partial Least Squares (PLS) approach was superior to other SEM approaches for this study because of its exibility for distributional assumptions, its small sample size requirements, and its strength in handling complex predictive models (Fornell & Bookstein, 1982; Hulland, 1999; Ko, Kirsch, & King, 2005). The computer program used for this analysis was the SmartPLS version 3.0 (Hansmann & Ringle, 2004) because this study aims at theory development instead of theory testing (Komiak & Benbasat, 2006). On the other side, PLS supports

1306 C.C. Chang et al. exploratory research, this study uses PLS as the research model proposed that is consistent with all currently available theoretical knowledge and collect data to test the theory (Marcoulides & Saunders, 2006). The procedure of data analysis with PLS suggested by Hulland (1999) was followed and chosen using a bootstrapping method (Efron & Gong, 1983) to determine the signicance of the paths within the structural model. Standard errors of parameters were computed on the basis of 500 bootstrapping runs. Bootstrapping method is a modern, computer-intensive, general purpose approach to statistical inference, falling within a broader class of resampling methods. It has gained great popularity in the statistical research literature as a method for solving tougher problems (Efron, 1979). To estimate the signicance of the path coefcients, we used the bootstrapping method with a sample size of 500, as recommended by Chin (1998). The sample size of 167 exceeded the recommended minimum of 60, which represented 10 times of: (1) the number of items comprising the most complex constructs; or (2) the number of independent constructs directly inuencing a dependent construct (Barclay et al., 1995; Wixom & Watson, 2001). According to Hullands (1999) procedure, a PLS model is analysed and interpreted in two stages. In the rst stage, the measurement model has to be tested by performing validity and reliability analyses on each of the measures of the model to ensure that only reliable and valid measures of the constructs are used before conclusions about the nature of the constructs relationships are drawn (Hulland, 1999). In the second stage, the structural model is tested by estimating the paths between the constructs in the model, determining their signicance, as well as the predictive ability of the model. Reliability and convergent validity The adequacy of the measurement models was evaluated on the criteria of reliability, convergent validity, and discriminant validity. Reliability and validity were tested with regard to: (1) individual item reliability; (2) the convergent validity of the measures associated with individual constructs; and (3) discriminant validity. Firstly, reliability was examined using the composite reliability values. Table 3 shows that all the values are above 0.8, which is the commonly accepted level for explanatory research. The convergent validity of the scales was veried by using two criteria suggested by Fornell and Larcker (1981): (1) all indicator loadings should be signicant and exceed 0.7; (2) the average variance extracted (AVE) by each construct should exceed the variance due to the measurement error for that construct (AVE should exceed 0.50). For the current measurement model, most indicator loadings were above the 0.70 threshold (see Table 4), expect one at 0.63. AVE ranged from 0.690.79 (see Table 3). Hence, both conditions for convergent validity were met.
Table 3. Constructs Compensation Loyalty Leadership Empowerment Satisfaction Training Teamwork Reliability and convergent validity. AVE 0.74 0.68 0.72 0.79 0.69 0.76 0.74 Composite reliability 0.89 0.90 0.89 0.92 0.90 0.90 0.90 R square 0.59 0.66 Cronbachs Alpha 0.82 0.84 0.81 0.87 0.85 0.84 0.83

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Total Quality Management 1307

Table 4. PLS conrmatory factor analysis and cross-loadings. CP CP1 CP2 CP3 LO1 LO2 LO3 LO4 LS1 LS2 LS3 PO1 PO2 PO3 SA1 SA2 SA3 SA4 TR1 TR2 TR3 TW1 TW2 TW3 0.88 0.85 0.85 0.45 0.44 0.44 0.55 0.43 0.50 0.54 0.40 0.50 0.49 0.42 0.43 0.68 0.56 0.45 0.49 0.43 0.54 0.38 0.39 LO 0.48 0.45 0.53 0.86 0.83 0.86 0.76 0.49 0.61 0.59 0.54 0.57 0.51 0.63 0.64 0.56 0.72 0.54 0.43 0.51 0.51 0.53 0.61 LS 0.53 0.44 0.52 0.58 0.58 0.54 0.52 0.79 0.87 0.89 0.67 0.75 0.70 0.71 0.69 0.52 0.57 0.67 0.60 0.66 0.63 0.66 0.55 PO 0.49 0.39 0.46 0.60 0.48 0.43 0.49 0.59 0.66 0.77 0.90 0.89 0.88 0.68 0.71 0.43 0.54 0.68 0.61 0.65 0.62 0.67 0.50 SA 0.58 0.46 0.54 0.69 0.59 0.64 0.60 0.58 0.64 0.69 0.63 0.65 0.62 0.89 0.88 0.73 0.82 0.53 0.47 0.49 0.51 0.56 0.60 TR 0.47 0.42 0.46 0.57 0.46 0.40 0.46 0.55 0.66 0.67 0.65 0.70 0.63 0.50 0.55 0.38 0.47 0.88 0.85 0.88 0.64 0.63 0.54 TW 0.40 0.39 0.51 0.62 0.48 0.52 0.48 0.60 0.56 0.64 0.59 0.67 0.57 0.53 0.64 0.46 0.52 0.61 0.58 0.62 0.85 0.88 0.85

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Discriminant validity Discriminant validity implies that measures of a given construct differ from those of another (Hulland, 1999). The discriminant validity of the scales was assessed using the guideline suggested by Fornell and Larcker (1981): the square root of the AVE from the construct should be greater than the correlation shared between that construct and others in the model. Table 5 lists the correlations between the constructs, with the square root of the AVE on the diagonal. All of the diagonal values exceed the interconstruct correlations; hence the test for discriminant validity was acceptable. Therefore, we conclude that the scales should have sufcient construct validity.

Path coefcients and predictive ability The assessment of the structural model involves estimating the path coefcients and the R2 value. The path coefcients indicate the strengths of the relationships between the independent and dependent variables, whereas the R2 value is a measure of the predictive power of a model for the dependent variables. Table 6 and Figure 2 show the path coefcients, their signicance level and the R2 values of the endogenous variables. The PLS analysis results (see Figure 2) show that only one hypothesis has a negative effect and other hypotheses are supported. Thus the proposed theoretical model in Figure 1 is partially supported. In this study, the model accounts for 58.7% to 66% of the variances (R2 scores). In addition, all of the paths are signicant at the level of 0.05 (Figure 2). Thus, the t of the overall model is good. Employee satisfaction increases loyalty in the government (b 0.82, p , 0.01). Employee empowerment (b 0.28, p , 0.01), teamwork (b 0.18, p , 0.05), management leadership (b 0.39, p , 0.01) and employee

1308 C.C. Chang et al.

Table 5. Constructs Compensation Loyalty Leadership Empowerment Satisfaction Training Teamwork Latent variable correlation matrix. CP 0.86 0.57 0.58 0.52 0.62 0.53 0.50 LO 0.83 0.67 0.61 0.77 0.57 0.64 LS 0.85 0.80 0.75 0.74 0.71 PO 0.89 0.71 0.74 0.69 SA 0.83 0.57 0.65 TR 0.87 0.70 TW 0.86

Notes: CP: employee compensation; LO: employee loyalty; LS: management leadership; PO: employee empowerment; SA: employee satisfaction; TR: employee training; TW: teamwork. Square root of AVE is on the diagonal.

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Table 6.

Summary of the hypothesis test results. Hypothesis H1 H2 H3 H4 H5 H6 Casual path SA . LO TR . SA PO . SA TW . SA LS . SA CP . SA Path coefcients 0.82 0.17 0.28 0.18 0.39 0.25 t-value 31.96 2.08a 2.84b 2.24a 3.86b 3.37b
b

Association Loyalty Satisfaction

Supported Yes No Yes Yes Yes Yes

Notes: aSignicant at p , 0.05 level; bSignicant at p , 0.01 level.

Figure 2. Structure model and results of partial-least-squares analysis. Note: signicant at the 0.05 level; signicant at the 0.01 level.

Total Quality Management 1309 compensation (b 0.25, p , 0.01) increase employee satisfaction. However, employee training (b 0.17, p , 0.05) in this study shows negative effect on employee satisfaction which deserve our attention. The R2 values of the endogenous constructs are 0.587 (employee loyalty) and 0.66 (employee satisfaction). Thus, it can be concluded that the hypothesised model is partially supported by the data. Discussion The results of the study clearly demonstrate the effects of TQM practices in the government from the HRM perspective. The results also show that employee compensation, empowerment, teamwork and management leadership are signicantly and positively associated with employee satisfaction. The research data are consistent with prior empirical studies that employee satisfaction is positively related to employee loyalty, even though the organisation they served is the government in this study. While prior research in TQM has examined the relationship between satisfaction and loyalty (Jun et al., 2006) in the HRM perspective, this study is the rst to examine the role of TQM practices in government. The ndings indicate that: (1) TQM practices acts indirectly on employee loyalty through the mediating effect of employee satisfaction; and (2) employee training has negative effect on employee satisfaction. Those results show that the hypotheses are strongly supported. Theoretical implications This research extends the previous work on the perspective of HRM in government TQM programmes, and the results indicate that many of the empirical associations among TQM practices, such as employee satisfaction and loyalty, are also found to be signicant in this study. In other words, TQM as a holistic management philosophy is applicable across different kinds of organisations, such as prot or non-prot organisations. The result conrms that the government workers satisfaction had a signicant, positive impact on their loyalty towards the organisations, and its effect size is substantially large (R2 0.587). Such a strong relationship between satisfaction and loyalty may be attributed to the unique government workplace culture. The current study also found that all the TQM practices will affect the employee satisfaction. Management leadership, empowerment, teamwork and employee compensation have a signicant and positive inuence on employee satisfaction. The improved employee satisfaction leads to a higher level of employee loyalty. Moreover, the nding that employee training has a negative effect to employee satisfaction has a meaningful implication. Practical implications The contribution of this study is critical to the literature on government quality management and organisational studies as well, as these links have never been studied before. Since employee satisfaction signicantly affects their loyalty to the organisation, it may be necessary for government managers to enhance the overall employee satisfaction levels. The studied TQM practices are veried to signicantly affect employee satisfaction. Therefore, the government can improve employee satisfaction through TQM practices. Empowering employees to gain the higher levels of job satisfaction in turns works efciently because of their involvement in goal setting and in making decisions that affect their work. The appropriate empowerment provides employees with a positive

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1310 C.C. Chang et al. job experience and leads to higher employee satisfaction. Although teamwork has signicant effects on employee satisfaction, there are still multiple factors such as the composition of the team, group processes within the team, employees lack of knowledge of their co-workers contributions, high levels of trust, or the nature of the work itself, that determined the teamwork construct. Future research can take these additional factors into consideration when analysing the effect of teamwork. The research nding reported a positive relationship between leadership behaviour and job satisfaction. As leaders take care to help and support employees and express concern about their needs, these employees will feel more satised. Employee compensation often consists of nancial and non-nancial rewards for individuals and teams who contribute to TQM efforts and has a positive inuence on employee job satisfaction. An important practical implication of these ndings is that governments may be able to improve employee loyalty via employee satisfaction. TQM practices have conrmed in this study that it will improve employee satisfaction, except the training. Different research studies argue that a lack of training has been attributed to shorter employment tenure, frustration and job dissatisfaction. This study also has a different nding: the employee training has a negative effect on employee satisfaction, so it is worth keeping an eye on it. Based on our practical experiences, some possible reasons with related suggestions for this worrying nding were proposed as follows. First of all, the negative impact may be attributed to overlong training hours; some of the training courses in TCG require too much time and effort for rst-line governmental employees who already have a heavy workload. Hence, it is important for those government managements to design and provide courses with appropriate training hours. Another reason may be the bureaucratic structure of government makes employees less motivated to receive training, since training raises expectations that cannot be met as career opportunities are not available. Furthermore, the size of some TCG training classes tends to be big. Roth and Bozinoff (1989) indicated that people who receive training conducted in small groups are more satised with education. Thus, keeping the training classes small may be an effective way to improve satisfaction. In addition, the training courses design should correctly link to job skills and competencies required by the employees. This study suggests that as the government implements training programmes it must be very careful to redesign the schedules and programmes based on employees diverse needs for effectively sustaining the quality of training. However, some future studies with qualitative interviews/open ended survey questions should be urgently conducted by TCG in order to clarify the real reasons behind this negative training effect on satisfaction, and further provide feedback for redesigning the training programmes. Without knowing the real reasons, it is impossible to know how to redesign the effective training programmes in the future. Other TQM practices are also very important as the government undertakes service quality improvement projects. The government should organise the employees as a team and establish trust between the team members. The government can also give the employee enough empowerment to make them feel greater identication and reduce the feeling of powerlessness related to policies. An effective strategy is giving government employees nancial and non-nancial rewards, especially non-nancial rewards such as praise and recognition, because the nancial recognition system in Taiwan governmental system tends to be less exible compared to private enterprises. Practically, an internal service quality awards with ofcial ceremony, for instance, has been held by TCG annually for six years in order to achieve the employee recognition and motivation by means of non-nancial rewards.

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Total Quality Management 1311 Encouraging management leaders to better take care of employees is another important way to improve satisfaction. Establishing a long-term relationship between management and employees can enhance satisfaction. In the government organisation, our ndings strongly support the view that the fundamentals of TQM, including employee compensation, employee empowerment teamwork and management leadership, must be implemented simultaneously, regardless of the organisational and cultural contexts (Sousa & Voss, 2002).

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Limitations and future research There are some limitations of the current study, which suggest some directions for possible extensions in the future. Firstly, the study is based on data collected from an Asian city government. Although there may be some commonality among all of the government organisations, readers should be cautious about generalising the results, especially to afliates in other countries. Thus, future research may be conducted to verify these results by studying government organisations located in a variety of regions. Secondly, it should be noted that, since the presented study focuses only on the ve types of TQM practices associated with human resources, other important practices such as employee selection, employment security and the selective hiring of new personnel, were excluded from the studys model. Thirdly, when testing the effect of employee satisfaction on employee loyalty, the mediating variable perceived value was ignored in the research model due to simplication consideration. Future research can include the perceived value to test its mediating effect between satisfaction and loyalty. Finally, the presented study employed a cross-sectional survey method, which is limited in exploring the longitudinal evidence of how TQM practices evolve in organisations. If one can examine the changes in employee satisfaction and loyalty at different stages of TQM implementation, this would be more helpful in identifying the specic causality between TQM practices, employee satisfaction and loyalty.

Conclusion This study proposed that government employee satisfaction and loyalty may be improved through the inclusion of TQM practices associated with human resources. The empirical test of the TQM practices found the model to be strongly supported, with only one path indicating a negative effect in the hypothesised directions. The study shows that employee empowerment, employee compensation, teamwork and management leadership are signicantly positive predictors of employee satisfaction within the context of government. The study also provides evidence that employee loyalty is built through employee satisfaction. Researchers, therefore, should give careful consideration to the unique government environment when investigating the relationship between the training and satisfaction. In summary, this study contributes to the service management literature by proposing theoretically and testing empirically a perspective that links TQM practices to employee satisfaction and loyalty within the context of government. References
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