Examining the efficiency of the social security organization of Gilan province using data envelopment analysis (DEA)

Department of Business Administration

Dissertation for receiving Master's degree (M.A.)

Abstract

Today, all managers in all organizations want to use the facilities and capacities in different departments optimally. Therefore, the existence of a model to provide feedback in order to improve various branches of organizations and to obtain a tool to meet this need of managers seems very necessary and logical.  In line with the above necessity, the Social Security Organization of Gilan province will be selected as a statistical sample and the efficiency of its branches will be investigated using the Data Envelopment Analysis (DEA) method. In order to evaluate the performance of its branches, determine effective and ineffective branches and formulate solutions to improve the performance of ineffective branches and strengthen effective branches as much as possible. In order to check the efficiency of human resources inputs and the area of ??the infrastructure used and the percentage of sending the list of insurance premiums to the active workshop, the ratio of approved votes issued to the cases processed by the First Claims Board, the ratio of insurance premium collection to the approved budget, the ratio of closed cases to the active class of executives, the ratio of self-employed, optional and special insurance to the insured's affairs staff was investigated using the input-oriented CCR model through DEA-Master software. The results showed that 4 branches out of 21 investigated branches were effective and 17 branches were ineffective. It should be noted that their average technical efficiency is 59.22 and the average efficiency of the investigated branches is 86%.

Keywords: efficiency, performance evaluation, data coverage analysis, social security of Gilan province

Chapter 1

Research overview

Introduction

Currently, the situation governing global markets, limited resources, very intense competition, etc. It has led organizations to adopt appropriate strategies. So that the managers and decision makers of the organizations demand the optimal use of the facilities and capacities available in different departments. Therefore, performance evaluation in order to provide feedback in order to improve the performance of various branches of organizations and obtain a tool to meet this need of managers, seems very necessary and logical. Therefore, the evaluation of performance and productivity has received a lot of attention in recent decades. Many methods and techniques have been created to evaluate performance, each of which introduces a set of indicators to balance the traditional and one-dimensional views of performance. But despite all these advances in performance evaluation, many organizations still rely on traditional and financial performance indicators (Tangen, et al, 2004). The social security organization is also entitled and interested in using a suitable model to evaluate the performance of its branches in line with the above necessity, so that in addition to identifying effective and ineffective branches, it can formulate appropriate strategies to improve the performance of ineffective branches and strengthen effective branches as much as possible. Since most of the studies carried out in the field of investigating the efficiency and evaluating the performance of social security branches have been using parametric methods, the present research is trying to measure the efficiency and performance evaluation of social security branches in Gilan province using a non-parametric method. In this regard, the data envelopment analysis technique [1], which was created by "Charnes" and his colleagues (1976) and has been widely noticed, was used.

1-2) Statement of the problem

Today, all managers in all organizations want to use the facilities and capacities available in different departments optimally. One of the ways to achieve this goal is to review and evaluate the efficiency and performance of the organization. Efficiency means doing the job right and achieving an expected level of output from a given input. Efficiency means producing the least amount of waste and spending the least amount of money; so that the quantity and quality are kept constant. Assuming that in an organization, all resources are constant and limited; The optimal use of these resources in order to produce products is determined by efficiency criteria (Arab Mazar and Mousavi, 1389).

Efficiency refers to the success of a company or institution in producing the maximum possible output from a set of production factors with fixed technology so that all inputs and outputs are accurately measured (Farrell, 1957). Farrell proposed that the efficiency of a company consists of three components: technical efficiency, allocation efficiency (price) and economic efficiency (cost). According to Farrell's definition, technical efficiency is the ability of a company.Farrell proposed that the efficiency of an enterprise consists of three components: technical efficiency, allocation efficiency (price) and economic efficiency (cost). Based on Farrell's definition, technical efficiency reflects the ability of an enterprise to obtain the maximum output from a set of certain inputs with known technology. In this case, the less the enterprise wastes resources and produces more at a certain level of inputs, the more efficient it will be from a technical point of view. Allocative efficiency shows the ability of a firm to use the optimal combination of inputs according to their prices. This efficiency is related to the minimization of the cost of production by choosing the appropriate combination of inputs for a certain level of output according to a set of input prices. Assuming that the firm in question is technically perfectly efficient, a firm that is allocatively efficient uses a combination of inputs. have the lowest possible cost for production. According to Farrell's definition, economic efficiency is obtained from the product of technical efficiency and allocation efficiency. This means that an organization that is fully efficient economically must be efficient both technically and allocatively. Being independent of scale and relativity are among the characteristics of mentioned efficiencies. Allocation efficiency compared to technical efficiency requires price information, and this issue causes more use of technical efficiency than allocation efficiency (Rajabi, 2018).

Efficiency measurement and analysis shows how units can use their resources in order to achieve the best performance and increase production at a point in time. In general, efficiency represents the ratio of outputs to inputs compared to a certain standard (Kazemi and Nikkhah Farkhani, 2018).

Koeli has shown that among the various performance evaluation methods, the envelope analysis method has two major advantages in measuring efficiency: firstly, it does not need to specify a functional form between data and inputs, which means that the researcher can choose the form of the production function or the cost function from the limiting conditions that can influence It should be avoided on the results of efficiency analysis, and secondly, it does not need to assume statistical distributions for efficiency components. On the other hand, using the data envelopment analysis method, for each of the inefficient units, a unit or units can be proposed as a reference unit that is efficient and can show the optimal input and output structure for each of the inefficient units in the form of a linear combination. In fact, this method, in addition to calculating various types of efficiency, provides a suggested program for inefficient units, based on which the optimal amount of each input and the ideal amount available for output, presentation and efficiency are maximized (Mehrgan, 2013).

Given the importance of measuring efficiency for organizations, the purpose of the research is to examine the efficiency of the social security organization, which is a social institution and provides multifaceted support to individuals against various risks.

13) The importance and necessity of research

As long as organizations strive for survival and consider themselves in need of presence in the national and global arena, they should put the principle of continuous improvement [2] at the forefront of their activities. This principle will not be achieved unless the context of its achievement is made possible by improving performance management. This improvement can be created by getting the necessary feedback from the internal and external environment, analyzing the strengths and weaknesses and opportunities and threats of the organization, taking responsibility and satisfying the customer, by creating and applying a performance evaluation system with a suitable model. The performance evaluation system with a suitable model helps significantly to the flexibility of the programs and goals and missions of organizations in today's dynamic environment. Evaluation and measurement of performance and its development requires culturalization and promotion of organizational culture (Tolaei, 2016). Because the absence of an evaluation and control system in a system is considered as a lack of communication with the internal and external environment of the organization, the consequences of which are old age and ultimately the death of the organization. The phenomenon of organizational death may not be felt by top managers of organizations due to the fact that it does not happen all at once. However, studies show that the lack of a feedback system makes it impossible to carry out necessary reforms for the growth, development and improvement of the organization's activities. Finally, this phenomenon is organizational death. (Adali, 1384: 125). The science of management also shows the mentioned contents. What we cannot measure, we cannot control, and what we cannot control, it will not be possible to manage. The main issue in all organizational analysis is performance, and its improvement requires measurement, and therefore an organization without a performance evaluation system is unthinkable.