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Submitted
August 9, 2017
Accepted
August 13, 2017
Published
March 8, 2018
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Abstract

This study estimates the efficiency of employees’ performances under profit
sharing system using data envelopment analysis (DEA). This method is one of the
most common methods used in efficiency measurement analysis. However, a
robust approach is used to deal with the complexity of the traditional DEA
estimators. Robust Data Envelopment Analysis (RDEA) is very useful when
outliers contaminate the data. The sample includes five divisions which cover as
many as 102 employees of a shipping company in Malaysia are analyzed by using
R program. The results reveal that the initial DEA efficiency is an over-estimate of
the true efficiency. RDEA provides better accuracy of the results. Further, the
robust approach is appropriate to be used in the measurement of the efficiency of
company divisions under profit sharing program.

Keywords

DEA DMUs profit sharing robust shipping

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Author Biographies

Umi Mahmudah, Universiti Malaysia Terengganu, Trengganu

School of Informatics and Applied Mathematics

Muhamad Safiih Lola, Universiti Malaysia Terengganu, Trengganu

School of Informatics and Applied Mathematics
How to Cite
Mahmudah, U., & Lola, M. S. (2018). Robust approach for efficiency measurement of employee performance under profit sharing system. Economic Journal of Emerging Markets, 10(1), 1–7. https://doi.org/10.20885/ejem.vol10.iss1.art1
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