A study examined the impact of work teams on production, quality, and morale within the State of Alaska Division of Vocational Rehabilitation, using data from fiscal years 1992 and 1993 when a change from a hierarchical organization to a team-based approach took place in the agency. Production was defined as the percentage of placements achieved by the Anchorage area in comparison to the rest of the state. Quality was measured using the Case Review System Two, an accepted national model, to evaluate the quality of the work. Morale was evaluated through an interview process with 25 of the 26 individuals comprising the 8 teams; participants were asked if morale had improved or declined as a result of teamwork. To assess the impact of team work on the organization, it was necessary to determine if real teams had developed or if individuals were working with on-paper-only teams. Administration of the Hoevermeyer team effectiveness survey showed that five of the eight teams were effective teams and that the teams with higher effectiveness ratings accounted for higher percentages of the placements. The study concluded that the team model has had an impact on the quality of work and the morale of the employees. It is still too early to determine if production is affected as the average placement takes 2 years from eligibility and the model has been in place only 1 year. Based on the interviews, the study made five recommendations for improvements in the implementation of the team concept. (Contains 29 references.) (KC)