Ijppm-01-2018-0012 - Assignment PDF

Preview

Summary

Assignment...

Description

See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/329978024

Factors affecting employee performance: an empirical approach ArticleinInternational Journal of Productivity and Performance Management · December 2018 DOI: 10.1108/IJPPM-01-2018-0012

CITATIONS

READS

30

41,437

2 authors: Anastasios D. Diamantidis

Prodromos D Chatzoglou

Democritus University of Thrace

Democritus University of Thrace

15 PUBLICATIONS390 CITATIONS

122 PUBLICATIONS2,144 CITATIONS

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

ED-BPR View project

Banking View project

All content following this page was uploaded by Anastasios D. Diamantidis on 30 May 2019. The user has requested enhancement of the downloaded file.

SEE PROFILE

International Journal of Productivity and Performance Management Factors affecting employee performance: an empirical approach Anastasios D. Diamantidis, Prodromos Chatzoglou,

Article information:

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

To cite this document: Anastasios D. Diamantidis, Prodromos Chatzoglou, (2019) "Factors affecting employee performance: an empirical approach", International Journal of Productivity and Performance Management, Vol. 68 Issue: 1, pp.171-193, https://doi.org/10.1108/IJPPM-01-2018-0012 Permanent link to this document: https://doi.org/10.1108/IJPPM-01-2018-0012 Downloaded on: 30 May 2019, At: 00:04 (PT) References: this document contains references to 72 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 1821 times since 2019*

Users who downloaded this article also downloaded: (2017),"Factors affecting employee performance of PT.Kiyokuni Indonesia", International Journal of Law and Management, Vol. 59 Iss 4 pp. 602-614 https://doi.org/10.1108/IJLMA-03-2016-0031 (2014),"Determinants of employee engagement and their impact on employee performance", International Journal of Productivity and Performance Management, Vol. 63 Iss 3 pp. 308-323 https://doi.org/10.1108/IJPPM-01-2013-0008

Access to this document was granted through an Emerald subscription provided by emeraldsrm:297208 []

For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.

About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

*Related content and download information correct at time of download.

The current issue and full text archive of this journal is available on Emerald Insight at: www.emeraldinsight.com /1741-0401.htm

Factors affecting employee performance: an empirical approach Anastasios D. Diamantidis and Prodromos Chatzoglou Department of Production and Management Engineering, Democritus University of Thrace, Xanthi, Greece

Factors affecting employee performance 171 Received 31 January 2018 Revised 26 July 2018 Accepted 29 July 2018

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

Abstract Purpose – Nowadays, the phenomenon of increased competition between firms and their need to respond effectively to rapidly changing operational conditions, as well as to personnel requirements, has escalated the necessity to identify those factors that affect employee performance (EP). The purpose of this paper is to examine the interrelations between firm/environment-related factors (training culture, management support, environmental dynamism and organizational climate), job-related factors (job environment, job autonomy, job communication) and employee-related factors (intrinsic motivation, skill flexibility, skill level, proactivity, adaptability, commitment) and their impact on EP. Design/methodology/approach – A new research model that examines the relationships between these factors and EP is proposed utilizing the structural equation modeling approach. Findings – The results indicate that job environment and management support have the strongest impacts (direct and indirect) on job performance, while adaptability and intrinsic motivation directly affect job performance. Research limitations/implications – A potential limitation of this research is that it is not focused only on one business sector (i.e. the sample is heterogeneous). Originality/value – In this study, firm/environmental-related factors, job-related factors, employee-related factors and EP are incorporated in a single model using data from small- and medium-sized enterprises. Overall, the final model can explain 27 percent of EP variance ( first-level analysis) and 42 percent of EP variance (second-level analysis). Keywords Adaptability, Proactivity, Employee performance Paper type Research paper

1. Introduction Firms have realized that they have to develop unique dynamic characteristics that empower their competitive advantages in order to survive in a constantly changing market environment. Thus, they are focusing on the exploitation of their human resources (HR), particularly on employee performance (EP), as a source of strategic advantage (Wright and Snell, 2009). Narcisse and Harcourt (2008, p. 1152) state that employee’s “performance appraisal encroaches upon ‘one of the most emotionally charged activities in business life’ – the assessment of a man’s contribution and ability.” Boxall and Purcell (2011) indicate that the implementation of a well-defined process for evaluating EP plays a crucial role on a firm’s smooth running. Rynes et al. (2000) argue that the main challenge for firms is to evaluate EP and to consider how it can become more efficient and more “valid.” In other words, in which way firms can apply performance evaluation practices in order to improve their ability to distinguish “good” employees (that display desirable performance) from the bad ones. Therefore, it is essential for firms to be aware of their employees’ capabilities in order to be able to manage them and, in turn, to align them with the firm’s overall business strategy (Boxall and Purcell, 2011). However, Murphy and Cleveland (1991) report that many important factors regarding the research and development of a performance evaluation International Journal of Performance model are still often overlooked and that this may be why there is not yet an integrated Productivity andManagement Vol. 68 No. 1, 2019 model for evaluating EP. Additionally, as Nguyen et al., (2015, p. 567) state “Though there pp. 171-193 Limited have been many studies examining the impacts of various factors on employee © Emerald Publishing 1741-0401 performance, very few examined more than three factors at one time.” An organization is aDOI 10.1108/IJPPM-01-2018-0012

IJPPM 68,1

172

consciously coordinated system where characteristics of individuals, groups and organization interact with each other and effective interaction among them highly depends on organizational culture that shapes the individual performance (Kozlowski and Klein, 2000). Uddin et al. (2013) also argue that although environmental cultural factors support and develop EP, employee-related factors connect environmental cultural factors and EP and further research is needed for a better understanding of these relations. The purpose of this research is thus to explore and integrate the relations between firm/ environment-related factors, job-related factors and employee-related factors into an analytical EP assessment model. Although the individual impact of the model components is established in the literature, the contribution of this research is the incorporation of them into a single model (holistic framework), as well as the correlations between the 13 sub-factors and EP.

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

2. Theoretical framework and hypotheses 2.1 Proposed employee evaluation model Figure 1 demonstrates the proposed research model, where the relations between the three core constructs (firm/environment-related factors, job-related factors and employee-related factors) and EP appear. Firm/Environment-related factors Management support

Training culture

Organizational climate

Environmental dynamism (Perceived instability)

H5 –H8 (a,b,c,d,e,f)

H1–H4

Employee-related factors H9 –H12 (a,b,c) Proactivity Adaptability Intrinsic motivation Skill flexibility

H13 –H15 (a,b,c,d,e,f)

Commitment Skill level

Job-related factors Job environment

Job communication

Figure 1. Research model and hypotheses

Job autonomy

H16–H18

H19–H24

Employee performance

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

Mathis and Jackson (2011) and Armstrong (2012) argue that firm-related factors from firm’s Factors internal and external environment, such as management support, training culture, affecting organizational climate and environmental dynamism are related to: job-related factors, such employee as communication, autonomy and environment; employee-related factors, such as intrinsic motivation, proactivity, adaptability, skill flexibility, commitment and skill level; and EP. performance Firm/environment-related factors. Although there are many firm/environment-related factors that have been examined in the literature regarding their impact on EP, such as 173 leadership, organizational trust, human capital investments, etc. (Bapna et al., 2013), this study turns its attention on management support, training culture, organizational climate and environmental dynamism. Many researchers (Pulakos, 2004; Armstrong, 2012) claim that management support is an important condition for EP improvement. As Morrison and Phelps (1999) also indicate, when employees perceive that the management supports their job-related efforts, then it is likely that improved job performance will be noticed. Further, Parker et al. (2006) found that management support is positively related to commitment and proactivity (employee-related factors). Lepak et al. (2006) have found that organizational climate influences employees’ attitudes and behaviors and hence their performance levels, while Chatman et al. (2014) report that there is a relationship between organizational climate and adaptability and Erkutlu (2012) argues that it also affects employees’ proactivity level. Finally, Boxall et al. (2007) point that organization’s culture affects employee’s behavior, while Roos and Van Eeden (2008) claim that it is related with the level of employees’ motivation. Dermol and Cater (2013) state that the acquisition of new knowledge and skills through training leads to improved EP. Additionally, Hale (2002) and Armstrong (2012) argue that training improves employees’ knowledge and skills, so they can successfully deal with new everyday job-related challenges and, thus, improve their job performance. Moreover, Song et al. (2011) found that training culture is related to job autonomy and Winterton (2008) report that firms’ training policy is closely related to the improvement of their employees’ job-related skills and flexibility (employee-related factors). Ketkar and Sett (2010) report that environmental dynamism affects firm performance. Further, Motowildo and Schmit (1999, p. 56) indicate that when firms’ external environments are dynamic, then it is difficult for them to predetermine their employees’ efficiency levels. In other words, in a dynamic environment, the job itself and its performance acquire unique characteristics. Finally, according to Crant (2000), employees working in a dynamic job environment with increasing job-related demands are likely to develop behaviors that lead to increased performance. Panayotopoulou et al. (2003) state that environmental dynamism is a factor that affects employees’ capability to adapt, while Papalexandris and Nikandrou (2000, p. 400) state that “the instability of the general economic environment in which European companies operate create difficulty in defining the necessary skills that the workforce should have.” Based on the above, the following hypotheses are proposed: H1–H4. Firm/environment-related factors are related to EP. H5–H8. (a, b, c, d, e, f ): Firm/environment-related factors are related to employee-related factors. H9–H12. (a, b, c): Firm/environment-related factors are related to job-related factors.

2.2 Job-related factors Although there are many job-related factors that have been examined in the literature regarding their impact on EP such as organizational fairness, job control (Kooij et al., 2013),

IJPPM 68,1

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

174

this study focuses on job communication, job autonomy and job environment. To that end, we have adopted these factors because there are strong evidences in the literature supporting that these factors are related with the other factors incorporated in the proposed model. Noe et al. (2006, p. 162) define job autonomy as the extent to which “the job allows the employee to make decisions about how to perform his work.” They also state that job autonomy is positively associated with EP. Specifically, Noe et al. (2006) report that job autonomy reflects the degree of freedom and independence that employees have in decision making regarding the way they perform their jobs. Thus, employees with increased job autonomy have more flexibility in their work because they choose how to execute their jobs more efficiently and thus their performance is increased (Morgenson et al., 2005). Further, Parker et al. (2006) found that job autonomy is also positively related to commitment and proactivity. Moreover, Dysvik and Kuvaas (2011) report that that there is a relationship between job autonomy and EP, which is moderated by intrinsic motivation (employee-related factors). Concerning job environment, Kopelman et al. (1990) report that job environment affects employee productivity and performance. Further, Fawcett et al. (2008) state that job environment affects employees’ ability to be proactive and productive. Similarly, van Veldhoven (2005) support the fact that job environment is related to EP. As regards to job communication, Price (1997) implies that job communication is related with commitment and motivation and Chen et al. (2006) found that job communication is related to commitment (employee-related factor) and EP. Bush and Frohman (1991) report that job communication is an important factor that can lead to higher firm performance levels. In the same line, Armstrong (2012) argues that job communication is a crucial factor, which is related to employees’ overall performance. The above lead logically to the formulation of the following hypotheses: H13–H15. (a, b, c, d, e, f ): Job-related factors are related to employee-related factors. H16–H18. Job-related factors are related to EP. 2.3 Employee-related factors and employee performance Even though there are many employee-related factors that have been examined in the literature regarding their impact on EP such as turnover, absenteeism (Hancock et al., 2013), this study focuses on proactivity, adaptability, intrinsic motivation, skill flexibility, commitment and skill level. Employing people who have a variety of skills is a valuable asset for a firm, because it forms the basis for creating multiple alternatives to current or future job requirements. Wright and Snell (1998, pp. 764-765) define employees’ skill flexibility as “the number of possible alternative ways, through which employees can apply their skills in their job” and “how employees with different skills can be repositioned to the proper places in a fast way.” Bhattacharya et al. (2005) suggest that a firm can improve employees’ skill flexibility through various processes, such as job rotation and cross-functional teams. These processes create unique skill combinations, exploitable by the firm and difficult to copy by competitors. Thus, claim that skill flexibility has the strongest direct and most visible impact on EP meaning that the higher the level of HR skill flexibility, the more likely it is that employees will demonstrate higher performance. Besides skill flexibility Noe et al. (2006) and Boxall and Purcell (2011) report that skill level is directly related to EP. Examining employees’ intrinsic motivation, Boxall and Purcell (2011) indicate that it is related (and determine) EP. Moreover, Delaney and Huselid (1996) suggest that in order for firm performance to be improved through increased EP, firms should strengthen employee motivation.

Downloaded by University of Sheffield At 00:04 30 May 2019 (PT)

Next, Crant (2000, p. 435) reports that research on proactivity “has not emerged as an Factors integrated research stream in the organizational behavior literature. There is no single affecting definition, theory, or measure driving this body of work.” Parker and Collins (2010, p. 634) employee define proactivity as “acting in anticipation of future (job-related) problems, needs, or changes,” while Parker and Collins (2010, p. 634) define proactivity as “controlling a situation performance by causing something to happen rather than waiting to respond to it after it happens.” Many researchers (Crant, 2000; Thompson, 2005; Grant and Ashford, 2008; Parker 175 and Collins, 2010) argue that the level of employees’ proactivity is linked to their performance. Thompson (2005) states that proactive employees perform more efficiently than those who have low proactivity. Overall, it has been observed that employees with high proactivity take the initiative, express their views, prevent future problems in their job environments, improve their ways of performing work and positively influence their peers (Parker and Collins, 2010). Moreover, another important factor affecting EP is adaptability (Pulakos et al., 2002; Griffin et al., 2007). Pulakos et al. (2002) state that if employees adapt easily to a new workplace (and/or new job requirements and needs), as well as to irregular situations, there may be a positive effect on their performances. In other words, employees with no particular difficulty to deal with different job requirements and environments may be more efficient than other employees (who find it difficult to apply new knowledge, skills and techniques to their jobs and, generally, do not effectively manage any changes in their jobs). Finally, it is argued that employee commitment, which consists of the three components (affective commitment, continuance commitment and normative commitment) is also related to EP. Chen and Francesco (2003) argue that the nature of the psychological status of each commitment factor varies from employee to employee. According to Chen and Francesco (2003), there is a positive relationship between affective commitment and EP, suggesting that, employees who feel that a firm’s behavior towards them is good (e.g. fair treatment, participation in decision making) may increase their levels of emotional commitment to the firm and, in turn, their performances may ...