Module$-$ Research for computing methods

Factors affecting employee performance: an empirical approach

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 model are still often overlooked and

that this may be why there is not yet an integrated model for evaluating EP$.$ Additionally, as Nguyen et al$.,(2015,$ p$.567)$

state $$Though there have been many studies examining the impacts of various factors on employee performance, very few

examined more than three factors at one time.$$ An organization is a 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, jobrelated 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$.$QUESTION $2(20$ Marks$)$

Interpret the conceptual framework presented in the study, specifically focusing on the delineation of firm$/$environmentrelated factors, job$-$related factors, and employee$-$related factors as they relate to employee performance $($EP$).$

QUESTION $3(20$ Marks$)$

Recommend the alternative research methodology the study could employ, and explore how it could enrich the study.