DEVELOPING EMPLOYEE ENGAGEMENT AND BUSINESS PERFORMANCE

CHAPTER TWO

LITERATURE REVIEW AND THEORETICAL FRAMEWORK

2.1 Literature Review

Until recently there has been a general resistance to investment of training in the public service because of the believe that “workers hired under a meut system must be presumed to be qualified, that they were already trained for their jobs and that if this was not so it was evidence that initial selection of personal was at fault.’’(Stahl, 1976). This assumption has been jettisoned as the need for training became obvious both in the private and the public sectors.

Many organizations have come to recognize that training offers a way of developing skills, enhancing performance and quality of work, and building worker loyalty to the firm (http://www.bls.gov/oco/ocos 021.htm). They have seen for themselves that training is where skills are developed, attitudes are changed, ideas evolve and the organization is reinvented. In the course of learning the skills that will increase sales, build effective teams, improve quality standards or meet a wide range of other objectives, workers create a new organizational culture (Babaita, 2010).

Training means investing in people to enable them to perform better and to empower them to make the best use of their natural abilities for overall effectiveness and efficiency of an organization. An organization is seen to be effective and efficient if there is demonstrable increase in performance (Goldstem and Gillian, 1990; Ranft and Lord, 2000; Daniels, 2003; Babaita, 2010). There is need for continual training and retraining especially with the impact of rapid technological changes on existing skills and jobs. From the literature review, the workers are seen as an indispensable group in the entire office in the labor markets; hence the training given to them is such that assists an individual to be occupationally competent by providing him with learning experiences that will help him develop skills and ability for making sound decisions.

There are numerous problems (funding, lack of training facilities, lack of manpower, etc.) which have continued to affect the training of workers thereby hampering their optimal performance (Iwuoha, 2009). Despite the recognition of importance of training by management experts and government in white papers on various reforms in Nigeria, the experience of manpower (employee) employee engagement (Okotoni and Erero, 2005) in the Nigerian public service has been more of ruse and waste.

A study carried out by Okotoni and Erero (2005), on the topic titled “Employee employee engagement in the Nigerian Public Service” aimed at identifying the experience of Nigerian public services on employee employee engagement with view to understanding the problems being faced. The researchers found out that employee engagement helps to ensure that organizational members possess the knowledge and skills they needed to perform their job effectively, taken on new responsibilities, and adapt to changing conditions. They also found that the experience of employee employee engagement in the Nigerian public service has been more of ruse and waste. They recommended that the government should avoid the use of quack consultants in training the public servants.

In another study carried out by Iwuoha (2009) on the topic titled “Impact of

employee engagement policies on Secretaries Performance in selected Business Organization in Owerri” aimed at identifying the adequacy of development programme provided to the secretaries in the selected business organizations in Owerri. The researcher employed a survey research design. The population of the study was 50 respondents using simple random sampling technique, while questionnaire was used for data collection and mean scores for data analysis. It was found that engagement strategies were adequately provided for the secretaries by the management of these organizations in such areas as seminar, conferences, workshops, etc. The researcher recommended that the secretaries should be given periodic leave with full pay to fully acquaint them with the latest skills.

2.3.1 Traits Engagement and Organisational Performance

It is widely believed that possession of certain traits predispose individuals to certain characteristics that affect their performance (Le, Oh, Robbins, Illies, Hollard & Westrick, 2011). For instance, conscientious employees are believed to be hard working, dependable, responsible and organised (Jackson, 2014). These personality traits are believed to contribute positively to organisational performance. Further, employees with low emotional stability are believed to be moody, prone to stress, have low self-esteem and inadequate copying strategies and hence are less productive which negatively influence organisational performance. A study carried out in Iran on personality characteristic of school principal and performance found that personality traits of introversion and extraversion have a positive influence on organisational performance while extroversion have been found to lead to low levels of performance (Ali, Azizollah, Zaman, Zahra and Mohtaran (2011). Nevertheless, personality is said to be modified by the environment and the individual capacity to engage hence the need to have other variable that leads to engagement in the same study to determine the interplay between personality and other predictors of performance. Further, the big five personality characteristics (conscientiousness, agreeableness, extraversion, openness and emotional stability) have been found to be correlated with employees’ performance through their influence on employees’ adaptive behaviour (Echchakoui, 2013; Ghani, Yunus & Bahry, 2016). However, the influence of personality traits is modified by organisational environment and individual commitment and hence 29 the need for further investigations on the influence of traits on organisational performance while factoring demographic characteristics and organisational commitment. Another study on the influence of emotional intelligence on performance found that the relationship is mediated by personality traits (Jackson, 2014). People with positive emotions were found to exhibit broader scope of attention which was linked to higher output and by extension, performance. In addition, the study found that emotional intelligence predicts work engagement as effective management of emotions, social skills and self-control leads to improved performance. However, this study was based on a sample of one institution; San Jos University in California and may not be used to make generalisation. Other studies have shown that supervisors who exhibit traits of being mindful of employee wellbeing are associated with employee outcomes such as job satisfaction, need satisfaction and organisational citizenship behaviour (Reb, Navayanan & Chaturvedi, 2014). These outcomes are closely associated with organisational performance. Further, Albrecht, Bakker, Grumman and Macey (2015) found that selection of candidates with specific personality traits that predicts engagement, results in having higher levels of employee engagement when other institutional factors such as performance management processes and learning and development opportunities.

2.2.2 worker performance

worker performance is normally looked at in terms of outcomes. However, it can also be looked at in terms of behavior (Armstrong 2000). Kenney et al. (1992) stated that worker's performance is measured against the performance standards set by the organization. There are a number of measures that can be taken into consideration when measuring performance for example using of performance, efficiency, effectiveness, quality and profitability measures (Ahuja 1992) as briefly explained hereafter. Profitability is the ability to earn profits consistently over a period of time. It is expressed as the ratio of gross profit to sales or return on capital employed (Wood &Stangster 2002).

1. Efficiency and effectiveness - efficiency is the ability to produce the desired outcomes by using as minimal resources as possible while effectiveness is the ability of workers to meet the desired objectives or target (Stoner 1996). Performance is expressed as a ratio of output to that of input (Stoner, Freeman and Gilbert Jr 1995). It is a measure of how the individual, organization and industry converts input resources into goods and services. The measure of how much output is produced per unit of resources employed (Lipsey 1989). Quality is the characteristic of products or services that bear an ability to satisfy the stated or implied needs (Kotler& Armstrong 2002). It is increasingly achieving better products and services at a progressively more competitive price (Stoner 1996).

As noted by Draft (1988), it is the responsibility of the company managers to ensure that the organizations strive to and thus achieve high performance levels. This therefore implies that managers have to set the desired levels of performance for any periods in question. This they can do by for example setting goals and standards against which individual performance can be measured. Companies ensure that their workers are contributing to producing high quality products and/or services through the process of worker performance management.

This management process encourages workers to get involved in planning for the company, and therefore participates by having a role in the entire process thus creating motivation for high performance levels. It is important to note that performance management includes activities that ensure that organizational goals are being consistently met in an effective and efficient manner.

performance management can focus on performance of the workers, a department, processes to build a service, etc. Earlier research on performance of workers has showed that workers who are satisfied with their job will have higher job performance, and thus supreme job retention, than those who are not happy with their jobs (Landy 1985). Further still, Kinicki&Kreitner (2007) document that worker performance is higher in happy and satisfied workers and the management find it easy to motivate high performers to attain firm targets.

2.2.3 Impact of Training on performance

In the real world, business performance and development is affected by a number of factors. In light with the present research during the development of organizations, worker training plays a vital role in improving performance as well as increasing performance. An organization is seen to be effective and efficient if there is demonstrable increase in performance.

Performance can be seen as the raison d’etre of management since it provides how efficiently production inputs are used in an economy (Bartel, 1994). As the development is focusing more in the worker’s personal growth, successful workers prepared for positions of greater responsibility must have analytical, human, conceptual, and specified skills. For this reason, corporate management globally is concerned with performance because it is regarded as a main indicator of efficiency when comparisons are made with competitors in the labor markets (UK.NOP Business., 2001).

In one way or another, the two are related in the sense that worker performance is a function of business performance since worker performance influences general business performance. In relation to the above, Wright &Geroy (2001) note that worker competencies change through effective training programs. It therefore not only improves the overall performance of the workers to effectively perform their current jobs but also enhances the knowledge, skills an attitude of the workers necessary for the future job, thus contributing to superior business performance.

Through training the worker competencies are developed and enable them to implement the job related work efficiently, and achieve firm objectives in a competitive manner. Further still, dissatisfaction complaints, absentism and turnover can be greatly reduced when workers are so well trained that can experience the direct satisfaction associated with the sense of achievement and knowledge that they are developing their inherent capabilities (Pigors& Myers 1989).

The importance of performance in any organization can hardly be overstated, that is why the organization exposed their workers including managers for maximum performance. Performance is often seen as total output/total input. That is effectiveness of the use of the factors of production to produce goods and services. When an organization integrates resources, physical and human will, this will result a better output. Babaita (2010) recommended that organization should monitor their firm’s performance using the following tools: employment costs per unit of output and costs as a ratio of sales value; add value per worker; labor costs as a percentage of added value, sales vale per worker, etc.

Most of the benefits derived from training are easily attained when training is planned. This means that the organization, trainers and trainees are prepared for the training well in advance. According to Kenney & Reid (1986) planned training is the deliberate intervention aimed at achieving the learning necessary for improved job performance. Planned training according to Kenney and Reid consists of the following steps:

• Identify and define training needs
• Define the learning required in terms of what skills and knowledge have to be learnt and what attitudes need to be changed.
• Define the objectives of the training
• Plan training programs to meet the needs and objectives by using right combination for training techniques and locations. -Decide who provides the training
• Evaluate training.
• Amend and extend training as necessary.

2.2.4 The other factors affecting worker performance

1. Management – Subordinate relationship

As organizations strive for flexibility, speed and constant innovation, planning with the people and not for the people ensures a positive relationship to performance improvement When workers are given freedom to participate in organizational decision making for example, there is are high chances of having mutual trust between management and workers. Mutual trust and cooperation help to break the barriers between the two parties. The workers will not resort to strikes and work stoppages without exhausting all the available channels of resolving the dispute. workers will be motivated because management considers them as partners in contributing to organizational success instead of being seen as mere subordinates and therefore will avoid engaging into counterproductive behaviors hence improved performance through timely achievement of organizational goals and objectives (Carrel, Kuzmits & Elbert 1989). Additionally, (Ichnniowski 1997) argues that innovative human resource management practices improve performance like use of systems related to enhance worker participation and flexibility in the design of work and decentralization of managerial tasks and responsibilities.

2. Working conditions

Although working conditions do not have a direct impact on production or output, they indeed have an indirect performance for example if the manual or mental work involved in certain jobs in a factory is tiresome, it will result into endangering not only the company property but also result into accidents which may further involve such incidents like loss of life. This might have adverse effects on the morale of the entire work force. Therefore organizations should establish working conditions that do not affect the work force negatively by providing among other things noise free environments, adequate lighting systems, adequate temperatures (Hogber 2005).

Organizations can prevent accidents and maintain good safety records through development of a positive safety culture to ensure good working condition hence performance improvement (Newstrom 2002).

3. Reward system

The overall aim of reward systems is to attract and retain quality human resources. When the pay conditions are perceived by the worker as equitable and in relation to their performance improvement. Organizations can use non-financial rewards like transport fee, incentive schemes to increase performance (Armstrong 2006). Additionally, organizations should adopt reward systems that are similar to the industry in which they operate or organizations can develop performance based pay systems in order to reward workers according to the set performance standards and profitability goals. Therefore for performance to improve, organizations need to create and maintain a sense of fairness equity and consistence in their pay structures (Davar 2006). workers expect that the employers will purchase their labor at a certain price.

4. Manufacturers unionization

In creating a healthy work climate, both management and workers unions should have a united hand and in the well-being of the organizational workers. Unionizations improve the industrial relations in instances where the management allows free participation of workers in trade unions. Management and trade unions will negotiate through collective bargaining processes the conditions of workers employment. Nilsen (2002) argued that industrial peace is a very important aspect for performance and growth of organizations. If the organization is plagued by industrial disputes and strikes, performance is bound to decrease.

In other words, for overall performance to improve health unionization should be considered and industrial disputes prevented through negotiations, conciliation rather than confrontation (Daft 1997).

5. Team work

This is when two or more people interact and coordinate to accomplish a specific goal and objective. When organizational members work together in teams, coordination of organizational goals and objectives becomes easier. This will lead to the teams sharing performance goals and thus lead to improving the morale of the workers which will later lead to improvements in performance. Team works encourages open communication between workers and have compliment skills which enable them to achieve more in a specified period of time as compared to when the individual is working alone hence creating synergy (Daft 1997). Additionally, Stoner (1996) argues that workers in teams often unleash enormous energy and creativity reduces boredom because teams create a sense of belonging and affiliation hence increase in worker's feeling of dignity and self-work. However, teams have the potential to be productive but the degree of performance depends on the relationship between management and the working team. Therefore support from management enhances performance of teams and performance improved in general.

2.3 Theoretical Framework

Manpower development can be described as a system involving a circle of input, through put and output. It equally involves the man, the job and the environment. There is a relationship and interdependence between these tripartite. While employee engagement needs constitute the input and through put, the results of employee engagement make up the output.

The system theory thus, provides the theoretical framework upon which manpower planning and development in Nigerian Port Authority is being evaluated.

The system theory was propounded by Easton (1961). The systems perspective assumed a system as a set of interrelated and independent parts arranged in manner that produces a unified whole. From a system perspective, an organization is seen as being made up of interdependent factors, including individuals (managers, workers, supervisors, etc), groups, attitudes, motives, formal structure, interactions, goals, status and authority Owojor and Asaolu (2010).

The system approach believes that system is made up of parts which are differentiated in some ways but are connected to make up the whole though the interaction between its component parts and with the external environment. The organization as an open system cannot exist in isolation. It must exchange energy and information/competencies with its environments. Every system is loosely connected with many other sub-system or sub-units. For example, organizational system is loosely coupled by the following elements; raw materials, equipment, administrative personnel, working tools, managers, workers, supervisors and other workers.

The organization is environments within the larger environment. It is important for the organization to expand its functions in order to bring it into closer relations with the surrounding environment. For example, managers, workers, supervisors are recruited from outside the organization; while funds may be internally or externally generated. The system theory gives the mangers a way of looking at an organization as a whole and as part of the larger external environments. In doing so, systems theory is of the view that activity of any of the organization affects activity of every other part. The job of a manager is to ensure that all parts of the organization are coordinated internally so that the organization’s goal can be achieved.

With this, the manager has to ensure that the activities of both human resources and materials are well coordinated and represented in terms of motivation and training of employee- including workers to enable them fit in the environment of work.

Employee engagement is a mixture of activities aimed at improving the performance of personnel in organization for the attainment of continuous improvement in performance. An organization does not exist in a vacuum; hence it is dependent on its external environment. Organization invests in people to enable them to perform better and to empower them to make the best use of their natural abilities for overall effectiveness and efficiency of an organization.

An organization is seen to be effective and efficient if there is demonstrable increase in performance. The workers are expected to meet the needs and expectations of the organization by performing their responsibilities to the organization. The Job of an organization manager, supervisor etc, is to assume that all parts of the organization are coordinated internally so that the organization are not self-contained. They rely on their environment for life sustaining inputs.

One possible explanation of the system theory is that it is based on the interrelated and interdependent parts arranged in a manner that produces a unified whole. An organization as being made up of interdependent factors such as individuals (Managers, supervisors, workerss, etc), groups, attitudes, motives, status and authority (Ibeaja, 2009), are connected to make up the whole through the interaction between its components parts and with the external environment.

The organization as an open system cannot exist in isolation; rather it exchanges energy, information and training with its environment. Application of system theory on the implication of employee engagement on the workers performance programmes in Okotoni and Erero (2005), personnel in any organization as part of the entire organization remain the most invariable asset for growth and development.

Training and re-training are essential components of manpower development. Manpower development and training play a major role, if not decisive in promoting economic growth with equity, they benefit individuals, enterprise, and the economy and society at large, and the can make labor markets function better.

The implications of this theory is that organizations and trainers should watch changes and demands of the labor market so that they could rethink, reposition repackage and re-engineer their missions, messages and methods in line with the changing requirements of the labor market and those of the labor market continue. (Usoro, 2010).

The relevance of system theory to this study is based on ideal employee employee engagement, hence this will no doubt produce economic, social and political growth. It is unfortunate, however, that most employee engagement policies that have been embarked upon at various levels of government in Nigeria have not produced the desire results mainly due to attitudinal problems on the part of government, organization and the trainees.