THE IMPACT OF WORK ENVIRONMENT ON EMPLOYEE’S PERFORMANCE

CHAPTER TWO

REVIEW OF LITERATURE

INTRODUCTION

Our focus in this chapter is to critically examine relevant literature that would assist in explaining the research problem and furthermore recognize the efforts of scholars who had previously contributed immensely to similar research. The chapter intends to deepen the understanding of the study and close the perceived gaps.

Precisely, the chapter will be considered in three sub-headings:

 Conceptual Framework

 Theoretical Framework

 Chapter Summary

2.1 CONCEPTUAL FRAMEWORK

Working environment

The work environment refers to the relationship between a worker and his environment that can be broken down into different dimensions like the social, technical and economic in which the work is normally viewed and designed. An attractive and supportive work environment can be described as an environment that attracts individuals into the professions, encourages them to remain in the workforce and enables them to perform effectively. The purpose of providing attractive work environments is to create incentives for entering the professions (recruitment) and for remaining in the workforce (retention). In addition, supportive work environments provide conditions that enable workers to perform effectively, making best use of their knowledge, skills and competences and the available resources in order to provide high-quality services. Many organizations have been trying new designs and techniques to construct office buildings, which can increase productivity, and attract more employees. Many authors have noted that, the physical layout of the workspace, along with efficient management processes, is playing a major role in boosting employees ‘productivity and improving organizational performance

In this literature, it is posited that the industrial revolution and the movement away from agrarian society was the pivotal point in history that instigated the concern with workers output (Kartzell and Yanalorich, 2000). The major schools of thought, namely, Fredrick W. Taylor and the Human Relations Movement have impinged on productivity since the mid-nineteenth century. Stephen P. Robbins (2001) advocates that working conditions will influence employee’s performance, as employees are concerned with a comfortable physical work environment. In turn this will render a more positive level of performance. Miller, Erickson & Yust (2001) forwarded their view that employees get benefited by work environment that provide sense of belonging [cited in Shoaib Madiha et al., 2009]. Kabir (2011) also established in his research at Pharmaceutical industry, Bangladesh that working environment played an important role in the employee’s job satisfaction. A positive work environment is not only important for our physical, mental and emotional health, but is also important for the product or service we produce for the company. The better we feel at work, the more likely we will take pride in our work functions and be loyal toward our place of employment.

Working environment can be divided into two components namely physical and behavioral components. The physical environment consists of elements that relate to the office occupiers‟ ability to physically connect with their office environment. The behavioral environment consists of components that relate to how well the office occupiers connect with each other, and the impact the office environment can have on the behavior of the individual. According to Haynes (2008), the physical environment with the productivity of its occupants falls into two main categories office layout (open-plan verses cellular offices) and office comfort (matching the office environment to the work processes), and the behavioral environment represents the two main components namely interaction and distraction. Among a number of factors that were since that time believed to have some influence on performance are (a) the growth of organized labour unions, (b) technological advancement and (c) the changing role of government. Work environment includes some factors, which either contributes positively or negatively to achieving maximum employee productivity (Elywood, 1999). Moreover, there are two types of work environment according to Kyko (2005), which are conducive and toxic work environments. Conducive work environment gives pleasurable experience to employees and enable them to actualize their abilities and behavior. This type of environment also reinforces self-actualizing behaviors’. For instance, an irresponsible employee can change into a responsible employee in conducive work environment. Toxic work environment gives unpleasant experiences and at the same time, deactualize employees’ behavior. This environment reinforces low self-actualizing behaviors and it leads to the development of negative traits of the employees’ behavior. In toxic work environment, responsible and sensible employee can change into irrational and irresponsible employee as a survival strategy.

Effect of Work Environment on Job Satisfaction

The main aim of this study is to identify the effect of work environment on employee’s performance. However the physical work environment creates the physical condition that can affect the health of employees. Yet, the way in which the mental environment creates vicious condition (e.g. fatigue boredom, attitude and behavior of supervisor and colleagues) for employees and social environment can affect the confidence level or performance of employees. So, ultimately the work environment can influence the performance level of employees or else these factors can consequence the performance of overall.

Workplace Environmental Factors

The workplace environment comprises of various factors that are imperative determinants of employee performance (Lambert, 2001). These factors may positively or negatively contribute to achieving maximum employee performance 2.3.1 Physical Workplace Environmental Factors Ismail et al. (2010) opine that the conditions of physical workplace environment influence the employees’ functions and it will determine the well-being of organizations. They add that the physical work environment includes the internal and external office layout, temperature, comfort zone and also the work setting or arrangement.

The physical workplace environment

Factors also include lighting (both artificial and natural), noise, furniture and spatial layouts in workplaces (Vischer, 2007). The physical workplace environment includes comfort level, ventilation and heating, lighting. These features assist on functional and aesthetic side, the decor and design of the workplace environment that ultimately help improve the employees’ experience and necessitate better performance. The comfort level and temperature also substantially influence health of employees. Niemela et al. (2002) found out that there is decrement in work performance when temperatures are high, and low temperature has relation to performance of manual tasks. Office design encourages employees to work in a certain way by the way their work stations are built. Spatial layouts contribute a lot towards how the employees perform their tasks (Al- Anzi, 2009). Closed office floor plan, which may consist of each employee having a separate office of their own or a few people in each office, allows employees a greater amount of privacy than open plan office layout. It allows employees to work in peace and quiet, keeping them focused on their tasks without a lot of distraction. It also offers employees a thinking frame and creativity without much distraction. According to McCoy and Evans (2005) the elements of physical work environment need to be proper so that the employees would not be stressed while doing their job. Physical elements play an important role in developing the network and relationships at work. All in all, the physical work environment should support the desired performance. Vischer (2008) stressed that conducive workplace environment should be prioritized as it provides support to the employees in carrying out their jobs. It should be conducive enough to enable performance of tasks by employees.

Workplace Reward

Rewards can be financial and non-financial (Luthans, 2000) and they can be utilized positively to enhance performance of employees. Rewards can also be intrinsic or extrinsic. Intrinsic rewards are inherent in the job itself along with what the employee enjoys as a result of successfully completing a task or attaining his projects. Extrinsic rewards on the other hand are external to the task of the job, like pay, work condition, fringe benefits, security, and contract of service A reward package can influence employee performance; it can help to increase employee performance by enhancing employee skills, knowledge and abilities in order to achieve organizational objectives (Ajila and Abiola, 2004). Studies have revealed that if an organization fails to reward employees, it will decrease employee performance and that an efficient reward 9 system can be a good motivator but inefficient reward system can lead to demotivation of employees in terms of low performance, internal conflicts, absenteeism, high turnover, lack of commitment and loyalty and lateness (Heng, 2012). Organizations therefore need to set up efficient reward systems that enhance employee performance leading to attaining organizational goals.

Management / Leadership Style

The developments and changes made by individuals and group are associated with the presence of a leader. Every manager uses a particular leadership style which has a significant impact on employee morale. Consequently, the employee morale will affect their performance. Storey (2004) asserts that transformational leadership style which is composed of ideals, influence, inspirational motivation, intellectual stimulation and individualized consideration is one of the most effective leadership styles. These components of transformational leadership provide high performance and impact highly on employee satisfaction. There is also pragmatic oriented leadership which emphasizes on leadership of equality between the leaders and subordinates. All members of the organization have equal and same law, information and perspective and the role of the leader is facilitating the formation of the organization (Duckett and Macfarlane, 2003). This kind of leadership is most successful. Successful leadership is therefore very vital for the effectiveness of any organization and employee performance. Leadership style affects a range of factors such as job satisfaction, performance turnover intention and stress and so contributes to organizational success. Managers need therefore to adopt appropriate leadership behavior in order to improve employee performance. 2.3.4 Training and Development Armstrong (2006) states that development is an unfolding process that enables people to progress from a present state of understanding and capability to a future state in which higherlevel skills, knowledge and competencies are required. It takes the form of learning activities that prepare people to exercise wider or increased responsibilities. Tzafrir (2005) asserts that training is an important element in producing the human capital. It provides employees with the skills, abilities and knowledge required by the post. The objective of training is to achieve a change in the behaviour of those trained. This means that the trainees shall acquire new 10 manipulative skills, technical knowledge and skills on the job in such a way as to aid in the achievement of organizational goals. Training helps to reconcile the gap between what should happen and what is happening between desired targets or standards and actual levels of work performance (Armstrong, 2006). Training need is any shortfall in employee performance, or potential performance which can be remediated by appropriate training. There are many ways of overcoming deficiencies in human performance at work, and training is one of them. Employee performance may be seen as the result of congruence between training and development and organizational goal.

Work Life Balance

Work life balance may refer to one of the following: organizational support for dependent care, flexible work options and family or personal leave (Estes and Michael, 2005). Work life balance employment practices are concerned with providing scope for employees to balance what they do at work with the responsibilities and interests they have outside work (Armstrong, 2006). By so doing, they reconcile the competing claims of work and home by their own needs as well as those of employers. Work life balance policies can lower absence and help tackle the low morale and high degrees of stress that can lead to underperformance since the employees get tired of juggling work and life responsibilities. Many researchers have agreed on important role of work life balance as it is related with employees’ psychological well-being and overall sense of harmony in life (Clark, 2000). Balanced work-life is associated with increased job satisfaction and organizational commitment. Employees’ work life experiences deepen their role-related engagement which is related to organizational performance improvement.

Employee Performance

Employee performance is defined as whether a person executes their job duties and responsibilities well. Many companies asses their employee's performance on an annual or quarterly basis in order to define certain areas that need improvement. Performance is a critical factor in organizational success. Job performance relates to the act of doing a job. Job performance is a means to reach a goal or set of goals within a job, role, or organization (Campbell, 1990), but not the actual consequences of the acts performed within a job. Campbell (1990) affirms that job performance is not a single action but rather a “complex activity” (p. 704). Performance in a job is strictly a behaviour and a separate entity from the outcomes of a particular job which relate to success and productivity. It is related to the willingness and openness to try and achieve new aspects of the job which in turn will bring about an increase in the productivity of the individual (Sinha, 2004). However, Howell and Hall-Merenda (1999) has a different point of view regarding this employees’ performance. Howell stated that employees’ performance is all about social standing which also related to the point of view that being stated by Greenberg and Baron (2000).Greenberg and Baron had stated that it gives a positive impact on the relationship in between of the job performance and also the vocation. In the organization, especially for profit orientation organization, employee’s performance is considered as the most important aspect in generating continuous profit. Employee’s performance is determined during job performance reviews with the consideration factors of time management, leadership skills and productivity to assess each employee on an individual basis. According to Rabey (2007), she stated that a supervisor could be a trainer to the employees as the trainer will assist the employees in getting their job done by guiding the employees on the operational process especially when it comes to a new operational procedure.

Factors that Affect Employee Performance

There are many factors that affect employee performance at the workplace. These factors can affect performance of employees individually and collectively. They can also have either positive or negative impact on employee performance.

Motivation

Dessler (2001) defines motivation as the intensity of a person’s desire to engage in some activity. Motivation can be intrinsic or extrinsic. Extrinsic motivation refers to the external factors which can be measured in monetary terms e.g. salary and benefits, promotion and 11 disciplinary. Extrinsic motivation has immediate and powerful effect but does not last long. Intrinsic motivation refers to external factors e.g. responsibility, freedom to act, scope to use and develop skills and abilities and challenging work and opportunities for development. Intrinsic motivation lasts longer since they are concerned with quality of working life. Nel et al. (2001) assert that a motivated person has the awareness of specific goals that must be achieved in specific ways; therefore his efforts are directed at achieving such goals. According to Mullins (2006) motivation is a key ingredient in employee performance and productivity. Though people might have clear work objectives, the right skills and supportive work environment, they will not get the work done without sufficient motivation to achieve those work objectives. He added that motivated employees are willing to exert a particular level of effort, for a certain amount of time, toward a particular goal. Motivation represents the complex forces and needs which provide the energy for an individual to perform a particular task. A motivated employee is always conscious of the goal to be achieved and directs his efforts towards attaining it. Organizational Culture Organizational culture is a system of shared beliefs about what is important, what behaviors are important and about feeling and relationships internally and externally (Purcell et al., 2003). It can enhance employees’ performance if what sustains it can be understood. Thus, the culture of an organization acquaints employees with the firm’s history as well as current methods of operation that guide employees on expected and accepted future organizational behaviors and norms. Bullach et al. (2012) posit that the effects of organizational culture can be summarized as; knowing the culture of an organization allows employees to understand both the organization’s history and current methods of operations. Secondly, organization culture can foster commitment to the organization’s philosophy and values. Thirdly, organizational culture, through its norms, serves as a control mechanism to channel behaviors towards desired behaviors and lastly, certain types of organizational cultures may be related directly to greater effectiveness and performance than others.

Organizational Commitment

Organizational commitment is a situation whereby an employee is in line with a specific organization as well as with the goals and wishes to maintain membership in the organization 12 (Robbins and Judge, 2001). Studies have shown relationship between organizational commitment was significantly associated with productivity in Auto Component Industry. Riketta (2002) pointed out that the organizational commitment has a great impact on almost all behaviors related to the organization like; staying with organization, attendance and performance. Organization commitment corresponds with important factors such as improvement of working efficacy, job movement reduction, and more satisfaction both in organizational and professional levels (Elias, 2005). Related studies have shown that higher levels of commitment in employees result in more satisfaction and motivation and decrease the probability of leaving the organization (Huang, 2006). Furthermore organization commitment probably affects working behaviors of employees such as their observable attitudes, the judgments of ending, and their involvement in professional groups. Organizational commitment corresponds with positive behaviors which are useful for the organization. A committed employee tends to keep on his membership and shows tremendous effort not because of his own advantage but for the belief that he must act in this manner because that is what is expected of him.

Workplace Environment and Employee Performance

Various studies have been carried out on workplace environment as a factor that determines employee performance. In his study, Tamessek (2009) analyzed the extent to which employees perceive their workplace environment as fulfilling their intrinsic, extrinsic, and social needs and their need to stay in the organization. He also analyzed the impact of perception of workplace environments on employee commitment and turnover in the organization, he concluded that if the employees are provided with enabling workplace environmental support, they will be highly satisfied and show high level of commitment towards their organization and hence low turnover rate. A research by Roelofsen (2002) indicates that improving the working environment reduces complains and absenteeism while increasing productivity. Better physical workplace environment will boost the employee and ultimately their performance. A study done by Chevalier (2004) revealed that when environmental supports are sound, employees are better equipped to do what is expected of them. Chandrasekar (2003) in her study found out that workplace environment plays a big role in increasing employees’ performance. Findings by Ajala (2012) indicated that workplace environmental elements such as sufficient light, absence of noise, proper ventilation and layout arrangement substantially increase employees’ 13 productivity. Khan et al. (2011) investigated the impact of workplace environment and infrastructure on employees’ performance from the education in Pakistan and concluded that incentives at workplace had a positive impact on employees’ performance. Hameed and Amjad (2009) in a survey of 31 bank branches showed that comfortable and ergonomic office design motivates the employees and increased their performance substantially. Aisha et al. (2013) in their study “Effects of Working Ability, Working Condition, Motivation and Incentive on Employees Multi-Dimensional Performance” found that the variables incentives, motivation and working conditions have a significant effect on employee performance in an Indonesian university. It is evident from these studies that a good workplace environment plays a very vital towards increasing performance of employees in general.

2.2 THEORETICAL FRAMEWORK

Many theories have been advanced to explain the link between workplace environment and employee performance. The study is grounded on two theories i.e. The Two Factor Theory and The Affective Events Theory.

Herzberg Two Factor Theory

The Two Factor Theory was advanced by Frederick Herzberg in 1959. This study is grounded on this theory that has been explored by various scholars to explain the relation between workplace environment and employee performance. Herzberg defined two sets of factors in deciding employees’ working attitudes and levels of performance, named motivation and hygiene factors (Robbins and Judge, 2007). He stated that motivation factors are intrinsic factors that will increase employees’ job satisfaction; wile hygiene factors are extrinsic factors to prevent any employees’ dissatisfaction. The theory pointed out that improving the environment in which the job is performed motivates employees to perform better.

Herzberg’s theory concentrates on the importance of internal job factors as motivating forces for employees. He wanted to create the opportunity for employees to take part in planning, performing and evaluating their work (Schultz et al., 2010). The content of the theory has been widely accepted as relevant in motivating employees to give their best in organizations. Further research has proved that the employee is more motivated by intrinsic factors as captured by Herzberg’s motivator needs than anything else. There are however other schools of thought that share a different opinion from Herzberg’s. One such scholar is King (2005) who sought to eradicate and evaluate five distinct versions of the Two Factor theory. He concluded that two versions are invalid as they are not supported by any empirical studies. However, the two factor theory can be said to be a truly outstanding specimen 7 for it to last a long period of time without disapproval. It has been a great influence on the body knowledge about workplace motivation and performance. It has generated a great amount of further research by many scholars. It draws its thought from Maslow’s famous hierarchy of needs theory and human behaviour. However due to changes in organizational environment and the advancement in technology, it is necessary to develop new methods of analysis. This will provide new ways of conducting research and revaluating the results of existing findings. 2.2.2 Affective Events Theory The theory was advanced by Howard M. Weiss and Russel Cropanzano in 1996 (Phua, 2012).

The Affective Events Theory

explains the link between employees’ internal influences and their reactions to incidents that occur in their work environment that affect their performance, organizational commitment and job satisfaction. It proposes that positive-inducing as well as negative emotional incidents at work have significant psychological impact on employees’ job satisfaction. The impact results into lasting reactions exhibited through job satisfaction, organizational commitment and job performance. According to Ashton-James and Ashkanasy (2005) research to date has supported the central tenets of AET that workplace events trigger affective responses in employees and that these affective responses influence workplace cognition and behavior. They assert that AET is both empirically and theoretically, restricted to events that are internal to the organization. The theory also considers how specific events at work other than job characteristics lead to specific emotional and behavioral responses (Briner, 2000). He posits that these events or things that actually happen at work affect the well-being of employees thus affecting their performance.

CHAPTER SUMMARY

In this review the researcher has sampled the opinions and views of several authors and scholars on work environment and employee performance. The works of scholars who conducted empirical studies have been reviewed also. The chapter has made clear the relevant literature.