This chapter focuses on the background of the study, particularly about the creating better employees’ performance through employees’ engagement in Syarikat Faiza Sdn Bhd.
Transformasi Nasional 2050 or TN50 is an initiative to plan the future of Malaysia in the period 2020 to 2050 by our Prime Minister Datuk Seri Najib Tun Razak. The roadmap will prepare and complement the country’s economic structure after it achieves the high-income and developed nation status by 2020. In order to achieve the vision of becoming a developed nation, we should strive to be amongst the top countries in the world in terms of economic development and citizen well-being.
Every developed and developing country emphases on human capital development because it is a key element in country and organization in order to increase the productive as well to sustain competitive advantage. Under the New Economic Model, The Human Capital Development (HCD) Strategic Reform Initiative (SRI) has been proposed whereby the SRI focuses to enhance the human capital capabilities and the needs of the 12 National Key Economic Areas (NKEAs).
Employees’ engagement acts as a potential factor for organizational performance because the employees’ goals and objectives can be achieved when they have a good work environment (Macleod, D. and Clarke, N., 2012). Besides, employee engagement is also a management concept that determines how enthusiastic an employee is on his work that can affect a positive outcome. According to Teng et al. 2007; Salanova ; Schaufeli (2008), the engaged employees be an important source of organizational competitiveness. This is because when employees are engaged at work, they feel connect with the company and believe the work they are doing is important that lead to productivity. Being engaged simply means that you are fully involved and interested in the work so that it really holds your attention and inspires you to do your best.
According to Bakker et al. (2008) ; Towers Perrin (2009), those who give full discretionary at work and are highly dedicated to their job are engaged employees, while disengaged employees are those who are demotivated from work and not enthusiastic at work. The significance of engagement employees affects productivity, profitability, employee retention and quality of customer services (Zigarmi et al. 2009; Xanthopoulou et al. 2009). Other article was highlighted by Healthcare People Managers Association and NHS Employers (2014) entitled ”Meeting the Challenge: Successful Employee Engagement in the NHS” shows engagement is correlated to individual and to organizational success. Staff with higher levels of engagement has lower levels of absence. This is because they are less reporting suffering from work-related stress. Therefore, the link to turnover with engaged employees being less.
Besides that, the ability of organization to achieve high performance levels and superior business result is related with the organization’s capacity to manage their employee engagement. This is because the engaged employees will be loyal to company, and normally perform better and are more motivated. There is a significant link between employee engagement and profitability towards organization indirectly. An emotional connection which is positive impacts their attitude towards the company’s stakeholder, therefore improves company productivity and their performance.
On the other hand, there are some barriers that inhibit employees’ ability to engage. The key factors like bureaucracy and heavy workloads is supported by Lockwood (2007) stated that bureaucratic behavior in organizations prevent the potential of an organization to engage its employees. These findings are supported by research Roffey Park Institute found that workload pressure with poor management were key barriers to engagement. Despite of this, some factors of employee’s engagement have been identified in order to increase their performance in the workplace.
According to the article by The Edge Financial Daily (2010), Malaysians Human Resource Managers stated employee engagement as a crucial factor in employee retention. This is because employee retention as a ”systematic effort by employers to create sustainable environment that could encourage employees to remain employed by having policies and practices in place that address their diverse needs”. Moreover, employees are an asset for organization thus it is important to understand of their needs. Besides engagement, training and development are recommended by Malaysian Human Resource Manager for retaining employees. This is because employees need appreciation, thus organization has to invest towards them and it is basically about development. Organization has to engage employee at different levels by having different development plans so that the goals of the organization can be achieve.
However, recent trend shows that many organization did not know how to retaining their employees. According to article from Sinar Harian on 30 July 2017, in ” Belia Pentingkan Minat Untuk Tentu Masa Depan” stated that young employees are more likely to quit from their job because they want to continue their career based on their interest even though they work with well establish company. Furthermore, employees’ retrenchment increases because some company offered them lower level position that did not suit with their qualification. This statement was supported in article by Astro Awani on 3rd February 2016 as said by Malaysian Employers Federation (MEF) Datuk Shamsuddin Bardan “Employers right now are focusing on those who are willing to start at lower positions regardless their qualification. They are prioritising those who are willing to enter at the lower level with a minimum salary. Employers also will look to employee’s motivation and dedication, and if the worker fulfils the needs of the employer, then their position will be elevated faster and retain.
Other articles also stated nearly seven out of 10 (66 %) of workers in Malaysia are planning to quit their jobs in the next 12 months to advance in their respective careers. (Utusan Online, Ramai Pekerja Malaysia Rancang Berhenti Kerja, 23rd January 2014). Based on Randstad 2013/2014 Work World Report 2014, Malaysian workers’ attitude was similar to that of workers in Singapore (70%) compared to other country in Australia (57 %), China (61 % ), New Zealand (63 %) and India (64 %) (Utusan Online, Ramai Pekerja Malaysia Rancang Berhenti Kerja, 23rd January 2014). It is to note that employers need to improve their way of attracting talent, strategy and retaining employees and, most importantly, addressing the high rates of turnover.
Furthermore, according to articles Key Insights to Attract, Reward and Retain Talent in Malaysia, survey has been done by Aon Hewitt’s that was highlighted in HR in Asia on 3rd December 2015, stated that “Malaysia recorded the second highest involuntary turnover rate at 6.0% and third highest voluntary turnover rate at 9.5% this year in South East Asia”. Such example why the employees leaving from their job is because of not feeling valued, no career advancement, company cannot economic condition and many more. The impact of highly turnover is costly for employers to bear. Thus, the employers need to take serious action and a solid solution. Based on this survey, the reason why employees disengaged are because of they get better opportunity, work life balanced and further studies meanwhile the factors that can retained employees from quit their job is by increasing their salary above market, appreciation from the leaders and improved work life balanced.
Therefore, this study is to identify or examine what are the antecedents or drivers of employees’ engagement that lead to employees’ performance at Syarikat Faiza Sdn Bhd. This study will measure the relationship of work environment, communication and incentives ; rewards on employees’ performance. Besides that, it also will identify which is the most influential variable of employees’ engagement give impact on employees’ performance. The specific research questions and objectives of this study are outlined in the following section.
The objectives of this research are to create better employees performance through employees engagement in Syarikat Faiza Sdn Bhd. Some factors had been identified to measure the relationship towards employees’ engagement. Therefore, this study attempt to accomplish specific objectives as below:
i.To determine whether work environment have an impact on employee performance.
ii.To examine whether communication have an impact on employee performance.
iii.To examine whether incentives ; rewards have an impact on employee performance.
iv.To identify what is the most influential variable on employees’ performance?
This study will attempt to answer some research questions in order to achieve the above mentioned objectives:
i.Does work environment have an impact on employee performance?
ii.Does communication have an impact on employee performance?
iii.Does incentives have an impact on employee performance?
IvDoes the most influential variable give high impact on employees’ performance?
1.5Scope of the Study
The study was conducted about ………………… starting from …………. until …………. The study will be conducted in Syarikat Faiza Sdn Bhd as the targeted employees. The focus of this study to identify what is the most influential factors that contribute employees’ engagement.
1.6Significance of the study
This study focus on the factors contributes to employees’ engagement in the workplace. This study want to know what is the correlation between engagements with employees’ performance. This is because, those who feel positive towards their jobs will optimistic and more engaged in their work, thus it give a benefit towards organization indirectly. Besides, the positive emotions that lead positive work outcomes will reflect their attachment to their organization and have a lower tendency to quit. Thus, researcher hopes this study will give an idea to the management of organization in creating the culture that can improve the level of its employee engagement.
1.7Definition of Key Terms
The terms used in this study are defined for ease understanding.
Engagement is not just simply satisfaction or commitment. According to Suff (2008), Vodaphone defines employee engagement as ”an outcome ‘measured or seen as a result of people being committed to something whereby a very best effort that is willingly given”. Furthermore, Kahn (1990) defined engagement in terms of psychological state as people employ and express themselves physically, cognitively, and emotionally during role performance.
According to Bindu ; Gunaseelan (2012) , a work environment can be identifies as the place that people work, whereby it is the social and professional environment that people will interact each other. The work environment has a significant impact towards employee productivity and performance. Besides, work environment also encompasses the physical setting like equipment, the characteristic of job like work overload, the organizational features (e.g. culture) (Briner, 2000). It means that, it is the interrelationship among employees, employers and the environment works that including the technical, human and organizational environment.
Communication refer for exchanging information, opinions, making plans, executing decisions, sending and fulfilling orders and sales (Blalock, 2005; Alyssa, 2006; Kotler, 2006) . When communication stops and has a barrier, organized activity ceases to exist. In addition, business organization are made up for people, thus good communication plays a vital role (Blalock, 2005). It is supported by Robert Kent, former dean of Harvard Business School stated, ”in business, communication is everything”. Moreover, Brewster, Sparrow and Vernon (2007) summarized that communication gives a significant in HRM and the effective of communication may increase engagement, job satisfaction, development of cooperation between organizational stakeholder, facilitate teamwork and improve development of strategies.
According to Robbins (2001), incentive system can be divided into the intrinsic rewards and extrinsic rewards. Intrinsic reward is participation in decision making, job autonomy, and personal growth. Meanwhile, extrinsic rewards are the financial rewards like bonus, and non-financial rewards such as welfare holiday. Basically, in order to manage individual performance in organization, it assessing performance and enhance incentives, whereby Wang (2007) stated that effective performance is seen as the result of the interaction between individual ability and motivation. Therefore, it is supported by Condly (2003), whereby incentives can increase work performance if they are carefully implemented-measure performance.
Employees’ performance refers to how well employees or workers accomplish their job. According to Sinha (2001), employees’ performance defined as willingness and openness of the employees itself in doing their job.
Retention means initiatives done by the management in order to prevent employees from leaving the company. It is the effort by employer to keep desirable workers in order to meet business goals (Frank et.al., 2004). It means that it is an effort to maintain good working environment which will support current staff to stay longer in the company.
According to Kreitner (1995), motivation refers to the psychological process that creates individuals behaviour and direction. Higgin (194) derives motivation as internal drive to satisfy an unsatisfied need. Meanwhile, employee motivation is the level of commitment and creativity of employees that they bring into their job.
Productivity refers as a measure of efficiency of a person, machine, and system in converting inputs into outputs. Productivity is computed by dividing average output per period by the total costs incurred or resources consumes in accomplish one job .According to Mali 1998) productivity is how well resources being used in the right mix to attain organizational goals. Employees’ productivity referred as assessment of the efficiency of workers or group of workers.
This chapter will further explain the relationship between factors contribute to the employees engagement, theories of engagement and the review of the literature on the past findings. Finally, a conceptual framework is illustrated to further discuss about the finding and results.
There are a lot of researchers that had come out with their own research about employees’ engagement in the workplace. Employee engagement as research is not new because many studies were carried out. Basically, it is about a management concept that determines how enthusiastic an employee in the workplace that creates a positive influence among his co-workers. Nowadays, employees’ engagement becomes a hot topic that put into significance into HR agenda. However, it become a challenge among organization to build a culture that enable employees to engage in their work. This is because organizations need to put into the practice the theory of engagement so that they can get benefit from employees who are willing to go extra mile and contribute a better performance.
In order to achieve the objective of engagement, the organization need to identify the factors that give an impact towards it. According to Levinson (2007), the organizational culture is needed whereby the collaborative leadership participates to drives engagement. It was supported by Macey and Schneider (2008) proposed that the nature of an organization’s leadership and management can have an indirect impact on engagement. Apart from that, a competitive base pay ; rewards, good company culture and regularly involvement in various task roles will retain employees’ longer,” said Dr. Andrew Chamberlain, chief economist of Glassdoor quoted in article “Uncovering the Real Reasons on Why Employees Quit Jobs”. Furthermore, employees may engage in organization if they understand the organization’s values and goals. Thus, it will lead positive outcome towards organization’s performance. Therefore, several instruments have been identified to measure employee engagement included work environment, communication, incentives and age.
Employees’ engagement and ”work engagement” are used interchangeably whereby work engagement refers to the relationship of the employee with their work, while employee engagement is the relationship with the organization (Schaufeli, W.B., 2013). Furthermore, employee engagement is about the act of employee being involved, enthusiastic with their work (Seijts et al., 2006; Harter et al., 2002). In other words, engaged employees perform better, retain to company and less likely to turnover. They usually experience job satisfaction and having positive attitudes and emotions towards their work.
The concept of employees engagement were introduced by Kahn (1990) defines personal engagement as ”the harnessing of organization members to their work roles and employee express by physically, cognitively and emotionally during role performance. It means that, employees engagement is related with employees’ behaviours in the workplace whether to engage or disengaged. In contrast with employees engagement is personal disengagement that people withdraw and defend themselves physically, cognitively and emotionally during role performance. Kahn (1990) also pointed out that the cognitive aspect of employee engagement concerns about employee’s belief regarding their organization. Meanwhile, the emotional aspect focus how employees feel about these three factors (physically, cognitively and emotionally) either it will lead to positive or negative attitudes towards the organization. Based on Kahn theory, there are three psychological conditions associated with engagement which are psychological meaningfulness, safety and availability. Psychological meaningfulness is when the workers feel valued and the job is worthwhile, safety is when the workers are feeling safe and trust with their organization environment and availability is when workers are physically available to do job. Kahn found that employees become engage when these three conditions are fulfilled. This approach has been empirically tested by using a sample of 203 employees from a large insurance firm where they found out that engagement was positively correlated to meaningfulness (r = 0.63), availability (r = 0.29) and safety (r = 0.45) (May et al., 2004). Psychological meaningfulness displayed the strongest relation to engagement compared to another two approaches.
The development of Kahn definition of employees’ engagement is continued by Maslach and Leiter (1997) where they introduced Burout Antithesis Approach. This approach defines engagement as people’s relationship to their jobs as a continuum between negative experiences of burnout and positive experiences of engagement (Maslach & Leiter, 1997). Meaning that, employees who have high levels of engagement are characterized by low burnout level. This approach support Kahn theory but at the same time expanding the framework of employees engagement into energy, involvement and a sense of efficacy. In spite of that, employees’ engagement becomes a serious topic that has been discussing by human resource practitioner. According to Rothbard (2001), define employees’ engagement as two dimensional and motivational construct of attention and absorption. Attention is a cognitive ability on how the employees complete the task while absorption is the employees’ intensive ability to focus on their work.
Soldati (2007) stated that it is rare to find article in management press without mention of engagement and how to enable it. This is because there is no clear agreed definition of engagement and many researchers describe the term in different ways. Nevertheless, according to Levinson (2007) and Cleland et al, (2008), the employee engagement in private, business performance have achieve a high awareness where engaged employees are the backbone of good environment where people are industrials, ethical and accountable. Therefore, the result of engagement can affect employees’ attitude, absence and turnover levels that indirectly related with productivity. This research have been supported by Baumruk (2006) which is the organizations with higher engagement levels can lead to lower employee turnover, and better financial performance. The example of research by Tower Perrin (2007) found that the highest percentage of engaged employees contribute the higher operating income by 19% and their earnings per year increased by 28% years to year. Furthermore, if the organizational culture has a high engaging organization culture, it will also have an attractive employer brand, being an employer of choice which can retains the best talent (Martin & Hetrick, 2006). This because, by building culture will enables employees to engage in their work while organization will achieve better financial performance. However, the study conducted by Gallup (Flade, 2003) found that more than 80% of British employees are not truly committed to their work, and a quarter of the result are dissatisfied or known as ”actively disengaged’. In addition, the employees could be divided into three types based on their level of engagement as been proposed by Gallup (2006) which are the engaged, not engaged and the actively disengaged.
The Figure 1.0 below shows the summary ”Three Types of Employees”.
Besides, some of the terms of engagement have a conflict in academic literature according to the study by Macey and Schneider (2008) in their article ”The Meaning of Employee Engagement’ whereby it defined in psychological state, behavioural, and attitude towards one’s work (trait). Macey and Schneider (2008) also split engagement into three areas and propose that ”trait engagement” that can be reflected in the individual’s state engagement which leads to ‘behavioural engagement”.
To conclude, there is no standard definition of employees’ engagement but a variety of similar about what it is and what it could mean. The most inspired definition of engagement comes from Kahn in 1990. Kahn (1990) defined it in terms of a psychological state as ‘the harnessing of organization members selves to their work roles, whereby people employ and express in physically, cognitively and emotionally during their performance. This statement was supported by May et al. (2004) which has tested Kahn theory found that saying “in engagement people employ and express themselves physically cognitively and emotionally during role performances”. This is because, the engaged individuals will fully committed in terms of time and effort to contribute successful outcome towards the organization.
2.3Theories of Engagement
Based on the study and empirical research that has been done by the previous researchers, a unique theoretical framework for work engagement does not exist. Even though lots of perspectives have been identified in various aspect, but it cannot integrated into one conceptual model. Based on research finding 65% researcher has used JD-R model to interpret employees’ engagement followed by social exchange theory 30% and other following theories about 15%. Therefore, in this research, we adapt JD-R model to identify the relationship of drivers’ employees’ engagement on employees performances.
2.3.1 Job Demands – Resources (JD-R) Model
Lots of theoretical frameworks has been identify in the literature to studying employees engagement. There are several famous theoretical framework that has been usually used by the researcher to measure employees engagement such as Kahn theory (1990) Need satisfying approach, Maslach and Leiter (1997) Burnout antithesis approach, Bledlow, Schmitt, Frese and Kuhnel (2011) Affective shift model, Saks (2006) Social exchange theory and Bakker and Demerouti (2008) Job Demand Resource model (JD-R). All theoretical frameworks have difference perspective of engagement. However, the JD-R model are widely used in organizational studies since it emergence and the empirical study support in explaining the psychological mechanisms involved in engagement. Research by Bailey et.al. (2015) shows 38% of studies use JD-R model as a theoretical framework of engagement. It can be said that, studies using this model give clear picture of the links between job characteristics and work performance via employees’ engagement. Since this study want to measure the drivers of employees engagement to employees performance, therefore, this research will adapt Job Demand-Resource Model to clarify employees’ engagement deeper.
Job Demand Resource (JD-R) model focus on categorizing job characteristic into resources and demands which is useful to influence employees’ engagement (Bakker and Demerouti 2008). The model assumes two assumptions which is job resources act as a motivational process which leads to engagement and higher performance. Second is job resources lead to high motivation when employees are confronted with high job demands (Bakker ; Demerouti, 2008). They further drew from Xanthopoulou et al. (2007) who expanded the JD-R model by showing that job and personal resources are mutually related. Based on this theory, characteristics of work environment can be divided into two categories which is job demands and job resources. Job demand consists of physical, social or organizational aspects of the job that require sustained physical or psychological effort and related with certain physiology and psychological costs. It can be seen in terms of high work pressure, and uncomfortable physical environment. Bailey et al. (2015) found out that results of studies examining the relationship between engagement and job demands are inconclusive with some studies finding a positive association between engagement and demands (DeBraine ; Roodt, 2011), others no association (Gan ; Gan, 2013) and others observing a curve linear relationship (Sawang, 2012). While job resources are defined as physical, social or organizational aspects of the job that will reduced job demand, be functional in achieving work goals and improve or stimulate personal growth and motivation (Schaufeli ; Bakker, 2004).
Figure 2 : The JD-R Model of Work Engagement
Source : Bakker ; Demerouti (2007)
Job Demands-Resources (JD-R) originates from two processes which are job demands lead to burnout and job resources lead to engagement. Subsequently, the energetic process implies a process of wearing out in which job demands exhaust teh employees’ energy backup (Scaufeli & Bakker, 2004, p.296). Job demands may lead to fatigue, burnout and health problems where increase job demands will increase job problems. In contrast, job resources may foster intrinsic and extrinsic motivational role that is positively relate to work engagement (Difeng Yu, 2013). Researcher state that motivational process assumes the indicators in job resources will lead to engagement. In motivational process, it divided into two processes which is intrinsic and extrinsic motivational role. The intrinsic motivational role act to fulfil human basic need while the extrinsic motivational roles play to complete basic human need in achieving work goal (Deci & Ryan, 1985). In contrast, extrinsic motivation which is work environments will support and increase employees engagement. These roles give positives outcome to engagement. It means that, the development of employees’ engagement can be measured through the antecedents from job resources (Saks, 2006).
Several studies showed a positive relationship between job resources and engagement. Therefore JD-R model identifies several antecedents or drivers of job resources in achieving employees’ engagement. Job resources energize employees, encourage their persistence and make them focus on their efforts. According to Demerouti et. Al. (2001), job resources include performance feedback, rewards, communication, job control, participation, working environment, job security, supervisor support and etc. This drivers of employees engagement has been studied by three different occupational fields, which are human services (teachers & nurses), manufacturing industry and transportation (air traffic controller). The results of the study show that the following job resources are positively related to engagement. Further, a study in four different Dutch service organisations which are insurance company, pension fund company, Occupational Health and Safety Service and a home care institutions indicates a negative relationship to disengagement between three job resources (performance feedback, social support and supervisory coaching) Schaufeli & Bakker (2004). Another study from Hakanen, Bakker & Schaufeli (2006) for 2000 Finnish teacher’s shows evidence that job control, information, supervisory support, innovative climate and social climate were all related to positive engagement. Many existing study have agreed and stated that more job resources more autonomy, more support and feedback from supervisor and colleague, more development opportunities will cause better employees’ engagement.
Since JD-R model has been used widely to derive employees engagement, many Human Resources practitioner body like Aeon Hewitt, Burke and the Institute of Employment Studies come out with their general antecedents’. Aeon Hewitt is one of bigger and world’s top global human capital and management consulting firms that providing a complete array of outsourcing and insurance brokerage services (Aon Fact Sheet, 2012). The employees’ engagement model by Aeon Hewitt has been tested over and over across millions of employees in different companies and industries. The Aeon Hewitt’s model of engagement consists of six categories that can potentially drive employees’ engagement (quality of life, work, people, opportunities, total rewards and company practices). These six categories have their own subcategories to define employees’ engagements. Apart from that, Burke model of employees’ engagement derives general antecedents of engagement which consist of six components (company, manager, work group, job, career and customers (Employee engagement model, 2011). Besides the major six components, Burke’s model introduces various sample drivers of employees’ engagement. These is because, the drivers of engagement were varying across industry and organization. Lastly is the study from Institute for Employment Studies (IES). This institute was established in 1969 and one of the UK’s leading independent institution for research in employment, labour market and human resource practices. According to Robinson, Perryman, & Hayday’s (2004), indicate that feeling valued and involved is the key driver of engagement. Feeling valued and involved consists of several components such as communication, pay and benefits, health and safety, career advancement and etc. To conclude, the evidence and results found by these three institutions in identifying drivers of employees engagement, shows different organization or occupational fields will have different drivers of employees engagement even within the organization but different job task and function is also will have their own drivers.
2.4Drivers contribute to Employees Engagement in Private Sector (Retail Industry)
From the literature review, several drivers have been identified that affect the employees’ engagement in the workplace that can lead to employees’ performance. Therefore, in this research we adapt three drivers that influence employees’ engagements which are work environment, communication, and incentives & rewards
In order to have a better employees’ performance, the workplace environment plays a vital role. This is because; Chandrasekar (2001) stated that employees will get an impact either the negative or positive outcomes due to workplace environment. Hasun ; Makhbulk (2005) have researched that there are some other factors of work environment that had changed due to the changes in several factors like social environment, information technology and the flexible ways of organizing work processes. The performance of employees will be increased and better and it is supported by the research by Boles et al. (2004) whereby when the employees are physically and emotionally have the desire to work, their performance outcomes will be increased. Besides, they stated that by having a proper workplace environment, the number of absenteeism can be reduced and it leads to employees’ performance. Burri & Halander (1991) have stated that by applying a proper workplace environment strategy like the machine design, jib design and environment design, it will give positive effects.
Furthermore, there are number of research accepted that the work environment has an impact either positive or negative towards the employee performance. Other article was highlighted by Bindu A. O. & Rupa G. (2012) entitled A study on the impact of Work Environment on Employee Performance, whereby the scholar strongly stated that work environment gives influences the extent to which employees are engaged in their work and committed to the organization. This is because highly engaged employees produce extraordinary results, meanwhile disengaged employees produce mediocre results. Therefore, it is crucial to study the impact of work environment in organization towards the performance of its employee.
Bindu A. O. & Rupa G. (2012) also stated that the workplace environment impacts morale, productivity and engagement. This because in majority of industry, the workplace environment is unsafe and unhealthy. Poorly design workstations, lack of ventilation, excessive noise and insufficient safety are some of the examples of it and people who working in such environment are easily affected to occupational disease and it gives impact on employees’ performance. Therefore, the productivity will decreased and how extent they engage with the organization influences the level of how they can retain in company, and produce better job productivity.
Besides, Pech and Slade (2006) argued that the employee disengagement increased drastically and it is needed to take an action at workplace in order to make a positive influence over the workforce. They stated that it is needed to focus on the symptoms of disengagement like distraction, poor decisions and high absence rather than the root causes. The working environment is just a key root affect employees’ engagement or disengagement. Meanwhile, Roelofsen (2002) stated that by improving the working environment can reduces absenteeism and increasing productivity indirectly.
Communication is approach which messages are passed across from one to another. Effective communication is the process that transmitted in way that the hearer successful receives it. Therefore, an engagement process is bidirectional; not a liner process. Nowadays, researcher also found that some employee disengaged due to communication and they turnover by leaving the organization (Tett & Meyer, 1993). Therefore, communication becomes an antecedent to employee turnover.
In the context of communication, according to Iyer and Israel (2012), internal communication is one of key driver of employee engagement. It supported by Smidts, Pruyn and Van Reil (2001), internal communication facilitates interaction between organizations and employees which create social relationships. Cropanzano and Mitchell (2005) agreed that it lead to increase productivity and drive positive employee attitudes. In order to retain a satisfied and motivated workforce, senior leaders and managers must know how to meet individual employee needs. Therefore, the organization can use an approach to foster satisfied and motivated employees through internal communication (Ryynanen et al. 2012; van Vuuren, de Jong, and Seydel 2007). Hence, according to Ryynanen et al. 2012; Zahay and Peltier (2008), internal communication plays an integral role in the management function because it can provide value to an organization’s internal external customers. Besides, the senior leaders and managers within organization need to communicate frequently with employees in order to establish a trust and performance goals (Smith,2011). Thus, communication also have a challenging process which strengthen the connection between an organization and its stakeholders especially employees (Gray and Robertson 2005; Mazzei 2010).
Furthermore, Mobley (1982) observed that ineffective communication can lead to high rate of employee turnover. Barret (2006) have supported it and said that lack of communication will prevent employees from reporting injury at work, bullying, harassment. Besides, ineffective communication can cause skewed understanding from a manager that gives unclear job task. This will give an impact towards employees’ performance and lead to turnover (Barret,2006). Moreover, communication plays important role in managing human relationship. However, in certain contexts it is inappropriately practiced. Managers and employees are exposed to the significance of communication, however this is not realised in certain situations. Employees will intends to leave, lack of commitment to work and leadership problem might occur when the barriers of communication is not realised (Kotter, 1996).
According to a series of studies by Watson Wyatt Worlwide (2008, 2009, 2010), engaged employees are twice to be top performer, more supportive of organizational change and have lower turnover rates. This is because; effective communication is a key driver for employee engagement and it act as indicator for financial performance as well. Besides, the return on investment (ROI) for engagement also includes in staff satisfaction that can leads to productivity. It is supported by HR Solutions (2010), when productivity increased; it drives values for the organization. They also surveys reveal that employee engagement adds value to the organization by driving customer satisfaction that enhances customer loyalty and increase productivity growth of company too.
2.4.3Incentives & Rewards
Incentives is one of the work policies that gives an essential for the achievement of defined goals in an organization especially performance goals (Wang and Barney, 2007). According to Armstrong (2010), employee performance refers to the outcome, accomplishment of work that linked to the strategic goals of the organization and economic contributions. He also stated that performance needs to be managed by having a systematic action to improve organizational and individual performance whereby individual performance process is related with both financial and non-financial incentives.
Furthermore, Lawler (2003) also stated that the success and the survival of any organization are determined by the ways of worker are remunerated and rewarded. For example like the reward system will determine the level of employees’ commitment and their attitude to work. We can seen a lots of major factor affecting employees’ commitment and productivity based on how employee been engaged, as been studies by Dixit and Bhati (2012). Therefore, if organization what to achieve their objective, they needs to studies what drives the employees to perform efficiently and rewards them (Mueller,2012).
Moreover, adequate incentives act as tool by which organization can increase their employees’ performance. Al-Nsour et. al (2012) studies that the monetary and non-monetary incentives will affects on organizational variables. This is because according to National Commission on Productivity and Work Quality (1975), incentives programs are been conducted by organization to reward performance of employees who achieve the organizations expectation (Schiller, 1996). Griffin (2002) explained that incentives can forces employees indirectly to behave in certain ways and they may choose to have committed and work had in performing their job.
Besides, Luthans (1998) have divided that incentives is also known as financial and non-financial incentives. According to Nelson (2003) and Kepner (2001), monetary incentives are used by employees to retain them and reward them due to well job performance through monetary form. It can be derived from basic salary, compensation, retirement plans, profit sharing (Pattanayak et. al (2005). This is because, monetary incentives is formerly to describe as incentive-payment plans that act as productivity standard (Ubeku, 1975, Alaba ; Owodunni, 2007).
On the other hands, non-monetary incentives are means to reward employees for job performance through opportunities as been stated by Kepner (2001). It can be derived from enabling authority, award, promotion, better working performance, promotion holidays (Ellis et. al (2004).
Every organization needs resources to achieve their goals and objectives. Employees being greatest resources to the organization that leads to organizational performance. In business environment that changing drastically, in order to sustain in retail industries, organization needs to have engage and motivated employees to achieve organization target. Besides that, the rapid changing or external business environment like social, cultural, legal, political, and economic, technology and competition give effects to organization growth. Therefore, to compete with others, employers need to have highly skilled and dedicated employees that can give the best output to the organization. The contribution of employees in completing the job is important for development and excellent in business. The employees’ performances are important to measure how far the organization can stay and be a leader in the market place. Highly performed employees will give a huge impact on the total production, sales, profit, progress and market position of the company in the market.
According to Herzberg (1995) and Linder (1998), employees’ performance refers to managerial side of performance. Meaning that, performance is let an employee do what I want him to do. It includes task hierarchy and task distribution for good employees’ performance. However, Linder (1998) argues this statement where employees’ performance can be perceived as obtaining external funds. Many researchers agree that employees’ performance is divided into five factors which are personality, skills, knowledge, experience and abilities (Hunter & Hunter, 1984).
Sanderson et.al (2009) argues that employee’s performance can be divided into two distinct categories which are elevated performance and standard performance. Elevated performance comes from individual’s effort that the employees realize they need to go beyond their limit due to their commitment to the organization in order to accomplish company mission or teams’ objectives. This level of employees’ performance is supported by the individuals’ commitment which makes employees feel motivated to achieve higher performance levels. Besides, standard performance is describes through normal output that employees delivers just to fulfill their job duties. Standard performance consists of the typical level of output that an employee delivers in their normal course of fulfilling their duties. Sanders et al. (2009) claim is dependent on “hygiene factors” whose absence in an organization could easily affects productivity yet they do not necessarily drive employee productivity. The hygiene factors are defines as essential elements that indirectly influence employees’ performance. However, if the employees see in a negative action, meaning that they refuse to give full commitment in doing their job and attempt to deliver a standard performance. (Gupta, 2009; Rossi, 2012). By doing the job on track with minimum supervision by the superior it will improves employees’ motivation that will lead to greater employees’ performance. Furthermore, a reward system can be implemented by the organization in order to encourage employees’ motivation to perform better. It supported by the research from Ajila and Abiola (2004) in their findings revealed employee performance increased with good reward systems, enhancing employee skills to achieve organizational objectives and goals.
Research by research has been done before and a lot of statements have produced to derive employees’ performance. Howel and Hall Merenda (1999) see employees’ performance is about social standing which also supported by Greenberg and Baron (2000), where employees’ performance gives a positive impact on the relationship between job performance and career advancement. It means that, when employees feel satisfied with their job duties, it is not only improve employees’ performance but will lead to whole organizational performance. It is because employees’ satisfaction and employees’ engagement are related directly to performance.
According to Sinha (2001) stated that willingness and openness of the employees itself on doing their job are the attitude that shows good employees’ performance. By having this attitude, it could increase employees’ productivity which will leads to the performance. Willingness to perform is the desire of the employees to perform well by putting much efforts in completing their job (Eysenck,1998).
Stup (2003) also identify several factors towards the success of the employees’ performance. These factors include physical work environment, equipment, meaningful work, performance expectation, feedback on performance, and reward for good or bad system, standard operating procedures, knowledge, skills and attitudes. Franco et al (2002) stated that performance relies on internal motivation such as necessary skills, intellectual capacity and resources to do the job clearly have an impact on performance. As a consequence employers are supposed to provide appropriate working conditions in order to make sure the performance of employees meet the required standards.
Research by Borman & Motowidlo (1993) stated that employees’ performance is derived from employees’ behavior. There are two types of employees’ behavior which are task performance and contextual performance. Task performance refers to individual’s proficiency which they can perform activities which can give benefits to the organization’s performance either in term of productivity of workers or task problems. Meaning that, task performances are related with job specific routine behavior and job responsibilities. Campbell, Gasser ; Oswald (1996), identify five factors which refer to task performance job-specific which are task proficiency, non-job-specific task proficiency, written and oral communication proficiency, supervision—in the case of a supervisory or leadership position—and partly management or administration (Borman ; Brush, 1993). Each factors has own subs factors which differentiate it from others factors. For this research, management or administration has consists of four subs factors such as planning and organization, guiding and motivating subordinates, training and coaching and lastly communication effectively. For example, through task performance, effective communication between superior and employees on how to do the task given will lead to better understanding of the task. Hence, the employees will not doing wrong because they understand about their task.
For contextual performance concepts, it can be derives as non job specific behavior that are not directly related to the task or job duties such as employees relationship with other co-workers that shows individuals personality and traits. The aim of contextual performance is to encourage harmonious environment within the organization and improve organization processes. According to Organ (1988), contextual performance consists of five components which are altruism, consciousness, courtesy, civic virtue, and sportsmanship. Thus, contextual performance is not a single set of uniform behaviors, but it is a multidimensional concept (Van Dyne ; LePine, 1998). It complements the task performance concept in order to encourage employees’ engagement and therefore will lead to employees’ performance productivity. Moreover, task performance and contextual performance are related to each other where the abilities and skills tend to predict task performance while personality of individuals who doing the task tend to predict contextual performance (Borman ; Motowidlo, 1997; Hattrup, O’Connell, & Wingate, 1998; Motowidlo & Van Scotter, 1994).
This study will look how working environment, communication, incentives and rewards correlate to employees’ performance. The employees performance will be measure in terms of increase employees productivity, high employees motivation or satisfaction and higher retention. These indicators were adapted from research by Workplace Employment Relations Surveys (WERS) 2004 and 2011 where they analyze on employees performance in terms of their productivity, communication, satisfaction, organizational profits, working environment, employee psychological problems like absenteeism, turnover, and etc. WERS is a survey institution for British workplace and they have used STATA in getting the results of employees’ performance. According to their findings, continuous communication and personnel development have positive impact on employees’ performance (adapted from Zhang Ying Ying, 2012). If employees are not happy with the working environment or performance management system, they feel frustrated and unwilling to take an active part in the job process because they do not see any value of it. As a result, employees’ performance will reduce and organizational performance will become worse.
In Bhatti (2007) and Qureshi’s (2007) perspectives, employees performance is measure in term of employees’ productivity. Employees’ productivity means the output of workers per unit of time. The growth rate of labor productivity is approximately equal to the difference between the growth rate of output and the growth rate of the number of hours worked in the economy (Christopher Gust; Jaime Marquez, 2004). Huselid (1995), stated that employees will contribute to the development of organizational performance and the influences of human resources practices in organization helps to improve employees’ skills, commitment, and motivation (adapted from Zhang Ying Ying, 2012). Moreover, employees’ engagement will lead to employees performance where the condition of working environment, job security, communication, compensation and rewards, and organizational commitment become a crucial parts in measuring employees performance (Arnold and Feldman, 1982) and Jonathan, 2004 also stated that adequate remuneration, job security and good working environment will avoid employees dissatisfaction. The disengagement of employees will cause employees to search another job and leave the organization (Mobley, 1997). To measure employees’ performance organization need to have a specific tools like balance scorecard, or performance appraisal method that can be used in order to know whether employees’ performance are good or bad.
The conceptual framework was developing to have a better understand on how the independents variable which is the factors that contribute to employees’ engagement will affect the dependent variable. The independent variables consist of the factors which are work environment, communication, and incentives & rewards. The dependent variable for this study is employee’s performance in the organization which can be measured through improve employees productivity, high retention and improve employees satisfaction or motivation. The conceptual framework on this study is adapted from the antecedents from Job Demand-Resource model and it is illustrated as follows:
Improve employees productivity
Improve employees motivation
High employees retention
Incentives ; Rewards
Figure 2: Conceptual Framework
The framework above shows that factors contribute to the employees’ performance in organization is determined by three independent variables namely work environment, communication, and incentives. Employee engagement is a critical ingredient of individual and organizational success because it predicts financial performance, employee outcomes and organizational success. It was supported by the study of Schaufeli and Bakker (2008) that the impact of engagement or disengagement can be shown through productivity and organizational performance, employee retention rates and outcomes for customers of the organisation.
Besides, performance is a multi- dimensional construct and it can be defined as the record of an individual’s accomplishment. However, Kane (1996) argues that performance is something that the person leaves behind and that exists apart from the purpose because apart from being an outcome, it is related doing the work as well as about the results achieved. However, Campbell (1990) believes that performance is behaviour. It was supported by Campbell, McHenry ; Wise (1990) studies that employee performance consists of observable behaviours that people do in their jobs that are aligned towards the goals of the organization. Motowidlo, Borman ; Schmit (1997) argues that rather solely considering the behaviour, it also need to emphasize with the dominant methods used to measure job performance- performance ratings. There is vary method to identify the factors used in performance ratings but Campbell et all suggest that it should look at the dimensions separately because the general factor cannot represent the best outcome when rating employee performance.
The research framework expects the factor contribute to employees’ performance in the organization. There are three factors namely work environment, communication and incentives. Based on the research framework, the researcher had provided hypothesis to evaluate the findings.
Firstly is work environment. Work environment include the infrastructure, facilities, servicescape or condition within the organization whether it is comfortable to employees or not. It is to identify whether work environment enhance employees performance or not.
RO1 : To determine whether work environment have an impact on employee performance.
H1 : There is a positive relationship between work environment on employees productivity in the organization.
H2 : There is a positive relationship between work environment on employees motivation in the organization.
H3 : There is a positive relationship between work environment on employees retention in the organization.
Secondly is communication. As mentioned earlier, effective communication within organization can improve employees’ performance towards their job. It is because employees feel appreciate and respect by their colleagues and upper management.
RO2: To examine whether communication have an impact on employees performance.
H4 : There is a positive relationship between communication on employees productivity in the organization.
H5 : There is a positive relationship between communication on employees motivation in the organization.
H6 : There is a positive relationship between communication on employees retention in the organization.
Next factor is incentives. As people love to be rewarded, this factor shows whether the incentives can contribute employees’ performance or not.
RO3: To examine whether incentives & rewards give an impact on employees performance.
H7 : There is a positive relationship between incentives and rewards on employees productivity in organization.
H8 : There is a positive relationship between incentives and rewards on employees motivation in the organization.
H9 : There is a positive relationship between incentives and rewards on employees retention in the organization.
The last hypothesis is to measure the most correlate variables on employees performance.
RO4 : To determine the most influential variables on employees’ performance (employees productivity, motivation and high retention).
The intention of this chapter is to describe the methods and procedures that were followed in responding the research question that were describe earlier in the study. It will focus on the theoretical framework, research design, the sampling design, sampling size, instrumentation, the data collection procedures and data analysis design. It is to help the researcher manage and answer the research question by identifying each variable.
According to Kerlinger (1992) research design is to ensure the internal and external validity which means how strong the relationship between Independent Variables and Dependant Variable and reliability of the research. To achieve the objective of the study, it is important to analyze the factors of employees’ engagement toward employees’ performance. The data need to be collected to test the hypothesis whether it is accepted or not.
The study will use a set of questionnaires to the targeted group in order to identify the factors influence employees’ engagement. This is quantitative research because it use questionnaire as a method to get respond from the respondents. While the objectives require the relationship between the variables to be established, this research design is adequate for this study.
Unit of analysis can be described as the element that is the focus of the study (Hazman, 2012). According to Zikmund (1999), the sampling unit can be a single or a group that selected from the sample depending on the nature of the study. The sample unit in this study is the employees in Syarikat Faiza Sdn Bhd.
Sample size is to know on how many units the researchers need to include in their research (Hazman, 2012). Krejcie R.V., Morgan D.W. (1970) has proposed the ideal sample size for the respondent. Syarikat Faiza Sdn Bhd has around 173 employees and based on this table, the selected employees for Syarikat Faiza Sdn Bhd is about 115 respondents.
Source: Krejcie & Mogan, 1970
This study use random sampling technique. Random sampling technique is where all respondent has the same equal chance to be selected as respondent of the questionnaire and there is no bias in selecting the respondent. For example the researcher takes around 115 respondents from Syarikat Faiza Sdn Bhd to answer the questionnaires that will act on behalf the other population in the organization.
Objectives Concept/construct Measurement Scale
1 To determine whether work environment will influence the employees’ performance in the workplace Work environment refer to the place, colleagues where the employees will do and cooperate with their task or job. Use scale measurement to determine work environment.
Strongly Disagree Ordinal
2 To examine whether communication will influence the employees’ performance in the workplace Good communication occurs when information is successfully transferred from the sender to the receiver and the receiver give feedback to the sender. Use scale measurement to determine communication effect.
1- Strongly Agree
5- Strongly Disagree Ordinal
3 To investigate whether incentives (monetary or non monetary) and rewards will influence employees’ performance in the workplace Incentives is something that the organization provide for the employees who can achieve organizational goals or etc. It can be monetary or non monetary forms. Use scale measurement to determine the effects of incentives towards employees’ motivation.
Strongly Disagree Ordinal
4 To identify what is the most influential independent variables on employees performances
Employees’ performance can be divided into three drivers which is employees productivity, motivation and high retention. Use scale measurement to determine what is the most influential independent variables on employees performances
Strongly Disagree Ordinal
According to Hazman, (2007) studied by Syukri ; Zaki in 2012 stated that data collection is deal with the question on how you will collect and gathered the data from the units of study.
3.7.1The Primary Data
Primary data can be obtains through questionnaire and observation or knowledge from someone that know about the topic. For this research, the primary data is obtain by distribute the questionnaire to employees in Syarikat Faiza Sdn Bhd. Before questionnaires were distributed to the company, official letter from University has been given to the Manager of Syarikat Faiza Sdn Bhd to get her permission. The questionnaire has two main sections which are demographic section and factors contribute to employees’ performance through employees’ engagements. Likert scale will be used to evaluate the findings. The scale consist of 1 – 5 which indicates strongly agree, agree, neutral, disagree and strongly disagree (Sekaran, 2006).
The secondary data will be collected from literature review made by others researchers by obtain any kind of journal, magazines, newspapers, books and others to support this study.
All the data and information collected in this study will be analyzed using statistical software which known as SPSS (Statistical Package Social Science) version 20. Descriptive statistic is used to measure all the variables involve in the study. It includes frequencies, the means and the standard deviation of the variables.
Reliability and validity will be tested by looking Cronbach alpha value and it will be check using internal consistency measure. Testing the normality can be gathered through histograms, steam and leaf plots, normal probability plots and so on.
Pearson Correlation will be used to examine the relationship between the dependent variable and independent variables. Furthermore, multiple regressions is use to measures the degree of contribution of the independent variables against dependant variable.
3.9 PILOT TEST RESULT
A pilot study has been done to provide feedback on the survey question’s design. Based on this research, 30 respondents have been identified from various employment backgrounds to answer the survey. This is important to discover any problematic questionnaire that might need refining. Once pilot test results were complete, an analysis to SPSS software was conducted. According to Neuman (2003), suggested the researcher should correct any items of their survey that needs to be correct in order to get a valid and reliable set of questionnaires. The pilot test results encouraged the researcher to revise the questionnaire before the real survey conducted.
Therefore, reliability test was conducted to measure the items in the questionnaires are reliable and able to be ask in the study. Sekaran (2009), stated that reliability test is perform to identify whether the item used in the questionnaire are free error and acceptable. It will look the value of Cronbach alpha which consist the value of 0 to 1 (Tavakol, et al., 2011). 0.00 means no variance is consistent and 1.00 means all variance is consistent. If the value of Cronbach alpha is below 0.4 it considered as low reliability, 0.5 to 0.6 considered as moderate reliability which is acceptable and good, while coefficient value more than 0.7 and above is considered as highly reliable.
Table 3.9.1: Test of Reliability
Factor Cronbach Alpha No of Items
Work Environment 0.846 17
Communication 0.910 18
Incentives & Reward 0.907 14
Employee Performance 0.904 21
Overall 0.960 70
As seen in Table 3.9.1, all factors showed the result is acceptable. Based on the result showed the Cronbach’s alpha of work environment is 0.846, communication is 0.910, incentives and reward is 0.907 and employee performance is 0.904. Based on this three independent variables, incentives and rewards shows the most influential factor to create better employees’ performance which is highly reliable. Meanwhile, the overall of the factors showed the Cronbach’s alpha is 0.960. Every questionnaire items is said to be valid because the Cronbach’s alpha greater than 6. So, the data in this study can be classified as good and adequate for this research means.
RESULT AND DISCUSSION
In this chapter, the findings obtained from the analysis based on research questionnaire were explained well. In this part, the results were generated from the questionnaire distributed to the respondents. The data were analyzed by Statistical Package For The Social Sciences (SPPS), Version 22 For Windows. Each part of the research question were discussed and analyzed in the discussion parts. Then, at the end of the study, overall results were obtained to determine the final result and conclusion of the study.
4.1 Reliability of data
In this study, reliability test were conducted to determine on how the findings able to reflect the situation reflect the situation accurately. Reliability is the crucial part of the research. Reliability in the quantitative method of the study can be tested using pilot test. Pilot study used as a trial (preliminary trial) before the items were tested towards the real samples. Pilot study conducted to determine the transparency of the data based on the small groups of individuals.
Commonly, most of the researchers used Cronbach’s Coefficient Alpha (?) to measure reliability of the items in the questionnaire. Reliability can be determine when the higher degree of reliability of the instrument, the more accurate the data obtained to produce good-quality studies. Cronbach’s Coefficient Alpha acts as a tool to test the internal consistency of the measures. The range for Cronbach’s alpha normally in range 0 and 1. Based on the study conducted by Sekaran;Bougie (2012), the closer the reliability coefficient approaching 1, the better the results of reliability test. The reliability value less than 0.7 are considered as poor, while the value in range 0.7 as acceptable and more than 0.8 as good state of reliability test.
20 respondents were selected for pilot study. As seen in Table 4.1, all factors showed the result is acceptable. Based on the result showed the Cronbach’s alpha of work environment is 0.846, communication is 0.910, incentives and reward is 0.907 and employee performance is 0.904. While the overall of the factors showed the Cronbach’s alpha is 0.960. Every questionnaire items is said to be valid because the Cronbach’s alpha greater than 6. So, the data in this study can be classified as good and adequate for this research means.
Table 4.1: Test of Reliability
Factor Cronbatch Alpha No of Items
Work Environment 0.846 17
Communication 0.910 18
Incentives & Reward 0.907 14
Employee Performance 0.904 21
Overall 0.960 70
4.2 Validity of data
The validity of the data can be tested through factor analysis which is a part of the test (Conway&Huffcut, 2003). It was used to test the validity of the items involved in the questionnaire (Segar &Grover, 1993). The questionnaire were designed based on the original version also need to undergo validation test due to the changes involved in the survey instrument (Painoet . al , 2010). Thus, unrelated question can be eliminated and rational question can be added which related to the objective of the study (Lestari, 2010).
The validation test can be conducted using SPSS 22. Several conditions need to be considered before undergoes factor analysis test in terms of its factorability such as Test Kaiser-Meyer-Olkin and Barlett’s test of sphericity test. According to the value obtained in Kaiser-Meyer-Olkin Measure of Sampling Adequancy (KMO) where the values is 0.6 or above, all the variables can be considered as significant and correlated between the items.
Table 4.2 shows the factor analysis of work environment. The Keiser-Meyer-Olkin result showed the value is 0.812. Based on the result, Bartlett’s Test of Sphericity give.This means all variables are statistically significant and correlated between the items.
Table 4.2: Factor Analysis of Work Environment
All facilities are functioning well and accessible 0.687
My workplace is a physically comfortable and safe place to work 0.797
I have the resources I need to do my job well 0.707
I have understand policies and procedures in my workplace 0.785
I feel accepted and valued by my colleagues 0.697
The superior team provides an environment in which honesty and openness are values 0.737
The department has a clear division of responsibilities and task 0.703
There are no cases of harassment or bullying 0.678
kDoes your team help you to complete your work? 0.626
I am satisfied with the lunch break, rest breaks and leaves given in the organization 0.683
Table 4.3 shows the factor analysis of communication. The Keiser-Meyer-Olkin result showed the value is 0.878. Based on the result, Bartlett’s Test of Sphericity give.This means all variables are statistically significant and correlated between the items.
Table 4.3: Factor Analysis of Communication
Managers explain well about my task and work scope 0.671
My manager does a good job of sharing information 0.767
Managers and staffs are consistently and actively explain and encouraged discussion and effective communication in workplace 0.812
Managers and staffs communicate with courtesy 0.672
Managers and staffs are listening to my suggestion and decision in problem solving 0.852
Staffs at the company regularly share and exchange ideas 0.747
Managers communicate frequently and honestly about issues affecting staffs 0.753
Meetings are usually chaired by competent and ideas and information 0.73
Goals, objectives, and strategies are clearly communicated and discuss 0.684
Communication is good between departments 0.786
Table 4.4 shows the factor analysis of incentives and reward. The Keiser-Meyer-Olkin result showed the value is 0.816. Based on the result, Bartlett’s Test of Sphericity give.This means all variables are statistically significant and correlated between the items.
Table 4.4: Factor Analysis of Incentives and Rewards
My salary is competitive with similar jobs I might find elsewhere 0.661
My benefits are comparable to those offered by other organizations 0.761
I understand and satisfied with my benefit plan 0.698
Do you believe thatincentives can positively influence and improve your work performance 0.634
The company pay policy helps attract and retain high performing employees 0.67%
My pay matches my job performance 0.752
I am rewarded for exceeding organizational goals 0.666
The salary increments given to employees who do their jobs very well and shows better employees performance 0.771
Financial incentives motivates me more thannon-financial incentives 0.674
I think the benefits offered by the Company meet my needs 0.717
Table 4.5 shows the factor analysis of employee performances. The Keiser-Meyer-Olkin result showed the value is 0.812. Based on the result, Bartlett’s Test of Sphericity give.This means all variables are statistically significant and correlated between the items.
Table 4.5: Factor Analysis of Employer Performance
My job enables me to make use of all my skills and abilities 0.567
I understand the link between my performance and my pay 0.614
A positive working environment influence your performance in workplace 0.666
Attractive internal communication influence your performance in workplace 0.682
Do you believe you’ll be able to reach your full potential here? 0.783
I plan to stay working here for at least another year 0.699
Gaining respect from others improve my motivation 0.606
Staff here feel they are part of the organization 0.755
Customers are happy with our service 0.652
At scale 1 to 5 how happy you working here? 0.694
4.3 Normality Test
In statistics, normality test are used to determine if a data set is well-modeled by a normal distribution and to compute how likely it is for a random variable underlying the data set to be normally distributed. Normality is an important concept in statistics because before start the analyses, the researcher should check a dataset for normality before performing an analysis that relies on normally distributes data. When the data is normal, the test should be conducted using parametric. Based on Table 4.6, that all factor have a mean and median are very similar and based on the test of significantly found that each factor showed significant level of p <0.05. This showed that it is not normal distribution and is suitable for further analyzed for this study. This means that the test should be conducted using non-parametric although all items are shaped Likert scale. Although, the sample is big, we assume the data is normal.
Table 4.6: Test of Normality for Each Factor
Factor Mean Standard Deviation Median Skewnee Significant
Work Environment 3.757 0.631 3.8 0.083 0.013
Communication 3.776 0.675 3.85 -0.213 0.011
Incentives & Reward 3.578 0.613 3.45 0.276 0.001
Employee Performance 3.736 0.557 3.8 -0.012 0.006
4.4 Descriptive Statistics
Descriptive statistics described the data collection and summary of the data in the simple and easy way such as table, figure, frequency, percentage, mean and standard deviation.
4.4.1 Respondent Demographic
Respondent chosen among ???????to analyzed demographic distribution of the respondents such as gender, age, marital status, race,salary and length of employed the company comprised of 112 respondents. Demographic distribution of the respondents is one of the important element in this study because it may be one of the factor influenced the finding of the study.
Table 4.7 shows the frequency and percentage (%) of the respondents based on gender. Respondents consist of 89people or 79.5% aremaleinvolved inthisstudyanda total of23peopleor 20.5% are females. This show the respondent by male is higher than female.
Table 4.7: Number of Respondents based on Gender
Gender Frequency Percentage
Male 89 79.5
Female 23 20.5
Total 112 100
Table 4.8 shows the distribution of frequency and percentage of the respondents by age. Based on the data obtained from the questionnaire, there were 29 respondents or 25.9% in the range 21 until 30 years old. Then, the respondents for 31 to 40 years comprised of 36 respondents with 32.1% of the overall respondents. It was followed by 41 to 50 years with 22 respondents or 19.6% and 25 respondents or 22.3% above 51 years old. This illustrated that the highest number of respondents in the range 31 to 40 years and the lowest allocated by the respondents between 41 to 50 years old.
Table 4.8: Number of Respondents based on Age
Age Frequency Percentage
21-30 years 29 25.9
31-40 years 36 32.1
41-50 years 22 19.6
51 and above 25 22.3
Total 112 100
Referring to the Table 4.9, it shows the finding regarding the marital status of the respondents. Based on the data obtained, there were 80 respondents or 71.4% are single. It was followed by 31 respondents or 27.7% were married and others showed one respondents or 0.9%. Hence, it shows that the highest number of respondents are married and the lowest are others.
Table 4.9: Number of Respondents based on Marital Status
Marital Status Frequency Percentage
Married 80 71.4
Single 31 27.7
Others 1 0.9
Total 112 100
Table 4.10 exhibits the findings based on the race of the respondents. Based on the data obtained, there were 106 respondents or 94.6% are Malay. It was followed by 5 respondents or 4.5% are Chinese and others showed one respondent or 0.9%. Thus, it shows that the highest number of respondents are Malay and the lowest were others.
Table 4.10: Number of Respondents based on Race
Race Frequency Percentage
Malay 106 94.6
Chinese 5 4.5
Others 1 0.9
Total 112 100
Referring to the Table 4.11, the findings on the salary of the respondents shown. Based on the data, there were 3 respondents or 2.7% have less thanRM 1,000. While 72 of them which represent 64.3% have salarybetween RM 1,001 until RM 3,000 followed by 34 of them with 30.4% have between RM 3,001 until RM 5,000. Then, there were 3 respondents or 2.7% have more than RM 5000. Hence, it shows that the highest number of respondents had salarybetween RM 1001 until RM 3000 and the lowest are more than RM 5000.
Table 4.11: Number of Respondents based on Salary
Salary Frequency Percentage
Less than RM 1000 3 2.7
RM 1001-RM 3000 72 64.3
RM 3001-RM 5000 34 30.4
More than RM 5000 3 2.7
Total 112 100
Table 4.12 below show the number of respondents based on employed the company. Based on the data obtained, there have 14 respondents or 12.5% had less than 1 year. This was followed by 33 respondent or 29.5% had 1 to 3 years. Then the respondents have 23 respondent or 20.5% had 4 to 6 years and followed by 18 respondents or 16.1%. While for respondents who more than 10 years were 24 respondents or 21.4%. This representedthe highest numberof respondents for the employed the company had 1 to 3 year and the lowest are less than 1 year.
4.12: Number of Respondents based on Employed Company
Employed Frequency Percentage
Less than 1 years 14 12.5
1-3 years 33 29.5
4-6 years 23 20.5
7-9 years 18 16.1
More than 10 years 24 21.4
Total 112 100
4.4.2 To identify the factor influencing the employee performance
There are 3 factors influencing the work performance. There are work environment, communication, incentives and reward and employee performance.
22.214.171.124 Work Environment
Table 4.13 represents the frequencies and percentages for work environment. As shown in Table 4.13, a substantial majority of the respondents chooses agree about “I am satisfied with the lunch break, rest breaks and leaves given in the organization” (47.3%). It was followed about “I have understand policies and procedures in my workplace” (45.5%). The respondents also chooses moderate about “My workplace is physically comfortable and safe place to work” (33.9%). It was followed by “All facilities are functioning well and accessible” (29.5%). As seen in Table 4.13, the respondents showed various reactions towards the work environment. The highest mean showed respondents moderate about “All facilities are functioning well and accessible”(with a mean of 3.848, SD=0.892). While the lowest mean showed the respondents also moderate about “My workplace is physically comfortable and safe place to work(with a mean of 3.651, SD=0.927). The overall mean for work environment is3.757 and standard deviation is 0.631. These shown the respondents moderate about work environment.
Table 4.13: Frequencies and percentages for work environment
STATEMENT 1 2 3 4 5 MEAN SD
All facilities are functioning well and accessible 0(0%) 7(6.3%) 33(29.5%) 42(37.5%) 30(26.8%) 3.848 0.892
My workplace is a physically comfortable and safe place to work 0(0%) 12(10.7%) 38(33.9%) 39(34.8%) 23(20.5%) 3.651 0.927
I have the resources I need to do my job well 2(1.8%) 9(8%) 27(24.1%) 50(44.6%) 24(21.4%) 3.669 0.933
I have understand policies and procedures in my workplace 0(0%) 9(8%) 26(23.2%) 51(45.5%) 26(23.2%) 3.839 0.875
I feel accepted and valued by my colleagues 2(1.8%) 9(8%) 27(24.1%) 50(44.6%) 24(21.4%) 3.758 0.941
The superior team provides an environmentin which honesty and openness are values 0(0%) 7(6.3%) 32(28.6%) 47(42%) 26(23.2%) 3.821 0.861
The department has a clear division of responsibilities and task 3(2.7%) 10(8.9%) 24(21.4%) 50(44.6%) 25(22.3%) 3.75 0.99
There are no cases of harassment or bullying 6(5.4%) 11(9.8%) 22(19.6%) 47(42%) 26(23.2%) 3.678 1.1
Does your team help you to complete your work? 1(0.9%) 6(5.4%) 30(26.8%) 50(44.6%) 25(22.3%) 3.821 0.872
I am satisfied with the lunch break, rest breaks and leaves given in the organization 6(5.4%) 7(6.3%) 22(19.6%) 53(47.3%) 24(21.4%) 3.732 1.039
Overall 3.757 0.631
Table 4.14 represents the frequencies and percentages for communication. As shown in Table 4.14, a substantial majority of the respondents chooses agree about “Managers and staffs are listening to my suggestion and decision in problem solving” (51.8%). It was followed about “Managers and staffs communicate with courtesy” (50%). The respondents also chooses moderate about “Communication is good between departments” (37.5%). It was followed by “Meetings are usually chaired by competent and ideas and information” (32.1%). As seen in Table 4.14, the respondents showed various reactions towards the communication. The highest mean showed respondents moderate about “Managers and staffs are listening to my suggestion and decision in problem solving”(with a mean of 3.91, SD=0.833). While the lowest mean showed the respondents also moderate about”Communication is good between departments”(with a mean of 3.651, SD=0.936). The overall mean for communication is3.776 and standard deviation is 0.675. These shown the respondents moderate about communication.
Table 4.14: Frequencies and percentages for communication
Statement 1 2 3 4 5 Mean SD
Managers explain well about my task and work scope 4(3.6%) 6(5.4%) 30(26.8%) 53(47.3%) 19(17%) 3.687 0.939
My manager does a good job of sharing information 2(1.8%) 8(7.1%) 28(25%) 54(48.2%) 20(17.9%) 3.732 0.9
Managers and staffs are consistently and actively explain and encouraged discussion and effective communication in workplace 2(1.8%) 8(7.1%) 28(25%) 52(46.4%) 22(19.6%) 3.75 0.915
Managers and staffs communicate with courtesy 2(1.8%) 7(6.3%) 27(24.1%) 56(50%) 20(17.9%) 3.758 0.882
Managers and staffs are listening to my suggestion and decision in problem solving 0(0%) 8(7.1%) 20(17.9%) 58(51.8%) 26(23.2%) 3.91 0.833
Staffs at the company regularly share and exchange ideas 3(2.7%) 10(8.9%) 23(20.5%) 48(42.9%) 28(25%) 3.785 1.008
Managers communicate frequently and honestly about issues affecting staffs 0(0%) 8(7.1%) 22(19.6%) 53(47.3%) 29(25.9%) 3.919 0.86
Meetings are usually chaired by competent and ideas and information 1(0.9%) 6(5.4%) 36(32.1%) 45(40.2%) 24(21.45) 3.758 0.882
Goals, objectives, and strategies are clearly communicated and discuss 1(0.9%) 7(6.3%) 29(25.9%) 50(44.6%) 25(22.3%) 3.812 0.885
Communication is good between departments 1(0.9%) 9(8%) 42(37.5%) 36(32.1%) 24(21.4%) 3.651 0.936
Overall 3.776 0.675
126.96.36.199 Incentives and Rewards
Table 4.15 represents the frequencies and percentages for incentives and rewards. As shown in Table 4.15, a substantial majority of the respondents chooses agree about “Financial incentives motivates me more than non-financial incentives” (43.8%). It was followed about “I understand and satisfied with my benefit plan” (42.9%). The respondents also chooses moderate about “I think the benefits offered by the Company meet my needs” and “My pay matches my job performance” (39.3%). It was followed by “My salary is competitive with similar jobs I might find elsewhere” and “The company pay policy helps attract and retain high performing employees”(35.7%). As seen in Table 4.15, the respondents showed various reactions towards the incentives and rewards. The highest mean showed respondents moderate about “Financial incentives motivates me more than non-financial incentives”(with a mean of 3.812, SD=0.905). While the lowest mean showed the respondents also moderate about”My pay matches my job performance”(with a mean of 3.321, SD=0.941). The overall mean for incentives and rewards is3.578 and standard deviation is 0.613. These shown the respondents moderate about incentives and rewards.
Table 4.15: Frequencies and percentages for incentives and rewards
Statement 1 2 3 4 5 Min SD
My salary is competitive with similar jobs I might find elsewhere 2(1.8%) 13(11.6%) 40(35.7%) 41(36.6%) 16(14.3%) 3.5 0.939
My benefits are comparable to those offered by other organizations 3(2.7%) 12(10.7%) 38(33.9%) 41(36.6%) 18(16.1%) 3.526 0.976
I understand and satisfied with my benefit plan 1(0.9%) 11(9.8%) 37(33%) 48(42.9%) 15(13.4%) 3.58 0.876
Do you believe thatincentives can positively influence and improve your work performance 1(0.9%) 7(6.3%) 36(32.1%) 42(37.5%) 26(23.2%) 3.758 0.912
The company pay policy helps attract and retain high performing employees 1(0.9%) 11(9.8%) 40(35.7%) 40(35.7%) 20(17.9%) 3.598 0.924
My pay matches my job performance 4(3.6%) 15(13.4%) 44(39.3%) 39(34.8%) 10(8.9%) 3.321 0.941
I am rewarded for exceeding organizational goals 1(0.9%) 14(12.5%) 38(33.9%) 46(41.1%) 13(11.6%) 3.5 0.89
The salary increments given to employees who do their jobs very well and shows better employees performance 2(1.8%) 9(8%) 37(33%) 46(41.1%) 18(16.1%) 3.616 0.912
Financial incentives motivates me more thannon-financial incentives 1(0.9%) 8(7.1%) 28(25%) 49(43.8%) 26(23.2%) 3.812 0.905
I think the benefits offered by the Company meet my needs 0(0%) 10(8.9%) 44(39.3%) 42(37.5%) 16(14.3%) 3.571 0.845
Overall 3.578 0.613
4.4.3 To determine the employee performance
Table 4.16 represents the frequencies and percentages for employee performance. As shown in Table 4.16, a substantial majority of the respondents chooses agree about “Customer are happy with our service” (56.3%). It was followed about “Gaining respect from others improve my motivation” (47.3%). The respondents also chooses moderate about “I understand the link between my performance and my pay” (31.3%). It was followed by “My job enables me to make use of all my skills and abilities” (30.4%). As seen in Table 4.16, the respondents showed various reactions towards the employee performance. The highest mean showed respondents moderate about “Gaining respect from others improve my motivation”(with a mean of 3.901, SD=0.869). While the lowest mean showed the respondents also moderate about “Do you believe you’ll be able to reach your full potential here?”(With a mean of 3.562, SD=0.918). The overall mean for employee performance is3.736 and standard deviation is 0.557. These shown the respondents moderate about employee performance.
Table 4.16: Frequencies and percentages for employee performance
Statement 1 2 3 4 5 Mean SD
My job enables me to make use of all my skills and abilities 0(0%) 9(8%) 34(30.4%) 48(42.9%) 21(18.8%) 3.723 0.861
I understand the link between my performance and my pay 0(0%) 6(5.4%) 35(31.3%) 52(46.4%) 19(17%) 3.75 0.799
A positive working environment influence your performance in workplace 3(2.7%) 6(5.4%) 28(25%) 50(44.6%) 25(22.35) 3.785 0.943
Attractive internal communication influence your performance in workplace 2(1.8%) 5(4.5%) 33(29.5%) 49(43.8%) 23(20.5%) 3.767 0.89
Do you believe you’ll be able to reach your full potential here? 1(0.9%) 14(12.5%) 34(30.4%) 47(42%) 16(14.35) 3.562 0.918
I plan to stay working here for at least another year 0(0%) 9(8%) 31(27.7%) 46(41.1%) 26(23.2%) 3.794 0.891
Gaining respect from others improve my motivation 1(0.9%) 6(5.4%) 24(21.4%) 53(47.3%) 28(25%) 3.901 0.869
Staff here feel they are part of the organization 2(1.8%) 8(7.1%) 31(27.7%) 52(46.4%) 19(17%) 3.696 0.898
Customers are happy with our service 1(0.9%) 3(2.7%) 33(29.5%) 63(56.3%) 12(10.7%) 3.732 0.722
At scale 1 to 5 how happy you working here? 3(2.7%) 10(8.9%) 33(29.5%) 43(38.4%) 23(20.5%) 3.651 0.992
Overall 3.736 0.557
4.5 Statistical Test
Statistical test used to investigate the relationship between the variables studied. Correlation and regression tests used to determine the relationship between dependent variable and independent variable.
As this is a correlation study, the results report Pearson correlation coefficients as a measure of the linear relationships that exist among the factors (work environment, communication, incentives and rewards) with employee performance. The range of the correlation coefficient is from –1 to +1. If there is a strong positive linear relationship between the variables the value of r will be close to +1. If there is a strong negative linear relationship between the variables the value of r will be close to -1. When there is no linear relationship between the variables or only a weak relationship, the value of r will be close to 0.
188.8.131.52 The Relationship between Work Environment, Communication, Incentives and Rewards with Employee Performance.
The table 4.17 displayed the results of correlating the mean score of the four mean score of work environment, communication, incentives and rewards with employee performance.As indicated by the r-value, the work environment is significant with communication (r=-0.662, p=0.00), incentives and rewards (r=-0.558, p=0.00) and employee performance (r=0.646, p=0.000). Besides that communication showed significant with incentives and rewards (r=0.543, p=0.00) and employee performance (r=-0.00, p=0.000). Then incentives and rewards showed significant with employee performance (r=-0.648 p=0.00).
Table 4.17: Correlation Coefficients between variables
Environment Communication Incentives
and Rewards Employee
Work Environment 0.662(0.00) 0.558(0.000) 0.646(0.00)
Communication 0.662(0.00) 0.543(0.000) 0.555(0.000)
Incentives and rewards 0.558(0.00) 0.543(0.00) 0.648(0.000)
Employee Performance 0.646(0.00) 0.555(0.00) 0.648(0.00) **Correlation is significant at the level 0.01
*Correlation is significant at the level 0.05
4.5.2 Simple Regression
For regression test, it is used to determine the relationship between dependent variable (employee performance) and independent variable (work environment, communication, incentives and rewards)
H1: Work environment is associated with employee performance
Table 4.17 illustrated he overall sample of employee performance with work environment. The results showed work environment had significant with employee performance at the 0.05 level. The work environment explains 64.6% of the variance of the employee performance. The R2 (41.8%) of the employee performance is mainly due to the work environment and the 58.2% indicates of other factor. The probability of the F statistic (78.957) for the overall regression relationship for work environment is p<0.05. This finding corresponding to the research estimation where there is significant effect betweenwork environments is associated with employee performance. Based on the collinearity statistics, VIF value showed 1.00, meaning that there is no multicollinearity.
Table 4.17: The relationship between work environment and employee performance
UnstandardizedCoefficients StandardizedCoefficients Collinearity
B SE B T Sig Tolerance VIF
Constant 1.591 0.245 6.497 0.00 1 1
Work Environment 0.571 0.64 0.646 8.886 0.00 R=0.646, R2=0.418, Adjusted R2=0.413, F-statistic=78.957, p-value=0.00
H2: Communication is associated with employee performance
Table 4.18 illustrated he overall sample of employee performance with communication. The results showed communication had significant with employee performance at the 0.05 level. The communication explains 55.5% of the variance of the employee performance. The R2 (30.8%) of the employee performance is mainly due to the communication and the 69.2% indicates of other factor. The probability of the F statistic (48.892) for the overall regression relationship for communication is p<0.05. This finding corresponding to the research estimation where there is significant effect betweencommunications is associated with employee performance. Based on the collinearity statistics, VIF value showed 1.00, meaning that there is no multicollinearity.
Table 4.18: The relationship between communication and employee motivation
UnstandardizedCoefficients StandardizedCoefficients Collinearity
B SE B T Sig Tolerance VIF
Constant 2.007 0.251 7.984 0.00 1 1
Communication 0.458 0.066 0.555 6.992 0.00 R=0.555, R2=0.308, Adjusted R2=0.301, F-statistic=48.892, p-value=0.00
Table 4.19 illustrated he overall sample of employee performance with incentives and rewards. The results showed incentives and rewards had significant with employee performance at the 0.05 level. The incentives and rewardsexplains 64.8% of the variance of the employee performance. The R2 (42%) of the employee performance is mainly due to the incentives and rewardsand the 58% indicates of other factor. The probability of the F statistic (79.601) for the overall regression relationship forincentives and rewards is p<0.05. This finding corresponding to the research estimation where there is significant effect betweenincentives and rewards is associated with employee performance. Based on the collinearity statistics, VIF value showed 1.00, meaning that there is no multicollinearity.
Table 4.19: The relationship between communication and employee motivation
UnstandardizedCoefficients StandardizedCoefficients Collinearity
B SE B T Sig Tolerance VIF
Constant 1.627 0.240 6.786 0.00 1 1
Incentives and Rewards 0.589 0.066 0.648 8.922 0.00 R=0.648, R2=0.420, Adjusted R2=0.415, F-statistic=79.601, p-value=0.00
4.5.3 Multiple Regression Analysis
184.108.40.206 To identify what is the most influential variable on employees’ performance
Table 4.20 represents the overall sample of employee performance. Based on Anova test, overall of employee performance is significant F, (3,108) =42.826, p < 0.05. While the multiple regression showed work environment and incentives and rewards is significant related on the employee performances when p<0.05. While communication is not significant related on the employee performances.
The results revealed that with the standardized beta value of 0.391, incentives and rewards is the most significant in influencing employee performances compared to the other two independent variables, work environment and communication. Work environment has a standardized beta value of 0.359, which indicates its significant influence on employee performance. However, communication beta value is 0.104, which indicates that communication does not have significant influence on employee performances. Based on the collinearity statistics, VIF value showed close to 1.00, meaning that there is no multicollinearity.
Table 4.20: The relationship between dependent variables and independent variables
UnstandardizedCoefficients StandardizedCoefficients Collinearity
B SE B T Sig Tolerance IVF
Constant 0.947 0.250 3.784 0.000 Work Environment 0.317 0.081 0.359 3.927 0.000 0.506 1.978
Communication 0.086 0.075 0.104 1.155 0.251 0.517 1.933
Incentives & Rewards 0.355 0.074 0.391 4.788 0.000 0.635 1.575
R=0.737, R2=0.543, Adjusted R2=0.531, F-statistic=42.826, p-value=0.00
DISCUSSION, SUMMARY AND RECOMMENDATION
In this chapter, it consists of four main parts which are discussion, research limitation, recommendation and summary. In discussion, it includes the summary of the result well explained with the result of the research and concept or theory related to the previous research. For research limitation it comprised of limitation occur during the research. Then, for the recommendation, it divided into two which are recommendation from the related parties and recommendation related to the future research. As the conclusion, the result of the research and implications of the research are well discussed in this chapter.
5.2.1To identify the factors influenced employee performance through employees engagement in retail industry
Work environment is considered to be an important elements which affecting employee performance. It is composed of all factors which related to job and organization that influence the relationship between employees, their job and the organization. Good work environment used to boost productivity of employees in order to fulfil satisfaction among employees. There are two components involved in work environment which are culture and climate. Work environment in term of culture can be defined as norms, beliefs, assumptions and values shared by the individuals which prevail in the organization. These values and beliefs used to help the employees in order to approach the work in the organization and enhance employee performance towards better reputation. For work environment in term of climate, it can be described as practices, procedures, policies and routines in the organization which fit in the working routines.
Working environment plays an important role towards the employees ‘performance. Working environment is argued to impact immensely on employees’ performance either towards negative or the positive outcomes (Chandrasekar, 2001). In the world, there are international organizations who debate the rights of employee. Most people spend fifty percent (50%) of their lives within indoor environments, which greatly influence their mental status, actions, abilities and performance (Dorgan, 1994). Better outcomes and increased productivity is assumed to be the result of better workplace environment. Better physical environment of office will boosts the employees and ultimately improve their productivity. When employees’ are physically and emotionally fit, they will have the desire to work and their performance outcomes shall be increased. Moreover, a proper workplace environment helps in reducing the number of absenteeism and thus can increase the employees’ performance which leads to increased productivity at the workplace (Boles et al.2004).
Based on the finding in Chapter 4, the respondents state that work environment can be enhance their working performance when all the facilities are functioning well and can be accessible faster. Those element required to ensure their work can be done on time and fulfil the requirements and orders from the top management. In addition, as the excellent employees, they need to understand and practice all the policies and procedure in the workplace. The policies and procedure used to ensure all the staffs followed the rules stated and enhance the job performance and productivity. Thus, better employees performance can be created and develop superior organization with the presence of excellent employees.
Communication is an essential process in our day-to-day life, and the entire world revolves around it. Lasswell’s Maxim defines communication as “who says what to whom in what channel with what effect”. Communication is exchanging of information from one point of the project to the other point in an efficient manner. Like this, there are various definitions and concepts about communication in today’s world. Communication is an essential tool in the field of any organization including retail industry as studied in this research which implement in Syarikat Faiza Sdn. Bhd. It is gaining importance everyday and is the centre of all management processes soon. The success of a project largely depends on the efficiency of its communication network. It starts working from day one of the venture and continues for the entire life span of the project.
Communication is a basic skill because communication is the ability of a project manager or leader to listen, persuade, and to understand what others mean by their behaviour. Communication skills for leaders in managing projects are needed in achieving the goals of a project. As a skilled leader in communicating this way may make it easier to interact between project leader or project manager with the staffs, in the case of any problems occurring on construction projects that can be completed quickly and easily (Mehta, 2012).
Efficient communication, that is the key to success or failure of a project, is a full-fledged knowledge area essential for Project Management (PMI 2009; Schwalbe, 2010). A web source of knowledge revealed that ‘project management is central to businesses today’, which contributes that project management remains effective only when there is an effective communication for team management. Where stakeholder communication management is necessary for the beginning and progress of any project, it simultaneously addresses relations and motivation of the project team. Therefore, effectiveness of communication is critical for the project’s success.
Referring to the finding obtained in Chapter 4, most of the respondents state that listening to each other in making suggestion and decision is one of the method in problem solving and improve communication skills between employers and employees. In term of communication, managers need to communicate frequently and honestly regarding the issues which affecting the staff. Hence, better employee performance can be achieved through the effective communication skills and good relationship between employers and employees.
220.127.116.11Incentives and rewards
A good remuneration system can motivate employees, thereby reducing the intention of looking for other jobs and turnover (Wanous, 1974; Shi, 1991). As an incentive for companies, employee benefits play a unique role in attracting and retaining talents. Benefits satisfaction as a feeling and evaluation of the employees to the corporate welfare system will have an important impact on employees’ attitudes and behaviour (Danehower & Lust, 1996). From the perspective of the development of human resources practice, organizations take actions which are conducive to the development of employees will enhance the motivation of the staff to make positive reciprocal behaviours (Settoon, Bennett &Liden, 1996).
Nowadays many companies use some kind of incentive system to motivate and reward their employees. In the last two decades, incentives have become more popular and companies use lots of money in their incentive systems. Pay satisfaction and satisfaction with incentives are important determinants of overall job satisfaction and employee performance which in turn has great effect on commitment and turnover. Employees’ satisfaction with incentives is also an important role in achieving of the goals of organization’s compensation system and motivate employee performance. A study, for example, which researched how incentives and rewarding have develop in Finland in last decade reported that almost 65 per cent of companies have introduced a new rewarding system during last three years and 50 per cent have planned to adopt an incentive system during the next three years (Salimäki, Sweins, Heiskanen & Laamanen, 2009). Usually companies considered incentives important in motivating employees and making employer more attractive among possible future employees. Incentive pay also as token of appreciation towards the workers to appreciate their hard work and scarification to make their organization well develop and established as stated in finding of the study.
Employees consider compensation as an earnings for services rendered. They also see it as a sign of their individual worth in terms of abilities and skills, as well as the education and training they have extended. This potential to effect employees’ work behavior and attitudes and thereafter, the productivity and success of the organization, is another reason why majority of employees think that compensation decisions can become a basis of competitive advantage (Milkovich, 1998:16). Paying for performance is a way of providing a monetary reward to an individual, which is linked directly to individual, team and organizational performance (Armstrong, 2005). Inspiring employees to productivity and superior performance is consider to be one way to attain greater returns. The ambition against incremental systems has taken place because management does not understand why employees need to be paid more for being in the job (Armstrong, 2005:100).
On the basis of the literature review and the interview research, it seems that all the incentives types are important but they have different meanings for employees. Indeed it seems that there are two different aspects in rewarding. These two aspects are effectiveness and humanity. Effectiveness aspect means that employees feel that they are justified to get monetary incentives because they have put extra effort on work. For the humanity aspect it is important that employees feel that employer is interested in employees, their work and well being. The rewarding of the humanity aspect is more important in generating job engagement and satisfaction whereas the rewarding of the effectiveness aspect affects performance. Different incentives affect various aspects in employees’ life in a different way. Hence different incentives have different effects on performance, and satisfaction, like it was posited. When employees satisfied, they will be engage to the company and increase their performance.
Organizations are often highly interested in valuable and talented employees, they are so because of the value that those employees bring into the organization (Podsakoff et al., 2007; Singh and Loncar, 2010). For instance, pay satisfaction is one of the most important factors that scholars have focused on in studying the job involvement, engagement and also job satisfaction (Jayasingam and Yong, 2013). People need to feel that their work is being rewarded and that they are satisfied with the designated reward. It’s been argued that money is one crucial factor in feeling rewarded and appreciated. Thus, the pay satisfaction is said to have crucial effect on the job involvement as it works as a motive (Currall et al., 2005).
Pay rewards includes not only simply the salary, or monetary benefits, but also dozens of spiritual incentives, such as an excellent work conditions, a good working atmosphere, training and promotion opportunities (Tropman , 2002). Liu (2004) divided total rewards into 4 parts, from inside to outside: salary, welfare, career and environment. While Giancola (2009) simplify the total rewards into five parts: remuneration, welfare, work-life balance, performance or appreciated and development or career opportunity. In fact, pay rewards is a good interactive system of return on investment, it is always highlighted the win-win thought of coordinating and maximizing the interests of business and individual. Each organization has different rewards systems; however, total rewards are not merely the salary and welfare (Zingheim & Schuster, 2006). It’s a comprehensive unified program that consist all parts of rewards (Armstrong & Stephens, 2005). Pay rewards make chance for employees to get the knowledge and learn new skills, which promote their future career (Ludlow & Farrell, 2010). In order to create better employees performance through employees engagement, good incentives and rewards was given to enhance their job performance and productivity with the respective organization. The same situation applied in Syarikat Faiza Sdn Bhd to create better employees performance through employees engagement. In another side, the pay reward acts as token of appreciation of their effort towards the company as stated in Chapter 4.
Based on the result of the data analysis, it proved that employees’ performance can be increased through good incentives and rewards from the employers. According to the findings obtained in Chapter 4, financial incentives motivates the employees more than non-financial incentives. Nowadays, money controlled our life where power of money very useful in every aspect of life. Through the financial incentives, the employees able to reward themselves and their family based on their work hard to achieve the token of appreciation. In addition, this rewards, acts as a motivation symbol to enhance the work performance and productivity. Thus, most of the respondents agreed that financial incentive give significant effect towards their work performance.
Employee performance plays a significant role in defining organizational success. It is necessary to understand as to how employees can be kept satisfied and motivated to achieve out of the ordinary results. Customer satisfaction seems to be a natural corollary of employee satisfaction and in turn organizational success is upshot of this duo. Satisfied employees generate customer satisfaction by excellence in performance that leads to organizational success thus resulting in improved financial success. Employee satisfaction not only enhances the productivity, but also increases the quality of work. It is necessary for a company to perceive as to what employees feel, think, desire along with discovering how the workforce devotion and commitment can be increased. Employee satisfaction is closely related to service quality and customer satisfaction which is then related to company profitability. Service quality has a positive persuade on customer satisfaction. Besides this, firm profitability has a reasonable non-recursive effect on employee satisfaction. Employee satisfaction plays a considerable role in enhancing the firm profitability and improving operational performance of organizations and quality of goods and services. There is no doubt in it that employee satisfaction is critical to attain quality and profitability in service industry especially. Employee satisfaction impacts quality at industry through satisfaction-quality-profit cycle. In service industry, to achieve quality and profitability at organization, employee satisfaction is fundamental and without it, service industry cannot think of being successful (Rachel et al., 2008).
In organization, there are various factors which determine their success and power. Based on the previous literature, it shows that employee performance is one of the important aspect leads to the glory of the organization. Employee’s performance can be defined as the execution or accomplishment of work, acts and responsibility. As the employee, they should perform well to make their employer proud and reward them with great appreciation. As the employees, appreciation and being praised by the managers towards the successful employees is one of the biggest motivation to them to contribute more effort to accomplish the mission and vision of the organization. It can be proved when most of the respondents in this case study agreed with the statement. Employee’s performance also one of the factor used to determine the increment of salary, advancement and incentive pay based on their hard work. In addition, employee’s performance used to show off their capability and ability.
Commonly, in every organization, they need highly performance of the employees to meet their goals and able to achieve the competitive advantage. This situation due to the level of the competitive among the organizations classified in the same expertise where all of them compete to show their power and capability. Hence, the employer needs the employees which have high ambition and motivation to accomplish the goals. It can be conclude that employee performance is key aspect to determine the glory of an organization. Employee is the pioneer to the development of the organization.
In any organization either public sector or a private sector, employee performance is strongly emphasized to ensure that the organization is in a systematic manner. In this study, employee performances among staffs in Syarikat Faiza Sdn Bhd were studied. Therefore, it is important for the organization to select employee who is fit for the organization, so that he or she will be motivated to give excellent services to the customer and increase the organization profit and reputation. With the excellent services provided, employee performance among staffs of Syarikat Faiza Sdn Bhd can be increased.
According to the finding obtained in Chapter 4, majority of the respondents mentioned that better employees’ performance can be obtained by gaining respect from others to improve employees’ motivation. Then, based on the better employee performance build up, the respondents plan to stay working at the same organization. Employees’ performance can be achieved based on the convenient work environment, good communication and better incentives and rewards in order to create better employees performance through employees engagement especially in this scope of study to implement in retail industry. According to the test conducted, the most influential variable on employees’ performance is incentives and rewards, followed by work environment and the least influential variable is communication. It shows that, incentives and rewards are very important in creating better employees’ performance at Syarikat Faiza Sdn Bhd. It might be because of the inflation, small value of Malaysian Ringgit and the ups and downs of Malaysian economy that cause higher cost of living and so on.
In this research, there are several limitation faced by the researcher. One of them is time constraint to carry out the survey to identify the impact of work environment, communication and incentives and rewards towards creating better employee performance in Syarikat Faiza Sdn Bhd. It occurred when the researcher was not able to commit with the time given to settle down the task due to work precedence and working commitments. In addition, the study was conducted only limited to 112 staffs at Syarikat Faiza Sdn Bhd. Then, there are some of them do not give full commitment and cooperation during the study conducted. Moreover, this study can be extended by making comparison towards the employee based on their position and division to determine the impact of work environment, communication and incentives and rewards towards creating better employee performance. Thus, this study can be discussed further due to the sufficient information and data. For the research which using this kind of technique, data is very important to obtain the actual output and analyse the data to examine the research is significant toward the overall research.
This research can be extended further by making comparison on the impact of work environment, communication and incentives and rewards towards employee performance in Syarikat Faiza Sdn Bhd. Besides that, the number of samples can be increased to evaluate the employee performance in this study. In addition, other relationship can be study to investigate the employee performance towards their respective situation. Method of research can be varies such as interview or observation at each of the location and respondents selected as centre of the research.
Further research is needed to further analyze the impact of the incentive pay at the state owned enterprises. I am of the opinion that it will cover a wider population and be able to do a proper comparison as it will incorporate a larger random sample size by questioning employees. This would allow for further generalizability of the findings. The present results illustrate a concurrence between employees and executives, however other state owned enterprises need to follow suit to see how they stand with the employees, and engage them from the onset.
On the basis of the literature review and the interview research, it seems that all the incentives types are important but they have different meanings for employees. Hence different incentives have different effects on performance and their view on the job engagement, like it was posited. In another side, communication and work environment also play crucial role in creating better employees performance in organization. With the proper and convenient treat from employer towards employees, it able to keep their relationship stronger and work in harmony environment.
Based on the findings obtained, it shows that there are positive significant relationship between work environment, communication, incentives and rewards towards creating better employees performance. However, the rate of incentive pay and convenient of work environment need to be enhance to keep the employees motivated because based on the result obtained incentives and rewards are the most influential drivers or factors that lead to better employees’ performance. Besides that, internal issues and conflicts need to be clarify to ensure the organizational free from any controversy and leads to be categorized as establish and powerful party.Overall it is important that employees feel that they are important assets of the company and that managers are interested in employees, their well-being and work.
Employees’ performance is important as they are the asset for the organization to ensure they well-establish in their respective field. Commonly, performance and motivation of the employees can be gain from the sense of reward which is related to them after hardship to fulfil their responsibility. For example, after the great performance of the employees, treat them with the appreciation night and giving them awards based on their excellent achievement. Employer need to be alert with their performance to take care of their welfare. Hence, they pleased to carry out the responsibility. As all the factors mentioned well monitored, the organization able to withstand at the high level comparable to the establish organization in this global era. Thus, they are able to compete with others in terms of mentality, progress and competitiveness. In conclusion, the concept of employee motivation has generated a considerable research attention and are important facets of the work life of any employee.