THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES’ PERFORMANCE IN VIETNAMESE COMPANIES

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business


NGO CONG TRUONG

THE IMPACT OF
ORGANIZATIONAL FACTORS
ON EMPLOYEES’ PERFORMANCE
IN VIETNAMESE COMPANIES



MASTER OF BUSINESS (Honours)
SUPERVISOR: CAO HAO THI


Ho Chi Minh City – Year 2012
i

ACKNOWLEDGEMENTS
This thesis could not be accomplished without the help, advise, support, guidance and
encouragement of many people.
I wish to express my sincere gratitude to my advisor, Dr. Cao Hao Thi, for his clear and
careful direction, guidance and correction to my thesis, especially for his enthusiasm in
answering reminding, help and support.
Secondly, I would like to thank my dear colleagues, friend and classmates for their invaluable
advice, help, encouragement and support during the time I was doing this thesis.
Last but not least, I would like to express my great thanks to my beloved wife and my family
for their support, assistance and encouragement for my study and thesis fulfillment.

ii

ABSTRACT
Vietnam is a developing country and has the emerging market, so the employees'
performance in Vietnamese companies plays a significant role to increase the competitive
advantages. However, so far the study for employees' performance in Vietnamese companies
has not yet been thoroughly conducted. This research is carried out with the objectives to
identify the measurement scale of employees’ performance, identify the organizational
factors that impact on employees’ performance and measure the strength of relationship
between organizational factors and employees’ performance in the Vietnamese companies.
This research is done by a thorough literature review on concepts relating to employees'
performance from which the initial research model and hypotheses are constructed. Research
process has three steps including Generation of Items, used to assure the appropriateness of
the initial research model and its components; Pilot Survey, used to verify the initial
questionnaires and see if there should be any adjustment or modification needed; Survey and
data analysis used to collect the answer for the survey on various employees in the South

organizational factors Vietnam with the sample size of 175 for data analysis.
Number of statistical analysis techniques are used to analyze the data collected via SPSS
program. Factor analysis results in the identification of factors having significant impact to
employees' performance, and the extraction of four factor groups named as Organizational
Culture, Leadership, Communication and Working Environment. Regression analysis proved
that these four groups have statistically significant influence to the employees' performance in
Vietnamese companies, which Communication has the highest impact.
The research results can be used as a reference for the team leaders, managers, supervisors in
Vietnamese companies to enhance and better the employees' performance in the future.






iii

TABLE OF CONTENTS
ACKNOWLEDGEMENTS i
ABSTRACT ii
TABLE OF CONTENTS iii
ABBREVIATION v
LIST OF TABLES vi
LIST OF FIGURES vii
LIST OF EXHIBITS viii
LIST OF FORMULA ix

THE IMPACT OF ORGANIZATIONAL FACTORS ON EMPLOYEES'
PERFORMANCE IN VIETNAMESE COMPANIES 1

CHAPTER 1 1
INTRODUCTION 1
1.1 Background 1
1.2 Research questions and objectives 2
1.3 Research scope 3
1.4 Research contribution 3
1.5 Research structure 4

CHAPTER 2 5
LITERATURE REVIEW 5
2.1 Introduction 5
2.2 Theoretical review 5
2.2.1 Employees’ performance 5
2.2.2 Organizational factors 7
2.2.3 Relationship between organizational factors and employees' performance 14
2.3 Research model 16
2.4 Hypotheses summary 17
2.5 Summary 18

CHAPTER 3 19
RESEARCH METHODOLOGY 19
3.1 Introduction 19
3.2 Research design 19
3.3 Measurement scale 20
iv

3.4 Sample size 22
3.5 Sampling techniques 22
3.6 Data collection methods 22
3.6.1 Primary data collection 22

3.6.2 Secondary data collection 22
3.7 Data quality control 23
3.7.1 Validity 23
3.7.2 Reliability 23
3.8 Data analysis method 23
3.9 Summary 24

CHAPTER 4 25
DATA ANALYSIS 25
4.1 Introduction 25
4.2 Pilot testing 25
4.3 Descriptive statistics 27
4.4 Assessment and refinement of measurement scale 28
4.4.1 Refinement of measurement scale 28
4.4.2 Exploratory Factor Analysis (EFA) 31
4.4.3 Refined research model and hypotheses 35
4.5 Hypotheses testing 36
4.5.1 Regression analysis 36
4.5.2 Hypotheses testing 39
4.6 Summary 40

CHAPTER 5 42
CONCLUSIONS 42
5.1 Introduction 42
5.2 Findings 42
5.3 Managerial implications and recommendations 43
5.4 Limitations and future research direction 45

REFERENCE 46
APPENDICES 51

APPENDIX A: QUESTIONNAIRE IN VIETNAMESE 51
APPENDIX B: DESCRIPTIVE STATISTICS 57
APPENDIX C: SURVEY RESULTS 59
APPENDIX D: SURVEY RESULTS 62
APPENDIX E: SURVEY RESULTS 64
v

ABBREVIATION
ORGF: Organizational Factors
ORGC: Organizational Culture
WENV: Working Environment
LEAD: Leadership
COM: Communication
TEAM: Teamwork
SPSS: Statistical Package Software for Social Science

vi

LIST OF TABLES
Table 2.1: List of variables 8
Table 3.1: Measurement scale 21
Table 4.1: Reliability analysis of pilot survey 26
Table 4.2: Descriptive statistics 28
Table 4.3: Reliability analysis of official survey 30
Table 4.4: KMO and Barlett’s Test 31
Table 4.5: Refined rotated component matrix 31
Table 4.6: Reliability analysis of refined model 32
Table 4.7: KMO and Barlett;s test for employees’ performance 32
Table 4.8: Component matrix 33
Table 4.9: Variables in Leadership 34
Table 4.10: Regression analysis of employees' performance 37
Table 4.11: Hypotheses summary 37








vii

LIST OF FIGURES

Figure 2.1: Research model 17
Figure 3.1: Research process 19
Figure 4.1: Refined research model 36
Figure 4.2: Result of refined research model 38
















viii

LIST OF EXHIBITS
Exhibit 1.1: Vietnam competitiveness ranking, 2010-2011 3

ix

LIST OF FORMULA
Formula 3.1: Cronbach’s alpha coefficient 23

1

THE IMPACT OF
ORGANIZATIONAL FACTORS
ON EMPLOYEES’ PERFORMANCE
IN VIETNAMESE COMPANIES

CHAPTER 1
INTRODUCTION
This chapter includes five sections. The first section introduces the background of the
research, where and why this research takes place. The second and third sections introduce
research questions and objectives of research respectively while the fourth and fifth sections
introduce the scope of the research and the research structure.
1.1 Background
As Mohamad Salim Zahargier, Nimalathasan Balasundaram, (2011), employees are the most
valuable asset in any organization. A successful and highly productive business can be
achieved by engaging them in improving their performance. Not all employees are equal in
their working and they have different modes of working in that some have the highest
capability regardless of the incentive while others may have an occasional jump-start. If they
are handled effectively, the result can be greater productivity and increased employee morale.
Employees in a firm are required to generate a total commitment to desired standards of
performance to achieve a competitive advantage and improved performance for sustaining
that competitive advantage at least for a prolonged period of time, if not forever.
According to Judge & Ferris (1993), perhaps there is no human resources system more
important in companies other than performance evaluation and the ratings of employees’
performance represent critical decisions that highly influence a variety of subsequent human

resources actions and outcomes.
According to General Statistics Office of Vietnam (2007) (citation by McKinsey (2012)),
Vietnam’s economy continues to grow strongly, with GDP in 2006 growing 8.2 percent
(IMF, 2006) and in 2007 at 8.4%. Both the industry and service sectors (which include trade,
hospitality and tourism, banking, education, real estate, and consulting services) contributes
2

40 percent to the total country GDP while the portion for agricultural sector (where 57
percent of the total population is employed) was merely 20 percent. At the end of 2005, the
population of Vietnam was 83.1 million. Seventy percent of this population is living in rural
areas versus 30 percent living in urban areas. Overall, 95 percent of the country’s population
is in the labor force.
To facilitate a transition toward higher productivity operations, Vietnam needs to replace low
wage costs with new sources of comparative advantage. Though Vietnam has clearly
established itself as an attractive investment location for foreign investors, it lags behind
many of its Asian peers in overall international competitiveness rankings. In the World
Economic Forum global competitiveness ranking, 2010-2011, Vietnam’s ranked 50 out of
139 countries. Many of the areas showing the largest gaps when compared with other Asian
economies are well recognized, and Vietnam has already started to address many of these
shortcomings. It showed that the employees’ performance of Vietnamese companies have the
low efficiency versus other Asian countries. That’s a big issue that Vietnamese companies
need to solve in the near future in order to have the high competitive with others. The
Vietnam competitiveness ranking is showed in the Exhibit 1.1.
Employees’ performance is an essential part for the success of any organization, and it is
affected by number of factors. The performance of employees is affected by many factors
which come from both inside and outside such as leadership, earning, promotion
opportunities, working environment, employee employer relationship, leadership
commitment, organizational factors and etc.
1.2 Research questions and objectives
This research is to identify, measure factors affecting employees' performance and determine

the relationship among them. The research questions are presented as:
- Are there identifiable factors affecting employees' performance?
- How is the relationship between these factors and employees' performance? Which will
influence employees’ performance the most?
The objectives of this research are to:
- Identify the organizational factors that impact employees’ performance in Vietnamese
companies
- Determine the impact of each factor on employees' performance.
3


Exhibit 1.1: Vietnam competitiveness ranking, 2010-2011
Source: World Economic Forum Global Competitiveness Report 2010–11;
McKinsey Global Institute analysis
1.3 Research scope
Vietnamese companies are numerous and of different types. However due to the limitations
of data availability, research funds and time, the scope of this research is therefore limited to
all kinds of Vietnamese companies in the Southern Area of Vietnam
Respondents of this research include department head, managers, team leaders and
supervisors.
The employees’ performance will be evaluated by the result at the end of 2011. The research
duration is six months.
1.4 Research contribution
The contribution of this research is finding the way to improve the employees' performance in
Vietnamese companies by focusing on improving the organizational factors defined in
measurement scales.
4

1.5 Research structure
This thesis comprises five chapters. Chapter 1 named as “Introduction” generally introduces

the subject area interest with defined problems, research questions, research objectives, scope
of the research and sources of information to be collected for the research. Chapter 2 named
as “Literature Review” summarizes concepts and theories relating to employees’ performance
in previous studies which are linked to this research. From such review, basic theories for
studying will be synthesized to develop an initial research model and hypotheses used for the
research. Chapter 3 named as “Research Methodology” introduces and reports the research
process together with the analyzed results of pilot survey. Chapter 4 named as “Data
Analysis” reports the analysis results of data collected from the survey. Chapter 5 named as
“Conclusions” discusses the main finding in Chapter 4 the implications of the result, based on
which conclusions and recommendations are provided.










5

CHAPTER 2
LITERATURE REVIEW
2.1 Introduction
In this chapter, theoretical background and review on previous studies are presented. This
Chapter includes three sections. The first section is theoretical review relating to critical
factors and employees’ performance. The second section presents the Research model. The
last section describes the hypotheses development for this research.
2.2 Theoretical review

In this part, theoretical review of employees' performance and organizational factors on
previous studies are presented. In addition, the relationship between employees' performance
and organizational factors is also presented.
2.2.1 Employees’ performance
According to Armstrong and Baron (1998), performance management is a strategic and
integrated approach to delivering sustained success to organizations by improving the
performance of the people who work in them and by developing the capabilities of teams and
individual contributors. It supports the rationale that people and not capital provide
organizations with a competitive advantage (Reynolds & Ablett, 1998). The purpose of
performance management is to transform the raw potential of human resource into
performance by removing intermediate barriers as well as motivating and rejuvenating the
human resource (Kandula, 2006). Competitive capacity of organization can be increased by
building strong people and effectively managing and developing people (Cabrera & Banache,
1999) which is in essence performance management.
According to Kandula (2006) the key to good performance is a strong culture. He further
maintains that due to difference in organizational culture, same strategies do not yield same
results for two organizations in the same industry and in the same location. A positive and
strong culture can make an average individual perform and achieve brilliantly whereas a
negative and weak culture may demotivate an outstanding employee to underperform and end
up with no achievement. Therefore organizational culture has an active and direct role in
performance management. Murphy and Cleveland (1995) believe that research on culture will
contribute to the understanding of performance management. Magee (2002) contends that
6

without considering the impact of organizational culture, organizational practices such as
performance management could be counterproductive because the two are interdependent and
change in one will impact the other.
Employees are the most valuable asset in any organization. A successful and highly
productive business can be achieved by engaging them in improving their performance. Not
all employees are equal in their working and they have different modes of working in that

some have the highest capability regardless of the incentive while others may have an
occasional jump-start. If they are handled effectively, the result can be greater productivity
and increased employee morale. Employees in a firm are required to generate a total
commitment to desired standards organizational factors performance to achieve a competitive
advantage and improved performance for sustaining that competitive advantage at least for a
prolonged period of time, if not forever.
According to Judge & Ferris (1993), perhaps there is no human resources system more
important in organizations other than performance evaluation and the ratings of employees’
performance represent critical decisions that highly influence a variety of subsequent human
resources actions and outcomes.
Performance is the important term used in the modern organizational structure. It has been
identified from different meanings. According to process view, performance is defined as the
conversion of efforts into productivities in order to achieve some particular results.
Performance means both behavior and result. Behavior emanates from the performer and
transforms performance from abstraction into action. Not just a means to an end, the behavior
is also an outcome in itself, the product of mental and physical effort applied to the task,
which can be judged apart from the result (Armstrong, 2000).
Bates & Holton (1995) have pointed out that performance is a multidimensional construct,
the measurement of which varies depending on a variety of factors (Armstrong, 2000). A
more comprehensive view of performance is achieved if it is defined as embracing both
behavior and outcomes (Armstrong, 2000). Employees’ performance (EP) is an important
factor that contributes to improve the outcomes, behavior and traits of the employees. It helps
to improve the productivity of the organization.
Nickols (2003) and Fort& Voltero (2004) identify similar factor that are closely related and
affect provider performance in the workplace. They include: clear goals and job expectations,
7

suitable repertoire, immediate feedback, skills to perform, knowledge of the organizational
structure, functional feedback system, sound metal models, sufficient motivation through
self-satisfaction and incentives.

As Waleed Ahmed Abdel-Razek (2011) mentioned, job performance is one of the most
important activities that reflect both the goals and the means necessary to achieve it and
represents the specialist efficiency or reaching our the desired level of achievement in that
work. It is the effort made by the employee within the organization in order to achieve a
particular goal. The actual results that companies desire objectively measure. This study has
pointed out the effectiveness of job performance through six elements: planning, goal and
objectives, organizing, decision making, individual abilities and characteristics.
2.2.2 Organizational factors
According to Mohamad Salim Zahargier & Nimalathasan Balasundaram (2011), there are a
number of factors that may be affecting the employees’ performance. Each employee may
have a different impact from different things at the workplace. Their attitude and behavior
can play a vital role in their performance. Employees do not perform in a vacuum. There are
a variety of organizational factors, such as:
- Organizational culture
- Working environment
- Communication
- Team work
Identifying these factors can help improve recruitment, retention and organizational results.
Hence, in an attempt to fill the research gap, the present study was initiated to identify the
factors which affect employees’ performance in Vietnamese companies.
2.2.2.1 Organizational culture
Literature on organizational culture is reviewed using sources which specifically address
issues relevant to librarians as well as sources from other disciplines. The information
gathered is ordered thematically and includes investigations into different models used for
typologies, the affects organizational culture has on performance, the measurability of
organizational culture, and ways in which organizations can manage cultural change.
Organizational culture was once seen as “how things are done around here” (Drennan, 1992)

8

The list of variables using for these above factors is summarized in Table 2.1.
Table 2.1: List of variables
No
Coding
of
factors
Factors Measurement Scale Sources

EP
Employees’
performance

Waleed Ahmed Abdel
-
Razek ,2011
1 EP1
Planning and
Organizing
Your jobs are sufficiently well
-
planned before field
work begins
UTS Employee Survey
Questions
Your plans and organizes work well, coordinates
with others, and establishes appropriate priorities.
The university of Alabama

Annual employee
performance evaluation

You allocate resources effectively.

/>ontracts/employee-
evaluation-australia/
You are effective in managing your own time.

You have many problems with prioritization.

Assigns priorities exceptionally well
healthcaregr
oup.com/pdf/90585.pdf
2 EP2
Goals and
Objectives
Performance

goals

for

my

work

group

are

clearly

defined
UTS Employee Survey
Questions
Clear

priorities

are

established

for

my


department
Accomplishes tasks efficient
ly. Able to complete
tasks quicker as the employee gains experience.
Newly developed
3 EP3
Decision
Making
When

decisions

are

made,

the

persons

affected area
asked for their ideas
UTS Employee Survey
Questions
You able to identify issues and relati
onships when
comparing data from various sources
/>ontracts/employee-
evaluation-australia/
You are effective in preparing reports or budgets

4 EP4
Individual
Abilities
You meet all the requirements of the job
ple
question
naire.com/employee-
evaluation.html
You serve as a role model
The university of Alabama

Annual employee

performance evaluation
You often miss deadlines

/>ontracts/employee-
evaluation-australia/
You are familiar wit
h the technical requirements of
your job
You can initiate, manage and bring to a close a
completed project
You are able to correctly use or operate the
technology required to do your job
9

5
EP5
Characteristics
You meet set deadlines on a regular basis
plequestion
naire.com/employee-
evaluation.html
Proactive at finding new tasks, as tasks are
completed, rather than waiting for a manager to
give further direction.
Newly developed

ORGF
Organizational
Factors

1 ORGC
Organizational
Culture
The organization's policies for promotion and
advancement are always fair.
tominsight.c
om/employee-engagement-
survey/sample-survey-
items.asp
Everybody is treated fairly in this organization

This organization respects its e
mployees

The leaders of this organization know what they
are doing
2 WENV
Working
environment
This organization has a real interest in the welfare
and satisfaction of those who work here
UTS Employee Survey
Questions
I recommend my organization as a good place to
work
/>ys/results/Employee/2011E
mployeeSurveyResults.asp
The environment in this organization supports a
balance between work and personal life.
tominsight.c

om/employee-engagement-
survey/sample-survey-
items.asp
3 COM Communication
Compared to other organizations, this organization
has useful method of communication.
UTS Employee Survey
Questions
Overall, information in this organization is
communicated well
formancepro
grams.com/surveys/What_
Employers-Ask.html
Information and knowledge are shared openly
within this organization
tominsight.c
om/employee-engagement-
survey/sample-survey-
items.asp
I have enough information to do my job well.
/>ys/results/Employee/2011E
mployeeSurveyResults.asp
4 TEAM Teamwork
There is emphasis on teamwork in this organization

UTS Employee Survey
Questions
Management is supportive of its employees

formancepro

grams.com/surveys/What_
Employers-Ask.html
I get the cooperation I need from those outside my
department
The people I work with cooperate to get the job
done.
/>ys/results/Employee/2011E
mployeeSurveyResults.asp
10

but has since evolved into a facet of management with a robust range of literature affording a
far deeper understanding. Schein’s definition (1985) remains one of the most often used and
can be summed up as the learned product of group experience which affects the behavior of
individuals. Organizational culture is differentiated from organizational climate in that it is
not as overt. Organizational culture is also differentiated from organization structure in that
structure has more to do with the relationships between individuals in an organization.
Whilst many different models exist for the categorization of cultures, the next area to explore
is whether any one culture type is better than any other. Early research suggested that strong
cultures, or those with widely accepted beliefs within the organization, performed better than
those with a lack of shared values (Peter and Waterman, 1982; Pascale and Athos, 1986; Deal
and Kennedy, 1982). However, when culture is too strong it can lead to stagnation and a
reduced ability to adapt to changes in the environment (Cloke and Goldsmith, 2002). Schein
(1985) actually predicts in Organizational Culture and Leadership that the culture of the
future would be the one that heavily promoted active learning and training. For librarians,
before the idea of what constitutes the best culture can even be considered, the idea of what is
meant by performance must be addressed. Early papers on the link between culture and
performance show that the culture of libraries was effectively one without goals (DuMont,
1980). This prompted Martell (1989) to advocate libraries adopting a business model in order
to increase productivity. However, a business model is too incongruent since performance for
commercial organizations is often so tied to profits. For libraries, performance is best related

to service quality. Holloway (2004) makes a case for the use of LibQUAL+ or the Balanced
Scorecard to measure the service quality, and thus performance, of academic libraries. Edgar
(2006) is a little more cautious, emphasizing the need for libraries to balance LibQUAL+
results with other factors which affect them uniquely. However, one problem concerning
culture’s effect on performance remains. Even if performance is clearly defined and links are
established, organizations do not exist in a vacuum. Amidst the overall organizational culture
are a series of subcultures and demographic cultures, which can cause members to experience
a limited adherence to the dominant culture (Tsui, 1992).
Organizational culture and performance relation has been examined by many researchers
(Ogbonna & Harris, 2000; Rousseau, 1990; Kotter & Heskett, 1992; Marcoulides & Heck,
1993), not much research has been done on organizational culture as a contextual factor of
performance management (Magee, 2002). Therefore the second purpose of this paper is to
determine the relationship between components of organizational culture and performance
11

management practices, a pervasive human resource development and management practice.
This study is indented to fill these gaps.
H1: There is a positive relationship between Organizational Culture and Employees’
performance.
2.2.2.2 Working Environment
Many enterprises limit their productivity enhancement of employees to the acquisition of
skills. The type of work environment in which employees operate determines the way in
which such enterprises prosper. According to Akinyele (2010), about 80% of productivity
problems reside in the work environment of organizations. Business is full of risks and
uncertainties and the ability of any organization to respond successfully to the challenges
posed by the present dynamic nature of economic situations will largely depend on how well
the organization can effectively and efficiently utilize the human resources at its disposal. It
is a generally accepted fact that the success of any business organization will largely depend
upon the effective and meaningful utilization of its financial and physical resources. The
performance of a corporate organization, which determines its survival and growth, depends

to a large extent on the productivity of its workforce. Yesufu (2000) asserted that the wealth
of the nation as well as socio-economic well-being of its people depends on the effectiveness
and efficiency of its various sub-components. However, labour is generally regarded as the
most dynamic of all the factors that are employed for the creation of wealth, having the
potential to energize and serve as catalyst to all the other resources.
Conducive work environment ensures the well-being of employees which invariably will
enable them exert themselves to their roles with all vigour that may translate to higher
productivity (Akinyele, 2007).
The need to provide a safe work environment for employees has had a long history in human
resource management. Spector and Beer (1994) acknowledged that work systems cannot only
affect commitment, competence, cost effectiveness and congruence but also have long term
consequence for workers’ well-being; there are some evidences to indicate that work systems
designs may have effects on physical health, mental health and longevity of life itself.
Conducive work environment ensures the well-being of employees which invariably will
enable them exert themselves to their roles with all vigour that may translate to higher
productivity (Akinyele, 2007).
12

Kohun (1992), defines work environment as an entirely which comprises the totality of
forces, actions and other influential factors that are currently and, or potentially contending
with the employee’s activities and performance. Work environment is the sum of the
interrelationship that exists within the employees and the employees and the environment in
which the employees work. Brenner (2004) was of the opinion that “the ability to share
knowledge throughout organizations depends on how the work environment is designed to
enable organizations to utilize work environment as if it were an asset. This helps
organizations to improve effectiveness and allow employees to benefit from collective
knowledge”. In addition, he argued that work environment designed to suit employee’s
satisfaction and free flow of exchange of ideas is a better medium of motivating employees
towards higher productivity. However, work environment when appropriately designed,
motivates employees toward higher productivity.

Work environment, according to Opperman (2002), is a composite of three major sub-
environments via: the technical environment, the human environment and the organizational
environment. Technical environment refers to tools, equipment, technological infrastructure
and other physical or technical elements. The technical environment creates elements that
enable employees perform their respective responsibilities and activities.
The human environment refers to peers, others with whom employees relates, team and work
groups, interactional issues, the leadership and management. This environment is designed in
such a way that encourages informal interaction in the work place so that the opportunity to
share knowledge and exchange ideas could be enhanced. This is a basis to attain maximum
productivity. Organizational environment include systems, procedures, practices, values and
philosophies. Management has control over organizational environment. Measurement
system where people are rewarded on quantity, hence workers will have little interest in
helping those workers who are trying to improve quality. Thus, issues of organizational
environment influence employee’s productivity.
It is generally agreed that the more manager can answer the question of what motivates their
employees accurately, the more effective they will be at enhancing performance and
advancing the notion of organizational accountability (Chernis & Kane, 2004). Lambart
(2005) opines that “labour productivity is rarely measured directly but inferred from changes
in employees’ attitude and behaviour such as organization commitment, organizational
citizenship behaviour and job satisfaction”. An effective work environment management
13

entails making work environment attractive, creative, comfortable, satisfactory and
motivating to employees so as to give employees a sense of pride and purpose in what they
do (Brenner, 2004).
H2: There is a positive relationship between Working Environment and Employees’
performance.
2.2.2.3 Communication
Communication skills are the foundation for success. The ability to communicate effectively
and with influence will determine the success in transmitting the message (Palazzolo, 2008).

Communication is the exchange and flow of information and ideas from one person to
another. It involves a sender transmitting an idea to a receiver. Effective communication
occurs only if the receiver understands the exact information or idea that the sender intended
to transmit. Many of problems that occur in an organization are the direct result of people
failing to communicate. Leaders of organizations who keep everything inside or can’t
communicate a message leave individuals to their devices to try and figure out what they
may, or may not want. This is a failure of leadership and communication (Baldoni, 2003).
Faulty communication causes the most problems. It leads to confusion and can cause a good
plan to fail.
The probable future impact on the organization will continue to be detrimental and further
distance the relations between line and staff personnel if communication barriers are not
identified and alternatives for internal organizational communications cannot be evaluated
and implemented. In hundreds of surveys at different companies, employees cite poor
communications as the greatest source of wasted time, effort and material as well as internal
and external conflict (Ladew, 1998, p.101). Organizational mistrust, decreased employee
morale, lack of production, and quality of service being provided could all be contributed to
ongoing poor internal communications if not corrected or improved upon.
H3: There is a positive relationship between Communication and Employees’ performance.
2.2.2.4 Teamwork
Teamwork is defined by Scarnati (2001, p. 5) “as a cooperative process that allows ordinary
people to achieve extraordinary results”. Harris & Harris (1996) also explain that a team has a
common goal or purpose where team members can develop effective, mutual relationships to
achieve team goals. Teamwork replies upon individuals working together in a cooperative
14

environment to achieve common team goals through sharing knowledge and skills. The
literature consistently highlights that one of the essential elements of a team is its focus
toward a common goal and a clear purpose (Fisher, Hunter, & Macrosson, 1997; Johnson &
Johnson, 1995, 1999; Parker, 1990; Harris & Harris, 1996). Teams are an integral part of
many organizations and should be incorporated as part of the delivery of tertiary units.

Successful teamwork relies upon synergism existing between all team members creating an
environment where they are all willing to contribute and participate in order to promote and
nurture a positive, effective team environment. Team members must be flexible enough to
adapt to cooperative working environments where goals are achieved through collaboration
and social interdependence rather than individualized, competitive goals (Luca & Tarricone,
2001).
J. Cannon-Bowers et al. divide human teamwork into three dimensions: cognitions, skills,
and attitudes. The cognition or knowledge category includes information about the task such
as a team mission, objectives, norms, problem models, and resources. Teamwork skills
include behaviors such as adaptability, performance monitoring, leadership, communication
patterns, and interpersonal coordination. Attitudes measure the participants’ feelings about
the team: team cohesion, mutual trust, and importance of teamwork.
H4: There is a positive relationship between Teamwork and Employees’ performance.
2.2.3 Relationship between organizational factors and employees'
performance
An organization is a set of elements in interaction, organized level and decision making units
(Martinelli, 2001). Identification of these elements has always been one of the most important
issues facing organizational researchers. Richard L.Daft categorized contextual dimension of
organization including size, technology, environment, aims, strategy, and culture
(Gholampourrad, 2003). There has been a large volume of studies that examine how the
fitness between organizational contexts explains variances in organizational performance.
What is lacking in existing literature is an understanding of the intervening mechanism that
explains the path of the influence from organizational context to organizational effectiveness.
Knowledge management plays a potentially mediating role in connecting organizational
context with effectiveness (Zheng et al., 2010). Many researchers have emphasized three
major factors for managing knowledge: enablers, processes, and organizational performance.
Knowledge management enablers (or influencing factors) are organizational mechanism for
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fostering knowledge consistently. Enablers, in fact, are some organizational elements that

influence knowledge management processes. Knowledge process can be thought of as a
structured coordination for managing knowledge effectively. Typically knowledge processes
include activities such as creation, sharing, storage, and usage that direst knowledge
throughout the organization and the third factor is organizational performance (Lee and Choi,
2003).
Every organization has been established with certain objectives to achieve. These objectives
can be achieved by utilizing the resources like men, machines, materials and money. All
these resources are important but out of these the manpower is the most important. It plays an
important role in performing tasks for accomplishing the goals. The question arises that how
these resources are utilizes by manpower. Further, the business environment is changing
drastically. The environmental factors are uncontrollable. These are beyond control of
management of the firms. One has to adjust with the external factors to do the business in the
market. Every environmental factor like social, cultural, legal, political, economic,
technology and competition gets changed very fast. For effective working the knowledge of
these factors is must otherwise the plan will misfire. In present situation it is difficult to
predict about anything. It is uncertain to say that what will happen tomorrow. Again the need
for highly skilled and dedicated manpower is felt who can give the best output. Nowadays the
markets are also very competitive and there is cut throat competition. For every organization
it is difficult to start, survive, stabilize and excel in the business. The firm that gets the
advantage over other competitors through their talented and dedicated manpower can take the
lead in the market. The contribution of employees on job is the most important factor for
development and excellence in business. The performance of employees on different jobs in
close coordination is needed for success of the unit. Employees are performing different jobs
in an organization depending upon the nature of the organization. They mainly perform tasks
like production, storage, manufacturing, transportation, marketing, purchasing, distribution,
promotion of business, finance and accounting, human resource, research and public
relations. All these activities are inter-related to achieve the targets. These are to be
performed by the employees properly so they can give their best output at the job. This will
have great impact on the total production, sales, profit, progress and market position of the
company in the market. Various factors like skills, training, motivation, dedication, welfare,

management policies, fringe benefits, salary and packages, promotion, communication etc.
are responsible to encourage the people to work sincerely and give their best output. The