Onyx 

Journals of Socio­Economic Studies 
 2018, Vol. 1, No. 1, pp. 181­207

ORGANIZATIONAL CULTURE AND EMPLOYEE PERFORMANCE

(A STUDY OF SELECTED BOTTLING PLANTS IN EASTERN AND
SOUTHERN NIGERIA)

Azugama Maxwell(Ph.D)
Department of Marketing,
Faculty of Management Sciences,
Imo State University, Owerri

&

Ekeruo Chukwudi (M.Sc)

Department of Management
Faculty of Management Sciences,
Imo State University, Owerri

ABSTRACT

Effects of organizational culture on employee performance were evaluated in this study. The
basic variables of the study were Democratic leaderships style, Reward System, Employee
Productivity, Employee Commitment and Employee Punctuality, from which the specific
objectives were derived. Six hypotheses were formulated in the study to test the significance of
democratic leadership style and reward system on employee productivity, commitment and
punctuality. The methodology of the research involved a sampling of 300 employees of four
bottling plants in eastern and southern Nigeria, through a combination of judgemental and
simple random techniques, using structured questionnaire as instrument. The primary data were
analyzed using the version 20 of the Statistical Package for Social Sciences (SPSS), for
correlations and analysis of variance. The results showed that a significant positive relationship
exists between democratic leadership style and employee productivity (r = 0.742), employee
commitment (r = 0.638) and employee punctuality (r = 0.796). Similarly, a significant
correlation was observed between reward system and employee productivity (r = 0.596)
employee commitment (r = 0.649) and employee punctuality (r = 0.801). It was also found out
from the coefficient of multiple determination that democratic leadership and reward systems
have the capacity to influence employee productivity, commitment and punctuality up to 50.2%.
base on these findings, it was concluded that organizational culture has significant effects on
employee performance.
Keywords: Democratic Leadership Style, Reward System, Employee Commitment,
Employee Productivity and Employee Punctuality.
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1.1 Introduction
A business organization has a set of values and beliefs which govern the activities

of the staff and gives a kind of identity to the organization. The values and beliefs

provide direction for the employees, bind them together and make them behave in

a similar manner when at work. These set of values, beliefs, leadership styles and

reward system are the organization’s culture. Culture has been variously defined as

the way of operation of the organization (Julie 2016); body of value that shapes the

way employees behave at their tasks (Needel 2004), collective principles of

organizational activities, and a product of such factors as history, product, market,

technology, type of employees and management style (Ugwulebo, 2014). Culture

encompasses all aspects of the organization. As Goke (2015) points out, culture

embraces organizational values, norms, leadership styles, reward system etc.

values are outstanding guides to organizational actions. Every organization has a

set of values, whether or not it is written. Values guide the perspectives of the

organization as well as its actions (Goke, 2015).

Reward system is another aspect of organizational culture. An organizational

reward system, as Biedman and Fieler (2014) explain, is a set of programmes set

up by a company or any organization to payback performance and motivate

employees. Many reward systems are used by various organizations to motivate

employees. Biedman et al; (2014) categorize the systems into two broad
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typologies, namely financial and non financial, while psychologist like Goke

(2015) and Scott (2017) classed reward systems into extrinsic and intrinsic.

Another outstanding aspect of organizational culture is leadership style. Scott

(2017), explains leadership style as the method employed by management to direct

the employees towards achieving specific goals. Different authors have different

classes of leadership styles such as the autocratic style, transformational style,

transactional style, paternalistic style and laissez-faire style. However, the most

practical leadership style in Nigeria organization are the autocratic and democratic.

This study focused on the democratic leadership style.

Various proxies are often used in lieu of performance in this study, three of such

indices were used and these are employee productivity, commitment and employee

punctuality.

Employee productivity is a measure of the output of a worker for a given quantity

of input. It is a type of input/output analysis designed to evaluate how a single unit

of input is transformed by worker into the expected output (Julie 2016). In

evaluating productivity, standards are used as yardstick to evaluate the output of all

employees.
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Commitment is the bond between the employee and his job. It has been found by

various researchers (Needel, 2004; Julie, 2016; Goke, 2016) that highly committed

employee’s often record high performance.

Organizational culture also reflects on the punctuality of its employees. Punctuality

is the ability to do things at the agreed or stated time. (Evans, 2012). Punctuality is

captured in most organizations using attendance records and the performance

rating of employees by the management often considers employee punctuality as

an important index.

From the foregoing, it is evident that organizational reward system and leadership

style as aspect of culture could influence the performance of employees. Although

several researches have been conducted to establish the relationship between

culture and employee performance in the Nigerian. This study examines the effects

of organizational culture on employee performance.

1.2 Statement of the Problem

The study is motivated by the following problems.

First, employee performance in many organizations is reportedly dropping in

recent times as reported by Julie (2016). Staff turnover is on the increase. People

are dropping out of jobs which seem to be lucrative, on the premise that coping

with the way things are done in such organizations (culture) is difficult. Many
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employees that remain on the job come up with incessant complaints of gross

unfairness and unethical business conducts to which employees are subjected to.

Many organizations no longer encourage employees to develop their careers and

the entire business organizations are drifting from what Julie (2016) describes as

“culture of human resource power” to “culture of machine power”.

Second, as technologies are changing by the day, the attention of managers is on

human resources that are needed to effect these changes for a high performance.

Human resource has always been acknowledge as the most important resource of

the organization. Organizations which fail to keep abreast with the recent changes

are phasing out of business. Julie (2016) argued that such organizations that are

winding up are those that do not accommodate change management in their

culture. Serious culture issues are cropping up as employee low productivity, weak

commitment, not being punctual to duty have been argued by Kennedy and

Wouden (2016) to have an association with the culture of such organizations.

Towards alleviating these problems, this study is conducted to examine the impact

of organizational culture on employee performance.

1.3 Objectives of the Study

The broad objective of this study is to examine the effects of culture on employee

performance. The specific objectives are to:

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i. Ascertain the effects of democratic leadership style on employee

productivity.
ii. Find out the effects of democratic leadership style on employee

commitment.
iii. Find out the effects of democratic leadership style on punctuality.
iv. Ascertain the effects of reward system on employee productivity.
v. Find out the effects of rewards system on employee commitment.
vi. Ascertain the effects of reward system on punctuality.

1.4 Research Questions

In line with the objectives of the study, the following questions were raised:

i. To what extent does democratic leadership style have effect on employee

productivity?
ii. To what extent does democratic leadership style have effect on employee

commitment?
iii. To what extent does democratic leadership style have effect on employee

punctuality?
iv. To what extent does reward system have effect on employee

productivity?
v. To what extent does reward system have effect on employee

commitment?
vi. To what extend does reward system have effect on employee punctuality?

1.5 Research Hypotheses

The hypotheses of the study are stated in null forms as follows:

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H01: Democratic leadership style has no significant relationship with employee

productivity.

H02: Democratic leadership style has no significant relationship with employee

commitment.

H03: Democratic leadership style has no significant relationship with employee

punctuality.

H04: Reward system has no significant relationship with employee productivity.

H05: Reward system has no significant relationship with employee punctuality.

H06: Reward system has no significant relationship with employee commitment.

1.6 Scope of the Study

This study was limited to examining organizational culture and its effects on

employee performance. It concentrated on two major aspect of culture (leadership

styles (specifically the democratic leadership style) and reward system), while the

following indices were used to represent employee performance: employee

productivity, employee commitment, and employee punctuality. The management

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and staff of Bottling Plants in Eastern and Southern Nigeria constituted the unit

scope.

1.7 Significance of Study

The study will be beneficial to bottling companies and other manufacturing

organizations. It will also be useful to researchers and academic institutions.

To bottling company and other manufacturing organizations, the study provides

empirical findings on how the culture of the organization impacts on the

performance of the employees. This information could be used by the top

management of the reference organization and others to effect changes that are

necessary for high employee productivity, commitment and punctuality.

Researchers and academic institutions will benefit from both the findings and

literature of the work. The findings reflect a typical empirical cases that could be

applicable to a wide diversity of organizations. The literature section provides

conceptual and theoretical framework upon which researchers could build further

studies or cite as valid reference.

2.0 Literature Review

2.1 Concept of Organizational Culture

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Every organization has a culture that influences the behaviours of both managers

and workers. Organizational culture consist of beliefs and values shared within the

organization. It influences the worker’s degree of job satisfaction as well as the

level and quality of their performance. (Agulanna and Madu, 2003). There is no

single definition of organization culture hence, various scholars have attempted to

define organizational culture in different ways. The definitions of various

authorities and scholars are adopted here. Below are the definition of various

authorities and scholars.

Cited in Agulana and Madu, (2003) Sharplin (1983) defined organizational culture

as “the system of shared values, beliefs, and habits within an organization that

interacts with formal structure to produce behavioural norms”. Similarly,

Armstrong (2006) defined organizational culture as the pattern of values, norms,

beliefs, attitudes and assumptions that may not have been articulated but shape the

ways in which people behave and things get done.

The following definitions of organizational culture by different authorities have

been cited in Akanwa (2000). Spender (1990) defined it as a belief system shared

by an organization’s members. In his own definition, Schein (1983) saw

organizational culture as the pattern of basic assumptions that a given group has

invented, discovered, or developed in learning to cope with its problem of external

adaptation and internal integration. Peters defined it as a dominant and coherent set
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of shared values conveyed by such symbols means as stories myths, legends,

slogans, anecdotes, and fairy tales.

According to Akanwa, (2008), Moorhead and Giffin (1992) developed what they

term a comprehensive definition. According to them, organization culture is the set

of values, often taken for granted, that help people in an organization, understand

which actions are considered acceptable and which are considered unacceptable.

Frank (1990) in Agulanna and Madu (2003) believes that culture govern what the

company stands for, how it allocates resources, its, organizational structure, the

system it uses, the people it hires, the fit between jobs and people, the result it

recognizes and rewards, what it defines as problems and opportunities, and how it

deals with them. The culture of an organization is sometimes conceptualized as the

climate or weather of a place.

Corporate culture has influence on workers and their job satisfaction, managers

and their life styles and strategies adopted by organizations to achieve their

objectives. “Culture affects not only the way managers behave within the

organization but also the decisions they make about the organization with its

environment and its strategy Lorch (1988) in Agulanna and Madu (2003).

Organizational culture can enhance communication, improve decision making as

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well as leading to resistance to change thereby impending the smooth

implementation of organizational strategies.

Organizational culture has the following elements: values, belief, philosophy,

leadership styles and reward system.

2.2 Leadership Styles

Various authors have defined leadership styles in different ways. According to

Schuitz and Durarie (2010), leadership style is the pattern adopted by a leader to

direct, motivate and influence employees towards goal attainment. The Harvard

Business Dictionary (2016) defines leadership style as a leader’s style of providing

direction, implementing plans and motivating people. In simplifying the definition

of leadership style, Liu and Zeng (2011) defined it as the way people are being led.

There are various types of leadership styles Udokwu (2014) quoted Ile (1999)

identify the following styles. Democratic, autocratic, laissez faire leadership style

etc.

Democratic Leadership Style: This leadership style is also known as participative

leadership. It is a type of leadership style in which member of the group take a

more participative role in the decision-making process. Everyone is given the

opportunity to participate; ideas are exchanged freely, and discussion is

encouraged.
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Autocractic Leadership Style: This type of leadership style is being used when a

leader dictates policies and procedures, decides what goals are to be achieved, and

duties and controls all activities without any meaningful participation by the

subordinates. This leader has full control of the team, leaving low autonomy within

the group. Business Dictionary Com. (2012).

Laissez-Faire Leadership Style: This is a type of leadership style in which

leaders are hands-off and allow group members to make the decisions. Researchers

have found that this is the leadership style that leads to the lowest productivity

among group members.

2.3 Reward System

Agulana and Awujo (2005) defined reward system as an organization’s integrated

policies. Processes and practices for rewarding its employees in accordance with

their contribution, skill and competence and their market worth. According to the

Business Dictionary (2002) reward system is procedures, rules and standards

associated with allocation of benefits and compensation of employees Evans

(2012), saw reward system as programs set up by a company to reward

performance and motivate employees on individual and/or group levels. They are
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normally considered separate from salary but try to be monetary in nature or

otherwise have a cost to the company.

A reward system comprises financial rewards (fixed and variable pay) and

employee benefit jointly is the total remuneration. The system also incorporates

non-financial rewards (recognition, praise, responsibility and personal growth).

Agulana and Awujo (2005). Non-financial reward focus on the needs of people

(achievement, recognition, responsibility, influence and personal growth).

Financial rewards on the other hand are monetary incentive that an employee earns

as a result of good performance.

2.5 Employee Performance

Evans (2016) defined employee performance as whether a person executes his

jobs, duties, and responsibilities well. He posited that while focusing on employee

performance for the purpose of cost analysis, promotion, salary increases,

dismissal retention etc. The measure of employee, performance adopted should

ideally be transparent to the employee, with performance expectations and

standards made clear to the employee from the outset, in the interest of fairness and

clarity.
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Employee performance according to Noel (2012), is a key factor that contributes

directly to the performance of the company. Companies today with increased

competition in the business arena, are keen to boost employee performance in

order to enhance their profitability, market reach and brand recognition.

Many authors measure employee performance using the following indices

productivity, employee commitment, punctuality innovation etc.

Punctuality: Webster Dictionary (2015) defines punctuality as the characteristics

of being able to complete a required task or fulfill an obligation before or at a

previously designated time. According to Kurt (2014) employees who regularly

arrive late for work or are frequently absent from the office are unlikely to be

meeting their performance objectives. Noel (2015) posited that in cultures which

values punctuality being late is seen as disrespectful of others time, and may be

considered insulting.

In such cases, punctuality may be enforced by social penalties. For example, by

excluding low-status late comers from meetings entirely.

Commitment is a measure of the employee’s connection to a goal. It means “being

bound” to a goal or the determination to achieve a goal. It stems from belief in a

goal, followed by passion to believe in that goal. Many authors acknowledge

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commitment as a psychological phenomenon that an employee continues to work

in a job and feels bound to it, regardless of whether the job is fulfilling or not.

Employee productivity is another essential component of employee’s performance.

It refers to the efficiency of a worker, often evaluated in terms of output of the

worker in a specific period of time.

The productivity of an employee is often assessed relative to an average or by used

of predetermined standards. The success of an organization depends largely on the

productivity of its employees.

2.6 Theoretical Review

XHang’s Theory of Cultural Multiplicity

The theory of culture multiplicity states that the human cognition contains many

components, among which three bread types of cultural rules of behaviour are

identifiable, namely; values, expectations and Ad Hoc rules.

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The theory was propounded in 2009 by Xibao Zhang and modified recently by Cox

and Cohen (2015).

According to Xhang, the three cognitive components have a mutually conditioning

relationship with behaviour. The three are different in terms of the scope and

duration of mutual shaping of behaviour as the theory identifies values as being

universal and enduring rules of behaviour, expectations, on the other hand, are

described as context – specific behavioural rules while Ad Hoc Rules are

improvised rules of behaviour that the human mind devices contingent upon a

particular occasion. Furthermore Ad Hoc Rules need not be consistent.

Metaphorically, they can be compared to a multi-carriage train which allows for

the relative lateral movements by individual carriage so as to accommodate bumps

and turns in the tracks. As Zhang (2009) puts it “they provide a shock absorber

mechanism’s.

This enables individuals in the organizational context to come with conflicts in

cultural practices and values and to adopt themselves to cultural contexts where

from different national cultural backgrounds work together over extended time. It

also provides a powerful framework to explain how interactions by individuals in

the organization give rise to emerging cultural hybrids characterized by both

stability and change.

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Zhang (2009) derived this from an empirical study of culture emergence in the

Sino-Western International Cross-cultural management contest in China.

One major theoretical contribution of this multi-carriage train perspective is its

allowance for the existence of inconsistencies among the three cognitive

companies in their mutual conditions of behaviour. The internal inconsistency view

is in stark contrast to the traditional interval consistency assumption explicitly or

tacitly held by many culture scholars.

The other major theoretical contribution of Xhang’s multiplicity proposition, which

follows logically from the first one, is to view culture as an over-arching entity

which is made of multiplicity of values, expectations and Ad Hoc Rules. This

notion of multiplicity of culture of an organization leads to the classification of

culture along its path of emergence into Nascent, Adolescent and mature types,

each of which is distinct in terms of the pattern of the three cognitive components

and behaviour.

2.7 Empirical Review

Kawooya (2010) carried out a research on effect of leadership styles on employee

performance. The study adopted survey design in its design approach, while the

sampling techniques as simple random sampling. The study sampled the opinion of

280 respondents by means of questionnaire. The date was sourced through primary
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and secondary means and the findings were: that a negative relationship was

discovered between authoritative leadership and employee performance.

According to him, authoritative leadership affected individual performance in a

way that compromised the efficiency to work individual innovation and creativity.

The study also discovered a positive relationship between democratic leadership

style and employee performance. According to Kawooya (2010); most employees

enjoyed less authority from their supervisors, this however compromised employee

performance in the department that had supervisors and managers who practiced

laissez-faire leadership.

Similarly, Chan and Chong (2014) conducted a research on the impact of

leadership styles on employee commitment. Questionnaire was adopted to sample

the opinion of 384 respondents from a retail industry in China. Convenience

sampling method was adopted. Their findings were that democratic leadership

style has a significant positive relationship with employee performance. They

asserted further that democratic leadership styles have been found more

appropriate for complex and dynamic organization in modern days.

Secondly, autocratic leadership style has negative impacts on employee

commitment. They noted that employees who fell under stress reported autocratic
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supervision on the part of their leaders. Finally, the study discovered that lesser-

faire leadership style is associated negatively to affective commitment.

Bello and Adebayo (2014) investigated “reward system and employees

performance in Lagos State” Two hundred.

3.0 Methodology

The researcher adopted descriptive survey design for the investigation. By this

method, a group of individuals were interviewed for their opinion and other

manifestations on the subject of culture and employee performance. The group

constituted respondents to the study, from which the primary data were generated.

The population of the study consisted of 620 management and staff of four bottling

companies in eastern and southern Nigeria, from which a sample of 300

respondents was selected, using the Yaro Yamene’s formula (Iwu, 2017). The

instrument for data collection was questionnaire, constructed in consideration of

the research questions and objectives.

The question was priority validated by authorities in management and statistics and

its reliability was ascertained by a test retest method that involved a pilot study.

While purposive sampling method was used to sample the managers of the

breweries, simple random sampling was adopted for the employees. Purposive

sampling was adopted for the managers, supervisors and heads of departments
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because it was necessary that they should be included in the study for more

realistic data. Simple random sampling was adopted for the employees in order to

accord each prospective respondent employee an equal probability of being

selected.

The primary data were analyzed using the version 20 of Statistical Package for

Social Sciences (SPSS) for correlations, regression and analysis of variance.

The variables measured in the study are: Democratic Leadership Style (DLS),

Reward System (RS) as the predictive (or independent) variables and;

Employee Productivity (EPR)

Employee Commitment (EC) and

Employee Punctuality (EP) as the dependent variables.

4.0 Results

The results of the SPSS software analysis are presented in tables 4.1 to 4.3.

Table 4.1
Correlations
DLS RS EPR EC EP
DLS 1.000
RS 0.608 1.000
EPR 0.742 0.596 1.000
EC 0.638 0.649 0.814 1.000
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EP 0.796 0.801 0.578 0.698 1.000

Source: Author’s Computation (2018) using SPSS Version 20.
Table 4.2: Model Summary
Model R R-Square Adjusted Std. Error of
R-Square Estimate
1 .740 .548 .502 1.623
Predictors: (Constant), DLS, RS

Table 4.3: ANOVA

Model Sum of Df Mean F Sig.
Squares Square
1 Regression 2014.206 4 503.552 18.836 .000a
Residual 962.411 36 26.734
Total 2976.617 40

4.1 Discussion of Findings

Table 4.1 presents the correlation results. The predictive variables were Democratic

Leadership Style (DLS) and Reward System (RS). DLS was observed to have a

strong correlation with employee productivity EPR (r 0.742). DLS also had

correlation coefficients of r=0.638 and re=.796 with Employee Commitment (EC)

and Employee Punctuality (EP) respectively. Similarly, Reward System (RS) had a

significant coefficient of r=.596 with employee productivity (EPR). R=.649 and

r=.801 with employee commitment (EC) and employee punctuality (EP)

respectively.
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These significant correlation coefficients were confirmed by the model summary in

table 4.2 which presents a coefficient of determination of R2=.548. A confirmation

of the determination coefficient is also contained in table 4.2, with an adjusted R-

Squared of .502 and a minimal standard error of estimate of 1.623. The R 2 of .502

depicts that above 50.2% variations in the dependent variables (EPR, EC, EP)

could be accounted for by the predictive variables (DLS and RS). By implication,

about 49.8% (i.e. 1-R2) is accounted for by other variables not captured in the

study.

The analysis of variance results in table 4.3 confirm the significance of the

predictive variables in influencing the dependent variable. The table shows a

Fisher’s statistic of F=18.836. These results led to the rejection of the null

hypotheses Ho1, Ho2, Ho3, Ho4, Ho5, and Ho6, and to the acceptance of the

corresponding alternative hypotheses. Thus, there was a significant relationship

between democratic leadership style and employee productivity, commitment and

punctuality. Similarly, there was a significant relationship between organizational

reward system and employee productivity, commitment and punctuality.

These findings are in tandem with the those of Kawooya (2010); Change & Chong

2014 and Bello & Adebayo (2014). Kawooya (2010) discovered a positive

relationship between democratic leadership style and employee performance and

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asserted that authoritative leadership affect individual performances in a way that

compromises efficiency, individual innovation and creativity.

Chang & Chong (2014) also found out in their study that democratic leadership

style has been found more appropriate for complex and dynamic organizations in

recent times.

5.1 Conclusion

The culture of an organization has significant effect on the performance of the

employees. Culture was measured in terms of leadership style and reward system;

and employee performance was measured in terms of commitment, productivity

and punctuality. Democratic leadership style can influence employee productivity,

commitment and punctuality by up to 50.2%. The same condition is applicable to

reward system and employee productivity, commitment and punctuality.

Organizations have as part of their culture a style of leadership and a system of

rewards. All leadership styles do not have the same effect on employee

performance; only democratic style produced the positive effects observed in this

study. Autocratic style was found to influence employee behaviour in a way that

impairs performance, according to previous studies. Furthermore, it is important to

note that reward system can have a positive effect on employee performance only

when the reward system is appropriate for the employees of that organization.
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5.2 Recommendations

From the findings of the study the following recommendations are made.

1. Organizations’ production managers should adopt leadership style that is

most suited to their employees for high productivity since leadership style

has been found to be significant determinant of employee productivity.

2. Human resources managers should use rewards such as increase in base pay,

bonuses and compensations to boost the morale of their employees for

higher employee commitment, punctuality and productivity.

3. Business managers should adopt the democratic leadership style in their

organizations to achieve high employee performance since democratic

leadership is the style of choice to a vast majority of employees.

4. Managers should avoid dwelling on a particular reward system but should

modify rewards to suit the need of the employees for increased employee

performance.

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