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An Empirical Study of the Factors Affecting Employees’ Performance at ABC


Group of Companies

Research · July 2021


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Proceedings of the 5th CIPM International Research Symposium on HRM 2021.
Chartered Institute of Personnel Management of Sri Lanka. ISSN: 2513-2733

An Empirical Study of the Factors Affecting Employees’ Performance at ABC


Group of Companies

Senthuran Nagarajah1, Priyantha Medawala2, and Samantha Rathnayake3


1
Independent Researcher and English Language Trainer
2
Visiting Lecturer and Management Consultant, Chartered Institute of Personnel Management of Sri
Lanka.
3
Faculty Member, Postgraduate Institute of Management, University of Sri Jayewardenepura, Sri
Lanka
1
senthuran.michael@gmail.com, 2pmedawala@gmail.com, 3samantha@pim.sjp.ac.lk

Abstract: ABC Group of Companies is one of the leading tyre manufacturing companies in Sri Lanka
that serves the local and global market. In line with the annual report of the company, it can be observed
that a sudden decrease in the profits since 2018. Management believes that the main motive for the profit
reduction is the lack of job performance. Therefore, a systematic study was aimed to identify the internal
determinant factors to the employees’ job performance of ABC Group of Companies. The research was
based on the mixed methodology using a structured questionnaire distributed among 80 employees of
ABC Group of Companies. Rewards, training, motivation, and leadership style were considered as
determinant factors that can contribute to the employees’ performance of the company. Descriptive
statistics and correlations between dependent and independent variables were analyzed using SPSS 23
and Microsoft Excel at a 95% confidence level. Results show that motivation (r = 0.822) has a strong
positive correlation with the employee’s job performance while rewards (r = 0.411) indicate moderate
association with the employee performance. Further, the determinants, motivation, and reward showed a
statistically significant effect on employees’ job performance (p<0.05). Hence it can be concluded that
ABC Group of Companies should pay their attention to rewards and motivation practices carried in terms
of remuneration, benefits package, promotion, recognition, and working environment to uplift the
employees’ performance to enhance the bottom line of the organization. Moreover, the implementation
of a knowledge management system is suggested.
Keywords: Employees’ Job Performance, Leadership style, Motivation, Rewards, Training

Introduction Human resource is an important factor of the


production process. A well-trained, motivated
Human resources can be defined as the most workforce makes it possible to achieve the
important resource to affect job performance in organization’s success. For this reason,
organizations. Among other organizational management has to supply not only raw
resources, human resource is the most critical materials, facilities, and equipment, but it also
and valuable resource to achieve organizational has to motivate its employees. Motivation,
objectives. Human resources can be defined as leadership, rewards, and training are the key
the most important resource to affect areas of success and these depend on the
performance in organizations (Stone, 2008). performance of the employees. Employees will
The effectiveness and efficiency of an perform well if they are motivated (Stone,
organization cannot be achieved without 2008). The organization has many resources,
effective management of the human resource. among these resources, employees are the most
Performance analysis is an examination of the valuable asset of any organization without
knowledge, skill, abilities, and attitudes of whom no production/ performance can take
employees, their current and future career goals place. The success of an organization largely
and objectives, and the “match” between depends on the quality of its employees which
employees and organizational expectations. is measured by their performance. Hence, good
Such an analysis also helps determine how employees’ performance is part of the success
employee performance helps the organization of the organization. Nelson and Quick (2003)
achieve its strategic goals and objectives argue that a job with high motivation and
(Gilley, 2009). hygiene factors leads to high performance and
few complaints among employees. Employees’

1
job performance like all other systems, they do a new entity. Subsequently, the company started
not function when their components do not manufacturing butyl tubes and other rubber
work together smoothly and efficiently. Thus, products. In 2013, started a new factory to
understanding the relationship between the recycle plastic and polythene waste as well as
organization and its employees is the key to manufacturing PVC pipes, shopping bags,
improve the organization‘s ability to move garbage bags, printed bags, etc. With the
through change effectively. Organizations need assistance of Vega Biz + USAID. Now ABC
to understand the factors that affect employee’s Group of Companies is a pioneer in the rubber-
performance because such insight will help based industry in Sri Lanka, and its service
them make decisions that will inculcate excellence has earned the company a renowned
improved performance from the employees and image among the leaders in the Sri Lankan
to an extension the overall performance of the market. It offers its’ unparalleled services
organization (Atasi et al., 2019). Employee delivery to a large number of customers that are
performance has been shown to have a engaged in leading business operations, and a
significant effect on organizational competitive business model has won the
performance. This is due to the reason that confidence of the quality of services. Further,
individual performance is the foundation of ABC Group of Companies, with its dynamic
organizational performance. Identifying factors growth in its business operations, and is now
that affect employees’ performance can help doing business with the global market and
improve recruitment, retention, and becoming a giant in the rubber-based industry.
organization result (Mohammed & ABC Group of Companies consist of 320
Nimalathasan, 2011). employees working in various departments.
However, the management has come to know
Armstrong (2012) noted that employee that the profits have gone down when
performance is a function of both ability and comparing with the last five years financial
motivation; it makes sense to have practices statements and performance of the company has
aimed at enhancing both. Thus, there are several decreased.
ways in which employees can acquire needed
skills (such as careful selection and training) Therefore, the present study was conducted to
and multiple incentives to enhance motivation identify factors affecting the employees’
(different forms of financial and non-financial performance of ABC Group of companies.
rewards). In addition to these, job performance
is viewed as a function of three factors and is Research Problem
expressed with the equation. According to this
equation, motivation, ability, and environment As per the discussions held with the researcher
are the major influences over employee and the company, it was revealed that the
performance. Performance standards are management believes employees’ performance
designed based on information from job is the main motive for the current situation.
analysis which is a systematic process of There were significant symptoms seen in the
determining the characteristics of job, skills, organization given below:
and knowledge required to performing jobs, and
evaluate employee’s performance based on the There was late attendance from the executive
standard (Kirkpatrick, 2006). It is indicated that and the floor level employees since the year
there is no one type of system or set of 2013 and it had consistency and increased
objectives that are best suited for all higher in 2018 and 2019. Labor turnover also
organizations. Organizations must design and increased from 2 % to 7 % in 2019 compared
administer the performance of employees in with 2018. Increase in the grievance of the
line with organizations’ purpose and objective. employees and no channel to resolve these
issues. The 5-year goal which was set in 2015
ABC Group of Companies, started in 1989, as a was not achieved in 2019. Namely, the goal was
small tyre and bicycle repairing shop employing to increase production from 10% - 40% from
two workers. In 1992, the company started 2015 to 2019 respectively, the company also
trading brand-new tyres and re-treading tyres. brought in new types of machinery to expand
In 1998 the establishment registered as a private the production line hence no significant
company, and started importing and distributing improvement in the production line.
brand new tyres, tubes and started a factory for
tyre pre-cure re-treading. Then new production Further, the employees are not engaged with the
line started, tyre hot cure treading, flap management and management decisions. In
manufacturing, etc. However, in 2001 the total 20 complaints have been received in 2018
company transferred the manufacturing unit to whereas 36 customer complaints in 2019

2
regarding the quality of the tyres manufactured. knowledge, and experience of employees and
The management organized 3 pieces of training their performance. Performance is the
in quality, production, and after-sales service in accomplishment of a given task measured
the year 2019. Only 50 % of the employees against preset known standards of accuracy,
participated in this training. completeness, cost, and speed. Employee
performance is the contribution of employees to
Research Questions the achievement of organizational objectives.
Employees are expected to perform to an
The research problem and questions were acceptable level of the standard and managers
focused to identify the major factors affecting follow up and evaluate the performance of
the effectiveness of the job performance of the employees to attain the stated objective of an
employees working in ABC Group of organization (Armstrong, 2012). Performance
Companies. The considered variables were can be defined as the achievement of a specified
motivation, leadership, rewards, and training. task measured against predetermined or
Thus, the primary research questions were identified standards of accuracy, completeness,
briefly specified as follows, cost, and speed. In an employment contract,
performance is deemed to be the
I. What significant relationship do accomplishment of a commitment in such a
rewards have with employees’ job manner that releases the performer from all
performance in ABC Group of liabilities laid down under the contract
Companies? (Birhane, 2016).

II. What significant relationship does The concept of performance management is a


training have with employees’ job continuous process that reflects normal, good
performance in ABC Group of management practices of setting direction,
Companies? monitoring and measuring performance, and
acting accordingly. Performance management
III. What significant relationship does should not be imposed on managers as
motivation have with employees’ job something ‘special’ they have to do. It should
performance in ABC Group of instead be treated as a natural function that all
Companies? good managers carry out. Performance
management is about getting results. It is
IV. What significant relationship do concerned with getting the best from people and
leadership styles have with helping them to achieve their potential. It is an
employees’ job performance in ABC approach to achieve a shared vision of the
Group of Companies? purpose and aims of the organization. It is
concerned with helping individuals and teams
Research Objectives achieve their potential and recognize their role
in contributing to the goals of the organization.
The general objective of the study was to Performance management is a systematic
identify the factors affecting the job process for improving organizational
performance of the employees of ABC Group performance by developing the performance of
of companies. To achieve the main objective, the individuals and teams (Armstrong, 2012;
the following specific objective was Pam, 2000)
established.
Performance management aligns individual and
 To analyze the effect of rewards, organizational objectives (Mbua & Sarisar,
training, motivation, and leadership 2013). Wright et al. (2003) has pointed out that
style on employee job performance. individuals are more committed to their
performance objectives when they believe those
Literature Review objectives are achievable and will result in
important outcomes for themselves or, the
Concepts of Employee Performance organization in which they work. Cokins (2004)
defines Performance Management, is the
Organizations are transforming coping against process of managing the execution of an
the changing needs of the environment and organization’s strategy. It is how plans are
excelling in the business by building up their translated into results. Performance
adaptive capabilities for managing change management fosters a work environment in
proactively. The sustainability of a business which managers and employees are genuinely
organization is depending on the talent, skill, engaged and behave as if they were business

3
owners. In general, all organizations have Poor performance can often be a symptom of
people who are not performing to standard but other problems.
try not to label them as ‘poor performers. Over
their careers, people may have times when they Individual performance can be measured by
are performing well and other times when they reference to key performance indicators (KPIs)
are not bringing in the results expected. The and metrics. KPIs define the results or outcomes
challenge is to maintain and develop the that are identified as being crucial to the
performance of all people. Performance achievement of high performance. Strictly
management is an important Human Resource speaking, metrics are measurements using a
Management process that provides the basis for metric system, but the term is used generally for
improving and developing performance and is any form of measure. It can be argued that what
part of the reward system in its most general gets measured is often what is easy to measure.
sense. Performance management is a means of And in some jobs what is meaningful is not
increasing the engagement and motivation of measurable and what is measurable is not
people by providing positive feedback and meaningful. Measuring performance is
recognition. relatively easy for those who are responsible for
achieving quantified targets, for example, sales.
The overall objective of performance It is more difficult in the case of knowledge
management is to develop the capacity of workers, such as scientists. But this difficulty is
people to meet and exceed expectations and to alleviated if a distinction is made between the
achieve their full potential to the benefit of two forms of results – outputs and outcomes.
themselves and the organization. Performance Further, performance is a multidimensional
management provides the basis for self- construct, the measurement of which varies
development but importantly, it is also about depending on a variety of factors. A more
ensuring that the support and guidance people comprehensive view of performance is
need to develop and improve are readily achieved if it is defined as embracing both
available. There may be several reasons for the behaviour and outcomes. Employees’
poor performance (Armstrong, 2012). performance is an important factor that
contributes to improving the outcomes,
 Personal ability: Does the individual behaviour, and traits of the employees. It helps
have the capability? Is there a skills to improve the productivity of the organization
gap needing training? holistically (Armstrong, 2012).

 Manager ability: Have I given enough As described by Hunger and Wheelen (2011),
direction, and made sufficient controls can be established to focus either on
resources available? actual performance results (output) or on the
activities that generate the performance
 Process gap: Has the appraisal system (behaviour), Whereas behaviour controls
been at fault? Have the goalposts specify how something is to be done through
moved, or external forces made the policies, rules, standards, operating procedures,
task unattainable? Have there been and orders from a supervisor. Output controls
regular enough review sessions? specify what is to be accomplished by focusing
on the results of the behaviours through the use
 Reward system, is it pointing in the of objectives and performance targets or
right direction? milestones. There are essentially three types of
performance data available; these are measures
 Environmental forces: Has the of the output of goods and services, which may
organization created departmental be quantitative (units produced, customers
barriers, red tape, overkill, cultural served) or qualitative (number of errors,
restrictions, or hidden agendas which customer complaints); measures of time,
make the task impossible? including lateness, absence, lost working time,
failure to meet deadlines); and financial
 Personal circumstances: Has indicators, which include a large array of
something at home affected possibilities. These may be interrelated; thus,
performance at work? absence reduces a unit production level which
reduces profits.
 Motivation: Is the person demotivated
Where ‘hard’ quantitative data are not
or suffering from stress or lack of
available, we may wish to resort to measures of
challenge?
behaviour. Ideally, we observe people at work,

4
noting whether they approach customers and between the current performance and the
offer help, or noting whether they observe standard desired performance. Training could
safety procedures. Failing that, we can obtain be given through different methods such as
reports either from an ‘observer’, such as the coaching and mentoring, peers’ cooperation,
superior or a peer or subordinate, or from the and participation by the subordinates. Training
person understudy (Mwita, 2002). Behaviour programs not only develop employees but also
and output controls are not interchangeable. help an organization to make the best use of its
Behaviour controls (such as following company human resources in favour of gaining a
procedures and getting to work on time) are competitive advantage. Therefore, it seems
most appropriate when performance results are mandatory for the firm to plan for such training
hard to measure but the cause-effect connection programs for its employees to enhance the
between activities and results is clear. abilities and competencies that are needed at the
Moreover, output controls (such as surveys of workplace (Birhane, 2016).
customer satisfaction) are most appropriate
when specific output measures have been The Relationship between Training and
agreed on but the cause-effect connection Employees` Performance
between activities and results are not clear
(Birhane, 2016). Most of the previous studies provide evidence
that there is a strong positive relationship
Factors Affecting Employees’ Job between human resource management practices
Performance and organizational performance. Training and
development programs as one of the vital
As Thao and Hwang (2002) mentioned, there human resource management practices
are certain factors individually and collectively positively affect the quality of the worker's
affect the performance of employees positively knowledge, skills, and capability and thus
or negatively, including: results in higher employee performance on the
job. This relation ultimately contributes to
Reward supreme organizational performance
(Sendawula et al., 2018).
The reward is central to the employment
relationship. The total reward is the Bridging the performance gap refers to
combination of financial (e.g., profit Share, implement a relevant training intervention for
employee benefit, incentive) and non-financial the sake of developing particular skills and
rewards (e.g., achievement, autonomy, abilities of the workers and enhancing
recognition, career development opportunities) employee performance. The study further
available to employees. A total reward elaborates the concept by stating that training
approach is holistic; reliance is not placed on facilitates organization to recognize that their
one or two reward mechanisms operating in workers are not performing well and thus their
isolation, the account is taken of every way in knowledge, skills, and attitudes need to be
which people can be rewarded and obtain moulded according to the needs of the firm.
satisfaction through their work (Birhane, 2016; There might be various reasons for the poor
Armstrong, 2012). performance of the employees such as workers
may not feel motivated anymore to use their
competencies, or maybe not confident enough
Training
in their capabilities, or they may be facing
work-life conflict. All the above aspects must
Training is a type of activity that is planned,
be considered by the firm while selecting the
systematic and it results in an enhanced level of
most appropriate training intervention that
skill, knowledge, and competency that is
helps organization to solve all problems and
necessary to perform work effectively. Existing
enhance employee motivational level to
literature presents evidence of the existence of
participate and meet firm expectations by
obvious effects of training and development on
showing desired performance. Further,
employee performance. Employee
employee superior performance occurs only
competencies change through effective training
because of good quality of training program that
programs. Training has been proved to generate
leads to employee motivation and the
performance improvement-related benefits for
fulfillment of their needs (Chandavimol et al.,
the employee as well as for the organization by
2013).
positively influencing employee performance
through the development of employee
Competencies changes through effective
knowledge, skills, ability, competencies, and
training programs. It not only improves the
behaviour. Training refers to bridging the gap

5
overall performance of the employees to
effectively perform the current job but also Motivation is divided into two major types,
enhances the knowledge, skills, and attitude of intrinsic and extrinsic motivation. Intrinsic
the workers necessary for the future job, thus motivation is linked to work content which
contributing to superior organizational happens when employee executes an action
performance. Through training, the employee from which they develop gratification for
competencies are developed and enable them to simply appealing in the effort himself/ herself.
implement the job-related work efficiently and Many scholars defined intrinsic motivation as
competitively achieve firm objectives. the performing of action for its innate happiness
However, employee performance is also relatively than for some distinguishable
affected by some environmental factors such as significance. Intrinsic motivation denotes the
corporate culture, organizational structure, job innate features of the job and distinguishing
design, performance appraisal systems, power connected with the work itself, for illustration
and politics prevailing in the firm, and group the capability to discuss to personnel an
dynamics. If the above-mentioned problems intellect of interest, accomplishment,
exist in the firm, employee performance achievement, and responsibility. Intrinsically
decreases not due to a lack of relevant motivated employees are encouraged to
knowledge, skills, and attitude, but because of perform for the exciting or trial enabled rather
above mentioned hurdles. To make training than because of outside stress and incentive. For
effective and to ensure the positive effect of some activities, workers are intrinsically
training on employee performance these motivated and not others, but not everyone is
elements should be taken into consideration; intrinsically motivated for some specific duty or
corporate culture, organizational structure, job works (Birhane, 2016). According to Guay et
design, performance appraisal systems, power al. (2010), intrinsic motivation refers to
and politics prevailing in the firm, and the group motivation that is energetic, by individual
dynamics. If the above-mentioned problems attentiveness, enjoyable, and is usually various
exist in the firm, employee performance from extrinsic motivation which is operated by
decreases not due to a lack of relevant strengthening eventuality.
knowledge, skills, and attitude, but because of
above mentioned hurdles. To make training Extrinsic motivation is an idea that affects
effective and to ensure the positive effects of whenever an activity is complete in direction to
training on employee performance, these achieve some distinguishable results. Its’
elements should be taken into consideration transactions with the external surroundings
(Birhane, 2016). mean what the organization must suggest.
According to Herzberg (1987), extrinsic
Motivation motivation frequently mentions working
features that are outside of the job themselves,
Motivation is the inner feeling or desire that given that incentives like pay, promotion, job
initiates within a person either intentionally or security, and funds sufficiency. In another
unintentionally to complete the job excellently aspect, extrinsic motivation contains the more
because it’s pleasurable and not obligatory for figurative benefits concerning customer
what will be expected in arrival. For the appreciation and communal endorsement, and
organization, employee motivation is one of the another community supports. Appraisal of this
best policies to improve effective work measurement imitates a worker’s want for the
management between the organization and satisfaction of public desires from the effort of
employees. Motivation is very significant for doing. Thus, extrinsic motivation is in disparity
the organization or management to treasure a with intrinsic motivation. The extrinsic facet of
method to motivate their workers. When employee motivation is apprehensive with the
workers realize that their views considered quality positioned on substantial remuneration
being valued, it provides them with an intellect at the effort. Extrinsic or material rewards
of belongingness which can motivate the provided by the organization that is tangible and
employees. The incentive always accomplishes visible to others (Bellenger et al., 1984).
the demand and requirements of the workers
and in return, the individuals repay it through Motivation is concerned with the factors that
hard work and honesty. The main objective of influence people to behave in certain ways.
the organization is to classify the needs and Some of the employee motivation-related
wants and replying it to the most elementary concepts are Maslow’s hierarchy of needs, the
method of all organization to get the Economic man approach, Herzberg’s two
commitment of the workers (Oluseye et al., factors model, Instrumental theory, Equity
2014).

6
theory, and Expectancy theory (Armstrong, doing jobs and carrying out decisions. In the
2012). democratic style, employees have discretionary
power to some extent to carry out their jobs, so
Leadership their performance is better than in the autocratic
style (Iqbal et al., 2015).
Many scholars give a different definition for the
single word leadership. Leadership is a process
by which an executive can direct, guide, and Methodology
influence the behaviour and work of others
In this study, a mixed methodology majorly
toward the accomplishment of specific goals in
with the scientific method was practiced.
a given situation. Leadership is an ability of a
Leadership style, motivation, rewards, and
manager to induce the subordinates to work
training were used as independent variables to
with confidence and enthusiasm. Leadership
measure the dependant variable which was
can be defined as the capacity to influence a
employee performance. Furthermore, the study
group's realization of the goal. Leaders are
aimed at obtaining information from a
required to develop the future vision, and to
representative selection of the population, and
motivate the organizational members to want to
the researcher was able to generalize the
achieve the visions and to improve the
findings to a larger population. A structured
performance (Iqbal et al., 2015). According to
questionnaire was used for data collection with
Adair (2002), leadership is the ability to
the intent of generalizing from a sample to a
persuade others to seek defined objectives
population. The researcher used a proportionate
enthusiastically. It is the human factor that
stratified sampling technique to select the
binds a group together and to improve their
sample from the population. Microsoft Excel
performance and to direct them towards goals.
and SPSS Version 23 (Statistical Package for
Leadership is to deal and cope with change,
Social Science) were used to organize and
focusing on the long-term and the big picture,
process the data gathered from the
not always doing to safeguard himself in fact to
questionnaire.
take risks, and concentrating on people and their
values, not just the bottom line (Koudri,1999). Conceptual Framework
Leadership Style: Leadership style is a set of The research is mainly based on the conceptual
the features of a leader to influence framework adopted from the journal (Thao &
subordinates so that organizational goals can be Hwang, 2002). Based on the conceptual
achieved. To be a good leader, a leader should framework, the hypothesis was developed. This
be able to choose what kind of leadership style research study has mainly four independent
is suitable to be applied in the company to variables namely rewards, training, motivation,
motivate employees as well as to discipline and leadership style, and one dependant
employees in the company. An effective leader variable, employee performance. The purpose
has a responsibility to provide guidance and of the study as mentioned above was to find out
share the knowledge to the employee to lead the relationship between independent variables
them for better performance and make them an and dependent variables. Moreover, to see to
expert for maintaining the quality. And to what extent rewards, training, motivation, and
become the head of all the team members is leadership style factors affect employees’
such a great responsibility. The introduction of performance at ABC Group of Companies and
clear standards of leadership promotes the core which factor contributes significantly.
values and maturity of their role and
responsibility. As the situation affects which
functions the leaders carry out, it would also
affect how the functions are performed. There
are broadly three types of leadership styles
namely autocratic, democratic, and
participative (Birhane, 2016).

The participative style of leadership has a


greater positive effect on employee
performance in which, the employee feels
power and confidence in doing their job and in
making different decisions. And in autocratic
style leaders only have the authority to take
decisions where employees feel inferior in

7
Companies and upon getting the approval to
conduct the research, the questionnaires were
Independent Variable Dependent Variable
distributed among 5 executive and 75 non-
executive level employees. The questionnaire
was constructed in the English language; the
researcher took time to explain the
questionnaire one by one for a group of 5 – 10
employees for 30 minutes at a time for 3
consecutive days.

10 workings days/ 2 weeks were given for the


sample group to return the filled questionnaires
and a reminder was given at the end of 2 weeks
in the form of a letter to every department where
the sample group was employed. Another 1
week was given and the filled questionnaires
were collected from the relevant departments.
Figure 1: Conceptual Framework Follow-up calls were also made to inform the
deadline of the submission and visited the
organisation thrice to collect the filled
questionnaire. The request letter of the reminder
Hypotheses of the Study of submission of the questionnaire can be found
From the above literature review, found that in the annexure. The distribution of the
many factors were affecting Transformational questionnaire was carried out in February 2020
Leadership, and using the above Conceptual and ran until the middle of March, 60 out of 80
framework model, the following hypotheses questionnaires received just before the breakout
were developed: of the pandemic of the Coronavirus. Phone calls
were made to receive the questionnaires to get
1. H10: There is no relationship between the rest of the questionnaires, but employees
rewards and employee performance. were not motivated enough to return the
H1a: There is a relationship between questionnaire since the lockdown was imposed.
rewards and employee performance.
Population: The target population of the study
2. H20: There is no relationship between was executives and non-executives of the ABC
training and employee performance. Group of Companies, located in Polonnaruwa
H2a: There is a relationship between with a total population of 320. The researcher
training and employee performance. excluded employees of non-clerical workers
such as janitors and securities who were
3. H30: There is no relationship between outsourced from other organization; moreover,
motivation and employee the target population was selected considering
performance. the easy access to data, cost-effectiveness, and
H3a: There is a relationship between easy manageability of the study. 5 executive
motivation and employee and 75 non-executive level employees were
performance. selected to the sample group and the method of
selection is shown below under the sample and
4. H40: There is no relationship between sample technique section.
leadership style and employee
performance. Sample and sampling technique: In line with
H4a: There is a relationship between the sampling methods described by Sekaran
leadership style and employee (2003), a proportionate stratified sampling
performance. technique was used to determine the sample
size. With proportionate stratification, the
sample size of each stratum was proportionate,
Sampling Method
which is 30% from both executives and workers
The questionnaire was constructed with the to the population size of the stratum.
guidance of the supervisor and questions
formulated from the literature along with Sampling size: The following calculation was
questionnaires from published journals and used to determine the representative sample
papers. The initial discussion was held with the size.
founder of the organization, ABC Group of

8
There were 300 workers and 20 executive-level variables, and employee performance was the
staff working for ABC Group of companies. dependant variable.

Executives Workers The questionnaire contained closed-ended


20 300 questions with 5 Likert Scale from “Strongly
Disagree” = 1 to “Strongly Agree” = 5 and it
1 : 15 = (1+15) = 16 was administered by the researcher. Employees
of the ABC Group of Companies were taken to
16 x 5 = 80 serve as the main source of primary data.
According to the study conducted by Birhane
Correlation coefficient (r) Strength of the (2016), the mean score below 3.39 was
considered as low, the mean score from 3.40 up
correlation
to 3.79 was considered as moderate, and mean
From 0.01 up to 0.09 Negligible association score above 3.8 was considers as high as
From 0.10 up to 0.29 Low association illustrated by Comparison bases of the mean of
From 0.30 up to 0.49 Moderate association a score of five-point Likert scale instrument.
Thus, details of the analysis were presented in
From0.50 upto0.69 Substantial association
line with the aforementioned study.
From 0.70 and above Very strong association
Sample size = 80 Table 1: Correlation Coefficient (r)
Source: (Kotrlik et al., 2011)
Executives 1 : 15 workers
Secondary data collection: Secondary data on
80 x 1/ 16 : 80 x 15/16 the company’s records and on the previous
works conducted in the subject matter were
5 : 75 collected mainly from reference books,
journals, and company Annual reports.
Moreover, Scholarly literature was reviewed
80 using Emerald and Google scholar to make the
study a complete picture.

Consequently, a sample of 80 employees Data Analytical presentation techniques


including 05 executives and 75 non-executives
were selected from the target population of Collected data were analyzed via descriptive
ABC company. and inferential statistics using Microsoft Excel
and SPSS software (Version 23, IBM, Chicago,
Data Types USA). The descriptive statistics (frequency
distribution, percentile, minimum, maximum,
The study employed both primary and mean, and standard deviation) was used to
secondary sources of data collection. examine the demographic information of the
respondents, the general level of job
Primary data collection: To realize the target, performance, and the selected determinant
the study used a well-designed questionnaire as factors of performance. Further inferential
the best instrument. The questionnaire was statistics were used to identify the correlation
adopted from different sources which were between the dependent and independent
found to be appropriate for the study. variables using SPSS. Determining the degree
of association between the selected independent
The first part of the questionnaire was included variables (rewards. training, motivation,
seven items about the demographic information leadership style) and employees’ job
of the respondents. It covers the personal data performance was done using Pearson
of respondents, such as gender, age, educational correlation.
qualification, marital status, years of service,
job grade, and salary. The second section of the Measurements and Data Analysis
questionnaire consisted of 25 questions Techniques
designed to extract data of the 05 variables.
Each variable has been equipped with 5 Demographic Characteristics of
questions which in return come to a total of 25 Respondents
questions. Leadership style, motivation,
reward, training being the independent The first part of the questionnaire consists of
seven items about the demographic information

9
of the respondents. It covers the personal data Ordinary level to a degree level. The majority
of respondents, such as gender, age, educational of the sample group holds G.C.E Advanced
qualification, marital status, year of service, level qualification followed by diploma. It was
current job position, and salary. The following accounted for 44% (26 respondents) and 20%
tables, graphs, and figures depicted each (12 respondents) of the total respectively.
demographic characteristic of the respondents. Moreover, 15% of employees (9 respondents)
hold G.C.E Ordinary level qualifications while
Gender of Respondents 18% (11 respondents) had a degree. However,
3% of the respondents had professional
The demographic data for gender showed that qualifications such as ACCA (Association of
there were 57 males and 3 females out of the 60 Certified Chartered Accountants), CIMA
respondents. Figure 4.1 indicated that the male (Chartered Institute of Management
respondents formed majority of the target Accountants), SLIM (Sri Lanka Institute of
population with a percentage of 95%, while Marketing), and masters’ degree qualifications.
female respondents were representing 5%.
G.C.E Ordinary
Level
5% 3% 15% G.C.E.
18%
Advanced
Male Level
Diploma
95% 44%
Female 20% Degree

Figure 2: Gender of Respondents Figure 4: Level of Education of the


Respondents
Civil status of respondents
Age of respondents
As indicated in Figure 5, 67% (40 respondents)
As demonstrated in Figure 3, the majority of the of employees were married whereas 28% (17
employees were at the age of 36 - 40 years old respondents) of employees were single.
which covered 32% of the total population. This However, 2% (1 respondent) of divorced
was followed by 31- 35, 41< and 25- 30 years employees and 3% (2 respondents) of widowed
old groups respectively. Further, precisely 5% employees were also reported.
of the respondents represented the less than 25
years old age group.

2% 3%

35 32 28% Single
30 27 Married
25
25 67%
Divorced
20
% Widowed
15 12
10
5
5
0
< 25 25 – 30 31 – 35 36 – 40 41<
Age Figure 5: Civil Status of Respondents

Figure 3: Age of Respondents Years of the service of employees


As shown in the Figure 6, majority of
Educational Qualification of Respondent employees had served 10-20 years for the ABC
Group of Companies whilst the minority had
According to Figure 4, respondents hold a range served 1- 4 years. It was represented the 47%
of educational qualifications from G.C.E (28 respondents) and 10% (6 respondents)

10
respectively. Furthermore, 32% (19 Figure 6: Years of the Service of
respondents) of employees had served 5-9 Employees
years. However, only 12% (7 respondents) of
employees had more than 20 years of working
experience. Job grade of employees
According to Figure 7, job grades of the
employees were categorized into two sections,
12
executive and non-executive grade employees.
Above 20 years
Engineers, Accountants, HR executives,
Years of service

10 – 20 years 47

5 – 9 years 32

1 – 4 years 10

0 20 40 60
Percentage %

International marketing executives and Sales ranged from 13, 500 to 25,000 LKR. It
executives fall under this category. Under the represented 5% of the sample population.
non-executive category supervisors, machine Nearly 23% (14 employees) of employees
operators, workers on the production floor are earned more than 55,001 LKR. However, the
taken into consideration. maximum number of employees, 16
respondents out of 60, had received a salary
ranged from 45,001 – 55,000 LKR. Moreover,
15 respondents (25% of the employees) had
received a salary ranged from 25,001 - 35,000
8% LKR whilst 12 employees (20%) had received
35,001 – 45,000 LKR.
Executive
Table 2: Remuneration Ranges of Employees
92%
Non - Executive Salary Scale in LKR No. of Percentage
respondents (%)

13,500 – 25,000 3 5

25,001 - 35,000 15 25
Figure 7: Job Grade of Employees
35,001 – 45,000 12 20

45,001 – 55,000 16 27
Remuneration Ranges of Employees
55,001 and above 14 23
Table 2 describes the salary ranges received by
60 100
the employees. The researcher had introduced
five scales of salary ranges. Three employees Source: (Survey Data)
had been received the lowest salary which

Relationship between Rewards, Training, Motivation, and Leadership Style with the
Employee Performance
Employee Performance in terms of resource utilization, lateness,
absenteeism, leadership style, etc. while 20% of
Table 3 results show that about 32% of respondents strongly disagreed and 14.7% of
respondents strongly agreed while about 26% respondents disagreed. The further average
agreed about effectiveness on their job mean value, 3.34 was proven that the
performances. However, 8% of respondents had employees of the ABC Group of companies had
neutral statements about their job performance a moderate level of job performance.

11
Table 3: Employee Response to Job Performance

Question SD D N A SA
Mean Min Max
No Freq % Freq % Freq % Freq % Freq %

Q1 8 13.3 4 6.7 9 15.0 32 53.3 7 11.7 3.43 1 5

Q2 9 15.0 3 5.0 4 6.7 4 6.7 40 66.7 4.05 1 5

Q3 12 20.0 9 15.0 4 6.7 5 8.3 30 50.0 3.53 1 5

Q4 15 25.0 6 10.0 1 1.7 29 48.3 9 15.0 3.18 1 5

Q5 16 26.7 22 36.7 6 10.0 7 11.7 9 15.0 2.52 1 5

20.0 14.7 8.0 25.7 31.7 3.34


Source: (Survey Data)
rewards by the ABC Group of companies while
around 34% of respondents were satisfied.
Rewards However, 8% of respondents had neutral
Table 4 described the employee responses to feelings about rewards. Further, mean score,
rewards on their performances. Nearly 65% of 2.74 was proven the level of satisfaction of
respondents disagreed with the provided employees on rewards.

Table 4: Employee Response to Rewards

Question SD D N A SA
Mean Min Max
No Freq % Freq % Freq % Freq % Freq %

Q1 11 18.3 25 41.7 2 3.3 5 8.3 14 23.3 2.62 1 5

Q2 11 18.3 30 50.0 4 6.7 11 18.3 12 20.0 3.12 1 5

Q3 8 13.3 36 60.0 0 0.0 2 3.3 19 31.7 3.05 1 5

Q4 6 10.0 29 48.3 2 3.3 4 6.7 12 20.0 2.43 1 5

Q5 14 23.3 25 41.7 1 1.7 3 5.0 14 23.3 2.48 1 5

16.7 48.3 3.0 8.3 23.7 2.74


Source: (Survey Data)
practices on the training of ABC Group of
Companies while nearly 30% had positive
Training attitudes. The mean score, 2.38 also indicated
As demonstrated in Table 5, nearly 67% of the low level of contribution of training on the
respondents were not satisfied with the existing job performance of employees.

Table 5: Employee Response to Training

Question SD D N A SA
Mean Min Max
No Freq % Freq % Freq % Freq % Freq %

Q1 33 55.0 15 25.0 1 1.7 6 10.0 13 21.7 2.58 1 5

Q2 22 36.7 4 6.7 1 1.7 5 8.3 10 16.7 1.72 1 5

Q3 33 55.0 12 20.0 1 1.7 3 5.0 26 43.3 3.37 1 5

Q4 38 63.3 1 1.7 0 0.0 3 5.0 12 20.0 1.87 1 5

Q5 24 40.0 20 33.3 3 5.0 2 3.3 12 20.0 2.35 1 5

50.0 17.3 2.0 6.3 24.3 2.38


Source: (Survey Data)

12
Motivation packages, promotion, recognition, and working
environment. This was further proven by the
According to Table 6, the average mean score average percentile which showed as 28%
of ABC Group of companies on motivation was strongly disagree and 45% disagree with the
2.41. Therefore, it indicated the low level of current motivational practices. However, nearly
motivation of employees against motivational 23% had a good attitude on motivation whilst
practices conveyed by the ABC Group of 4.3% had a neutral mind.
companies in terms of remuneration, benefits
Table 6: Employee Response to Motivation

Question SD D N A SA
Mean Min Max
No Freq % Freq % Freq % Freq % Freq %
Q1 17 28.3 33 55.0 1 1.7 1 1.7 5 8.3 1.92 1 5

Q2 19 31.7 25 41.7 1 1.7 3 5.0 12 20.0 2.40 1 5

Q3 20 33.3 28 46.7 2 3.3 1 1.7 13 21.7 2.52 1 5

Q4 16 26.7 23 38.3 2 3.3 1 1.7 15 25.0 2.45 1 5

Q5 12 20.0 26 43.3 7 11.7 3 5.0 14 23.3 2.78 1 5

28.0 45.0 4.3 3.0 19.7 2.41


Source: (Survey Data)
However, 20.3% of respondents strongly
agreed while 7.7% of respondents agreed about
the leadership styles conveyed by the ABC
Leadership Style Group of companies. But 10.7 % had neutral
feelings about leadership style. Moreover, the
As indicated in Table 7, about 61% of mean average score, 2.43 confirmed the low
respondents had not a positive attitude towards satisfaction of employees on leadership style of
the existing leadership style practices. ABC Group of companies.

Table 7: Employee Response to Leadership Style

Question SD D N A SA
Mean Min Max
No Freq % Freq % Freq % Freq % Freq %

Q1 29 48.3 12 20.0 9 15.0 2 3 8 13.3 2.13 1 5

Q2 22 36.7 10 16.7 4 6.7 8 13 16 26.7 2.77 1 5

Q3 29 48.3 9 15.0 2 3.3 3 5 17 28.3 2.50 1 5

Q4 24 40.0 10 16.7 9 15.0 5 8 7 11.7 2.10 1 5

Q5 28 46.7 11 18.3 8 13.3 5 8 13 21.7 2.65 1 5

44.0 17.3 10.7 7.7 20.3 2.43


Source: (Survey Data)

Correlation Analysis between


Independent Variables and Dependent
Variables
Correlation Analysis between Rewards and with the employee performance of ABC Group
Employee Performance of companies and a statistically significant
effect of rewards on employee job performance
In line with the results indicated in Table 8, (p= 0.001).
rewards have a moderate association (r=0.411)

13
Table 8: Correlation Analysis between Rewards and Employee Performance

Employee
Performance Rewards
Employee Performance Pearson Correlation
1 .411**

Sig. (2-tailed) .001


N 60 60
Rewards Pearson Correlation
.411** 1

Sig. (2-tailed) .001


N 60 60
**. Correlation is significant at the 0.01 level (2-tailed).
Source: (Survey Data)

Correlation Analysis between Training and .112, R2 = 0.030) have a low relationship with
Employee Performance employee performances. Moreover, there is no
statistically significant relationship (p= 0. 187)
As shown in Table 9, the existing training between training and employee job
practices of the ABC Group of companies (r=- performance.
Table 9: Correlation Analysis between Training and Employee Performance

Employee
Performance Trainings
Employee Performance Pearson
1 .173
Correlation
Sig. (2-tailed) .187
N 60 60
Trainings Pearson
.173 1
Correlation
Sig. (2-tailed) .187
N 60 60

Source: (Survey Data)

Correlation Analysis between Motivation Thus, it was clear that there was a strong
and Employee Performance association between these two variables.
Further, motivation and employee performance
According to Table 10, the correlation of ABC Groups of companies have a
coefficient between motivation and employee statistically significant relationship (p=0.000).
performance was 0.822 and R2 was 0.675.

14
Table 10: Correlation Analysis between Motivation and Employee Performance

Employee Performance Motivation


Employee Performance Pearson Correlation
1 .822**

Sig. (2-tailed) .000


N 60 60
Motivation Pearson Correlation
.822** 1

Sig. (2-tailed) .000


N 60 60
**. Correlation is significant at the 0.01 level (2-tailed).
Source: (Survey Data)

Correlation Analysis between Leadership negative correlation (r= -0.050, R2 = 0.003)


Style and Employee Performance with employee job performance. Further, the
relationship between leadership style and
As demonstrated in Table 11, the leadership employee job performance was not statistically
style of ABC Group of companies has a significant (p= 0. 704).
Table 11: Correlation Analysis between Leadership Style and Employee Performance

Employee Leadership
Performance Style
Employee Performance Pearson Correlation
1 -.050

Sig. (2-tailed) .704


N 60 60
Leadership Style Pearson Correlation
-.050 1

Sig. (2-tailed) .704


N 60 60
Source: (Survey Data)

Findings and Discussion their homes. Transportation cost is minimized


in the lives of the workers. Nearly half of the
The data gained from the demographic explains employees in the sample group, which is 47%
that there is 95 % of the employees are males of them, are working for the company for more
and 5% of them are males. There is a huge gap than 10 years and 20 years. The founder of the
in gender equality. Hence the production of company hired people who are related to him.
tyres is a tiresome job, ladies in the area are So, they are being with this organization for a
reluctant to work for ABC Group of longer period. 92 % of the sample group is non-
Companies. Most of the employees fall executive level employees, who are engaged in
underage category of 36 – 40 years of age. 44% operational jobs such as supervisors and
of the sample group is G.C.E Advanced Level workers in the production area. On the other
qualified. The company hires labour from hand, 8 % of the non-executive category staff
nearby places. So, they have hired people with are finance professionals and engineers.
advanced levels to work in the production area.
New and complicated types of machinery are From the arithmetic mean values, it shows that
not in place and the job does not require a high rewards (mean = 2.74), trainings (mean = 2.38),
caliber to operate these machines. 67 % of the motivation (mean = 2.41), leadership style
sample group are married and it is convenient (mean = 2.43) motivation (mean=2.86),
for the workers to go to a job that is closer to leadership (mean=2.94). From this, we can

15
understand that low values with the internal The values generated in the Pearson correlation
factors practice. Still, these practices need for rewards (r = 0.411, p = 0.001) is moderately
improvements so that employees will bring and positively correlated with employees’ job
better results than the organisation expects more performance. Correlation analysis between the
from its employees. All independent variables trainings and employee performance (r = 0.173,
have low mean values, need greater attention. p = 0.187), depicts as low association with
And job performance of employees in ABC employees’ job performance. Motivation in
Group of Companies under this study, the mean correlation with employees’ job performance (r
score for job performance is 3.34 which = 0.822, p = 0.000) has very strong association.
indicates the moderate level. Leadership style in correlation with employee
job performance (r = -0.050 , p = 0.704 ) has
When we look at the independent variables negative negligible association.
which have the lowest values which are in
between 2 and 3 (between disagree and neutral According to the results achieved we can only
in the Likert scale), from the mean values it is consider accepting the hypothesis in the
clear that there must be other independent following manner.
variables are in play in terms of the mean value
of job performance which is 3.34 (which is
between neutral and agree according to the
Likert scale.)
H10 There is no relationship between rewards and employee performance. Reject
H1a There is a relationship between rewards and employee performance.
Accept

H20 There is no relationship between training and employee performance. Accept


H2a There is a relationship between training and employee performance. Reject
H30 There is no relationship between motivation and employee performance. Reject
H3a There is a relationship between motivation and employee performance. Accept
H40 There is no relationship between leadership style and employee performance. Accept
H4a There is a relationship between leadership style and employee performance. Reject

Conclusion and motivational factors (promotion,


recognition, bonuses) have to be addressed
Determinant internal factors examined in this among the employees.
study, especially rewards, training, motivation,
and leadership style at ABC Group of As shown from correlation results that
Companies are not being implemented properly motivation and rewards have significant
as they have to be put into effect. That means positive relation and positive significant effect
there are still limitations in implementing these on employees’ job performance in ABC Group
practices. Regardless of, moderately well of companies. However, motivation shows a
implementation of the organisation’s practices, very strong association with employee
the job performance of employees is moderate. performance. Therefore, remuneration, benefits
The organisation is still not utilizing the full packages, recognition, promotion, a working
potentials of its human resources due to the environment that were tested through the
above limitations in implementing the human questionnaire should be implemented properly
resource management practices properly. by making changes in the company policies for
Employees in the organisation must be the long run of the organisation. In this regard,
motivated well enough to reach their fullest the organisation has the opportunity to get a
potential. Motivation can be achieved through high level of employees’ job performance since
different levels of aspect, the literature it has better contribution than other internal
discusses the hierarchy of needs, this has to be factors in this study. Based on the result we can
analyzed on an individual basis and relevant infer that there is a promising chance to
measures have to be taken to alleviate the gap alleviate the current employees’ job
between desired and expected levels in performance because motivation has a greater
performance. Rewards also have to be aligned contribution than other internal factors in this
with the job performance and both hygiene study. Moreover, the overall bundles of
(working environment, salaries, working hours) determinant factors incorporated in this study

16
have a positive effect on employees’ job on employees’ performance evaluation scores
performance except for leadership style. fairly and transparently in which considers all
employees equally without any discrimination.
Recommendations And also, alternative forms of reinforcement
should be introduced and used frequently,
The study investigated that the organisation has
including verbal reinforcement and priority for
limitations in properly implementing the
educational opportunities for employees who
internal factors assessed in this research which
excel in their job performance.
are rewards, training, motivation, and
leadership style. Hence, the management of A proper reward management system should
ABC Group of Companies should review their be developed, and they can hire an external
Human resource management implementations. human resource professional to do it for the
In doing so ensuring the participation of organisation if they find whether the existing
employees from every level in the organization human resource personnel could not implement
is indispensable. Because it is essential to get it. A reward system should be linked to the
enough direct input concerning the human performance of the employee. Each employee
resource-related factors that affect employees. should be assessed to know where he stands and
This helps develop smart policies that could what kind of reward can he be rewarded for
inspire employees for enhanced job good performance. A personality test can be
performance. If not employees may no longer done throughout the organisation to what type
stay working in this organisation or even if they of rewards would motivate employees to
stay they will not perform well enough to be perform well. There must be sufficient time and
outstanding, where: they do not get adequate effort spent in developing a sound rewards
training to reduce difficulties to discharging system, this too can be linked to the Key
their responsibilities, there is no equitable Performance indicators and the managers can
salary, and no fair promotion, without freedom monitor the employees closely to learn about
in making decision-related to their job, no their people to serve them better so that would
culture of encouraging for an employee who serve the clients best.
scores the high level of job performance, and
poorly designed office layout which may lead Suggestion for Further Research
to risk for that specific job.
The employer should know about their people.
A positive motivational practice can be Thus, a study can be done to measure and
achieved through that management should implement a knowledge management system.
increase compensation following work As motivation and rewards have relationships
experience and inequitable manner within the with job performance, in-depth research can be
organisation and equitable when compared to carried out to go deeper and to resolve issues in
others which are in the same industry on the terms of motivation and rewards. The
basis assessments of the job relative internal researcher was limited to four factors or
value and the external relativity’s i.e., market practices which affect the job performance of an
rate. Besides equitable salary payment, employee, but the future researchers may focus
recognition and promotion programs should be on different variables or a combination of those
regularly considered to recognize good job variables included in this study.
performers of the organisation. Promotional
opportunities should also be administered based

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