Final Thesis Habtamu Wubneh Corrected

EFFECTS OF WORKING ENVIRONMENT ON EMPLOYEE
PERFORMANCE: IN CASE OF INFORMATION NETWORK

SECURITY ADMINSTRATION.
BY:
HABTAMU WUBNEH YIRDAW
A Thesis Submitted to the School of Graduate Studies of

Maryland International College in Partial Fulfillment of the
Requirements for the Award of the Degree of Masters of
Business Administration (MBA).
MARYLAND INTERNATIONAL COLLEGE
SCHOOL OF GRADUATE STUDIES
MBA PROGRAM
SEPTEMBER 18, 2023
ADDIS ABABA, ETHIOPIA

EFFECTS OF WORKING ENVIRONMENT ON EMPLOYEE
PERFORMANCE: IN CASE OF INFOR
MATION NETWORK SECURITY ADMINSTRATION
BY:
HABTAMU WUBNEH YIRDAW
UNDER THE GUIDANCE OF:
MICHAEL G/MARIAM (PhD)
A Thesis Submitted to the School of Graduate Studies of Maryland

International College in Partial Fulfillment of the Requirements for the
Award of the Degree of Masters of Business Administration (MBA).
MARYLAND INTERNATIONAL COLLEGE
MBA PROGRAM
SEPTEMBER 18, 2023
ADDIS ABABA, ETHIOPIA

DECLARATION
I hereby declare that this thesis entitled “The Effects Working Environment on Employee
Performance: In case of Information Network Security Administration.”, has been carried out
by me under the guidance and supervision of Dr. Michael G/Mariam.
The thesis is original and has not been submitted for the award of any degree or diploma to
any university or institutions.
Researcher’s Name Date Signature
ii | P a g e
CERTIFICATE
This is to certify that the thesis entitles “Effects Working Environment on Employee
Performance: In Case of Information Network Security Administration”, submitted to
Maryland International College for the award of the Degree of Master of Business
Administration and is a record of bonafide research work carried out by Mr. Habtamu
Wubneh Yirdaw, under our guidance and supervision.
Therefore, we declare that no part of this thesis has been submitted to any other university or
institution for the award of a degree or diploma.
Main Adviser’s Name Date Signature
iii | P a g e
Maryland International College School of
Graduate Studies MBA Program
Approval of Thesis after Defense
As members of the board of examiners, we examined this thesis entitled ‘Effects of Working
Environment on Employee Performance: In case of Information Network Security
Administration. By Habtamu Wubneh Yirdaw. We hereby certify that the thesis is accepted
for fulfilling the requirements for the award of the degree of “Masters of Business
Administration”.
Board of Examiners
Main Advisers Name Signature Date
External Examiner Name Signature Date
Internal Examiners Name Signature Date
iv | P a g e
Acknowledgements
At First, may all the honor and glory be extended to the exalted Heavenly God, for His help,
guidance and encouragement, which has enabled me to complete my paper.
This paper is the result of the cooperation of many individual. I am very grateful to my
adviser, Michael G/Mariam (PHD) for his valuable critiques, helpful comments and constant
encouragements throughout the preparation. I would also want to thank my colleagues
Maryland International College for the valuable cooperation and guidance to complete this
paper.
Friends, Begizew (coworker) & Kefale (the classmate) thank you for your constructive
comment. My wife (Gebianesh), employees of INSA, and all my friends thank you so much
for you moral, material as well as all sided support
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | v

TABLE OF CONTENTS
CHAPTER ONE........................................................................................................................1
1 INTRODUCTION...................................................................................................................1
1.1 Background of the study...................................................................................................1
1.3 Statement of the problem..................................................................................................4
1.4 Research questions...........................................................................................................6
1.5 Research objective............................................................................................................6
1.5.1 General Objectives.....................................................................................................7
1.5.2 Specific objective.......................................................................................................7
1.6 Significance of the study..................................................................................................7
1.7 Scope and limitation of the study.....................................................................................8
1.7.1 Scope of the study......................................................................................................8
1.7.2 Limitation of the study...............................................................................................8
CHAPTER TWO.......................................................................................................................9
2 REVIEW OF RELATED LITRATURE.................................................................................9
2.1 Introduction......................................................................................................................9
2.2 Theoretical framework...................................................................................................10
2.2.1 Definition and Concept............................................................................................10
2.2.2 Theories related to employee performance..............................................................19
2.3 Empirical study...............................................................................................................25
2.4 Conceptual framework...................................................................................................31
2.5 Research hypothesis.......................................................................................................32
CHAPTER THREE..................................................................................................................32
3 RESEARCH METHODOLOGY..........................................................................................32
3.1 Introduction....................................................................................................................32
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | vi

3.2 Descriptions of the study area........................................................................................33
3.3 Research Paradigm.........................................................................................................33
3.4 Research design and Approach......................................................................................34
3.4.1 Research Design......................................................................................................34
3.4.2 Research Approach..................................................................................................34
3.5 Type and Source of data.................................................................................................35
3.6 Sampling Design, Procedure and Technique..................................................................35
3.6.1 Population, Sampling Frame and Sampling Unit....................................................35
3.6.2 Sample Size Determination.....................................................................................35
3.6.3 Sampling Technique and Procedure........................................................................36
3.7 Methods of Data Collection............................................................................................36
3.8 Data Quality Assurance Mechanisms.............................................................................36
3.9 Methods of Data Analysis and Mode of Presentation....................................................38
3.9.1 Quantitative Data Analysis......................................................................................38
3.9.2 Mode of Data presentation.......................................................................................39
3.10 Ethical consideration....................................................................................................40
CHAPTER FOUR....................................................................................................................40
4 RESULTS AND DISCUSION.............................................................................................40
4.1 Introduction....................................................................................................................40
4.2 Demographic and socioeconomic characteristics of respondents...............................41
4.3 Findings and discussions................................................................................................44
4.3.1 Descriptive statistics of the variable........................................................................44
4.3.2 Inferential statistics..................................................................................................45
CHAPTER FIVE......................................................................................................................59
5 CONCLUSION AND RECOMANDATION.......................................................................59
5.1 Summery.........................................................................................................................59
5.2 Conclusion......................................................................................................................60
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | vii
5.3 Recommendation............................................................................................................60
5.4 Limitations of the Study and Future Research Direction...............................................62
REFERENCES.........................................................................................................................63
Annex A: Questionnaire...........................................................................................................71
Annex B: Descriptive statistics for each items........................................................................74
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | viii
List of Tables and Figures
List of Tables
Table 4.1 Gender......................................................................................................................41

Table 4.2 Age...........................................................................................................................42
Table 4.3 Martial Status...........................................................................................................42
Table 4.4 Educational Level....................................................................................................43
Table 4.5 Position/occupation..................................................................................................43
Table 4.6 Descriptive Statistics for the study...........................................................................44
Table 4.7 Correlation...............................................................................................................46
Table 4.8 Tolerance and VIF for multi-collinearity test..........................................................48
Table 4.9 Coefficients..............................................................................................................50
Table 4.10 Model Summary.....................................................................................................51
Table 4.11 General interpretation of coefficients the independent variable............................53
List of Figures
Figure 1 Conceptual framework...............................................................................................31

Figure 2 Heteroscedasticity test...............................................................................................48
Figure 3 Histogram for Normality Test...................................................................................49
Figure 4 Normality Test...........................................................................................................50
List of Equations
Equation 1 Sample size Determination....................................................................................36
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | ix

ACRONYMS/ABRIVATIONS
ANOVA Analysis Of Variance
DLS Democratic Leadership Style
DS Discrimination
DW Durbin Watson
EP Employee Performance
INSA Information Network Security Administration
LRM Linear Regression Model
OLS Ordinary Least Square
PWE Physical Working Environment
RW Reward
TR Training
VIF Variance Inflation Factor
WL Workload
WLB Work Life Balance
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | x

ABSTRACT
The aim of this study was to investigate the effects of working environment on employee
performance in Information Network Security Administration found in Addis Ababa.
Quantitative research approach with explanatory research design have adopted in carrying
out this research. Cross sectional data was collected to address research objectives of the
study using self-administered questionnaire from 335 employees using simple random
probability sampling technique. The collected data were analyzed using descriptive statistics,
correlation and regression analysis through statistical package for social science (SPSS)
version 26. The study used seven major working environment factors including: physical
environment, reward, democratic leadership style, work life balance, training, workload and
discrimination as independent variables and employee performance as dependent variable.
The finding of the research highlights that physical work environment, work life balance,
democratic leadership style and discrimination have positive and statistically significant
impact on employee performance while reward have negative and statistically significant
impact on employee performance. On the other hand, training and workload have showed
negative and statistically insignificant impact on employee performance. Based on the
findings of the study, the recommendations made for the management of the Information
Network Security Administration were that the physical work environment, in terms of
lighting, noise level, temperature, and ventilation, as well as factors such as discrimination,
democratic leadership style, and work-life balance, should be ensured to remain at an
acceptable level. Additionally, efforts should be made to further improve these aspects, and
rewards should be maximized in the workplace to enhance employee work performance.
Keywords: Physical working environment, reward, democratic leadership style, work life
balance, training, workload, discrimination, Employee performance, working environment.
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | xi

CHAPTER ONE
1. INTRODUCTION
The chapter includes background of the study, statement of the problem, research
questions posed in this study, objective of the study, significance of the study,
literature review, scope of the study, and limitations of the study, research
methodology that the study was use, ethical consideration, and organization of the
study.
1.1 Background of the study
Ethiopia establish an organization called the Information Network Security

Administration to protect the country's critical infrastructure from cyber-attacks and
other forms of electronic threats (Council of Ministers Regulation No.130/2006). The
work environment within Information Network Security Administration is crucial
because it directly affects the performance of employees responsible for safeguarding
an organization's digital assets. When employee work in un-conducive work
environment it results in absenteeism, low productivity or other measurements by
employees that can directly or indirectly affect their performance as well as the
organization performance. Job Performance is a very significant factor for any
organization in order to achieve and accomplish the assigned tasks efficiently and
effectively which can lead to the profitability for the organization and means of
satisfaction for employee (Muchhal, 2014). However, in most organization the
performance of employee is affected by several factors among those working
environment, in which employee perform their tasks, plays a great role towards
affecting employee performance positively or negatively (Chandrasekhar, 2011).
According to Gerber et al (1998), working environment encompasses the social,

psychological work environment and the physical design of the job. According to
Tripathi (2014) the work environment can be defined as the environment in which
people work that include physical setting, job profile, work load, leadership style,
culture and market condition. Each aspect is inter linked and impacts on employees
Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | 1

overall performance and productivity. It is the quality of the employees workplace
environment that most affects their level of motivation subsequently performance.
Work environment can be thought of simply as the environment in which people work
(Briner, 2000) as such; it is a very broad category that encompasses the physical
environment (e.g. heat, equipment), characteristics of the job itself (e.g. workload,
task complexity), organizational features (e.g. culture, history) and even aspects of the
external organizational setting (e.g. local labor market conditions, industry sector,
work life balance). Other factors of working environment also identified by previous
studies; work load (Ali et al, 2013), training (Robertson et al., 2016) and
discrimination in work place (Robertson et al., 2016).
There are many organizations in which their employees run into different problems
with
working conditions related to environmental and physical factors (Leblebici, 2012). It
is the quality of the employee‘s workplace environment that most impacts on their
level of motivation and subsequent performance. How well they engage with the
organization, especially with their immediate environment, influences largely their
error rate, level of innovation and collaboration with other employees, absenteeism
and ultimately, how long they stay in the job. Many studies have revealed that most
employees leave their organization because of the relationship with their immediate
supervisor or manager (Chandrasekar, 2011). Therefore, by having proper workplace
environment, it‘s possible to reduce number of absenteeism, increased productivity
and maximize quality at workplace.
According to Cooke (2016), employee performance can be defined as the

achievement of specified task measured against predetermined or identified standards
of accuracy, completeness, cost and speed. Employee‘s performance is depending on
the willingness and also the openness of the employees itself on doing their job. By
having this willingness and openness of the employees in doing their job, it could
automatically increase the employee’s productivity, which also leads to the
performance (Sinha, 2001). Armstrong (2006) defines performance as the
development of quantified objectives. Performance is not only a matter of what
people achieves but also how they achieve.

According to the previous studies, there are different points of view regarding the
employee‘s performance. Some scholars have argued the job performance because of
behavior. Motowildo & Scotter (2013) stated that performance is based on behaviors
or activities that are associated with the goals of an organization. Moreover, job
performance is the action or behavior itself and not the result of actions or a
consequence. According to Borman & Motowidlo (1997), there are two types of
employees’ behavior that could leads to the employee’s performance as task
performance and contextual performance.
Task performance refers to the prescribed role an employee should comply with in
order to attain organizational goals. It can be defined as the efficacy with which
incumbents perform activities that contribute to the development of the organization‘s
technical core. This contribution can be direct, including the application of a part of
organizational technology, or indirect, providing materials or services needed to
perform organizational technical processes (Borman et al, 2007). Contextual
performance, also called citizenship performance, involves those behaviors not
directly related to job tasks, but having a significant impact on organizational, social,
and psychological contexts. In measuring employee task performance behavior for
this particular study, the indexes of measurement for performance were extracted
from (Hakala, 2009)
Various studies revealed that there is relationship between working environment and
employee job performance. If there is appropriate, fitting and suitable, working
environment in terms of physical design as well as psychosocial it highly increases
the performance of employees (Chandrasekhar, 2011; Buhter, 1997). Khan et al
(2011) examined the impact of working environment and infrastructure on employee
performance in education sector in Pakistan and the result showed that there is a
positive relationship between reward and employee performance.
Haneen Okasheh and Khaled Al-Omari (2017) investigated their study on the
influence of workplace environment on job performance the case of engineering
company in Jordan and the result showed that there is a positive relationship between
physical environment and job performance and also they suggested that employers
should have to take courage and make the working environment suitable in order to
increase employees job performance.

Khan et al (2011) examined the impact of working environment and infrastructure on
employee performance in education sector in Pakistan and the result showed that there
is a positive relationship between reward and employee performance. Al-Omari et al,
(2017) investigated their study on the influence of workplace environment on job
performance the case of engineering company in Jordan and the result showed that
there is a positive relationship between physical environment and job performance
and also they suggested that employers should have to take courage and make the
working environment suitable in order to increase employees job performance.
Even if many researches are done on the concepts of working environment in

different part of the world however there is lack of literatures in Ethiopian cases.
Clearly, there is insufficient literature that could help comprehending the relationship
of working environment and employee performance among cyber security firms. This
study, therefore, investigated the effect of working environment on employee
performance; in the case of INSA.
1.3 Statement of the problem
In today‘s competitive environment when any company come into existence, in

addition to providing service to customers, they want to make profit or cover their
production cost at least to survive, this is done through the mental and physical
abilities of their employee. However, there are different factors that affect the
performance of employee in organization; among those factors, working environment
plays a great role towards determining the performance and productivity of employee
in any organization (El-Zeiny, 2013).
Anugwom (2004) stated that un-conducive work environment creates a feeling of un-
fulfillment, inhuman treatment and neglect for the workers and with this feeling; they
can really put in their best. Onogori(2007)asserts that when the worker fail to find his
work fulfilling and satisfying, it lead to boredom, reduced efficiency, fatigue,
frustration and dependency. Preparing sustainable workplace environment improves
employee‘s performance in organization (Shilkdar and Shawaqed, 2003). According
to Chandrasekhar (2011), there are different key factors that could have very big
impact towards the performance of employee. When employees are working in
condition that matches their physical and mental abilities there is a correct fit between

employee and task. Employees are then making themselves ready for any learning,
challenging tasks and achievement.
Empirical studies done include Naharuddin and Sadegi (2013), did a study on factors
of workplace environment that affects employee performance a case of miyazu
Malaysia. The finding showed that only supervisors support have insignificant
relationship on employee performance, while job aid and physical workplace
environment had a significant relationship towards employee performance. A study
by Roelofsen (2002) who looked at the effect of working environment on employee
performance showed that improving the working environment reduces the grievance
and absenteeism while increasing productivity.
Similarly, Hameed et al (2009) studied the impact of office design on employee

productivity Case Study of Banking Organizations of Abbottabad, Pakistan. To find
out the relationship between office design and productivity they used 13 banks and
contacted 31 branches of those banks. Finally, the result of the study revealed that
Comfortable and ergonomic workplace style motivates the workers and will increase
their performance well. Teklehaimanot et al (2007) also conducted a study on Health
Extension Workers ‘working conditions in the Ethiopian context. Luna berihu (2017)
also looked at the effect of working environment on employee performance
in ayka Addis textile and investment group plc. The finding showed that there is
significant relationship between physical working environment and employee
performance and training have no relationship with employee performance.
Today organizations are faced with challenges of attracting; retaining, and motivating
employees, which subsequently affect performance. This is especially in terms of bad
physical work environment, unfair workplace reward, and poor leadership style, lack
of training, work overload and discrimination. Therefore, the researcher took it as a
challenge to conduct a study on this topic and bring out the problems for those who
are performing less at work due to bad workplace environment (Brehane H, 2018).
The conducted preliminary survey through personal observation and unstructured

interview on organization before beginning the actual study shows that there is bad
working environment in the organization, which directly or indirectly affects
employee performance. The major factors that create bad working environments in
INSA was; poor physical environment, unfair workplace reward, poor leadership

style, lack of balance between work and personal life, lack of regular training, work
overload and discrimination which directly reduce the productive capability of
employee. Therefore, there is requirement for each factory to have healthier,
motivated and productive employees, which can be maintained through creating
conducive working environment. In turn, suitable working environment enhances
productivity and maximize employee performance.
Even though, significant amount of research has been undertaken to add their own
contribution to the concept of working environment, employee performance and
effects of working environment on employee performance; Most of these studies were
however carried out in developed countries and few developing countries. The finding
of the study in one country may not serve to another. More clearly, there is a gap on
the area that is done in Ethiopian cyber-security firms regarding to the effect of
working environment on employee performance. As far as concerned the researcher
knowledge, the researcher cannot find research studies conducted using the working
environment factors physical environment, workplace reward, leadership style, work
life balance, training, workload and discrimination and its impact on employee
performance in Ethiopia organizations. Due to shortage of performing research in this
field particularly in Ethiopia and special importance of maximizing employee
performance, the researcher was interested to fill this research gap in Ethiopia cyber
security firms by conducting this study. In addition, the researcher was also interested
to know about the effect of working environment on employee performance in detail.
Therefore, the current study examines the effect of working environment on employee
performance the case of INSA.
1.4 Research questions
Based on the problem of the study the research was address the following questions
1. What is the effect of reward e on employee performance?

2. What is the effect of training on employee performance?
3. What is the effect of democratic leadership style on employee performance?
4. What is the effect of physical work environment on employee performance?
5. What is the effect of workload style on employee performance?
6. What is the effect of work life balance on employee performance?

7. What is the effect of discrimination on employee performance?
1.5 Research objective
The study contains general and specific objectives.
1.5.1 General Objectives
This study's main goal was to investigate the effect of the workplace on employees'
performance in the context of Information Network Security Administration.
1.5.2 Specific objective
The specific objective of the study includes the following:
To investigate the effect of democratic leadership style on employee performance.

To explore the effect of reward on employee performance.
To examine the effect of work-life balance on employee performance
To examine the effect of training on employee performance
To examine the effect of workload on employee performance
To assess the effect of physical working environment on employee performance.
To explore the effect of discrimination on employee performance
1.6 Significance of the study

The main basis of this study was to investigate the effects of the working environment
on employee performance. Therefore, the outcome of this study mainly benefits, the
country, companies, other researchers, and the researcher himself.
 The findings of this study would assist to make concrete recommendations for
organizations about the effect the working environment has on employee
performance, which helps the country to achieve its goal at large.
 INSA come into existence their primary objective protect the country's critical
infrastructure from cyber-attacks and other forms of electronic threats and to be
competitive in the industry and this is done through the mental and physical abilities
of their employee. However, according to a preliminary study, there is a high turnover
rate; absenteeism rate and productivity of employees are diminished because of
different factors in INSA. To solve the above problems making the working

environment suitable plays a great role in inspiring employees to perform their
assigned job.
 In line with the above facts, primarily it‘s hoped that the result of this study provides
adequate information for organizations regarding the effect of the working
environment on employee performance. In addition, it also visualizes that the findings
of this study would help the organization to understand and know how to address
issues related to employees and the working environment.
 The findings of this study will serve as reference material for other researchers who
conduct research in this area.
 Lastly, the study would benefit to enhance and practice the ability and creativity of
the
researcher in the area of this field.
1.7 Scope and limitation of the study
1.7.1 Scope of the study
Employees at the Information Network Security Administration in Addis Ababa

located Wollo Sefer, Ethiopia are the only participants in this study. Because, the
organization have a secure are which are difficult to collect data. The study's thematic
focus is on the variables that affect employee performance, such as the physical
environment, reward structures, democratic leadership style, work-life balance,
workload, training, and discrimination. The study was use a quantitative approach
with a survey to gather data, which was then be analyzed using a straightforward
random chance sampling procedure. The study was only collect data at one point in
time; hence, its time scope was cross-sectional. The purpose is to offer insight into
approaches that organizations may use to boost employee performance and the
working environment at Information Network Security Administration in Addis
Ababa, Ethiopia.
1.7.2 Limitation of the study
The study has several limitations, including:
1. Self-reported data: The study was rely on employee self-reported information, which could
be biased and inaccurate.

2. Single industry focus: The study's concentration on Information Network Security
Administration may limit the applicability of its findings to other sectors.
3. Cross-sectional design: The study was adopt a cross-sectional design, which might
make it harder to prove a connection between the working environment and
productivity.
4. Limited control over variables: Explanatory research focuses on explaining
relationships between variables. This research contains only physical environment,
reward, democratic leadership style, work life balance, training, workload and
discrimination as independent variable and employee performance as dependent
variable. Other variables that affect employee performance are not included.
1.8 Organization of the study
There are five chapters in the study. The background of the study, issue description,
general and particular objectives, as well as the research questions the study
addressed, are all included in the first chapter. The second chapter focuses on the
theoretical and empirical literature review, with the important findings of the study
area including a theoretical analysis and definitions of the key variables. The third
chapter entirely concentrates on the study's methodology, the fourth chapter discusses
the analysis and interpretation of the data and the final chapter will concentrate on the
study's main conclusions, recommendations, and findings.

CHAPTER TWO
2. REVIEW OF RELATED LITRATURE
2.1 Introduction
This chapter presents a comprehensive review of relevant literature in an attempt to

position the study in an appropriate theoretical framework. It reviews theoretical,
conceptual, and empirical literature related to the study comprises theories related to
the factor of workplace environment that affect the performance of employees, such
as physical environment, reward, democratic leadership style, work-life balance
workload, and discrimination. It further discusses the findings of related research.
2.2 Theoretical framework
2.2.1 Definition and Concept
Briner (2000) elaborated that the working environment is an incredibly broad

category that encompasses the physical setting (e.g., heat, equipment, etc.),
characteristics of the work itself (e.g., workload, task complexity), broader structural
elements (e.g., culture, history), and even aspects of the broader organizational
context (e.g., local market conditions, trade sector, work-life balance). This implies
that the work environment is the sum of the interrelationships that exist among
employees, employers, and the environment in which employees work. This includes
the technical, human, and organizational environments.
The working environment, according to Kohun (1992), is the totality of forces,

activities, and options that are likely to be in competition with employee performance
now (as cited in Taiwo, 2010). The interrelationships between the members of the
staff and the setting in which they operate make up the working environment.
According to Brenner (2004), an organization's capacity to transfer knowledge among
its members depends on the way it’s working environment is built up so that the
company may use it as a resource. Employees can gain access to collective
knowledge thanks to this, which also helps organizations become more effective.

Additionally, he contended that a work environment tailored to employee pleasure
and open communication is a superior means of inspiring staff to produce more.
The technical environment, the human environment, and the organizational
environment are the three main sub-environments that Opperman (2002) describes as
making up the working environment. The term "technical environment" refers to
various physical components as well as tools, equipment, technology, and
infrastructure. The technical environment produces components that let personnel
carry out their individual duties and activities. Peers, people with whom employees
interact, teams and work teams, shared issues, leadership, and management are all
examples of the human environment. These settings are intended to promote informal
interaction among employees, which may boost the opportunity for information
sharing and idea exchange. This can serve as a foundation for maximizing
productivity. The organizational environment embodies the values, ideas, processes,
and practices that are present there. Employees may have little motivation in helping
those who strive to improve quality under a measurement system when compensation
is based on quantity. Therefore, issues with the workplace environment have an
impact on employee productivity. The atmosphere of the organization is under
management's control. Employees will have little motivation in assisting those who
are seeking to enhance quality because of the measurement system that rewards
quantity rather than quality. Therefore, concerns with the workplace environment
have an impact on employees' performance and productivity.
2.2.1.1 Factors of working environment that affect employee performance
Work environments have many properties, components, or factors that may affect
both the physical and psychological well-being of workers (Briner, 2000). How well
employees engage with factors in their working environments influence largely their
error rate, level of innovation and collaboration with other employees, absenteeism,
and ultimately, how long they stay on the job, which is a function of their
commitment to work (Chandrasekar, 2011). Chandrasekar identified twelve factors in
the workplace environment that either lead to the engagement or disengagement of
workers. These factors include goal setting, performance feedback, role congruity,
defined processes, workplace incentives, and supervisor support, mentoring/coaching,
the opportunity to apply new skills, job aids, environmental factors, and physical

factors. Arsalani et al (2011) also pointed out that factors of working environments
are divided into two parts physical and psychosocial. The physical includes the
lighting, noise, and poor ergonomics while the psychosocial includes, influence at
work, the meaning of work, quality leadership, and insecurity at work. Many other
researchers have also shown various factors of the working environment, which
include two broader dimensions such as work and context. Work includes different
characteristics of the job as if the job is carried out and completed, task activities
training, job autonomy, and achievement. Context comprises of physical working
conditions and social working conditions (Sousa Poza&Sousa-Poza, 2000;
Gazioglu&Tanselb, 2006; Skalli, Theodosius, &Vasileiou, 2008).
From several working environment factors presented in previous studies, this study,
however, takes; a physical environment, reward, democratic leadership style, work-
life balance, training, workload, and discrimination as major working environment
factors.
1. Democratic leadership style
Leadership style refers to a type of relationship whereby a person makes use of his
methods and technique to make many people work collectively for a commonplace
undertaking (Fiedler).
There are three types of leaders (democratic, autocratic, and laissez-faire) that are
most widely frequent and used (Tannenbanum and Schmidt, 1958). Dahl (1989) and
Fishkin (1991) proclaimed that democratic leadership influences people in a manner
consistent with the basics of democratic principles and processes, such as deliberation,
equal participation, inclusiveness, and self-determination. Democratic leadership
encourages innovation, teamwork, and creativity and people are often engaged in
projects that lead to increased performance, job satisfaction, and increased
productivity (Verba, 2015). Iqbal, et al. (2015) stated that a democratic leader makes
no suggestions; however, they enquire about the opinions of others. This leadership
promotes all team members to participate to make the final decision and develop the
entire process to reach their goals (Trivisonno & Barling, 2016). One of the major
benefits of the democratic leadership style is that the process facilitates the
development of additional leaders who can majorly serve the organization and have
active involvement on the part of everyone in the team (Armstrong & Taylor, 2014).

Democratic leaders encourage and invite team members to play a significant role in
the final decision-making process but the ultimate power relies on the hands of
leaders and he/she guides the team on what to do, and how to do it, and employees
communicate their suggestions, experience, and recommendations (Skogstad, 2015).
2. Reward
According to Luthans (2000), Rewards may be financial and non-financial, and they
can be utilized completely to boost the performance of staff. According to
McCormick and Tifflin (1979), rewards are classified into two those are intrinsic
rewards (non-financial) and extrinsic rewards (financial). Intrinsic rewards are
inherent within the job itself together with what the workers enjoy as a result of
finishing tasks successfully or attaining their goals. They are intangible benefits
comprising autonomy, feedback, achievement, and recognition. Employees are
experienced satisfy when they have carried out something well worthwhile in work
and are orally liked by the organization.
On the other hand, extrinsic reward comes from external and is tangible in order to
appreciate the task performed by employees. Extrinsic rewards are external to the task
of the job, including pay, work condition, fringe benefits, security, promotion,
contract of service, salary, incentives, bonuses, payments, job security the work
environment, and conditions of work (Akanbi, 2008). A reward package will
influence worker performance; it can facilitate extending employee performance by
enhancing employee skills, information, and talents so as to realize structure
objectives (Ajila and Abiola, 2004).
Studies have revealed that if a corporation fails to reward staff, it'll decrease worker
performance Associate in Nursing economical reward system may be an honest
inducement however the inefficient reward system will result in the demotivation of
staff in terms of low performance, internal conflicts, absence, high turnover, lack of
commitment and loyalty and timing (Heng, et al.,2012). For the purpose of this study,
the researcher identified both extrinsic and intrinsic dimensions of reward.
3. Work-life balance
Work-life balance might talk over with one among the following: structure support for
dependent care, versatile work choices, and family or personal leave (Estes and

Michael, 2005). Work-life balance employment practices are involved with providing
scope for workers to balance what they are doing at work with the responsibilities and
interests they need outside work (Armstrong, 2006). By this doing, they reconcile the
competitive claims of labor and residential by their own desires yet as those of
employers. Work-life balance policies can lower absence and facilitate tackling low
morale and high degrees of stress, which will result in underperformance since the
staff gets uninterested in moving work and life responsibilities. Several researchers
have united on the necessary role of labor-life balance because it is expounded with
employee psychological well-being and overall sense of harmony in life (Clark,
2000). Balanced work-life is related to magnified job satisfaction and structure
commitment. Employees’ work-life experiences deepen their role-related engagement
that is expounded to structure performance improvement
4. Training
Nassazi (2013) remarks that employee training has an important role in the
improvement and increasing productivity. It takes the shape of learning activities that
prepare employees to exercise wider or magnified responsibilities. Tzafrir (2005)
asserts that training is a vital part of generating human capital. It provides staff with
the abilities, skills, and data needed by the post. The target of training is to realize a
modification within the behavior of these trained. This implies that the trainees shall
acquire new artful skills, technical data, and skills on the duty in the simplest way to
aid in the accomplishment of structure goals.
According to (Armstrong, 2006) training is helpful in order to fill the gap between
what ought to happen and what’s happening between desired targets or standards and
actual levels of labor performance. Training would like is any inadequacy in worker
performance or potential performance which might be remediated by acceptable
coaching. There are some ways of overcoming deficiencies in human performance at
work, and coaching is one of them. Worker performance is also seen because of the
results of harmony between coaching and development and structure goals.
5. Workload
The workload in a very work setting is delineated, as wherever tasks and

responsibilities are taken on will be accomplished with success in the time offered.

DiDomenico and Nassbaum, (2008) state that workload is set by the link between task
demands, the circumstances beneath which the task takes place, and therefore the
perceptions, actions, skills, and information of the individual playacting the task. The
task demands could embrace physical actions, psychological feature tasks, and/or a
spread of different factors. Hart &Stave Land (1988) the expenditure incurred by
someone, given their capacities (resources), whereas achieving a selected level of
performance on a particular task with bound demands. These definitions imply that
employment is the attribute of labor that may be known because of the personal set of
skills staff have and the way they execute task demands within the given time.
Work overload is a mismatch between the role requirements and the amount of time
and resources available to meet the duty (As cited by Orly Michael, 2009). More
clearly, Work overload happens when employees perceive the time and resources
available as not enough to complete the existing duty. Researchers have distinguished
between qualitative and quantitative forms of work overload. Qualitative overload
happens when people feel they lack the ability required to complete their jobs or that
performance standards have been set too high. On the other hand, quantitative
overload results from having too many things to do or insufficient time to complete a
job (Ivancevic et al., 2012).
6. Physical environment
Ismail et al. (2010) state that the physical environment in which an employee
performs has an impact on their performance as well as limits the prosperity of the
organization. In addition, the state that the physical work environment consists of
internal and external office layout, temperature, comfort zone, and also the work
setting or arrangement.
According to Vischer (2007) spatial layouts, noise, furniture, and lighting are included
under the physical working condition factor. The physical work atmosphere includes
comfort level, ventilation, and lighting. This option assists with practical and aesthetic
facets, the interior decoration, and the style of the work atmosphere that ultimately
improves employee expertise and necessitates higher performance. The comfort level
and temperature additionally well influence the health of workers. Niemela et al.
(2002) revealed that if there is a high temperature the performance of the employee is
reduced, and the low temperature has a relation to the performance of manual tasks.

Office style encourages staff to figure in a very bound manner by the way their
workstations are designed. Spatial layout contributes plenty toward however the
workers perform their tasks (Al Anzi, 2009). A closed workplace plan, which can
carry with it every worker having a separate workplace of their own or some
individuals in each office permits workers a larger quantity of privacy than in an open
arrange workplace layout. It permits staff to figure in peace and quiet, keeping them
centered on their tasks while not having plenty of distractions. It additionally offers
staff a thinking frame and ability while not a lot of distraction.
According to McCoy and Evans (2005), the weather of the physical work setting has
to be correct so the workers would not be stressed while doing their job. Physical
components play a vital role in developing the network and relationships at work.
Overall, the physical work atmosphere ought to support the specified performance.
Vischer (2008) stressed that contributing geographical point setting ought to be
prioritized because it provides support to the staff in closing their jobs. It should be
conducive enough to enable the performance of tasks by employees. This study will
identify five dimensions of the physical work environment including lighting,
ventilation, noise, ergonomics, and spatial layout.
7. Discrimination
The United Nations International Labor Organization (2015) defines Workplace

discrimination refers to a working environment that exhibits bias in the treatment of
employees based on gender, ethnicity, religion, age, disability, and belief. It occurs in
hiring, promotion, job assignment, and composition. This conceptualization reflects
world recognition of the persistence of unfair employment experiences of individuals
from the spread of social groups. Workplace discrimination not only hurts those who
are discriminated against, it can also damage the entire organization. Companies may
have trouble retaining employees, and those who stay may be dissatisfied with their
jobs and distrustful of each other and of company management. Discrimination in the
workplace could be direct or indirect. It is direct discrimination when an employer
treats an employee less favorably than an employer treats someone else. However,
indirect discrimination happens when working conditions or rule disadvantages one
group of people more than another. According to Hasan and Ali (2014); and Fatima
and Omar (2014), the different dimensions of workplace discrimination are; gender

discrimination, religious discrimination, and ethnic discrimination. Other scholars
identified six main types of discrimination, which are disability discrimination, sexual
harassment, ethnic discrimination, age discrimination, sexual orientation
discrimination, and gender discrimination (Hemphill and Haines 1997). This study
will use four dimensions of discrimination such as; age, gender, religion and ethnicity
discrimination.
2.2.1.2 Employee performance
Organizations are undergoing a transformation for coping with the changing needs of
the environment and excelling in the business by building up their adaptive
capabilities for managing change proactively. The sustainability of a business
organization depends on the talent, skill, knowledge, and experience of employees
and on their performance (Armstrong Michael, 2009). Performance is the
accomplishment of a given task measured against preset known standards of accuracy,
completeness, cost, and speed. Employee performance is the contribution of
employees to the achievement of the organization’s objective. Employees are
expected to perform to an acceptable level of standard and managers follow up and
evaluate the performance of employees to attain the stated objective of an
organization (Armstrong Michael, 2009). According to Cooke (2001), performance
can be defined as the achievement of the specified task measured against
predetermined or identified standards of accuracy, completeness, cost, and speed. In
an employment contract, performance is deemed to be the accomplishment of a
commitment in such a manner that releases the performer from all liabilities laid
down under the contract.
Employee performance is generally checked out in terms of outcomes. However, it

can even be checked out in terms of behavior (Armstrong 2000). Kenney et al. (1992)
declared that employee's performance is measured against the performance standards
set by the organization. There are varieties of measures that will be taken into thought
once measuring performance for instance exploitation of productivity, efficiency,
effectiveness, quality, and gain measures (1992) as in brief explained hereafter.
Profitability is the ability to earn profits systematically over an amount of your time.
It‘s expressed because of the quantitative relation of profits to sales or come-on
capital utilized (Wood &Sangster 2002). Potency and effectiveness - efficiency is the

ability to provide the required outcomes by exploitation as bottom resources as doable
whereas effectiveness is the ability of workers to satisfy the desired objectives or
target (Stoner 1996). Productivity is expressed as a quantitative relation of output to
its input (Stoner, freewoman, and Gilbert, 1995). It is a measure of how the
individual, organization, and industry convert input resources into goods and services.
The measure of how much output is produced per unit of resources employed (Lipsey,
1989). Quality is characteristic of products or services that bear an ability to satisfy
the stated or implied needs (Kotler& Armstrong 2002). It is increasingly achieving
better products and services at progressively more competitive prices (Stoner 1996).
As noted by Daft (1988), it's the responsibility of corporate managers to confirm that
the organizations attempt to and so bring home the bacon’s high-performance levels.
This thus implies that managers need to set the specified levels of performance for
any periods in question. They will interact as an example setting goals and standards
against that individual performance is measured. Corporations make sure that their
workers contribute to manufacturing top-quality products and/or services through the
method of worker performance management. This management method encourages
workers to induce concern in coming up with the corporate and thus participate by
having a job within the entire method thus making the motivation for top performance
levels. It is necessary to notice that performance management includes activities that
make sure that structure goals are being systematically met in a good and efficient
manner. Performance management will concentrate on the performance of the staff, a
department, processes to make a product or service, etc. The earlier analysis of the
productivity of employees has shown that workers who are glad about their job can
have higher job performance, and therefore supreme job retention, than those that are
not proud of their jobs (Landy, 1985). Still, Kinicki & Kreitner (2007) document that
worker performance is higher in happy and glad employees, and therefore the
management realizes it straightforward to inspire high performers to realize firm
targets.
2.2.1.3 Measurement of employee performance
Measuring performance is relatively easy for those who are responsible for achieving
quantified targets, like output per hour. The difficulty arises when we desire to
measure the conceptions of performance in employees. However, this difficulty is

alleviated if a distinction is made between the two forms of results, i.e. outputs, and
outcomes. An output is a result that can be measured quantifiably, while an outcome
is a visible effect that is the result of effort but cannot necessarily be measured in
quantified terms (Armstrong, 2009). There are components in all jobs that are difficult
to measure quantifiably as outputs, but all jobs produce outcomes even if they are not
quantified. It is therefore often necessary to measure performance by reference to
what outcomes have been attained in comparison with what outcomes were expected,
and the outcomes may be expressed in qualitative terms as a standard or level of
competency to be attained (Armstrong, 2009). Therefore a qualitative measure of the
outcome of an employee‘s performance can be attributed to the definition of the
aspects that define the work done meets or exceeds the expectations of the
organization, completing tasks satisfactorily, or if operations have reached an agreed-
upon standard. In measuring employee performance for this particular study, the
indexes of measurement for performance were extracted from Hakala (2009), and
their descriptions are as follows:
 Quantity: The number of units produced, processed, or sold is a good objective

indicator of performance. Be careful of placing too much emphasis on quantity, lest
quality suffer.
 Quality: The quality of work performed can be measured by several means. The
percentage of work output that must be redone or rejected is one such indicator. In a
sales environment, the percentage of inquiries converted to sales is an indicator of
salesmanship quality.
 Timeliness: How fast work is performed is another performance indicator that should
be used with caution. In field service, the average customer‘s downtime is a good
indicator of timeliness.
 Cost-Effectiveness: The cost of work performed should be used as a measure of
performance only if the employee has some degree of control over costs. For example,
a customer service representative‘s performance is indicated by the percentage of
calls that he or she must escalate to more experienced and expensive reps.
 Absenteeism/Tardiness: An employee is obviously not performing when he or she is
not at work. Other employees‘ performance may be adversely impacted by absences,
too.

 Creativity: It can be difficult to quantify creativity as a performance indicator but in
many white-collar jobs, it is vitally important. Supervisors and employees should
keep track of creative work examples and attempt to quantify them. Are important
 Adherence to Policy: This may seem to be the opposite of creativity, but it is merely
a boundary on creativity. Deviations from policy indicate an employee whose
performance goals are not well aligned with those of the company
 Manager Appraisal: A manager appraises the employee‘s performance and delivers
the appraisal to the employee. Manager appraisal is by nature top-down and does not
encourage the employee‘s active participation. It is often met with resistance because
the employee has no investment in its development.
2.2.2 Theories related to employee performance
Many theories have been advanced to explain the link between workplace
environment and employee performance. Maslow (1943) said that people work to
survive and live through financial compensation, to make new friends, to have job
security, for a sense of achievement and to feel important in society, to have a sense
of identity, and most especially to have job satisfaction. All employees that have job
satisfaction are high performers in their respective workplaces. On the other hand,
Taylor (1911) opined that the most important motivator of workers are salary and
wages when he said that a "non-incentive wage system encourages low productivity".
He said that if employees receive the same wage irrespective of their individual
contribution to the goal, they will work less and employees think working at a higher
rate means fewer employees may be needed which discourages employees to work
more (Gardner and Lambert 1972). Based on this, the following theories are reviewed
to indicate the relationship between workplace environment factors and employee
performance.
1. Goal-setting theory
Edwin Locke (1968) proposed the goal-setting theory. This theory suggests that the
individual goals established by an employee play an important role in motivating him
for superior performance. Skills required include the ability to engage employees in
mutual goal setting clarify role expectations and provide regular performance
feedback. Time and energy will also need to be given to providing relevant

performance incentives, managing processes, providing adequate resources, and
workplace training. It also advises that in order to drive the organization to peak
performance managers and supervisors must put out front the human face of their
organization. The principle here is human-to-human interaction by providing
individualized support and encouragement to each and every employee (Salaman et
al, 2005).
Employee performance is a major multidimensional construct aimed to achieve results

and has a strong link with the planned goals of an organization (Abbas and Yaqoob,
2009). Performance is the key multi-character factor intended to attain outcomes,
which has a major connection with the planned objectives of the organization (Sabir et
al. 2012). Employees ‘goals achievement in this theory is by creating of work
environment attractive, comfortable, satisfactory, and motivating to employees so as
to give them a sense of pride and purpose in what they do. How the working
environment is designed and occupied affects not only how people feel, but also their
work performance, commitment to their employer, and the creation of new knowledge
in the organization (Taiwo, 2009).
2. Victor Vroom’s Expectancy Theory
Currently, one of the most widely accepted explanations of motivation is victor

vroom‘s expectancy theory. This theory of motivation deals with a coupling of three
beliefs (Robbins and Judge, 2013): effort leads to performance, good performance
will lead to organizational rewards (bonus, salary, promotion), and rewards will
satisfy personal goals. The theory, therefore, focuses on the three relationships
(expectancy, instrumentality, and valence) Effort-Performance Relationship
(expectancy): Defined, as the probability perceived by the individual that exerts a
given amount of effort will lead to successful performance. If the employee believes
that effort will not result in successful performance or that the performance will not be
accurately reflected in the performance appraisal, little effort will be expended.
Performance-Reward Relationship (instrumentality): The degree to which the
individual believes that performing at a particular level will lead to the attainment of a
desired outcome. Unless the relationship between strong performance appraisals and
rewards is clear, little effort will expended to achieve those high appraisal marks.
Rewards-Personal Goals Relationship (valence): The degree to which organizational

rewards satisfy an individual's personal goals or needs and the attractiveness of those
potential rewards for the individual. Unless organizational rewards are tailored to
individual employee wants and needs, they will not be very motivational, and little
effort will be expended. While the research results are mixed, there is some support
for this theory. It may considered somewhat idealistic, considering the current realities
of the workplace.
Generally, expectancy theory offers a powerful explanation of performance variables

such as employee productivity, absenteeism, and turnover. Therefore, in the
workplace managers should take steps to improve expectancy, instrumentality, and
valence, which will lead workers to perform better and maximize productivity.
3. McGregor Theory X and Theory Y
McGregor has developed a theory of motivation based on hypotheses relating to

human behavior. According to him, the function of motivating people involves a
certain assumption about human nature. Theory X and Y are two sets of assumptions
about the nature of people. THEORY X considers individuals who dislike work and
avoid it where possible, individuals who lack ambition dislike responsibility and
prefer to be led, and individuals who desire security. The management implications
for Theory X workers were that to achieve organizational objectives, a business would
need to impose a management system of coercion, control, and punishment.
THEORY Y considers effort at work as just like rest or play, ordinary people who do
not dislike work. Depending on the working conditions, work could be considered a
source of satisfaction or punishment, for individuals who seek responsibility (if they
are motivated). The management implications for Theory X workers are that to
achieve organizational objectives, rewards of varying kinds are likely to be the most
popular motivator. The challenge for management with Theory Y workers is to create
a working environment (or culture) where workers can show and develop their
creativity.
4. Adam’s Equity (Fairness) Theory
Equity theory is a concept in industrial psychology that focuses on an individual‘s

perceptions of how equitably they are being treated in their work organization. The
theory is based on an individual‘s subjective judgments about the fairness of the

reward she or he got, relative to the inputs (which may include many factors such as
effort, experience, education, and so on), in comparison with the rewards of others.
Muchinsky & Culbertson (2016) argue that in order to understand equity theory, one
must be familiar with its various components, such as the person for whom equity or
inequity is perceived as well as any group or person used by a person as a referent for
the ratio of inputs and outcomes (e.g. recognition, fringe benefits, pay).
According to this theory, if workers perceive that their output/input ratio is less than
the referent, they feel inequity. An employee who feels they are being treated
inequitably may become absent more, steal from their organization, or may give the
same effort they were giving before.
Generally, from this theory, we can understand that, directly related to employee
performance. Unfair workplace rewards reduce employee performance. On the other
hand, fair workplace rewards improve employee performance. This makes it
important to understand the concepts that make up equity theory and put mechanisms
in place to create the perception of a more equitable work environment.
5. Herzberg Two Factor Theory
Frederick Herzberg advanced the Two Factor Theory in 1959. This study is grounded
on this theory has been explored by various scholars to explain the relationship
between workplace environment and employee performance. Herzberg defined two
sets of factors in deciding employees working attitudes and levels of performance,
named motivation and hygiene factors (Robbins and Judge, 2007). He stated that
motivation factors are intrinsic factors that will increase employee job satisfaction;
while hygiene factors are extrinsic factors to prevent any employee dissatisfaction.
The theory pointed out that improving the environment in which the job performed
motivates employees to perform better. Herzberg‘s theory concentrates on the
importance of internal job factors as motivating forces for employees. He wanted to
create the opportunity for employees to take part in planning, performing, and
evaluating their work (Schultz et al., 2010). The content of the theory has been widely
accepted as relevant in motivating employees to give their best in organizations.
Further research has proved that an employee is more motivated by intrinsic factors as
captured by Herzberg‘s motivator needs than anything else.

There are however other schools of thought that share a different opinion from
Herzberg‘s. One scholar is King (2005) who sought to eradicate and evaluate five
distinct versions of the Two Factor Theory. He concluded that the two versions are
invalid, as they cannot supported by any empirical studies. However, the two-factor
theory can said to be a truly outstanding specimen for it to last a long period without
disapproval. It has been a great influence on the body’s knowledge about workplace
motivation and performance. It has generated a great amount of further research by
many scholars. It draws its thought from Maslow‘s famous hierarchy of needs theory
and human behavior. However, due to changes in the organizational environment and
the advancement in technology, it is necessary to develop new methods of analysis.
This will provide new ways of conducting research and evaluating the results of
existing findings.
6. Maslow’s Hierarchy of Needs Theory
Abraham Maslow defined need as a physiological or psychological deficiency that a person

feels the compulsion to satisfy. This need can create tensions that can influence a person's
work attitudes and behaviors. Maslow formed a theory based on his definition of need that
proposes that humans are motivated by multiple needs and that these needs exist in a
hierarchical order. His premise is that only unsatisfied need can influence behavior; a satisfied
need is not a motivator (Ramlall, 2004).
Source: Ramlall, S. (2004)
A person starts at the bottom of the hierarchy (pyramid) and will initially seek to
satisfy basic needs (e.g. food, shelter).Once these physiological needs have been
satisfied, they are no longer a motivator. The individual moves up to the next level.

Safety needs at work could include physical safety (e.g. protective clothing) as well as
protection against unemployment, loss of income through sickness etc).Social needs
recognize that most people want to belong to a group. These would include the need
for love and belonging (e.g. working with colleague who supports you at work,
teamwork, communication).Esteem needs are about being given recognition for a job
well done. They reflect the fact that many people seek the esteem and respect of
others. A promotion at work might achieve this. Self- actualization is about how
people think about themselves - this is often measured by the extent of success and/or
challenge at work (Ramlall, 2004).One should also take care that employees don’t just
work for financial incentives. One should create an environment where employees
like to come to work because they enjoy their jobs hence increase performance.
Incentives also motivate the employees when you want them to go that extra mile to
achieve your targets. Maslow's model has great potential appeal in the business world.
The message is clear - if management can find out which level each employee has
reached, then they can decide on suitable rewards (Ramlall, 2004).
2.3 Empirical study
In this part, the researcher tried to analyze and discuss different findings or studies
regarding to the effect of working conditions on employee performance in the case of
INSA.
Bhat (2013) examined the effect of training on worker performance through a study of
the Indian retail banking industry. 180 bank workers participated in the survey. A
five-point Likert scale was used to clarify the study's contents. Results showed that
training and employee performance had a positive and significant link.
(Nur Shifaa Athirah Saidi, 2019) Researched the title “The Relationship between
Working Environment and Employee Performance”. In this study, the dependent
variable was employee performance, while the independent variable was job safety
and security, physical working environment, relationship with co-workers, supervisor
support, and working hour. The study was use quantitative approach and uses
correlation for the purpose of study relationship. The research result was generally,
there are direct relationship between job safety and security, physical
working environment, relationship with coworker, supervisor support and working

hour with employee performance. Support by supervisor has the strongest impact on
employee’s performance.
(Abbas, 2017) Studied “Factors of Workplace Environment that Affects Employee
Performance in an Organization: A study on Greenwich University of Karachi”. The
researcher were identify environmental factors that affect employee performance like
Employee Performance, Working Environment, Stress, Training and Development,
Rewards, Culture, and Leadership. This research was used quantitative methodology.
The target population of the study was 137. From this study the author conclude that
the factors with the highest impact on the performance of employees were Leadership,
training and development, and stress, which means that these independent variables
had the most impact on the dependent variable.
(Shammout, 2021) Discovered the Impact of Work Environment on Employees
Performance. The objective of this study was to examine the impact of workplace
environment of employees’ performance. The author was identify training and
development, benefit of employee, physical factor, and workload as independent
variable and he took employee performance as independent variable. The research had
had 120 respondents, out of this 59.78% of respondents was male and the other was
female. From this the author concluded that out of all the most
independent variable found was employee benefits that motivated the employees the
most towards performing better. All other variables also showed significant amount of
positive relation over the influence of work performance.
(Prathayini, 2016) Researched that the impact of work environment on employees’
performance. The writer was use self-administered questionnaire to collect primary
data from 100 respondents. To measure the reliability the researcher was use
Cronbach’s alpha. The research had had Supervisor support, internal communication,
and Physical work environment as independent variable and employee performance as
dependent variable. From those independent factors like supervisor support,
international communication and physical work environment (physical condition) are
helpful in developing a working environment that has positive impact on employees’
level of performance in the insurance companies.
(Iqra HAFEEZ, 2019) Was investigate “The Impact of workplace environment on
employee performance: mediating role of employee health”. The result of this
research generally was physical environment factor, behavioral environmental factor,

and employee health have positive and strong relationship with employee
productivity.
(GUNASEELAN, 2012) Examined “the Impact of Work Environment on Employee

Performance”. The research was a descriptive research, which uses survey and fact
finding as a research strategy. The study had conducted at manufacturing sector. The
variables used for this study were international relationship, participative
management, formalization and standardization, training and development, monetary
benefits, objectivity and rationality, scope for advancement, supervision, employee
welfare, and safety and security as independent variable. The researcher conclude that
workplace environment affects employee morale, productivity and engagement both
positively and negatively. The work place environment in a majority of industry is
unsafe and unhealthy. These includes poorly designed workstations, unsuitable
furniture, lack of ventilation, inappropriate lighting, excessive noise, insufficient
safety measures in fire emergencies and lack of personal protective equipment. People
working in such environment are prone to occupational disease and it affects
employees’ performance.
(ESHETU, 2022), investigated effect of working environment on employee work
performance in Unilever Manufacturing Plc. the researcher conclude that physical
environment, workload, and training have positive and significant impact on
employee performance. However, reward and working at home have positive and
insignificant impact on employee performance.
(Oktafien, Oktari, & Suhardi, 2023) Studied that the effect of quality of work life balance
and work environment on employee performance. They conclude that work life
balance, and work environment have positive and significant effect on employee
performance.
Khan et al. (2011) conducted research on the effects of infrastructure and work
environment on employee performance in Pakistan. The last finding indicated that
employee performance is positively impacted by workplace rewards. Workplace
rewards have a positive and statistically significant impact on employee performance,
according to a study by Ranjan et al. (2017) that looked at the Impact of Rewards on
Employee Performance: A Case of Indian Oil Corporation, Patna Region. Work-life
balance has a favorable and significant impact on employee performance, according

to Aslam's (2018) research on the subject of employee performance in Pakistan's
education sector.
The effects of the workplace environment on the health of leather manufacturing
workers in Sirpurm, India, are the subject of research by Ravi (2017). They employed
a cross-sectional technique. Data were gathered through a descriptive research using
one-time interviews and pretested questionnaires from 230 individuals working in
eight different leather sectors using cluster sample methodology. Finally, the findings
demonstrated that working conditions have an impact on employees' health status and
call for appropriate action to enhance facilities and, in turn, employees' health status.
Tesfu.A. (2019) investigated how the bole lemi industrial park's workplace affect
workers' productivity. He highlighted a number of elements that affect the workplace
environment, including the physical setting, compensation, democratic leadership
style, workload, training, and prejudice. He discovered that training, work-life
balance, democratic leadership, and the physical environment all have a favorable
impact on employee performance. Workload and prejudice, however, have a
detrimental impact on employee performance.
According to the respondents, the working environment of the organization has an
effect on its members, according to Christabella P. Bushiri's (2014) study, "The
Impact of Working Environment on Employees' Performance: The Case of Institute of
Finance Management in Dar es Salaam Region." According to the survey, an
organization's physical workspace has a big impact on how comfortable and happy its
workers are at work and how well they perform in general. Additionally, it was
discovered that having task aids in the workplace improved workers' output. The
organization's fair reward system for employees who performed well was another
finding of the study. The study advises management to address issues including
workplace flexibility, noise distractions, the quality of supervisor-subordinate
relationships, the availability of task aids, the use of performance feedback, and the
enhancement of work incentives in order to increase employee performance. By
addressing these problems, the company may inspire workers to do their tasks well.
(Suhamo Pawiro Sumarto, 2017) Examined the effects of work environment, leadership
style, & organizational culture towards job satisfaction & its implication towards
employee performance in Parador Hotels and Resorts, Indonesia. The aim of the study
was to determine the effects of work environment, leadership style, and organizational

culture on job satisfaction and implication towards employee performance. The
research population was the whole 642 employees of Parador Hotel and Resort,
Indonesia. The sample was determined by the formula of Slovin and th structural
equation model (SEM). 200 employees were the sample of the study, which 179 of
them were returned and analyzed using descriptive statistics. This study was use
stratified sampling technique. The result of this study was work environment,
leadership style, and organizational culture have positive and significant impact on
job satisfaction, but only leadership style have a positive and significant effect on
employee performance.
Leblebici (2012) looked at a case study of a foreign private bank in Turkey to
examine the effect of workplace quality on worker productivity. The study's findings
demonstrated that workers feel inspired when working in a modern office that is
tastefully furnished, thoughtfully organized, and equipped with convenient storage.
Asante (2012) investigated how office ergonomics affected Ghana's National
Petroleum Corporation (GNPC). As per the findings of the study, incomplete physical
environment can lead to a negative effect on a worker's performance ranging from
20% to 80%.
Omoh et al. (2015) examined workplace discrimination in Ghana and its effect on
workers' productivity. 159 employees from five different firms in five different
sectors who answered questionnaires about whether prejudice at work has any impact
on employee performance were gathered. Lastly, the research's findings show that
prejudice has a considerable detrimental effect on employee performance. Research
on the factors influencing employee performance in the corporate sector has been
done by Khan et al. (2013), using Pakistan as an example of a developing market.
Three distinct eight firms' worth of questionnaires were used to gather data for the
study. 240 respondents were chosen for the study using the convenience sample
technique. The researchers' conclusion was that there is a favorable and statistically
significant correlation between democratic leadership style and employee
performance.
Omoruyi Bernard Elaho & Amuen Samson Odion (2022) studied the Impact of
Working Environment on Employee Productivity in University of Benin Complex.
They were identified that work place, workload and supervisors support is essentially
identified with the productivity of employees of business focuses in University of

Benin Ugbowo campus, Benin City and the study were employed descriptive and
quantitative approach. They also found that work place, workload and supervisors
support were as good factor employee productivity in businesses. Additionally they
were conclude that safe workplace, workload and supervisors support significantly
impact employee productivity.
Khaliq Ur Rehman (2019) explored the Impact of workplace environment on
employee performance: mediating role of employee health. The researcher was select
employee performance as dependent variable, employee health as mediating variable,
and work place environment like physical environment and behavioral environment as
independent variable. This research was use primary data as a data source, survey as a
research strategy, and interview and questionnaire as data collection method. The
sample size of the study was 250 and analyzed by SPSS25. The conclusion of this
article was organizations must maintain a better physical environment in order to
enhance employee productivity as employee performance has a direct relationship
with workplace environment and employees productivity and physical as well as
behavioral environmental are linked through employee health. Improving physical
and behavioral factors will improve employee health and healthy employees can be
more productive; they can perform their tasks more effectively and efficiently and
hence improve employee performance.
Sadegi and Naharuddin (2013) conducted a study on Factors of Workplace
Environment that Affect Employees Performance: A Case Study of Miyazu Malaysia.
The researcher were identified three independent variable as job aid, supervisor
support and physical workplace environment and employee performance as dependent
variable. The data was collected through survey strategy and questionnaire was the
data collection methodology for 200 respondents. The data was analyzed using SPSS.
They summarized that job aid and physical workplace environment are significantly
effects the employee performance. However, supervisor support have not a significant
impact on employee performance.
Prathayini,K, Ganga,V, and Maryselesteena,N (2020) investigated the Impact of
Working Evironment on Employees’ Performance: An Empirical Study of Insurance
company. They were collect the data through self-administered questionnaire. The
researcher took 10 Insurance companies located in different workplace environment
as a sample. The research strategy that the researcher used for this study was survey

and the data were collected through questionnaire. They were conclude that
supervisor support, international communication and physical work environment
(independent variable) are helpful in developing a working environment that has
positive impact on employees’ level of performance (dependent variable) in the
insurance companies.
Sharmilee Bala Murali (2017) discovered the impact of job stress on employee
performance. The researcher were collect the data through questionnaire from 310
respondents. The researcher conclude that workload is a contributor factor to stress
but it is not significant. Because workload’s beta coefficient value stands at -0.126
with a negative insignificant value 0.147 which is higher than 0.05.
Dike, Ego E. & Madubueze, M. H. C (2019), revealed the study title of “Democratic
Leadership Style and Organizational Performance: An Appraisal”. They were stated
that democratic types of leadership is the best of leadership styles because of the
benefits that will be derived from it by the employees amid the overall result to the
organization as a whole. However, the study was established a significant positive
effect between application of democratic leadership style and the performance of the
employee. Based on this, the study concludes that high employee performance is
achieved when leaders involve employee's decision-making through constant
consultation.
Nurmaidah Ginting (2021), studied “Effect of Motivation, Work Environment and

Workload on Employee Performance at PT. Benua Penta Global Medan”. The
objective of the study was to determine and analyze the effect of motivation, work
environment and workload on employee performance at PT. Benua Penta Global
Medan. This used quantitative approach for the study and the researchers used
random sampling technique. The results of the study showed that motivation and
workload partially had a significant effect on employee performance, while work
environment partially had no significant effect on employee performance.
Simultaneously, motivation, work environment, and workload have a significant
effect on employee performance.

2.4 Conceptual framework
Onen and Oso (2009) note that an abstract framework could define the presentation of
a theory which it‘s presented as a model once the analysis of variables and also the
relationship between them are translated into a visible image for instance the
interconnections between independent and dependent variables. The abstract
framework is so a theme of ideas that the study employee in order to realize the set
objectives. The following figure demonstrates the diagram for conceptual framework
for the independent and dependent variables.
Figure 2-1 Conceptual framework
Source: Nduku (2015)
2.5 Research hypothesis

In order to find out the relationship and effect of the working environment on
employee‘s performance the case of INSA, the research hypothesis of the study was
include:
H0: 1 Reward has not a significant effect on employee performance
H1: 2 Democratic Leadership style has not a positive and significant effect on
employee performance

H1: 3 Work-life balance has not a positive and significant effect on employee
performance.
H1: 4 Training has not a significant effect on employee performance.
H1: 5 Workload has not a significant effect on employee performance.
H1: 6 Physical environments have not a positive and significant effect on

H1: 7 Discrimination has not a significant effect on employee performance.
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1 Introduction
This section primarily outlines the study's methodology, data collection strategies, and
methods for data processing and presentation. It is a highly important section since it
explains why a certain sampling, data collecting, analysis, and study design will
chose. It also contains information about the study's population, design, and validity
and reliability tests. Clearly, this chapter is about research methodology, which is the
overall plan that outlines the methods and procedures for gathering and interpreting
data.
3.2 Descriptions of the study area
The study have conducted in in Information Network Security Administration located

at Addis Ababa, Ethiopia, which is the governmental organization to prevent the
national information infrastructure from hazard. The specified area, which this
organization located in kirkos sub city at Wollo Sefer. The organization have talented
workforces/employees in order to prevent the national information infrastructure from
harm. Therefore, the target population of the study was taken those employees as a
target population, which is 2088.

3.3 Research Paradigm
This research have taken a positivism research philosophy because a primary goal of
positivist inquiry is to generate explanatory associations or causal relationships that
ultimately lead to prediction and control of the phenomena in question. (Yoon Soo
Park, 2019).
Positivism relies on the hypothetico deductive method to verify a priori

hypotheses that are often stated quantitatively, where functional relationships could be
derived between causal and explanatory factors (independent variables) and outcomes
(dependent variables).8 Positivist research, however, does not always rely

on quantitative methods. For example, an experimental study examining the effects
of an intervention through qualitative analysis fits within the positivist
paradigm. (Yoon Soo Park, 2019).
The quantitative data that positivist researchers use to answer research questions and
formulate theories can be collected through true experiments or less rigorous quasi
experiments, standardized tests and large or small scale surveys using closed ended
questionnaires. The numeric data that are generated through these methods are
subjected to descriptive or inferential statistical analysis (Adil Abdul Rehman, 2016).
Therefore, this research was use positivism research paradigm.
3.4 Research design and Approach
3.4.1 Research Design
A research design is the arrangement of conditions for the collection and analysis of
data in the manner that aims to combine relevance to the research purpose with
economy in procedure (Kothari, 1990). A research design is also a plan for a study
that provides specifications of procedures to be followed by the researcher in order to
achieve the research objective as well as, to test the hypothesis (McDaniel and Gates,
2006).
This study employed an explanatory research design based on its purpose, as it aimed
to analyze and explain the reasons and mechanisms behind occurrences. This type of
research is used to elucidate the effect of independent variables (working environment

dimensions) on the dependent variable (employee performance). The research follows
a cross-sectional design based on time; data collection occurred at a single point due
to constraints related to time and cost. Based on its outcomes, this research qualifies
as applied research, as it was conducted to address specific issues within INSA.
Moreover, this research is categorized as quantitative research based on the nature of
the data collected.
3.4.2 Research Approach
According to Dr. S. M. Aqil Burney and Hussain Saleem (2008), there are two
research approaches. This includes Deductive-research approaches work from the
more general to the more specific. It explains causal relationships between variables.
In addition, inductive-research approaches work in another way, moving from specific
observations to broader generalizations and theories. Understanding the way humans
build their world. This research explains the causal relationship between the
dependent (working environment) and the independent variable (Employee
performance). Based on this the research will follow a deductive research approach.
According to Creswell (2009), there are three basic research approach; quantitative,
qualitative and mixed approach. The quantitative approach is a research method in
which the researcher defines what to study, poses close-ended questions to the
respondents, gathers numeric data, and then analyzes these numbers using statistics
(Creswell, 2005).To achieve the study objectives, this research employed a
quantitative research approach to analyze data collected from INSA employees using
a close-ended questionnaire.
3.5 Type and Source of data
The main emphasis of this research was to investigate the effect of the working
environment on employee performance of INSA. The principal source of data for this
study was primary. The primary source of data refers to information obtained
firsthand by the researcher on the variable of interest for the specific purpose of the
study (Sekaran, 2003). The primary data source for this research was collected from
INSA employees through a self-administered questionnaire. The research strategy

employed for this study was a survey, as it facilitates the collection of primary data,
particularly quantitative data, which was the focus of this study.
3.6 Sampling Design, Procedure and Technique
3.6.1 Population, Sampling Frame and Sampling Unit
The population is the total collection of individuals to be studied and from which the
sample is drawn (Sekaran, 2016). Therefore, the targeted population for this study
was employees of INSA. The working population was employees of INSA located at
Wollo Sefer, Addis Ababa since the organization have secured branch which the
researcher unable to access data located in different part of the country. Accordingly,
the target population of the study was 2088 employees.
3.6.2 Sample Size Determination
The main emphasis of this study was identifying the effect of the working
environment on employee performance. The target populations for this study were all
employees of INSA under study. The sample size of employees who participated in
the study was determined using the simple random sampling technique. The sample
n
size of the target population was calculated using the formula .
1+ n(e 2)
Equation 1 Sample size Determination

Where e represents the standard error (0.05 in this case). The resulting exact sample
2088
size for the study was calculated as =335.69 which was rounded up
1+ 2088 ( 0.0025 )
to 336.
3.6.3 Sampling Technique and Procedure
This study used a probability sampling procedure, ensuring that every individual had
an equal chance of being selected. This approach ensures that every unit in the
population has a chance, greater than zero, of being included in the sample. Among
the four basic types of sampling procedures associated with probability samples
simple random, systematic sampling, stratified, and cluster, this study employed the
simple random sampling technique. This method involves drawing samples in a way

that gives each person or item an equal chance of being selected in each selection
round (Kanupriya, 2012).
3.7 Methods of Data Collection
To gather data for this study, the researcher used a questionnaire as the method of data
collection instrument. The questionnaire consisted of two sections. The first section
contained background and demographic information of the respondents, while the
second section included information about the working environment and employee
performance.
3.8 Data Quality Assurance Mechanisms
1. Reliability test
Aimed at the point that even if the research were repeated they would end up with
similar results or the consistency or dependability of a measurement technique, and
it‘s concerned with the consistency or stability of the score obtained from a measure
or assessment overtime and across settings or conditions. If the measurement is
reliable, then there is less chance that the obtained score is due to random factors and
measurement error (Marczyh, et al., 2005).
According to George and Mallery (2003, as cited in Joseph & Rosemary, 2003)
Cronbach‘s alpha is a coefficient of reliability. It is commonly used as a measure of
the internal consistence or reliability of a psychometric test score for a sample of
examinees. Cronbach‘s alpha reliability coefficient normally ranges between 0 and 1.
Table 3.1 Cronbach‘s alpha reliability coefficient range and description
Cronbach alpha Description

>=0.9 Excellent
>=0.8 and <0.9 Good
>=0.7 and <0.8 Acceptable
>=0.6 and <0.7 Questionable
>=0.5 and <0.6 Poor
<0.5 Unacceptable

Based on this, to ensure reliability, this study utilized a self-administered
questionnaire. The questionnaires were pre-tested through a pilot study to ensure a
shared understanding of the questions among respondents. The alpha values for the
questionnaire items were calculated, and their values met an acceptable threshold
(>0.7) in line with the specified requirement range. Overall, the reliability of this
study is summarized in the following table.
Table 3.2 Cronbach's Alpha for this Study
Item-Total Statistics Cronbach's Alpha Description
PWE .816 Good
RW .818 Good
DLS .796 Moderate
WLB .825 Good
TR .815 Good
WL .811 Good
DS .798 Moderate
EP .818 Good
From table 3.2, the Cronbach's of all items are greater than 0.7, meaning that the data
is reliable. The general Cronbach's alpha of all items are 0.832 which is greater than
0.7. Therefore, the data in this research had good reliability.
2. Validity test
Refers to the extent to which the concept one wishes to measure is actually being
measured by a particular scale or index. According to Kothari (2004), validity aims at
establishing the results which are linked with the condition. It is concerned with the
extent that the scale accurately represents the construct of interest. In order to assure
the validity of the measurement instrument of the study conducted based on the
literally accepted conceptual framework that clearly indicate the theoretical construct
and associated with the measurements valid to evaluate the effects of working

environment (independent variables) on employee performance (dependent variable).
Where possible this should be supported and consideration given to practical things.
Thus, the pre-questionnaire was distributed to 39 employees to validate the questions

and improve the data collection process. Following feedback and discussions with the
organization's experts, the researcher confirmed that the questions designed for
primary data collection to address the research objectives were valid. The data
gathered from these 39 employees were then analyzed using SPSS 26 to evaluate the
validity of the pilot survey. The results revealed a Cronbach's alpha greater than 0.7,
which indicates validity. It's noteworthy that these instruments or variables pertaining
to the working environment and employee performance had undergone validation
testing in previous studies
3.9 Methods of Data Analysis and Mode of Presentation
3.9.1 Quantitative Data Analysis
The data collected from the respondents were analyzed using descriptive statistics,
including mean, percentage, and standard deviation, as well as inferential statistics
such as Pearson correlation and regression analysis. A correlation test was employed
to assess the strength of the relationship between independent and dependent
variables. Furthermore, to test the hypotheses, regression analysis and analysis of
variance were utilized. The researcher employed the SPSS 26 software package for
data analysis.
7.9.1.1 Model Specification
The works reviewed in the previous sections indicated that employee performance
was influenced by factors within the working environment. Considering the
hypotheses outlined above, the central focus is on investigating the relationships
between employee performance and each of the explanatory variables identified
through literature and theories: physical work environments, rewards, democratic
leadership style, work-life balance, training, workload, and discrimination. Factors not
explicitly included in the model were accounted for by the error term within the
model.

Consequently, the comprehensive model that encompassed all variables to test the
study's hypotheses was as follows:
EP = β0 + β1 (PWE) + β2 (RW) + β3 (DLS) + β4 (WLB) + β5 (TR) + β6 (WL) +

β7 (DS) + µ
Where: EP=Employee Performance (Dependent Variable)
β0= constant term PWE=Physical Work Environment
RW= Reward DLS=Democratic leadership style
WLB= work life balance TR= training
WL= workload DS= discrimination
3.9.1.2 Operationalization and Measurement of Variables
The measurement of employee performance developed by Hakala (2009) was adopt

with slight modification. All the items, except background and demographic
information, are measured on a five-point scale such as; strongly disagree(SD)=1
disagree(D) = 2; Neutral (N) = 3; Agree (A) = 4; Strongly agree (SA)=5. The use
Likert scale is to make it easier for respondents to answer questions.
3.9.2 Mode of Data presentation

The research was use text based data presentation to interpret the result, table to
present the frequency, regression result, correlation, descriptive statistics, and graphs
to present assumption test.
3.10 Ethical consideration
(Mugenda, 2008) highlighted that respondent participation should be entirely

voluntary, and individuals have the right to refrain from responding without any
obligation to the researcher. Consequently, ethical considerations were adhered to
during the study's implementation. Every participant in the study was provided with
an initial explanation of the project's objectives, purpose, and the questionnaires that
would be utilized. Prior to administering the questionnaire, respondents were assured
of privacy and confidentiality, after being informed about the study's overarching
purpose.

CHAPTER FOUR
4. RESULTS AND DISCUSION
4.1 Introduction
Important literature on the subject that could offer sufficient understanding of the
topic and the methods selected to test the study hypotheses was mentioned in earlier
chapters. This chapter offers a comprehensive examination of the descriptive statistics
and regression findings. The chapter is divided into four specific sections. The first
section presents descriptive analyses of the variables. The second part discusses
correlation analysis and the extent of the relationship between the study variables.
Section three presents the findings of diagnostic tests for assumptions in the linear
regression model. The results of the regression analysis and related discussions are
ultimately provided in the fourth part.
4.2 Demographic and socioeconomic characteristics of respondents
The researcher were distributed 336 questionnaires for the employee of Information
Network Security Administration (INSA) located at Wolo-Sefer, Addis Ababa.
Among those 335 are answered and returned. The response rate for this research was
99.7% that is considered as very good response rate as mentioned by Babbie (2010).

Gender, age, marital status, position/occupation, and education level are among the
demographic factors. This portion of the analysis focuses on the personal information
of the survey respondents. Therefore, it is essential to assess the respondent's
demographic profile in order to confirm the accuracy of the data collected.
1. Gender
Table 4.1 Gender
Gender Frequency Percent
Valid Male 284 84.8
Female 51 15.2
Total 335 100.0
Source: Survey (2023) SPSS output
Male respondents made up 84.8 percent of the sample, as seen in the table above,
while female respondents made up 15.2 percent. According to the survey, there were
more males than females.
2. Age
Table 4.2 Age
Age Frequency Percent
Valid 18-25 68 20.3
26-33 201 60.0
34-41 52 15.5
42-49 13 3.9
Above 50 1 .3
Total 335 100.0
The age distribution of the respondents who took part in the study is shown in the
above table. We can see from the table that 20.3% of respondents are in the 18 to 25

age range. 60.0 percent of respondents are between the ages of 26 and 33, 15.5
percent are between the ages of 34 and 41, 3.9 percent are between the ages of 42 and
49, and 0.3 percent are over the age of 50. According to this, the majority of INSA
personnel who responded were adults.
3. Marital status
Table 4.3 Martial Status
Marital status Frequency Percent
Valid Single 212 63.3
Married 120 35.8
Divorced 3 .9
Total 335 100.0
Regarding the distribution of marital status, 212 (63.3%) of the respondents are
single, 120 (35.8%) are married, and 3 (0.9%) are divorced. From this, it can be
inferred that INSA employees come in all different types of marital statuses, with
majority 63.3 percent single.
4. Education level
Table 4.4 Educational Level
Education level Frequency Percent
Valid Diploma 12 3.6
Degree 259 77.3
Masters 64 19.1
Total 335 100.0
According to the data, 259 (77.3 percent) respondents have a degree, whereas 64
(19.1 percent) have a master's, and 12 (3.6 percent) have only a high school diploma.

From this, it can be inferred that the workforce at INSA consists of all levels of
education except below 12 with majority of degree-holders.
5. Position/occupation
Table 4.5 Position/occupation
Position Frequency Percent
Valid Team Leader 45 13.4
Supervisor 42 12.5
Professional 248 74.0
Total 335 100.0
According to the data, 45 (13.4 percent) respondents are team leaders, whereas 42
(12.5 percent) are supervisors, and 248 (74.0 percent) are professionals. From this, it
can be inferred that the workforce at INSA consists of all positions with majority of
professionals.
4.3 Findings and discussions
4.3.1 Descriptive statistics of the variable
This section contains the computed summary of the descriptive statistics for the
variables included in the questionnaires, including the dependent (employee
performance) and independent (physical working environment, reward, democratic
leadership style, work-life balance, training, workload, and discrimination). All
variables that were collected from respondents and assigned a mean and standard
deviation have been discussed.
Table 4.6 Descriptive Statistics for the study
Variables N Mean Std. Deviation
PWE 335 3.7112 .67369
RW 335 3.3676 .85291

DLS 335 3.6160 .61101
WLB 335 3.3746 .86773
TR 335 3.1391 .97151
WL 335 3.9355 .52084
DS 335 3.2203 .78325
EP 335 3.6279 .92454
Valid N (list wise) 335
According to (Luna, 2017) A mean score above 3.8 is considered high, a score
between 3.79 and 3.4 are moderate, where as a score below 3.39 is considered low.
Based on this PWE received a mean rating of 3.7112. The standard deviation of the
PWE deviation ratings is .67369, which denotes a moderate level of variability. This
implies that the evaluations are generally somewhat dispersed from the mean. The
average response score for RW was 3.3676. The standard deviation of the RW ratings
is .85291, which denotes a low level of variability. This implies that the evaluations
are generally somewhat dispersed from the mean. The DLS mean was evaluated
3.6160 by the respondents. The standard deviation of the DLS ratings is .61101,
which denotes a moderate of variability. This implies that the evaluations are
generally somewhat dispersed from the mean. The respondents gave WLB an
average rating of 3.3746. The standard deviation of the ratings for WLB is .86773,
which denotes low level of variability. This implies that in comparison to other
variables, evaluations are more dispersed around the mean. The average response
score for TR was 3.1391. The standard deviation of the TR scores is .97151,
indicating low level of variability. This implies that in comparison to other variables,
evaluations are more dispersed around the mean. WL had an average rating of 3.9355
from the respondents. The WL ratings' standard deviation is .52084, which indicates
high degree of variability. Accordingly, it can be inferred that the evaluations are
typically considerably skewed from the mean. The respondents gave DS an average
rating of 3.2203. The standard deviation of the ratings for DS is .78325, which
denotes a low level of variability. This implies that the evaluations are generally

somewhat dispersed from the mean. The average response score for EP was 3.6279.
The standard deviation of the EP ratings is .92454, which shows moderate level of
variability. This implies that, compared to other factors, the ratings are less dispersed
around the mean. The mean and standard deviation for all items are shown in
appendix B
4.3.2 Inferential statistics
This section elaborates on the findings of the inferential statistics used in the study,
which were supported by the Pearson correlation coefficient and linear regressions.
4.3.2.1 Correlation analysis
The intensity of the link between two variables is described by correlation.

Correlation analysis, according to Brooks (2008), measures the strength of the linear
relationship between dependent and independent variables. Correlation coefficient
values vary from -1 to 1. A correlation value of 1 denotes a perfect positive
association between two variables, while a correlation coefficient of -1 denotes a
perfect negative relationship. A correlation coefficient of 0, on the other hand, denotes
a lack of correlation between the variables.
McDaniel and Gates (2006) state that a correlation coefficient between 0.1 and 0.29
implies a weak relationship between the items. A moderate relationship is indicated
by a correlation coefficient between 0.3 and 0.49. A correlation value of more than
0.5 indicates a significant association between the two variables. According to
Gujarati (2004), who made this observation, the most often employed bi-variant
correlation coefficient—typically referred to as Pearson correlation was used to
ascertain the connection between working environment variables and employee
performance. The following table presents the result of Pearson correlation between
variables.
Table 4.7 Correlation

Correlations
EP PWE RW DLS WLB TR WL DS

PWE .421** 1
RW .630** .268 1
DLS .482** .483 .327 1
WLB .340** .230 .174 .392 1
TR .643** .259 .351 .259 .178 1
WL .313** .262 .205 .479 .223 .437 1
DS .580** .475 .388 .528 .374 .414 .474 1
**. Correlation is significant at the 0.01 level (2-tailed).
From the correlation table there is a moderate relationship or association between

physical work environments (0.421), democratic leadership style (0.482), work life
balance (0.340), and workload (0.313) and employee performance, which have the
correlation coefficient, is between 0.3 and 0.49. Discrimination (0.580), Training
(0.643), and Reward (0.630) have significant association with employee performance
which the correlation coefficient is greater than 0.5.
4.3.2.2 Testing Assumptions of Linear Regression Model (LRM)
In this work, the ordinary least square approach (OLS) was used to estimate the linear
regression model's parameters and reduce the sum of squared errors, or the difference
between the observed value and predicted value. The five fundamental underlying
assumptions must be met when utilizing the OLS method in order to get an accurate
estimate value. When the assumptions are broken, OLS estimators yield results that
are biased, inconsistent, and ineffective. As a result, since the standard errors are
inaccurate, hypothesis tests are no longer valid. The researchers to guard against the
possibility of obtaining and interpreting incorrect regression results therefore carried
out a diagnostic test. The following tests are run on the model to ensure that it is
objective, consistent, efficient, and valid.
1. Test for Residual Has Zero Mean

Linear regression models assume that the error terms zero mean value. In fact, if a
constant term is included in regression model equation this assumption will never be
violated (brooks, 2008). In this study, the researcher included the constant term in the
regression equation. Therefore it‘s expected that the error terms have zero mean value
and the assumption is not violated.
2. Test for Heteroscedasticity
Linear regression model assume the variance of the error term is constant, this is
known
as homoscedasticity. If the variance of the error term is not the same, they are said to
be heteroscedastic. In order to check the violation of this assumption the research used
scatter plot technique. The result plots the standardized residual, against standardized
predicted value. If the plots have a pattern, it implies the presence of
heteroscedasticity. Conversely, if the plots depict a pattern there is no evidence for the
presence of heteroscedasticity. As illustrated in the figure 2 below the graph looks like
a random array dots or the plots have no pattern. So, homoscedasticity assumption is
not violated.
Figure 4-2 Heteroscedasticity test
3. Multi-collinearity testing

LRM model assume no correlation between explanatory variable. Multi-collinearity
refers to the situation were some or all explanatory variables are highly inter-
connected or the existence of exact linear association. According to Guajarati (2004),
if multi-collinearity is ideal the regression coefficients of independent variables are
undetermined and difficult to measure their standard error. In order to test the multi-
collinearity problem the researcher applied variance inflation factor (VIF) and
correlation coefficient of explanatory variables. If the VIF of the variables exceed
10% and tolerance <0.1, multi-collinearity can be a potential problem. As illustrated
in table below the value of variance inflation factor for all explanatory variables is
less than 10%. Therefore, it implies that there is no multi-collinearity between
explanatory variables.
Table 4.8 Tolerance and VIF for multi-collinearity test
Variables Tolerance VIF

PWE .693 1.442
RW .786 1.272
DLS .566 1.767
WLB .749 1.335
TR .782 1.278
WL .649 1.540
DS .526 1.902
a. Dependent Variable: EP
4. Test for Normality

LRM assume that the distribution of the error term is normally distributed. As field
(2009), noted, that normality assumption is important while using regression and
worthwhile, if we want to make inference about the population parameter from the
sample parameters. If the mean of the residual is zero and constant, variance the error
is normally distributed. Thus, the result in figure below illustrates that the mean of the
residual is zero and approximately its variance is 1, which implies that the distribution
of the error is normally distributed.

Figure 4-3 Histogram for Normality Test
Figure 4-4 Normality Test

4.3.2.4 Results of Regression Analysis
In accordance with linear regression model, the model has satisfied the five diagnostic
tests. Based on this, multiple regression analysis was determined in order to reveal the
value of coefficient included in the model. Accordingly, table below depicts, the
result of regression model that examine the effect of explanatory variables on
employee performance. Hence, employee performance is explained variable whereas
physical environment, reward, democratic leadership style, work life balance,
training, workload and discrimination are explanatory variable.
Table 4.9 Coefficients
Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) -.758 .185 -4.087 .000
PWE .060 .029 .075 2.021 .044
RW .399 .039 .362 10.328 .000
DLS .097 .032 .125 3.017 .003
WLB .071 .025 .103 2.869 .004
TR .504 .045 .390 11.096 .000
WL -.043 .033 -.050 -1.297 .196
DS .118 .031 .161 3.764 .000
a. Dependent Variable: EP
Thus, the model applied in this study was ordinary least square method. The
regression equation can be stated as:
EP=-0.758+0.060PWE+0.399RW+0.097DLS+0.071WLB+0.504TR -
0.043WL+0.118DS+ µ
Table 4.10 Model Summary
Model Summary

Adjusted R
Model R R Square Square Std. Error of the Estimate
1 .827a .684 .677 .38278
a. Predictors: (Constant), TR, WLB, PWE, RW, WL, DLS, DS
4.3.2.5 Interpretation of R-square and Adjusted R-square
R-square- is statistical measure that tells the proportion of the variance for a
dependent variable that‘s explained by an independent variable or variables included
in regression model. R2- also explains to what extent the variance of one variable
explains the variance of other variable. R-Squared value range from 0 to 1 and
commonly stated as a percentage from 0%to100%. An R-Square of 100% indicates
that, dependent variable is completely explained by independent variable of the
model. 0% shows the model explains none of the variability of the response data
around its mean. The value of R-square in this study was found to be 0.684. This
indicates that, 68.4% of variation in employee performance is explained by selected
explanatory variables and other factors captured by the constant.
According to Brooks (2008), R-square has some problems; the first one is when we
add
predictor variables in the model, every time, even if its irrelevant R-square never
decreases. Consequently, a model with more variable may appear to have high R-
square. Second, if the model rearranged and the dependent variable changes, r-square
will change in order to get around these problems, a modification is often made that
takes in to account the loss of degree of freedom associated with adding extra
variables, this is known as adjusted R-square. Adjusted R square is a modified version
of R-squared that has been adjusted for the number of predictor in the model.
Therefore, adjusted R-square compares the explanatory power of regression models
that contain different number of predictors. The value of adjusted R-square in this
study found to be 67.7%. This implies that, 67.7% of changes that occur in employee
performance are attributable to independent variables.

The other factors such as, harassment, violence, Welfare Facilities, Association and
bargaining power and other remaining factors that were not included in the model but
could help in explaining employee performance account the remaining 31.6%.
4.3.2.6 Interpretation of Regression Result and Hypothesis Testing
The effects of the independent variable and dependent variable were discussed in this
section of the study. Employee performance was a dependent variable, and training,
workload, rewards, a democratic leadership style, work-life balance, and
discrimination were independent variables.
The regression model's unknown beta value was replaced in the output by the
unstandardized coefficients of determination. Beta shows the strength of each
predictor variable's effect on the dependent variable, as well as the direction of the
relationship. When the mean score value of the independent variable increases by one
unit, the mean score value of the dependent variable also increases or decreases by the
beta amount, depending on whether the variable is statistically significant. A positive
beta coefficient indicates that the variable has a positive effect on the dependent
variable, whereas a negative beta coefficient indicates a negative effect. The
relationship's statistical significance is implied by the significance value (p-value).
The model's constant term emphasizes the importance of employee performance if all
explanatory variables held constant.
The coefficient of regression analysis shows that physical environment,
discrimination, democratic leadership style, and work-life balance exhibited positive
effects whereas reward showed negative effects and was statistically significant at the
5% level of significance. In contrast, training and workload had a negative impact but
were statistically insignificant. As a result, the investigator presents and discusses the
impact of predictor variables on employee performance in the next section.
Table 4.11 General interpretation of coefficients the independent variable
No Explanatory variables Expected sign Actual sign and Null

. and effect effect hypothesis
result
1 Physical work Have not effect +ve & Rejected
environment significant
2 Reward Have not effect -ve & significant Rejected

3 Democratic leadership have not effect +ve & Rejected
style significant
4 Work life balance Have not effect +ve & Rejected
significant
5 Training Have not effect +ve & Rejected
significant
6 Workload Have not effect -ve & Accepted
insignificant
7 Discrimination Have not effect +ve & Rejected
significant
Hypothesis 1:
H0: 1. Reward has not a significant effect on employee performance.
Results discussion: The lresult of multiple regressions as illustrated in coefficients
table above revealed that reward has negative and statistically significant effect on
employee performance with a beta value of 0.399 and p-value of .000, which is less
than 0.05. This implies that, other explanatory variable remain constant, if the mean
score value of reward increase by 1 unit, on average the mean score value of
employee performance increase by 0.399 unit and statistically significant at 5%
significance level.
Decision: the examiner rejects the null hypothesis and accepted alternative
hypothesis; that means reward has significant effect on employee performance. This
shows that an increase in Reward elements like; payment, benefits, promotion and
recognition will lead to correspondent decrease on employee performance.
Evidence: (Nurul, 2021) investigate the effects of a reward system in an organization
on employee performance. The variable tested in this study includes salary, bonuses,
appreciation and medical benefits. The results show that all variables have a
significant impact on employees' performance.
(Syed Durrab Hussain, 2019) Examines the role of employee rewards, recognition, and
job-related stress towards employee performance considering the mediating role of
perceived organizational support in the call-centers located in Lahore, Pakistan.
Results showed that employee rewards and recognition have a significant and positive

effect on employee performance whereas job stress has a significant and negative
effect on employee performance.
Hypothesis 2:
H0:2. Democratic Leadership style has not a positive and significant effect on
employee performance
Results discussion: The result of regressions as illustrated in coefficients table above
revealed that democratic leadership style has positive and statistically significant
effect on employee performance with a beta value of 0.097 and p-value of .000, which
is less than 0.05. This implies that, other explanatory variable remain constant, if the
mean score value of democratic leadership style increase by 1 unit, on average the
mean score value of employee performance increase by 0.097 unit and statistically
significant at 5% significance level.
Decision: the examiner rejects the null hypothesis and accepted alternative
hypothesis; that means democratic leadership style has significant and meaningful
effect on employee performance. This shows that an increase in democratic leadership
style will lead to correspondent increase on employee performance.
Evidence: Dike, Ego E. & Madubueze, M. H. C (2019), studied that Democratic
Leadership Style and Organizational Performance: An Appraisal. The study
established a significant positive effect between application of democratic leadership
style and the performance of the employee. Based on this the result is aligned with
this review.
Hypothesis 3:
H0: 3 Work-life balance has not a positive and significant effect on employee
performance.
Results discussion: The result of regressions as illustrated in coefficients table above

revealed that work life balance has positive and statistically significant effect on
employee performance with a beta value of 0.071 and p-value of .004, which is less
than 0.05. This implies that, other explanatory variable remain constant, if the mean
score value of work life balance increase by 1 unit, on average the mean score value
of employee performance increase by 0.071 unit and statistically significant at 5%
significance level.
Decision: the surveyor rejects the null hypothesis and accepted alternative hypothesis;
that means work life balance has significant and meaningful effect on employee

performance. This shows that an increase in work life balance will lead to
correspondent increase on employee performance.
Evidence: the research examined by (S.Roopavath, 2021), studied that. The
researcher conclude that Work-Life balance and employee performance are equally
proportional to each other. Meaning that when the work life balance increases
employee performance also increases and vice versa. The result of this study is
aligned with literature.
Hypothesis 4:
H0: 4. Training has not a significant effect on employee performance.
Results discussion: the result of coefficients table showed that training has negative
but statistically insignificant effect on employee performance with a beta value
of .504 and p-value of 0.003, which is greater than 5% significance level. This implies
that, other explanatory variable remain constant, if the mean score value of training
increase by 1 unit, on average the mean score value of employee performance
increase by 0.504 unit and statistically significant at 5% significance level.
Decision: the research reject the null hypothesis four or directional hypothesis in
favor of null hypothesis that means; training is significantly and favorably affects
Evidence: (Zia-ur-Rehman, 2020) conducted to find out the significance of the training
on employee performance. I observe from this research that there is a positive
relationship between training and employee performance. The correlation value of
training and employee performance indicates the significant positive correlation
between the independent variable and the dependent variable. Based on the significant
correlation, a regression analysis was performed, and the regression analysis provides
strong support for the causal nature of the link between the variables. The overall
hypothesis of the impact of training on employee performance is positive and
significant, which supports the developed theoretical hypothesis.
(Haydar, 2018) Conducted the effects of training on the performance of employees
from two Lebanese companies - Bonjus Company and Khatib & Alami Company.
They conclude that organizations rely on improved capability, skills, and knowledge
of talented employees to achieve positive performance.
Hypothesis 5:

H0: 5. Workload has not a negative and significant effect on employee
performance.
Results discussion: the result of coefficients table showed that workload has negative
but statistically insignificant effect on employee performance with a beta value of -
0.043 and p-value of 0.196, which is greater than 5% significance level.
Decision: the research accept the null hypothesis four or directional hypothesis in
favor of null hypothesis that means; Employee performance is not significantly
affected by workload.
Evidence: the study examined by (KETSELA, 2022), revealed that, workload has
negative insignificant effect on employee performance with a beta value of -0.05 and
p-value of 0.462 which is greater than 0.05. This shows that, other explanatory
variable remains constant and the relationship is statistically in significant at 5%
significance level.
The research studied by Abdul Basit (2017), investigated the impact of job stress on
employee performance. The study was explanatory research type, which explains the
cause and effect of dependent and independent variable. The researcher takes 310-
sample size. The surveyor suggested that workload have negative and insignificant
impact on employee performance with the sig and unstandardized coefficient of
0.147, which is greater than 0.05 and -0.167, which have negative coefficient
respectively. Therefore, this is consistent with the result of this study.
Hypothesis 6:
H0: 6. Physical environments have not a positive and significant effect on
Results discussion: The result of regressions as illustrated in coefficient’s table above

revealed that physical work environment has positive and statistically significant
effect on employee performance with a beta value of 0.060 and p-value of .044 which
is less than 0.05. This implies that, other explanatory variable remain constant, if the
mean score value of physical work environment increase by 1 unit, on average the
mean score value of employee performance increase by 0.060 unit and statistically
significant at 5% significance level.
Decision: the researcher rejects the null hypothesis and accepted alternative
hypothesis; that means physical work environment has significant effect on employee
performance. This indicates that, an improvement of physical environment elements

(sound, lighting, temperature, workspace, design and layout, equipment and tools)
will lead to a correspondent increase on employee performance.
Evidence: The research made by nzewi et al (2018), Investigated, the research was
cross-sectional study and conducted on 233 employee of brewing firms. They state
that physical work environment has positive and significant effect on employee
performance; which is consistent with the result of this study.
Hypothesis 7:
H0: 7. Discrimination has not a significant effect on employee performance.
Results discussion: furthermore, the results of coefficient’s table showed that

discrimination has significant and positive effect on employee performance with a
beta value of (.118) and p- value (0.000) which is less than 0.05. This shows that,
other explanatory variable remain constant, if the mean score value of discrimination
increase by 1 unit on average the mean score value of employee performance increase
by 0.118 unit and the relationship is significant at 5% significance level.
Decision: The researcher rejected the null hypothesis and accepted the directional
hypothesis. This implies that when discrimination based on gender, age, religion, and
ethnicity increases, and the performance of employees also increases.
Evidence: The findings of the study by Alagah et al. (2017), titled "The
Discrimination and Employee Performance," which was done in the Nigerian food
and beverage sector, are comparable to those of this study in that they show that
discrimination has a negative, significant impact on employee performance.
Discrimination has a significant detrimental effect on employee performance,
according to Omoh et al. (2015). According to the majority of respondents, however,
INSA does not discriminate against its employees and treats them equally in terms of
their gender, religion, color, and other factors. In this instance, discrimination had a
significant but positive effect on employee performance. From the associated
literature I looked at, there is generally no support for this study.

CHAPTER FIVE
5. CONCLUSION AND RECOMANDATION
This chapter provides an overview summary of the key findings from the analysis
section, followed by the study's conclusion that explains how the research goal was
achieved. This section also includes potential recommendations and ideas for further
research.
5.1 Summery
The study's goal was to research and analyze the relationship between the physical
environment of the workplace, rewards, democratic leadership style, work-life

balance, workload, and prejudice, as well as other key elements. Employees of INSA
in Addis Ababa conducted the research. The study's target group, 2089 operational
personnel, were given self-administered questionnaires, and 335 of the 336 employees
that participated in the sample gave accurate responses. Additionally, the statistical
program for social science version 26 was used to analyze the research. According to
the outcome, goal, and timing of the study, the research type was cross-sectional,
applied, and explanatory, and the methodology used was a quantitative approach. The
descriptive statistics of the variables revealed that most of the employees agreed with
democratic leadership style with a cumulative mean value of 3.6160 and 0.61101
standard deviation; the physical environment scored a mean value of 3.7112 and
0.67369 standard deviation; and employee performance had a cumulative mean and
standard deviation of 3.6279 and 0.92404, and workload (3.9355 and 0.52084)
respectively. While employees on other variables agreed on work-life balance (3.3746
and 0.86773), discrimination (3.2203 and 0.78325) was the mean and standard
deviation, training with a mean value of 3.1391 and 0.97151 standard deviation;
reward scored a mean value of 3.3676 and 0.85291 standard deviation.
According to the results of the Pearson product moment correlation coefficient, there
is a moderate positive relationship between the physical environment, democratic
leadership style, workload, and work-life balance and employee performance, while,
there is a significant positive relationship between discrimination, reward, and
training and employee performance. The results also showed that there is a moderate
correlation between workplace environment, democratic leadership style, work-life
balance, workload, and employee performance. It is discovered that discrimination,
reward, and training and employee performance have a significant association. The
model summary of multiple regression revealed that 68.4% of the variation in
employee performance is explained by seven factors of working environment
included in the study. The remaining 31.6% is explained by other variable that is not
included in the model. The coefficient table also indicates that training has high effect
on employee performance with a beta value of (.504), followed by reward (.399),
discrimination (.118), democratic leadership style (.096), work life balance (0.071),
physical work environment (.060) and workload (-.043). Moreover, from the finding
of this study, coefficient table indicate that training, reward, democratic leadership
style, physical environment, work life balance and discrimination has positive and

significant effect on employee performance However, workload showed negative and
statistically insignificant effect on employee performance.
5.2 Conclusion
The regression output revealed that training, reward, physical work environment,
democratic leadership style, work life balance, and discrimination has positive and
statistically significant effect on employee performance. The correlation analysis also
confirmed positive and significant relationship. From this, it was concluded that as
suitability of training, reward, physical work environment, democratic leadership
style, work life balance, and discrimination increase it lead to correspondent increase
in their performance.
Workload found to have a positive and moderate relationship with employee
performance. However, the coefficient table revealed it has negative effect and
statistically insignificant. Therefore, workload has a little effect on employee
performance.
5.3 Recommendation
The following recommendations is given to management of INSA located at Wollo

sefer based on the study's findings and the summary presented above.
 Enhance the Physical Working Environment (PWE): Since the coefficient for PWE is
positive, it indicates that improving the physical working environment can have a
positive effect on employee performance. INSA should focus on creating a
comfortable and conducive workspace for employees. As a result, it is advised that
the physical working environment (including lighting, noise level, temperature, and
ventilation) be kept at an acceptable level and improved so that employees will not be
distracted or troubled while at work.
 Provide well-structured reward system (RW): RW has a strong and highly statistically
significant positive effect on EP. Therefore, it is crucial to have a well-structured
reward system in place for employees who contribute to network security. This could
include performance-based bonuses, recognition, or promotions for those who excel
in maintaining network security. Recognize and reward employees who contribute
significantly to network security. This can include public acknowledgment,

certificates, or other forms of recognition that motivate employees to maintain a high
level of performance.
 Foster Democratic Leadership Style (DLS): The positive coefficient for DLS indicates
that adopting a democratic leadership approach can positively influence employee
performance. INSA should encourage leaders to involve employees in decision-
making processes and value their input and ideas.
 Foster Inclusive and Diverse Workplace (DS): The positive coefficient for DS
indicates that an inclusive and diverse workplace positively affects employee
performance. INSA should continue promoting diversity and inclusivity, ensuring
equal opportunities for all employees regardless of their gender, ethnicity, religion, or
other characteristics.
 Promote Work-Life Balance (WLB): The positive coefficient for WLB highlights the
importance of work-life balance in enhancing employee performance. INSA should
implement policies that support work-life balance, such as flexible working hours and
remote work options, to help employees maintain a healthy work-life integration.
 Manage Workload (WL): The negative coefficient for WL indicates that high
workloads may have a slight negative effect on employee performance. INSA should
ensure that workloads are manageable and reasonable, providing employees with the
necessary resources and support to handle their responsibilities effectively.
 Prioritize ongoing training and development (TR): TR has a strong and highly
statistically significant positive impact on EP. Prioritize ongoing training and
development for your network security team. Keeping employees updated on the
latest security threats and technologies is essential for maintaining a high level of
performance.
5.4 Limitations of the Study and Future Research Direction

This research was undertaken only at INSA in Addis Ababa located at Wollo-sefer;
therefore, the findings of this study might not represent all organizations throughout
Ethiopia. Therefore, using the finding of this research as a benchmark other
researchers need to conduct research in this area for other organizations.
Besides, the researcher recommends that this study only included seven working
environment variables such as physical environment, reward, democratic leadership
style, work life balance, training, workload and discrimination, which explains the

dependent variable at 68.4% variation. There might be other relevant working
environment factors that are more important for the issue under study, but they were
excluded due to various reasons. Therefore, it would be better if the future researchers
consider more factors of working environment that affect employee performance like
mill availability, work place violence, job autonomy, harassment, transportation
problem and occupational health and safety.
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Annex A: Questionnaire
To those who cooperate with me in filling out the questionnaire that I have prepared
to study the effect of the working environment on employee performance: The case of
INSA. I would like to express my thanks in advance to the employees of INSA in the
following and subsequent pages. The set questions are for you to express your opinion
about the work environment by agreeing and disagreeing. I humbly ask you to express
your opinion by placing a right sign (√) in the boxes.
I. Regarding Personal Information (Respondent Information).

1. Gender Male Female

2. Age 18-25 26-33 34-41 42-49 Over 50
3. Marital Status Single Married Divorced
4. Education level below 12th Diploma Degree Masters
II. The table in the next section contains a list of questions, based on your level of
recognition for each question. Mark the "√".
1=strongly disagree
2=Disagree
3=Neutral
4=Agree
5=strongly agree
No
123 4 5
1. Physical working environment
1.1 There is an air conditioner to control the temperature while the

machines are working
1.2 The location of the production equipment in the company is

convenient for work
1.3 My workplace offers me a place where there is no noise.
1.4 The tools that I use are the ones that are convenient for my position
and that I can easily adjust
1.5 When the machines are placed, light problems are taken into
consideration, so I don't have vision problems while working
2. Reward
2.1 Pay bases such as overtime pay are adequate.
2.2 I earn equal to or more than other people in the same position.
2.3 My salary is satisfactory for the work I do.
2.4 The company's benefit system treats every employee reasonably.

2.5 The treatment plan is satisfactory.
2.6 There is opportunity for growth in this organization.
2.7 I am always grateful for a job well done.
2.8 Every day I have the authority to fix problems as they arise.
3. Democratic leadership style 123 4 5
3.1 My immediate boss encourages me to express my thoughts on work

planning and implementation.
3.2 My immediate boss cares about procedures. It also gives me the

freedom to excel at work that relies on my ideas and decisions.
3.3 My immediate boss encourages me to be creative and come up with

new ideas in my work.
3.4 My immediate boss involves me in the decision-making process.
3.5 My immediate boss uses different methods of encouragement and

punishment depending on the situation and the importance of the
situation.
3.6 My immediate boss delegates some of his powers to his co-workers.
3.7 My immediate boss gives me the opportunity to be motivated to face

difficult situations.
3.8 My immediate boss keeps an eye on me, and the strict supervision he
gave me later made me understand the importance of work.
4. Work life balance
4.1 I have support at work so that I can balance my work and my

personal life.
4.2 My work does not interfere with my time for family and friends.
4.3 My work does not interfere with my work outside of work
4.4 I am satisfied with the number of hours I work.

4.5 I am satisfied with the balance between my work and personal life.
5. Training
5.1 My company separates employees for training based on their career

gaps.
5.2 Our company provides regular trainings to help develop skills to

perform effectively.
5.3 My company provides training to employees by following on-the-job

training method.
5.4 My company provides training to employees by following off-the-job

training method.
5.5 My company conducts a training evaluation after training.
6. Work load
6.1 I do not work long and hard working hours and days.
6.2 I can meet my deadlines for my work.
6.3 I do not feel like I am overworked with the pressure I have.
6.4 I do not feel tired under pressure.
6.5 I can take enough breaks between tasks.
7. Discrimination
7.1 The organization hires employees without gender discrimination.
7.2 Equal treatment will be given to all employees whether male or

female.
7.3 There is no age discrimination in the workplace.
7.4 My immediate boss involves members of all ethnicities in problem

solving and decision-making.
7.5 The organization provides equal opportunities to employees

regardless of ethnicity.

7.6 There is no discrimination based on religion in the workplace.
8. Employee performance
8.1 I will meet the production goal determined by the company
8.2 I produce products that are free of correction
8.3 I finish the work given to me at the right time
8.4 I will show good results without costing the company much
8.5 I am always at work
8.6 I bring creative ideas better at work
8.7 My work goals are related to the goals of the organization
8.8 I am not thinking of leaving the company, as I am comfortable with

the working conditions.
Annex B: Descriptive statistics for each items

Physical working environment items
Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
PWE1 335 1.00 5.00 2.8866 1.35551
PWE2 335 1.00 5.00 3.4716 1.10182
PWE3 335 1.00 5.00 3.7403 1.16897
PWE4 335 1.00 5.00 3.5254 1.11002
PWE5 335 1.00 5.00 3.2126 1.18030
Reward Items

N Minimum Maximum Mean Std. Deviation
RW1 335 1.00 5.00 2.1134 1.41600
RW2 335 1.00 5.00 2.8269 1.45178
RW3 335 1.00 5.00 2.0866 1.34085
RW4 335 1.00 5.00 2.4537 1.32574
RW5 335 1.00 5.00 2.5224 1.30818
RW6 335 1.00 5.00 2.8358 1.32680
RW7 335 1.00 5.00 3.5493 1.21238
RW8 335 1.00 5.00 3.4746 1.15237
Valid N (listwise) 335
Democratic leadership items
Std.
DLS1 335 1.00 5.00 3.6209 1.13313
DLS2 335 1.00 5.00 3.5194 1.14204
DLS3 335 1.00 5.00 3.5642 1.18924
DLS4 335 1.00 5.00 3.3761 1.13808
DLS5 335 1.00 5.00 3.0687 1.10986
DLS6 335 1.00 5.00 3.1970 1.06242
DLS7 335 1.00 5.00 3.4060 1.13569
DLS8 335 1.00 5.00 3.2448 1.06934
Work life balance items

Std.
WLB1 335 1.00 5.00 3.1075 1.28572
WLB2 335 1.00 5.00 3.1970 1.24414
WLB3 335 1.00 5.00 3.1313 1.21150
WLB4 335 1.00 5.00 3.3313 1.19156
WLB5 335 1.00 5.00 2.9284 1.25288
Training Items
N Minimum Maximum Mean Std. Deviation
TR1 335 1.00 5.00 3.1015 1.38701
TR2 335 1.00 5.00 3.1821 1.40773
TR3 335 1.00 5.00 3.2627 1.40026
TR4 335 1.00 5.00 3.0537 1.37453
TR5 335 1.00 5.00 3.1104 1.37222
Valid N (listwise) 335
Workload Items
Std.
WL1 335 1.00 5.00 2.6537 1.18856
WL2 335 1.00 5.00 3.6955 1.05669
WL3 335 1.00 5.00 3.1642 1.14511
WL4 335 1.00 5.00 3.1194 1.09875

WL5 335 1.00 5.00 3.4687 1.07143
Discrimination items
Std.
DS1 335 1.00 5.00 3.7373 1.08181
DS2 335 1.00 5.00 3.6507 1.14009
DS3 335 1.00 5.00 3.6896 1.10485
DS4 335 1.00 5.00 3.6657 1.14326
DS5 335 1.00 5.00 3.4090 1.17989
DS6 335 1.00 5.00 3.6149 1.20295
Employee performance items
Std.
EP1 335 1.00 5.00 3.7821 1.00163
EP2 335 1.00 5.00 3.4269 .96022
EP3 335 1.00 5.00 4.0030 .87718
EP4 335 1.00 5.00 3.9015 .90862
EP5 335 1.00 5.00 4.0090 .91719
EP6 335 1.00 5.00 3.9284 .86565
EP7 335 1.00 5.00 4.0209 .89719
EP8 335 1.00 5.00 2.6179 1.37241


Final Thesis Habtamu Wubneh Corrected

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EFFECTS OF WORKING ENVIRONMENT ON EMPLOYEE

PERFORMANCE: IN CASE OF INFORMATION NETWORK

HABTAMU WUBNEH YIRDAW

A Thesis Submitted to the School of Graduate Studies of

MARYLAND INTERNATIONAL COLLEGE

SCHOOL OF GRADUATE STUDIES

SEPTEMBER 18, 2023

ADDIS ABABA, ETHIOPIA

MATION NETWORK SECURITY ADMINSTRATION

HABTAMU WUBNEH YIRDAW

UNDER THE GUIDANCE OF:

MICHAEL G/MARIAM (PhD)

A Thesis Submitted to the School of Graduate Studies of Maryland

MARYLAND INTERNATIONAL COLLEGE

SEPTEMBER 18, 2023

ADDIS ABABA, ETHIOPIA

Researcher’s Name Date Signature

Main Adviser’s Name Date Signature

Main Advisers Name Signature Date

External Examiner Name Signature Date

Internal Examiners Name Signature Date

Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | v

1.1 Background of the study...................................................................................................1

1.3 Statement of the problem..................................................................................................4

1.4 Research questions...........................................................................................................6

1.5 Research objective............................................................................................................6

1.5.1 General Objectives.....................................................................................................7

1.5.2 Specific objective.......................................................................................................7

1.6 Significance of the study..................................................................................................7

1.7 Scope and limitation of the study.....................................................................................8

1.7.1 Scope of the study......................................................................................................8

1.7.2 Limitation of the study...............................................................................................8

2 REVIEW OF RELATED LITRATURE.................................................................................9

2.2 Theoretical framework...................................................................................................10

2.2.1 Definition and Concept............................................................................................10

2.2.2 Theories related to employee performance..............................................................19

2.3 Empirical study...............................................................................................................25

2.4 Conceptual framework...................................................................................................31

2.5 Research hypothesis.......................................................................................................32

Effects of Working Environment on Employee Performance. By Habtamu MIC. 2023 Page | vi

3.3 Research Paradigm.........................................................................................................33

3.4 Research design and Approach......................................................................................34

3.4.1 Research Design......................................................................................................34

3.4.2 Research Approach..................................................................................................34

3.5 Type and Source of data.................................................................................................35

3.6 Sampling Design, Procedure and Technique..................................................................35

3.6.1 Population, Sampling Frame and Sampling Unit....................................................35

3.6.2 Sample Size Determination.....................................................................................35

3.6.3 Sampling Technique and Procedure........................................................................36

3.7 Methods of Data Collection............................................................................................36

3.8 Data Quality Assurance Mechanisms.............................................................................36

3.9 Methods of Data Analysis and Mode of Presentation....................................................38

3.9.1 Quantitative Data Analysis......................................................................................38

3.9.2 Mode of Data presentation.......................................................................................39

3.10 Ethical consideration....................................................................................................40

4 RESULTS AND DISCUSION.............................................................................................40

4.2 Demographic and socioeconomic characteristics of respondents...............................41

4.3 Findings and discussions................................................................................................44

4.3.1 Descriptive statistics of the variable........................................................................44

4.3.2 Inferential statistics..................................................................................................45

5 CONCLUSION AND RECOMANDATION.......................................................................59

5.4 Limitations of the Study and Future Research Direction...............................................62

Annex B: Descriptive statistics for each items........................................................................74

Table 4.1 Gender......................................................................................................................41