THE IMPACT OF WORK ENVIRONMENT ON EMPLOYEE PERFORMANCE

Introduction

1.1 Background of the Study

There has been a great deal of research conducted on how organizations can become more competitive and profitable. Part of that research indicates that employee performance is a factor that successful companies possess. Performance as defined by Campbell (2011) is “what the organization hires one to do and do well”. Performing employees help leaders to create excellent organizations. Employee performance is affected by different factors. Job performance assesses whether a person performs a job well. Employee performance indicates the effectiveness of employee’s specific actions that contribute to attaining organizational goals. It is defined as the way to perform the job tasks according to the prescribed job description. Performance is the art to complete the task within the defined boundaries. Management’s new challenge is to form an environment that attracts, retain and motivate its workforce. The responsibility lies with managers and supervisors at all levels of the organization. The work environment affects employee morale, productivity and engagement both positively and negatively.

Work environment consists of the office buildings, its furniture and layout as well as the physical conditions under which workers operate. It is also concerned with the external factors to the business, which the office serves, the industry or other activities within which the business lies, the customs and laws of the community within which they operate. These environment factors are always changing and the office must react to the changes. The work environment is dynamic but the most dynamic factor in the office is the human factor. Workers today are more educated than before; they are more likely to raise questions about their environment of work. However, poor work environment and bad conditions have posed a great danger to workers health and therefore make them work with less joy and enthusiasm and work progress is hampered.

Higher salaries and compensation benefits may seem the most likely way to attract employees. However, quality of the physical workplace environment may also have a strong influence on a company’s ability to recruit and retain talented people. Some factors in workplace environment may be considered keys affecting employee’s engagement, productivity, morale, comfort level etc. both positively and negatively. Although convenient workplace conditions are requirements for improving productivity and quality of outcomes, working conditions in many organizations may present lack of safety, health and comfort issues such as improper lightening and ventilation, excessive noise and emergency excess. People working under inconvenient conditions may end up with low performance and face occupational health diseases causing high absenteeism and turnover. There are many organizations in which employees encounter with working conditions problems related to environmental and physical factors. Pech and Slade (2006) argued that the employee disengagement is increasing and it becomes more important to make workplaces that positively influence workforce. According to Pech and Slade the focus is on symptoms of disengagement such as distraction, lack of interest, poor decisions and high absence, rather than the root causes.

The influence degree of working environment is the counterpart requirement of a creative job. Higher job satisfaction and lower intentions to leave were found for those individuals whose work environment accompanied the creative requirements of jobs. Enhancing the creative performance of employees has been recommended as dire for remaining competitive in a dynamic environment and for enhancing the overall innovations of an organization (Janssen, O. and NW. Van Yperen, 2004).

Work environment can be divided into two components namely physical and behavioral components. The physical environment consists of elements that relate to the office occupiers’ ability to physically connect with their office environment. The behavioral environment consists of components that relate to how well the office occupiers connect with each other, and the impact the office environment can have on the behavior of the individual. According to, the physical environment with the productivity of its occupants falls into two main categories office layout (open-plan verses cellular offices) and office comfort (matching the office environment to the work processes), and the behavioral environment represents the two main components namely interaction and distraction. Every organization is set up for a purpose and such purpose is generally referred to as its objective, this cannot be achieved if the environment looks unhealthy. The non-availability of some necessary office facilities like air conditions, rugs, good ventilation makes a work environment poor and unhealthy.

In world over, the environment is seen to be man’s immediate surrounding which he manages for his existence. Wrongful management introduces hazards that make the environments unsafe and impede the productivity rate of the worker. Therefore, the workplace entails an environment in which the worker performs his work (Chapins, 2014) while an effective workplace is an environment where results can be achieved as expected by management (Mike, 2010; Shikdar, 2002). Physical environment affect how employees in an organization interact, perform tasks, and are led. Physical environment as an aspect of the work environment have directly affected the human sense and subtly changed interpersonal interactions and thus productivity. This is so because the characteristics of a room or a place of meeting for a group have consequences regarding productivity and satisfaction level. The workplace environment is the most critical factor in keeping an employee satisfied in today’s business world. Today’s workplace is different, diverse, and constantly changing. The typical employer/employee relationship of old has been turned upside down. Workers are living in a growing economy and have almost limitless job opportunities. This combination of factors has created an environment where the business needs its employees more than the employees need the business (Smith, 2013).

Many businesses fail to understand the importance of working environment for employee job satisfaction and thus face a lot of difficulties during their work. Such organizations are internally weak therefore unable to introduce innovative products into the market to outshine their competitors (Aiken, Clarke, & Sloane, 2002). Employee workforce is an essential component in the process of achieving the mission and vision of a business. Employees should meet the performance criteria set by the organization to ensure the quality of their work. To meet the standards of organization, employees need a working environment that allows them to work freely without problems that may restrain them from performing up to the level of their full potential.

With technological development, innovative communication methods, virtual reality; e-market improvement and alternative work patterns, workplace continues to change rapidly (Challenger, 2011). To accommodate these rapid changes while maintaining or improving outcomes, organizations have increasingly turned to some version of environment such as open office space (Terricone & Luca, 2008). This type of work environment supports new styles of working and makes the work place flexible, which offers interpersonal access and ease of communication compared to fully enclosed private offices. This change to open plan office has increased employee’s productivity compared to closed office spaces (Becker, 2002). Furthermore, it is easier to communicate with someone whom you can see more easily than someone adjacent/distant or separated by objects from you (J’Istvan, 2010). The open office creates egalitarian system with equal working conditions that reduces the distance between employees and improves communication flow (Brennan, Chugh & Kline, Hedge, 2014).

A good workplace environment is likely to pay off in a number of tangible ways. Firms can gain improvements in reputation, productivity, talent acquisition, employee retention and engagement. Workplace environment plays a crucial role in ensuring employee’s job performance (Naharuddin & Sadegi, 2013) since it may impact employee morale and productivity (Chandrasekar, 2011). A quality workplace environment is said to influence people around the organization in a number of ways including their job performance. Workplace environment factors such as lighting, noise, communication and psychology support are said to have significant impacts on employee morale in which may affect their work productivity. (Boyce, Veith, Newsham, Myer & Hunter, 2013) Besides, incompatible workplace environment including poorly designed workstations, unsuitable office furniture, lack of ventilation and insufficient safety measures are also contributors of occupational diseases. Research done by Ettner & Grzywacs demonstrated that workplace environment factors give significant impact on the respondents’ job where it shows build relationship between both (Shikdar, & Sawaqed, 2003; Ettner & Grzywacz, 2001). Prior research also suggested that, employee’s job performance level will be depending on the factor of workplace environment (Naharuddin & Sadegi, 2013). Thus, when the workplace environment is inappropriate, employee productivity and performance will also decrease. Moreover, today’s working environment differs from the past because workers today are working with technology advancement.

The concept of work environment includes the physical, psychological and social aspects that make up the working condition. Work environment performs to have both positive and negative effects on the psychological and welfare of employees. It is a very wide category that incorporates the physical scenery (noise, equipment, heat), fundamentals of the job itself (workload, task, complexity) extensive business features (culture, history) and even extra business background (industry setting, workers relation). However all the aspects of work environment are correspondingly significant or indeed appropriate when considering job satisfaction and the welfare of employees.

Mali (2008) sees productivity as “the measure of how resources are brought together in organizations and utilized for accomplishing a set of results. Productivity is reaching the highest level of performance with least expenditure of resources. The term employee productivity is commonly used to refer to the volume of goods and services produced or rendered per employee within some specific unit of time (year, month, week, day or hour). Productivity is seen as the power of employees, that is, ability of employee to turnout used values (goods and services) which can be normal at a given state, technique and organization (Lambert, 2000; Nwachukwu, 1987). Lambert (2005) made it evident that” it is the number of management functions in the work environment which appear to have been the key factor inhibiting higher productivity”.

An understanding of the effect of work environment on the productivity of employees cannot be over-emphasized or seen as an overstatement in every organization. It is evident that workers are directly influenced by the environment they find themselves. A poor work environment will see its employees competence achieve nothing in terms of productivity. The unproductive nature of workers in public enterprises is as a result of the poor nature of the environment. Therefore because of the adverse effect of work environment on employee performance, the need for provision of good physical work environment for workers was stated by Mill in 1930 after the first world war. During this period, various management were concerned with the importance of maintaining loyalty and morale through the elimination of irritants such as temperature, noise and pollution from their environment.

1.2 Statement of the Problem

Management’s new challenge is to build a work environment that attracts, retains and motivates its employees. It takes an entirely different approach than it did just a few years ago to keep employees satisfied today. Many workplace factors influence employee’s performance. Relationship among personality, work environment preferences and the outcome variables, performance and commitment affect employee’s performance at the workplace. Research has shown that work environment is having a great impact on the performance and attitude of employees and this to ascertain whether employees at selected small businesses in Ogun state are facing the same problem.

A large number of work environment studies have shown that workers/users are satisfied with reference to specific workspace features. These features preferences by users are highly significant to their productivity and workspace satisfaction, they are lighting, ventilation rates, access to natural light and acoustic environment (Becker, 1981; Humphries, 2005; Veitch, Charles, Newsham, Marquardt & Geerts, 2004; Karasek & Theorell, 1990). Lighting and other factors like ergomic furniture has been found to have positive influence on employees health (Dilani, 2004; Milton, Glencross & Walters, 2000; Veitch & Newsham, 2000) and consequently on productivity. This is so because light has a profound impact on worker’s/people’s physical, physiological and psychological health, and on their overall performance at the workplace. Ambient features in office environments, such as lighting, temperature, existence of windows, free air movement suggest that these elements of the physical environment influence employee’s attitudes, behaviours, satisfaction, performance and productivity (Larsen, Adams, Deal, Kweon & Tyler; Veitch & Gifford, 2010).

Noise is one of the leading causes of employees’ distraction, leading to reduced productivity, serious inaccuracies, and increased job-related stress. According to Bruce (2010), study showed that workplace distractions cut employee productivity by as much as 40%, and increase errors by 27%. Hicks (2011), opined that poor working environment expose employees to injuries, discomfort and helps to reduce productivity, therefore an organization has to provide a conducive environment that will protect them under emergency conditions.

1.3 Objectives of the Study

The aim of this study is to investigate and identify the effect of work environment on employee performance, ascertaining whether inadequacy of the various conditional factors can affect the productivity of employees. It is also geared towards ascertaining whether the nature of work environment leads to low productivity, absenteeism and lateness among employees. The main objective of this study is to examine the effect of work environment on employee productivity in selected small businesses in Ogun state. Specifically the study will be carried out to:

1. Examine the relationship between communication and citizenship behaviour of selected small businesses in Ogun state.
2. Find out how workload influences the efficiency of workers of selected small businesses in Ogun state.
3. Appraise the influence of workplace psychology on emotional intelligence of selected small businesses in Ogun state.

1.4 Research Questions

The following questions will guide the conduct of enquiry into the study.

1. What is the relationship between communication and citizenship behaviour of selected small businesses in Ogun state?
2. How does workload influence the efficiency of selected small businesses in Ogun state?
3. What is the significant influence of workplace psychology on emotional of selected small businesses in Ogun state?

1.5 Hypotheses of the Study

The tentative statements below will guide the research;

Hypothesis one

• H0: There is no significant relationship between communication and citizenship behaviour of selected small businesses in Ogun state.
• H1: There is a significant relationship between communication and citizenship behaviour of selected small businesses in Ogun state.

Hypothesis two

• H0: Workload does not significantly impact on the efficiency of selected small businesses in Ogun state.
• H1: Workload significantly impacts on the efficiency of selected small businesses in Ogun state.

Hypothesis three

• H0: Workplace psychology does not significantly influence the emotional intelligence of selected small businesses in Ogun state.
• H1: Workplace psychology significantly influences the emotional intelligence of selected small businesses in Ogun state.

1.6 Operationalization of Research Variables

Y = f (X)

Y = employee productivity

X = Work environment

Y = (y1,y2,y3,) where y1 = citizenship behaviour, y2 = efficiency, y3 = emotional intelligence.

X = (x1,x2,x3,) where x1 = communication, x2 = workload, x3 = work place psychology.

As simple functional equation derivable from these variables are as follows

y1 = f(x1)….. eqn (1)

y2 = f(x2)….. eqn (3)

y3 = f(x3)….. eqn (3)

The regression equations or models are as follows

y1 = α0 + β1×1 + µ…… (1)

y2 = α0 + β1×2 + µ…… (2)

y3 = α0 + β1×3 + µ…… (3)

From what we have above, we have α = constant of the equation, β = coefficient of the variables µ = error term.

1.7 Scope of the Study

The scope of this study will be focused on the impact of work environment on employee performance with specific reference to SME’s in Ogun state. The population of the study is given as 1,165,848 SMEs in Ogun state, registered with SMEDAN as at the last survey of 2013. The survey design will be adopted. The use of primary data will be adopted and a well-structured questionnaire will be used to obtain the data for the study. The data will be analyzed with the use of correlation and regression tool as well as the process tool for moderation analysis. The locations to study will be based on the sample size which will be distributed among the four major zones in Ogun state which are Egba, Remo Ijebu and Yewa.

1.8 Significance of the Study

Employee performance is a critical factor in organizational success. This study can be perceived in terms of significance in the following ways;

Management

Research studies and even text books on productivity and work environment are not exhaustive. It is in this view that the researcher claims that this study will be a valuable reading material for students and researchers. The study will also serve as a manual to managers as well as other business organizations. It is hoped that the work would provoke further research into productivity in other sectors in the economy Nigeria.

Industry

The information gathered in this study will provide an empirical framework for management on the challenges of employee productivity and work environment. It is the researcher’s conviction that inefficiency and ineffectiveness resulting in low production fixity, low profitability and chaos in organizations are the products of inadequate and poor productivity. If this holds true, then a study such as this will help organizations to assess their work environment and make amends where need arises, if their survival, effectiveness, efficiency and profit maximization objectives among others are to be achieved in an orderly and efficient manner.

Government

The result of the finding of this research will go a long way to hint the government, top management, policy makers and private owners of businesses and services on structures to put in place in order to enhance better performance and productivity in their organization. This study will have significant importance to workers, senior staff, junior staff, researchers, public administrators and government. The study will be useful to the policy makers to re-assess workers productivity level and plan for improvement. The study can be of great benefit to the government in making policy relating to the staff productivity in the SME sub sector.

Employee

The study will help the workers to know their area of weakness and improve accordingly. The study may echo the employees’ needs, so that employers and government would adjust to improve the situation. The study can also be useful to the future researchers, who might want to work in the area of staff productivity in Ogun State or somewhere else. The results obtained from this study will also provide information that will assist academic institutions and promote motivation and commitment of staff members, also this study will be an asset relevant for the future growth and development of the workplace.

1.9 Operational Definition of Terms

Work Environment:

This is the totality of physical, emotional, sound, psychological and spiritual atmosphere of a work place.

Productivity:

The measure of how resources are brought together in organizations and utilized for accomplishing a set of results.

Employee productivity:

Employee productivity (sometimes referred to as workforce productivity) is an assessment of the efficiency of a worker or group of workers. Productivity may be evaluated in terms of the output of an employee in a specific period of time.

Communication:

The act or process of using words, sounds, signs, or behaviours to express or exchange information or to express your ideas, thoughts, feelings and so on to someone else

Workload:

The term workload can refer to a number of different yet related entities. However, it is clear that cognitive workload results from mental processes when performing tasks, depending on the user’s capabilities and the task demands

Workplace Psychology:

Refers to the practice of applying psychological principles and practices to a work environment in order to solve problems and make improvements.

Organizational Citizenship Behaviour:

This is a person’s voluntary commitment within an organization or company that is not part of his or her contractual tasks.

Efficiency:

Efficiency signifies a level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs.

Emotional Intelligence:

The capacity to be aware of, control, and express one’s emotions, and to handle interpersonal relationships judiciously and empathetically. Emotional intelligence is the key to both personal and professional success.