A Model Linking Organisation Factor, Work Engagement, And Self-Efficacy To Job Performance

Abstract

The article proposes organisation factor, work engagement, and self-efficacy measures for enhancing employees’ job performance. In today’s environmental setting, all organisations aim to achieve organisational success and sustainability. Because employees’ job performance, in the aggregate, results in greater organisational performance, the need to enhance job performance has emerged as a growing concern amongst researchers and practitioners. Supportive organisation factor has been advocated as having the ability to set the tone for a favourable employee-employer relationship. Meanwhile, work engagement is a newly emerged concept that focuses on optimal functioning and positive experiences at work, with moderating self-efficacy. This paper aims to contribute to the growing body of strategic direction practitioners by informing the means to improve work engagement and job performance for organisational success through organisation factor, particularly by looking into training and development and compensation system with a moderating self-efficacy variable. Review of the literature has shed some evidence that can be interrelated from overall business perspective. The key findings emerging from this study show that the organisation factor appears to be the key variable when addressing the issue of job performance. In recent studies, the links between organisation factor and work engagement and job performance have become closer and intertwined. These links have prompted the adoption of more focused strategies to enhance job performance. The paper provides strategic and practical insights that can suggest some factors that can enhance job performance and explore the relationship between organisation factor and work engagement with moderating self-efficacy, which indirectly enhances job performance.

Keywords: Organisation Factortraining and developmentcompensation systemwork engagementjob performanceself-efficacy

Introduction

Rapid changes in the business environment of today have forced companies to strategically manage their operations by operating at the lowest possible cost. Many businesses concentrated on the reliability of their goods or service delivery to meet the expectations of customers in order to achieve better resource utilization. By becoming more technologically advanced, going up-market to manufacture more value-added goods and improving the skills of their workforce, many manufacturing companies have faced the global forces of globalization. When global competition intensifies, manufacturing companies must have greater knowledge of how to conduct business with their suppliers and consumers. We need to concentrate on processes that have important effects on their business performance and product quality.

Malaysia's manufacturing sector is one of the leading industries contributing to the country's economy's growth, particularly in terms of export manufacturing, jobs and investment (Brandt & Chuah, 2012; Bormann et al., 2010; MIDA, 2012, 2016). The manufacturing sector is Malaysian economy's second-highest key contributor in 2016 and 2017. Malaysia's economy grew at a rate of 4.2 percent for 2016, with a constant value of RM1107.9 billion and current prices of RM1229.4 billion for 2017 (Department of Statistics Malaysia, 2008). The manufacturing sector recorded a total investment of RM63.7 billion as stated in the MIDA report, representing an increase of 8.9 percent from the RM58.5 billion invested in 2016.

An organization's success is always dependent on its high-performing staff. Employees play a major role in the implementation of their top managers ' business strategies. An entity will face difficulties in carrying out its tasks without workers. Nonetheless, some entities are faced with the performance issue of employees. Job performance tests a person against his or her target, concentrating on whether the results suit the goal anticipated (Nguyen & Ryan 2008). According to Chaudhary et al. (2012), job performance is how an employee uses time, strategies and interactions with others to perform his or her tasks. Kittredge (2010) indicates that job performance reflects an individual or group's quantity and quality of work and whether the task has been successfully accomplished.

Job performance is one of the organizational performance and human resource management issues that is most concerned. Because the performance of workers is crucial to organizational sustainability and growth, it has become one of research's most widely studied outcome variables. The concentration of manufacturing organizations was on product design and creativity. And, depending on the type of organization, the relative importance of these variables. Manufacturers have focused primarily on product innovation's benefit and efficiency. The performance of R&D engineers thus plays an important role in the manufacturing sector's product design and innovation. A study of the existing literature reveals the following two common organizational factor predictors: (i) training and development and (ii) compensation system. These two factors will be discussed further in the following subsection

Literature Review

Organisation Factors (Training and Development, and Compensation) and Job Performance

The organisational considerations in this analysis are (i) training and development and (ii) compensation system. Delery and Doty (1996) researched the effects of (i) recruiting and selection orders, (ii) skill-oriented training and development systems, (iii) career progression, (iv) justified performance rating system, (v) work participation, (vi) employee engagement, and (v) performance-based incentives on the performance of strategic business units. The study found that a company's productivity is maximized by successful application of HRM activities. According to McClendon (2004), it is the duty of an HRM department or organisation (i) to recruit the right person for the right job, (ii) to identify and match job descriptions with job expectations, (iii) to improve workers by offering future-oriented training, (iv) transparent and impartial performance appraisal, (v) career development, (vi) succession planning, (vii) employee satisfaction, (viii) talent retention and (vix) compensation for workers in accordance with their job rankings. Research have shown that adopting post-selection processes can affect business efficiency and hence companies who follow the best HRM strategies will perform effectively and have a competitive advantage over peers that lack an efficient HRM system.

Factors that will be discussed in this research are the structure of training and development and compensation. Delery and Doty (1996) analyzed the impact on the performance of strategic business units of recruitment & selection centres, skill-oriented training & development programs, career progression, and justified performance rating system, work participation, employee engagement and performance-based rewards management and found that the successful application of HRM practices maximizes profitability of businesses. According to McClendon (2004), the HRM department or organisation is responsible for recruiting the right person for the right task, defining and matching job descriptions with job specifications, developing employees by providing future-oriented training, transparent and unbiased performance assessment, career progress, succession planning, employee motivation, retention of talented employees and compensation of employees in line with their job rankings. Studies showed that the introduction of post-selection processes has an impact on business results and concluded that companies that have implemented best HRM practices have successfully performed and have a competitive advantage over peers who lack an efficient HRM system.

Tessema and Soeters (2006) investigated the effect of post-selection HRM practices like training and development programmes, merit-based promotion, performance-based compensation, employee communication on perceived employee performance and found that positive relationship exists between these practices and perceived employee performance mediating to organisational performance. Training is linked to the skills that an organization finds necessary to achieve and improve its organizational goals. It is expected that a company will have a positive impact on the performance of workers from training Rowden and Conine (2005) conclude that workers who find their training to be advantageous will be more motivated and able to do well with the company in the workplace than those who do not receive training or unvalued training. Similarly, Sparrow (1998) defines training as an integrative system which, among other things, requires a high level of collaboration among various activities related to human resource management. Training is a structured creation of attitude, experience, and skill patterns in human resource practices needed by an individual to perform a given task or job properly (Barton & Delbridge, 2001).

Sparrow (1998) further argues that training and development skills, knowledge and awareness are essential for a company to develop workers capable of performing higher-grade tasks, provide traditional training for new and young workers, increase efficiency and performance standards, meet regulatory requirements, and inform people (e.g. training in induction, pre-retirement preparation, etc.). Past studies (e.g. Bassi et al., 1996; Bassi & Van Buren, 1997; Oakland, 2001) found evidence of the effect of training and development on the performance improvement of employees. This is plausibly due to the fact that preparation is a sign of an employer's loyalty to their employees from the employee's point of view (Storey & Sisson, 1993). Training involving the creation of organizational-specific skills is likely to result in increased productivity for the company, which in turn may increase the salaries of employees above what is available elsewhere and thereby motivate them to perform better (Frazis et al., 1998).

Nankervis et al. (1999) point out that effective training would not only provide employees with most of the knowledge and skills required to achieve jobs, but would also facilitate the achievement of overall organisational goals by contributing to employee satisfaction and productivity. New skills learning can create renewed interest in any aspect of the job. Such interactions are bound to make employees better communicate with their colleagues and promote higher work engagement, thus improving performance. As such, it is hypothesised that

H1(a): Training and development will be positively related to job performance.

Compensation at the organizational level is crucial to recruiting, maintaining and inspiring workers to continue to contribute to the performance of a company (Philips & Fox, 2003). The explanation is that it is necessary to have a compensation system to influence the decisions of individuals to work with an organisation. Most organisations not only use a compensation system as a reward and appreciate the achievements and accomplishments of workers, but also as a motivational mechanism (Chiu et al., 2002) to boost the morale of employees by improving job performance, impeding the intention to leave and increasing workplace satisfaction. Compensation systems have historically been designed to attract, retain and empower workers to maximize their contributions and productivity towards achieving organizational objectives (Bergmann et al., 2001).

A compensation system is also considered to be one of the main costs of running a company. In addition to affecting hiring and retention decisions, a compensation system is also an important tool for aligning the desires of workers with organizational objectives, especially by creating and offering incentives for achieving specific goals assigned to them. The effect of a compensation system has been widely studied and documented in the literature; or, for example, Trevor et al. (1997) have found that salary growth and other non-salary benefits provided to workers have a significant influence on their decision to leave. Miller and Wheeler (1992) shown that the overall compensation system has a significant impact on the performance of employees. Many productivity studies have found that individuals with high talent also prefer high pay. Therefore, if an organization can give them an acceptable scheme of compensation, they will perform better with the current organization in the scope of work (Jardine & Amig, 2001; Shepherd & Mathews, 2000).

On the opposite, the inability of an organization to provide fair compensation will result in the negative attitudes of workers towards the organization such as improving the performance of employees with the current organisation. As such, it is proposed that:

H1(b): Compensation system will be positively related to job performance.

Organisation Factors (Training and Development, and Compensation) and Work Engagement

A good indicator of work engagement is also considered to be training (Albrecht et al., 2015). The JD-Theory can be used to help the usefulness of this relationship (Bakker & Demerouti, 2014; Bakker et al., 2003; Schaufeli & Bakker, 2004). As such, preparation can be viewed as a work tool that serves not only as a buffer against job demands (i.e. performance) but also as an organisational mechanism for the growth of employees. Based on the psychological conditions of Kahn (1990), Gruman and Saks (2011) conclude that "training is particularly relevant to the provision of services to employees with resources that will make them feel available to fully engage in their roles” (p.131).

Therefore, if workers feel they will fulfill their job requirements, their level of engagement would increase (Albrecht et al., 2015). In addition, empirical evidence suggests a positive relationship between job engagement and preparation. Salanova et al. (2005), for example, indicated that preparation was a key factor that was positively correlated with work engagement among the 114 hotel and restaurant employees. Following a meta-analysis of 55 studies, Rich et al. (2010) found that organisations that provide their employees with extensive training and development opportunities have significantly higher levels of engagement. The following link is, therefore, hypothesised:

H2(a): Training and development will be positively related to work engagement.

A critical area of human resource management (HRM) that has been seen to influence the incentive of a person to join, know, and remain with a firm is indeed a compensation system and rewards (Medcof & Rumpel, 2007). Since new ventures take on an informal HRM feature, they have fewer options for incentives (Bau & Dowling, 2007) and view their rewards system from a viewpoint of "absolute rewards." A holistic view of overall incentives includes monetary (all monetary compensation, benefits, etc.) and non-monetary rewards (learning and development opportunities, job feedback and gratitude, etc.) (Heneman & Tansky, 2002). Past research evaluating different incentive elements and their motivational impact are based largely on standardized and organized work environments and have underestimated their influence on young firms (Pajo et al., 2010). Studying the motivating impact of a holistic view of a reward system on an informal and unstructured work environment (such as present in new ventures) would therefore allow newly-founded companies to effectively manage their talent (Khoreva et al., 2017). According to Strom et al. (2014), the level of commitment of workers varies based on their understanding of the return they earn after work is completed. Therefore, workers can be expected to be more likely to be involved in their jobs if they receive a greater amount of benefits (job resources) for the success of their task. Chirkowska-Smolak and Kleka, (2011) studied the effects of lack of incentives for employees (such as stress and burnout) and found that sufficient compensation for employees are important to improving the level of engagement at work.

When workers consider or view their employer as investing in their wellbeing, particularly through appropriate allocation of resources (rewards, job resources), they are more likely to reciprocate with positive work outcomes such as work engagement. Hulkko-Nyman et al. (2012) examined the impact of total compensation elements on employee engagement in the workplace. Previous studies explored the relationship between different components of total compensation and employee engagement, but none of the studies identified the relationship between the components to the best of the researchers ' knowledge complete rewards and dedication to work, particularly in the unstructured new ventures work environment (Medcof & Rumpel, 2007). Thus, we hypothesised that:

H2(b): Compensation will be positively related to work engagement.

Work Engagement and Job Performance

Several empirical studies (Kahn, 1990; Harter et al., 2002; Schaufeli et al., 2002) support the role of work engagement as a predictor of job performance. Bakker et al. (2004) found that hired employees earned higher in-role and extra-role performance scores from their colleagues, suggesting that hired employees perform well and are eager to go further. Schaufeli et al. (2002) surveyed Dutch workers from a wide range of professions in another study and found that work engagement is positively associated with job performance in-role.

A research by Gorgievski et al. (2010) found higher scored by engaged secretaries on job performance in-role than their non-engaged counterparts. Likewise, between 105 school principal and 232 students, Bakker et al. (2006) conducted a study on engagement and success and found significant and positive correlations between work engagement scores of school principals and the teacher-ratings of school principals’ performance and leadership. The results of their modeling of the structural equation revealed higher scored on in-role and extra-role performances by engaged principals. Higher levels of work participation can result in higher levels of job performance given these criteria. Therefore, the following hypothesis is forwarded:

H3: Work engagement will be positively related to job performance.

Work Engagement, Job Performance Moderating Self-efficacy

A Stajkovic and Luthans (1998) meta-analysis revealed a strong weighted average association between self-efficacy and work-related performance. The study also found that self-efficacy is a better predictor of organizational performance enhancement than the personality or job performance characteristics of the Big Five.

Such results are in line with those of Shea and Howell (2000), who found an important relationship between self-efficacy and success. Traditionally, in the field of organizational behavior, the role of permanent, secure, and optimistic features in improving human performance in the workplace has been studied (Youssef & Luthans 2007). Nevertheless, research has been largely neglected on the effect of positive psychological conditions on employee performance (Luthans et al., 2005). The relationships between personal resources and work engagement have been studied by several scholars. For example, Storm and Rothman (2003) conducted a cross-sectional analysis of South African police officers in 1910 and found that highly engaged police officers used an aggressive coping style linked to problem-focused and taking active steps to try and eliminate or rearrange stressors.

Xanthopoulou et al. (2007) explored the role of the three personal resources (self-efficacy) in predicting work engagement in their analysis among highly skilled Dutch technicians. The result showed that engaged workers are extremely self-efficient and they feel they can fulfill their job's demands. The finding also showed that self-efficacy provides a significant contribution to understanding variation in the commitment to work overtime, beyond the influence of job resources and previous rates of engagement. It can be concluded that high work engagement will be given to workers who pass personal resources, including self-efficacy. The moderating effect of self-efficacy is therefore predicted on the relationship between the organizational factor (training and development and compensation) and work engagement. The following hypothesis are therefore postulated:

H4: Self-efficacy moderates the relationship between work engagement and job performance

Conceptual Framework

On the basis of the previous discussion, a conceptual structure is proposed as illustrated in Figure 1 : Organisational factor (training and development and compensation system), work engagement was presumed to predict job performance with moderating self-efficacy in the sense of manufacturing R&D engineers.

Figure 1: Conceptual Framework
Conceptual Framework
See Full Size >

Problem Statement

Engineers have an imaginative potential, but this ability can never be realized without proper organizational substance. In a global economy, due to increased competition and rapid development of new technologies, a competitive advantage will decline rapidly Ghani et al. (2013). As mentioned in Y's written article. Bhg. One of the main challenges facing today's E&E manufacturing is the shortage of experienced engineers, Dato ' Wong Siew Hai, Chair of Malaysian American Electronics Industry (MAEI) 2013. Nevertheless, there is still limited research on the job performance of R&D engineers in Malaysia's manufacturing sector, especially studies focusing on organizational factors such as the aspect of training and development and compensation systems. The present study therefore proposes to examine how factors affect the work performance of R&D engineers in Malaysia's manufacturing sector.

The need to develop innovative products or services has become more intense in the digital transformation age, particularly in the E&E industry, where efficiency and productivity in manufacturing is highly desirable. Since engineers form an organization's backbone in the E&E industry, their output would have a major impact on the existence and success of the organization. Manufacturing was the second highest key contributor to the Malaysian economy in the fourth quarter of 2017 (Department of Statistics Malaysia, 2008). According to the Malaysian External Trade Development Corporation (Malaysia External Trade Development Corporation, 2018), production accounted for 82.1 percent of Malaysia's total exports in 2017. Although Malaysia's manufacturing sector is one of the key contributors to its economy, the country's manufacturing ranking compared to the country's economy is still far behind the country's manufacturing ranking compared to other countries.

Based on the rankings of the global Purchasing Manager Index (PMI), Europe, especially Germany, dominated the manufacturing sector as of May 2018, followed by Austria, the Netherlands and the UK (Global PMI, 2018). Of the 29 countries covered by the May 2018 PMI survey, four countries, one of which is Malaysia, experienced a deterioration in manufacturing conditions. The PMI index of the country fell below 50.0, implying a fall in productivity of manufacturing compared to other countries. This indicates that Malaysia's manufacturing sector efficiency is still lagging (see Figure 2 ). This deficit can be attributed to the decrease in productivity in manufacturing. One way to address this deficiency would be through job performance improvements, particularly those of the Malaysian manufacturing industry's R&D engineers.

Figure 2: Worldwide manufacturing PMI rankings, 2018 (Global PMI)
Worldwide manufacturing PMI rankings, 2018 (Global PMI)
See Full Size >

In view of the above, the Malaysian manufacturing sector urgently needs to re-energize itself and become productive and advanced. This can be done by looking at things such as training and development and compensation in the company. It has also been widely acknowledged that the use of a positive organizational element will lead to improvements in the attitudes and behaviors of employees. Work performance and job commitment are one type of work activity.

Research Questions

Do organizational factors such as the dimensions of (training and development and compensation system) connect job performance to work engagement and self-efficacy moderation?

Purpose of the Study

Based on the above discussion, the aim of this paper is to propose a model that links selected dimensions of the organizational factor (training and development and compensation system) with mediating work engagement to improve job performance by moderating self-efficacy.

Research Methods

A systematic review of the literature was conducted using an archival approach to achieve the specified objectives and address the research questions. This study was focused on a strong theoretical framework incorporating primary and secondary data. The research used a technique to review the articles cited in a database such as Emerald, ProQuest and Science Direct, particularly with moderating self-efficacy on the current topics in organizational factors (training and development and compensation system), work engagement and job performance. Secondary data were also checked as a basis for this study in order to build a solid theoretical framework.

Findings

As discussed in the literature review, this study suggests an integrated structure (Figure 1 .1), highlighting the organisational factors (training and growth and compensation) as the independent variables, and job performance as the dependent variable with mediating work engagement Self-efficacy, however, serves as the moderator.

Conclusion

A key source of competitive advantage for a company is highly motivated and high-performing employees. Considering the extreme challenges facing the manufacturing sector globally and more so in Malaysia, Malaysian manufacturing companies desperately need to pay close attention to how to motivate their workers to become highly engaged high-performers. In this regard, manufacturing companies need to pay attention to their organizational factor (training and development and compensation system) as such activities will create a friendly working environment that will bring out the best of positive attitudes and behaviors to their employees. Ultimately, this paper addresses the value of working and the fact that job performance can help workers, particularly manufacturing R&D engineers, become highly involved in their jobs, which in turn leads to higher job performance.

References

Copyright information

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

About this article

Publication Date

06 October 2020

eBook ISBN

978-1-80296-087-7

Publisher

European Publisher

Volume

88

Print ISBN (optional)

-

Edition Number

1st Edition

Pages

1-1099

Subjects

Finance, business, innovation, entrepreneurship, sustainability, environment, green business, environmental issues

Cite this article as:

Somu, H., Mohd Nasurdin, A., & Ling, T. C. (2020). A Model Linking Organisation Factor, Work Engagement, And Self-Efficacy To Job Performance. In & Z. Ahmad (Ed.), Progressing Beyond and Better: Leading Businesses for a Sustainable Future, vol 88. European Proceedings of Social and Behavioural Sciences (pp. 903-914). European Publisher. https://doi.org/10.15405/epsbs.2020.10.82