Effects of working Environment on Employee performance 2019

ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS
MASTER OF BUSINESS ADMINISTRATION

EFFECTS OF WORKING ENVIROMENT ON EMPLOYEE

PERFORMANCE: IN THE CASE OF BOLE LEMI INDUSTRAIL PARK

A THESIS SUBMITTED TO DEPARTMENT OF MANAGEMENT IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD
OF MASTER OF BUSINESS ADMINISTRATION (MBA)

BY: AWOKE TESFU

ADVISOR: JEMAL MOHAMMED (PHD)

JUNE, 2019

ADDIS ABABA, ETHIOPIA

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 Effects of working Environment on Employee performance 2019

Statement of Declaration

I, the under signed, declare that this thesis titled ―The Effect of working environment on
employee performance: in the case of Bole Lemi Industrial Park‖ is my original work and has
not been presented for a degree in any other University, and that all sources of materials used for
the thesis have been duly acknowledged

Declared by

Name: Awoke Tesfu

Signature: __________

Date: _______________

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 Effects of working Environment on Employee performance 2019

Statement of certification
This is to certify that Awoke Tesfu Ayalew carried out his research work on the topic entitled
―The Effect of working environment on employee performance: In the case of Bole Lemi
Industrial park,‖ The wok is original in nature and is suitable for submission for the award of the
Degree of Master of Business Administration in management at Addis Ababa University.

Advisor:

Name: Jemal Mohammed (PhD)

Signature: ___________

Date: _______________

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 Effects of working Environment on Employee performance 2019

ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

MASTER OF BUSINESS ADMINISTRATION

Declaration
This is to certify that the thesis prepared by Awoke Tesfu Ayalew, entitled: ―The Effect of
working environment on employee performance: in the case of Bole Lemi Industrial Park,.‖ and
submitted in partial fulfillment of the requirements for the degree of Master of Business
Administration in management complies with the regulations of the university and meets the
accepted standards with respect to originality and quality.

Approved by:

Advisor: Jemal Mohammed (PhD)

Signature_____________________________

Date ________________________________

Internal Examiner_____________________

Signature_____________________________

Date ________________________________

External examiner____________________________

Signature______________________________

Date_____________

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 Effects of working Environment on Employee performance 2019

Acknowledgement

First and foremost, I greatly want to thank God and his mother St. Virgin Marry for unrestricted
help, forgiveness, clarity and strength has given to me. This paper never become real without
Gods will. Secondly, I would like to express my profound gratitude to my family, especially my
brother Behiru Tesfu, for providing me with unfailing support and continuous encouragement
throughout my years of study. Besides, I would like to acknowledge my friends, especially,
Alemayehu Workineh, Eshetu Alemu and Endalkachew Mekonin, who have supported me in all
aspect for my study.

I would like to express my sincere gratitude to my thesis advisor Dr. Jemal Mohammed for his
helpful guidance. Finally, my sincere thanks also goes to Bole Lemi industrial Park employees
who contribute to this paper by providing correct information that build this thesis a valuable
document.

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 Effects of working Environment on Employee performance 2019

Abstract
The aim of this study was to investigate the effects of working environment on employee performance in
Bole lemi Industrial Park found around Addis Ababa. Quantitative research approach with explanatory
research design was adopted in carrying out this research. Cross sectional data was collected to address
research objectives of the study using self-administered questionnaire from 315 employees using random
probability sampling technique. The collected data were analyzed using descriptive statistics, correlation
and regression analysis through statistical package for social science (SPSS) version 25. The study used
seven major working environment factors including: physical environment, reward, democratic
leadership style, work life balance, training, workload and discrimination as predictor variables and
employee performance as dependent variable. The finding of the research highlights that physical work
environment, reward and training have positive and statistically significant impact on employee
performance while, workload and discrimination have negative and statistically significant impact on
employee performance. On the other hand, democratic leadership style and work life balance have
showed statistically insignificant impact on employee performance. Based on the findings of study,
recommendations made for management of the industrial park are: physical work environment in terms
of lighting, noise level, temperature and ventilation should be made sure that they stay at an
acceptable level, discrimination has to be minimized at work place by encouraging employee
irrespective of gender, age, ethnic group or religious belief to participate in decision making as this will
help to reduce discrimination in the workplace.

Keywords: bole lemi industrial park, Employee performance, working environment.

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 Effects of working Environment on Employee performance 2019

Table of contents
Statement of Declaration............................................................................................................................ i
Statement of certification .......................................................................................................................... ii
Declaration ............................................................................................................................................... iii
Acknowledgement ................................................................................................................................... iv
Abstract ..................................................................................................................................................... v
Table of contents ...................................................................................................................................... vi
Acronyms ................................................................................................................................................. ix
List of Tables and Figures......................................................................................................................... x
List of Tables ................................................................................................................................................ x
List of Figures .............................................................................................................................................. xi
CHAPTER ONE: INTRODUCTION ........................................................................................................... 1
1.1. Background of the Study ................................................................................................................... 1
1.2. Background of the Organization ........................................................................................................ 4
1.3. Statement of the Problem ................................................................................................................... 5
1.4. Research Questions ............................................................................................................................ 7
1.5. Objectives of the Study ...................................................................................................................... 7
1.5.1 General Objective ........................................................................................................................ 7
1.5.2 .Specific Objectives ..................................................................................................................... 7
1.6. Research hypothesis ........................................................................................................................... 8
1.7. Scope of the Study ............................................................................................................................. 8
1.8. Significance of the Study ................................................................................................................... 9
1.9. Limitation of the Study ...................................................................................................................... 9
1.10. Organization of the Paper .............................................................................................................. 10
CHAPTER TWO: RELATED LITERATURE REVIEW .......................................................................... 11
2.1. Introduction ...................................................................................................................................... 11
2.2. Definition of Working Environment ................................................................................................ 11
2.3. Factors of Working Environment That Affect Employee Performance. ......................................... 12
2.3.1. Physical Environment ............................................................................................................... 13
2.3.2. Reward ...................................................................................................................................... 14
2.3.3. Democratic Leadership Style .................................................................................................... 14
2.3.4. Work Life Balance .................................................................................................................... 15

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2.3.5. Training ..................................................................................................................................... 16

2.3.6. Work Load ................................................................................................................................ 16
2.3.7. Discrimination........................................................................................................................... 17
2.4. Employee Performance .................................................................................................................... 17
2.4.1. Measurements of Employee Performance ................................................................................ 19
2.5. Theories Related to Employee Performance. ................................................................................... 21
2.5.1. Victor Vroom‘s Expectancy Theory ......................................................................................... 21
2.5.2. Adam‘s Equity (Fairness) Theory ............................................................................................. 22
2.5.3. Herzberg Two Factor Theory .................................................................................................... 23
2.5.4. Affective Events Theory ........................................................................................................... 23
2.6. Empirical Study ............................................................................................................................... 24
2.7. Conceptual Framework of the Study ............................................................................................... 28
CHAPTER THREE: RESEARCH METHODOLOGY.............................................................................. 29
3.1. Introduction ...................................................................................................................................... 29
3.2. Research Design............................................................................................................................... 29
3.3. Research Approach .......................................................................................................................... 29
3.4. Source of Data.................................................................................................................................. 30
3.5. Data Collection Instruments and Measurement ............................................................................... 30
3.6. Target Population of the Study and Sample Size ............................................................................. 31
3.6.1 Target Population ....................................................................................................................... 31
3.6.2. Sample Size ............................................................................................................................... 31
3.7. Sampling Techniques ....................................................................................................................... 32
3.8. Method of Data Processing and Analysis ........................................................................................ 33
3.8.1. Data Processing ......................................................................................................................... 33
3.8.2. Data Analysis ............................................................................................................................ 33
3.9. Model Specification ......................................................................................................................... 34
3.10. Factor Analysis .............................................................................................................................. 35
3.11. Reliability and Validity of Instruments .......................................................................................... 35
3.11.1. Reliability Test ........................................................................................................................ 35
3.11.2. Validity Test................................................................................................................................ 37
3.12. Ethical Consideration ..................................................................................................................... 37
CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND ........................................................... 38
INTERPRETATIONS ................................................................................................................................ 38

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4.1. Introduction ...................................................................................................................................... 38

4.2. Questionnaire Response Rate........................................................................................................... 38
4.3. Descriptive Statistics ........................................................................................................................ 38
4.3.1. Background Information of the Respondents ........................................................................... 38
4.3.2. Descriptive Statistics of the Variables ...................................................................................... 40
4.4. Inferential Statistics ......................................................................................................................... 41
4.4.1. Correlation Analysis ................................................................................................................. 42
4.4.2. Testing Assumptions of Classical Linear Regression Model (CLRM)..................................... 43
4.4.3Analysis of Variance (ANOVA) ................................................................................................. 47
4.4.4. Results of Regression Analysis ................................................................................................. 48
4.4.5. Interpretation of R-square and Adjusted R-square.................................................................... 49
4.4.6. Interpretation of Regression Result and Hypothesis Testing .................................................... 50
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS ............................................................................................................................ 56
INTRODUCTION .................................................................................................................................. 56
5.1. SUMMARY OF FINDINGS ........................................................................................................... 56
5.2. CONCLUSIONS.............................................................................................................................. 57
5.3. RECOMMENDATIONS ................................................................................................................. 58
5.4. SUGGESTIONS FOR FURTHER STUDIES ................................................................................. 59
REFERENCES ........................................................................................................................................... 60
Appendix A: questionnaire ......................................................................................................................... 69
Appendix B: descriptive statistics for each items ....................................................................................... 77
Appendix C: Factor Analysis ...................................................................................................................... 80

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Acronyms

AET Affective Event Theory

ANOVA Analysis of Variance

CLRM Classical Linear Regression Model

DW Durbin-Watson

IPDC Industrial Parks Development Corporation

OLS Ordinary Least Square

VIF Variance Inflation Factor

WES REP Working Environment Survey Report

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List of Tables and Figures

List of Tables
Table 3.1: Sample Size Determination ....................................................................................................... 31
Table 3.2: Number of Employees and Proportion of Samples taken from each Beverage Factories ......... 32
Table 3.3: Rule of Thumb of Cronbach‘s Alpha......................................................................................... 36
Table 3.4: Reliability Statistics Result of the Study ................................................................................... 36
Table 4.5: Gender of Respondent ............................................................................................................... 38
Table 4.6: Age Category of the Respondent ............................................................................................... 39
Table 4.7: Marital Status of the Respondent ............................................................................................... 39
Table 4.8: Level of Education ..................................................................................................................... 40
Table 4.9: Descriptive Statistics of the Variables ....................................................................................... 40
Table 4.10: The Relationship Between Working Environment Dimensions and Employee Performance . 42
Table4. 11: Durbin Watson Test Result ...................................................................................................... 45
Table 4.12: VIF and Tolerance Statistics for Multicollinearity .................................................................. 46
Table 4.13: Analysis of Variance (ANOVA)............................................................................................. 48
Table 4.14: Coefficients of Regression Analysis ....................................................................................... 48
Table 4.15: Model Summary ...................................................................................................................... 49
Table 4.16: Summary of Actual and Expected Signs of Explanatory Variable on Dependent Variable. ... 55

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List of Figures
Figure 2.1; Conceptual Framework of Working Environment Factors and Employee Performance
....................................................................................................................................................... 28
Figure 4.2 Hetroscedasticity Test ................................................................................................. 45
Figure 4.3: Normality Test ............................................................................................................ 47

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CHAPTER ONE: INTRODUCTION

1.1. Background of the Study

Ethiopia is implementing phase II of its growth and transformation plan that is anchored on
building a solid and vibrant industrial bases which will engender in structural economic
transformation inclusive growth (National Planning Commission, 2016). Ethiopian government‘s
overarching plan is to make the country the leading manufacturing hub of Africa and aims in
building more industrial parks to enable the manufacturing sector to contribute to 20 percent of
GDP and 50 percent of export volume by 2025. Therefore, the Manufacturing industry is one of
the most important sectors for Ethiopians economy development. Employees in turn are one key
assets of manufacturing industry. They can largely determine the industry profitability and
survival fate in good or bad way. 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 overall performance and productivity. It is the quality of the
employees‘ workplace environment that most impacts on 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

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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 lots of 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 to a great extent 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 employees‘ 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 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 as a result of behavior. Moto
wildo & Scotter (20013) 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 employees‘ performance as
task performance and contextual performance.

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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.

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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 industrial parks. This study, therefore, investigated the effect of working
environment on employee performance; in the case of Bole Lemi Industrial Park.

1.2. Background of the Organization

The Government of Ethiopia places high importance to industrial parks development and is
establishing over 20 state-of-the-art industrial parks located along key development corridors –
each with distinct specialty in priority sectors. These industrial parks will be developed and
financed through different mechanisms ensuring a sustainable and inclusive partnership between
the Government and private industrial park developers. Furthermore, investors planning on
entering the industrial parks are meticulously selected to ensure cohesive and cordial
relationships among them with a shared vision of ensuring higher productivity and
competitiveness in the park. Among those bole lemi industrial park is operational since 2014.
Bole Lemi is Ethiopia‘s first industrial park developed by IPDC with a focus on exports. Bole
Lemi Phase 1 (156 hectares) has started operations in 2014, with all pre-erected factories already
rented-out to more than 12 different corporations including several investors from Taiwan, China,
India and South Korea in sectors such as textile, garment and shoe production. According to the
agreement with the investors, almost 95 percent of the products are supplied to foreign market,
and thereby enhance the nation‘s currency earning capacity. Moreover, the firms use local raw
materials such as skin and hides as an input for their products. Bole Lemi Phase 2 (186 hectares)
is currently being developed in collaboration with the World Bank Group. Bole Lemi Industrial
Park is a large Export Zone and a modern Industrial Park located in Addis Ababa, the capital city
of Ethiopia. The facility is located at IPDC, Bishangari Building, Comoros Street in Addis
Ababa. Many foreign countries are based there doing Export of Apparel related business and
other kinds of commercial activities. The area generally includes 2 large parts, with the first one
being 155 hectares and the other one being 185 hectares. The facility is developing under
administration and control of the Ethiopian Industrial Parks Development Corporation (IPDC).

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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

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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 industrial parks 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
industrial parks before beginning the actual study shows that there is bad working environment
in the industry which directly or indirectly affects employee performance. The major factors that
create bad working environments in bole lemi industrial park 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. So, 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 industrial
parks 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

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Ethiopia industrial parks. Due to shortage of performing research in this field particularly in
Ethiopia and also special importance of maximizing employee performance; the researcher was
interested to fill this research gap in Ethiopia industrial park by conducting this study. In addition
the researcher was also interested to know about the impact of working environment on
employee performance in detail. Therefore, the current study examines the effect of working
environment on employee performance the case of bole lemi industrial park.

1.4. Research Questions

Based on the research problems, the study addressed the following research questions:-

1. What is the effect of physical work environment on employee performance?

2. What is the effect of reward on employee performance?

3. What is the effect of democratic leadership style on employee performance?

4. What is the effect of work life balance on employee performance?

5. What is the effect of training on employee performance?

6. What is the effect of workload on employee performance?

7. What is the effect of discrimination on employee performance?

1.5. Objectives of the Study

1.5.1 General Objective

The general objective of this study was to examine the effect of working environment on
employee performance the case of bole lemi industrial park.

1.5.2 .Specific Objectives

The specific objectives of the research were:

1. To examine the effect of physical work environment on employee performance.

2. To examine the effect of workplace reward on employee performance.
3. To examine the effect of democratic leadership style on employee performance.

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 Effects of working Environment on Employee performance 2019

4. To examine the effect of work life balance on employee performance.

5. To examine the effect of training on employee performance.
6. To examine the effect of workload on employee performance.
7. To examine the effect of discrimination on employee performance.

1.6. Research Hypothesis

In order to find out the relationship and effect of working environment on employee‘s
performance, the following hypothesis was developed based on theoretical and empirical review:

H1: 1 Physical environment has positive and significant impact on employee performance.

H1: 2 Reward has positive and significant impact on employee performance

H1: 3 Democratic Leadership style has positive and significant impact on employee performance

H1: 4 Work life balance has positive and significant impact on employee performance.

H1: 5 Training has positive and significant impact on employee performance.

H1: 6 Workload has negative and significant impact on employee performance.

H1: 7 Discrimination has negative and significant impact on employee performance.

1.7. Scope of the Study

The scope of this study covers the effect of working environment on employee performance in
the case of bole lemi industrial park. Among 7 industrial parks in Ethiopia, the reason why the
researcher selected Bole lemi Industrial Park is firstly, there was a labor strike because of bad
workplace environment; secondly it‘s difficult to conduct research across several industrial parks
as it requires much time and money. From theoretical perspective, only physical work
environment, reward, democratic leadership style, work life balance, training, workload and
discrimination are considered as factor of working environment and employee task performance
as dependent variable. Methodologically, this study used simple random probability sampling
technique method in attempt to achieve its objective.

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1.8. Significance of the Study

The main rationale of this study was to investigate the effects of working environment on
employee performance. Therefore, the outcome of this study mainly benefit, the country,
companies, other researchers and for the researcher itself.

 Findings of this study would assist to make concrete recommendations to the industrial
parks about the effect of working environment has on employee performance, which
helps the country to achieve its goal at large.
 Today, when companies come into existence their primary objective is to make profit and
to be competitive in the industry and this is done through the mental and physical abilities
of their employee. However, according to preliminary study there is high turnover rate;
absenteeism rate and productivity of employees are diminished because of different
factors in bole lemi industrial parks. 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 provide
adequate information for the organizations regarding to the effect of working
environment has on employee performance. In addition, it also visualize that the findings
of this study would help the organization to understand and know how to address issues
related to employee and its 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 its field.

1.9. Limitation of the Study

In undertaking the study, there are some limitations against achieving its objectives effectively.
Firstly, lack of accessing records of employee performance and previous studies in this area.
Secondly, since this study only includes bole lemi industrial park and generalization of the
findings for other industrial parks will be done with consideration. Thirdly, there was lack of
cooperation in some respondents and management bodies during distributing the questionnaire

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and carelessly filling. In addition the researcher only included seven working environment
factors; however, other variables may have impact on employee performance.

1.10. Organization of the Paper

The study has five chapters. The first chapter talks about the study background, statement of the
problem, general and specific objectives including the research questions the study addressed.
The second chapter focuses on the literature review both theoretical and empirical with the key
finding of the study area including key variable theoretical review and definitions. The third
chapter entirely focuses on the methodology of the study and the fourth chapter talks about the
data analysis and interpretation, and last chapter is focused on the key findings, conclusions and
recommendations of the study.

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CHAPTER TWO: RELATED LITERATURE REVIEW

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 review theoretical, conceptual, and empirical
literature related to the study it comprises theories related to factor of workplace environment
that affect the performance of employee, such as physical environment, reward ,democratic
leadership style, work life balance work load and discrimination. It furthers discuses findings of
related researches.

2.2. Definition of Working Environment

Kohun (1992) defines the working environment as the totality of forces, actions, and alternatives
prestigious factors that are presently and probably competitive with the employee performance
(as cited in Taiwo, 2010). Working environment is the sum of the interrelationship that exists
within the staff and also the environment during which employee work. Brenner (2004) was of
the opinion that ―the ability to share knowledge throughout the organizations depends on how the
working environment is designed to enable organizations to utilize work environment as if it
were an asset. This helps organizations to improve effectiveness and allow employees to benefit
from collective knowledge‖. In addition, he argued that working environment designed to suit
employee‘s satisfaction and free flow of exchange of ideas is a better medium of motivating
employees towards higher productivity.

Briner, (2000) Elaborated working environment as a awfully broad class that encompasses the
physical setting (e.g. heat, equipments etc.), characteristics of the work itself (e.g. workload, task
complexity),broader structure options (e.g. culture, history) and even aspects of the
additional organizational setting (e.g. native marketplace conditions, trade sector, work life
balance) It means that work environment is the sum of the interrelationship that exists among the
employees and the employers and the environment in which the employees work which includes
the technical, the human and the organizational environment.
Opperman (2002) defines working environment could be a composite of three major sub
environments: the technical environment, the human environment and the organizational
environment. The technical environment refers to tools, equipment, technology, infrastructure,

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 Effects of working Environment on Employee performance 2019

and alternative physical parts. The technical environment creates elements that enable employees
perform their respective responsibilities and activities. The human environment refers to peers,
others within whom workers relates, team and work teams, mutual problems, the leadership and
management. These environments are meant in such some way that encourages informal
interaction within the work place so the chance to share data and exchange ideas may well be
increased. This can be a basis to achieve the most productivity. Organizational environment
embody systems, procedures, practices, values, and philosophies. Measurement system wherever
employees are rewarded on amount, therefore employees can have very little interest in serving
to those workers who try to boost quality. Thus, problems with organizational
environment influence employee‘s productivity. Management has control over organizational
environment. Measurement system where people are rewarded on quantity, hence workers will
have little interest in helping those workers who are trying to improve quality. Thus, issues of
organizational environment influence employee‘s productivity and performance.

2.3. Factors of Working Environment That Affect Employee Performance.

Work environments have many properties, components or factors that may affect both physical
and psychological well-being of workers (Briner, 2000). How well employees engage with
factors in their working environments influences to a great extent in their error rate, level of
innovation and collaboration with other employees, absenteeism and ultimately, how long they
stay in the job which is a function of their commitment towards work (Chandrasekar, 2011).
Chandrasekar identified twelve factors in workplace environment which either lead to
engagement or disengagement of workers. These factors include: goal-setting, performance
feedback, role congruity, defined processes, workplace incentives, supervisor support,
mentoring/coaching, 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 in to two
parts physical and psychosocial. The physical includes the lighting, noise and poor ergonomics
while psychosocial includes, influence at work, meaning of work, quality leadership and
insecurity at work. Many other researchers have also showed various factors of working
environment which include two broader dimensions such as work and context. Work includes
different characteristics of the job like job carried out and completed, task activities training, job

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 Effects of working Environment on Employee performance 2019

autonomy and achievement. Context comprises of physical working condition 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, the present study
however, takes; physical environment, reward, democratic leadership style, work life balance,
training, workload and discrimination as a major working environment factors.

2.3.1. Physical Environment

Ismail et al. (2010) state that physical environment in which employee performs has an impact
on their performance as well as it limits the prosperity of the organization. And also they 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) the spatial layouts, noise, furniture and lightning are included under
physical working condition factor. The physical work atmosphere includes comfort level,
ventilation and lighting. This option assists on practical and aesthetic facet, the interior
decoration and style of the work atmosphere that ultimately improves employee expertise and
necessitates higher performance. The comfort level and temperature additionally well influence
health of workers. Niemela et al. (2002) revealed that if there is high temperature the
performance of the employee are reduced ,and low temperature has relation to performance of
manual tasks. Office style encourages staff to figure in a very bound manner by the way their
work stations are designed. Spatial layout contributes plenty towards however the workers
perform their tasks (Al Anzi, 2009). Closed workplace plan, which can carries 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 open arrange work place layout. It permits staff to
figure in peace and quiet, keeping them centered on their tasks while not plenty of distraction. It
additionally offers staff a thinking frame and ability while not a lot of distraction.

According to McCoy and Evans (2005) the weather of physical work setting has to be correct so
the workers wouldn't be stressed whereas doing their job. Physical components play a vital role
in developing the network and relationships at work. All in all, the physical work atmosphere
ought to support the specified performance. Vischer (2008) stressed that contributing

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 Effects of working Environment on Employee performance 2019

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 performance of tasks by employees.
For the purpose of this study the researcher identified five dimensions of physical work
environment including: lighting, ventilation, noise, ergonomics, and spatial layout.

2.3.2. Reward

According to luthans (2000), Rewards may be financial and non-financial and that they can
be utilized completely to boost performance of staff. According to McCormick and Tifflin
(1979), rewards are classified in to two those are intrinsic reward (non-financial) and extrinsic
reward (financial). Intrinsic rewards are inherent within the job itself together with what the
workers enjoy as a result of finishing tasks successfully or attaining his goals. They are
intangible benefits comprise of autonomy, feedback, achievement and recognition. Employees
are experience satisfy when they have carried out something well worth in work and orally liked
through the organization.

On the other hand extrinsic reward comes from external and it is tangible in order to appreciate
the task performed by employee. Extrinsic rewards are external to the task of the job, including
pay, work condition, fringe benefits, security, and promotion, contract of service, salary,
incentives, bonuses, payments and job security the work environment and conditions of work
(Akanbi, 2008). A reward package will influence worker performance; it can facilitate to
extend 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
which Associate in Nursing economical reward system may be an honest inducement however
inefficient reward system will result in 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.

2.3.3. 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,.
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 Effects of working Environment on Employee performance 2019

There are three types of leaders (democratic, autocratic and laissez faire) which is 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 process, such as deliberation, equal participation, inclusiveness and
self-determination.

Democratic leadership encourages innovation, team work, creativity and people are often being
engaged in projects that lead to increased performance, job satisfaction and increased
productivity (Verba, 2015). Iqbal, et al. (2015) stated that democratic leader makes no
suggestions, however they enquire the opinions of others. This leadership promotes all team
members to participate to make final decision and develop entire process to reach their goals
(Trivisonno & Barling, 2016). One of the major benefit of democratic leadership style is that the
process facilitates in development of some additional leaders who can majorly sere 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 in the hands of leaders and
he/she guides the team on what to do, how to do, and employees communicate their suggestions,
experience and recommendations (Skogstad, 2015).

2.3.4. 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 thus 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
tackle the low morale and high degrees of stress which will result in underperformance since the
staff get uninterested in moving work and life responsibilities. Several researchers have united on
necessary role of labor life balance because it is expounded with employees‘ 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

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 Effects of working Environment on Employee performance 2019

2.3.5. 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 employee to exercise
wider or magnified responsibilities. Tzafrir (2005) asserts that training is a vital part generating
the 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 such the
simplest way on aid within 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 amongst them.
Worker performance is also seen because the results of harmony between coaching and
development and structure goal.

2.3.6. Work Load

Workload in a very work setting is delineated as wherever tasks and responsibilities taken on
will be accomplished with success among the time offered. DiDomenico and Nassbaum, (2008)
state that workload is set by the link between task demands, the circumstances beneath that that
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 that the
attribute of labor that may be known because the personal set of skills staff have and the way
they execute task demands inside the given time.

Rizzo et al., 1970 described Work overload as 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 is happen when employees perceive the time and resource available

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 Effects of working Environment on Employee performance 2019

as not enough to complete the existing duty. Two types of Work over load are identified by
researcher: qualitative and quantitative. ―Qualitative overload happen 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).

2.3.7. Discrimination

The United Nations‘ International Labor Organization (2015) defines Work place 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. It occurs in hiring, promotion, job
assignment, and composition. This conceptualization reflects world recognition of the
persistence of unfair employment experience of individuals from spread of social group.
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 workplace could be direct or indirect. It is direct discrimination when an

employer treats an employee less favorably than someone else. But indirect discrimination
happens when a working conditions or rule disadvantages one group of people more than
another. According to Hassan and Ali (2014); and Fatima and Omar (2014), the different
dimensions of workplace discrimination are; gender discrimination, religion discrimination and
ethnic discrimination. Other scholars identified six main types of discrimination which are;
disabilities discrimination, sexual harassment, ethnic discrimination, age discrimination, sexual
orientation discrimination and gender discrimination (Hemphill and Haines 1997). For the
purpose of this study the researcher identified four dimensions of discrimination such as; age,
gender, religion and ethnicity discrimination.

2.4. Employee Performance

Organizations are undergoing a transformation for coping against the changing needs of the
environment and excelling in the business by building up their adaptive capabilities for
managing change proactively. Sustainability of business organization is depends on talent, skill,
knowledge and experience of employees and on their performance (Armstrong Michael, 2009).

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 Effects of working Environment on Employee performance 2019

Performance is the accomplishment of a given task measured against preset known standards of
accuracy, completeness, cost, and speed. Employee‘s performance is the contribution of
employees for the achievement of organization objective. Employees expected to perform
acceptable level of the 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 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 which will be taken into thought once measure performance for
instance exploitation of productivity, efficiency, effectiveness, quality and gain measures (Ahuja,
1992) as in brief explained hereafter. Profitability is that the ability to earn profits systematically
over a amount of your time. It‘s expressed because the quantitative relation of profits to sales or
come on capital utilized (Wood &Stangster 2002). Potency and effectiveness - efficiency is that
the ability to provide the required outcomes by exploitation as bottom resources as do able
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 it of input (Stoner,
freewoman and Gilbert, 1995). It is a measure of how the individual, organization and industry
converts input resources into goods and services. The measure of how much output is produced
per unit of resources employed (Lipsey, 1989). Quality is the 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 a progressively more competitive price
(Stoner 1996).

As noted by Daft (1988), it's the responsibility of the corporate managers to confirm that the
organizations attempt to and so bring home the bacon high performance levels. This thus implies
that managers need to set the specified levels of performance for any periods in question. This
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 Effects of working Environment on Employee performance 2019

they will interact as an example setting goals and standards against that individual performance
is measured. Corporations make sure that their workers are contributive to manufacturing top
quality product and/or services through the method of worker performance management. This
management method encourages workers to induce concerned in coming up with for the
corporate, and thus participates by having a job within the entire method thus making 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 performance of the staff, a department,
processes to make a product or service, etc. Earlier analysis on productivity of employees has
showed that workers who are glad with their job can have higher job performance, and therefore
supreme job retention, than those that aren't proud of their jobs (Landy, 1985). Any still, Kinicki
& Kreitner (2007) document that worker performance is higher in happy and glad employees and
therefore the management realize it straightforward to inspire high performers to realize firm
targets.

2.4.1. Measurements of Employee Performance

Measuring performance is relatively easy for those who are responsible for achieving quantified
targets, like output per hour. Difficulty arises when we desire to measure the conceptions of
performance in employees. But 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 outcome of an employee‘s performance can be
attributed to the definition of the aspects that define the work done meets or exceeds expectations
of organization, completing tasks satisfactorily, or if operations have reached an agreed upon
standard. In measuring employee performance for this particular study, the indexes of

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 Effects of working Environment on Employee performance 2019

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 is 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.
In manufacturing, it might be the number of units produced per hour.
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.

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 Effects of working Environment on Employee performance 2019

2.5. 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 the 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 is salary and wages when he said that "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 that employees think working at a higher rate
means fewer employees may be needed which discourages employees to work more (Gardner
and Lambert 1972). Basing on this, the following theories are reviewed to indicate the
relationship between workplace environment factors and employee performance.

2.5.1. Victor Vroom’s Expectancy Theory

Currently, one of the most widely accepted explanation 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 reward will satisfy his or her 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 exerting 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 be
expended to achieve those high appraisal marks.

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 Effects of working Environment on Employee performance 2019

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 be 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, at work place managers should
take steps to improve expectancy, instrumentality and valence which will lead workers to
perform better and maximize productivity.

2.5.2. Adam’s Equity (Fairness) Theory

Equity theory is a concept in industrial psychology that focuses on individual‘s perceptions of

how equitably they are being treated in their work organization. The theory 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.

According to Muchinsky & Culbertson (2015) in order to understand equity theory, there must
be an understanding of its different components including; person (the individual for whom
equity or inequity is perceived), comparison (any group or person used by person as a referent
regarding the ratio of inputs and outcomes), inputs (the individual characteristics brought by
person to the job), and outcomes (what person received from the job (e.g., recognition, fringe
benefits, pay). According to this theory if workers perceive that their output/input ration 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 work place
rewards boost employee performance. This makes it important to understand the concepts that

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 Effects of working Environment on Employee performance 2019

makeup equity theory, and put mechanisms in place to create the perception of more equitable
work place environment.

2.5.3. Herzberg Two Factor Theory

The Two Factor Theory was advanced by Frederick Herzberg in 1959. This study is grounded on
this theory that has been explored by various scholars to explain the relation 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 employees‘ job satisfaction; wile hygiene factors are extrinsic factors to prevent any
employees‘ dissatisfaction. The theory pointed out that improving the environment in which the
job is 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 the
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
such scholar is King (2005) who sought to eradicate and evaluate five distinct versions of the
Two Factor theory. He concluded that two versions are invalid as they are not supported by any
empirical studies. However, the two factor theory can be said to be a truly outstanding specimen
for it to last a long period of time without disapproval. It has been a great influence on the body
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 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 revaluating the results of existing findings.

2.5.4. Affective Events Theory

The theory was advanced by Howard M. Weiss and Russel Cropanzano in 1996 (Phua, 2012).
The Affective Events Theory explains the link between employees‘ internal influences and their
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 Effects of working Environment on Employee performance 2019

reactions to incidents that occur in their work environment that affect their performance,
organizational commitment and job satisfaction. It proposes that positive-inducing as well as
negative emotional incidents at work have significant psychological impact on employees‘ job
satisfaction. The impact results into lasting reactions exhibited through job satisfaction,
organizational commitment and job performance. According to Ashton-James and Ashkanasy
(2005) research to date has supported the central tenets of AET that workplace events trigger
affective responses in employees and that these affective responses influence workplace
cognition and behavior. They assert that AET is both empirically and theoretically, restricted to
events that are internal to the organization. The theory also considers how specific events at work
other than job characteristics lead to specific emotional and behavioral responses (Briner, 2000).
He posits that these events or things that actually happen at work affect the well-being of
employees thus affecting their performance.

2.6. Empirical Study

In this part, the researcher was tried to analyze and discuss different findings or studies regarding
to the effect of working condition on employee performance the case of bole lemi industrial park.
Ravi (2017), conduct research on the impact of workplace environment on the health of leather
factory workers in sirpurm, India. The methodology they used is cross-sectional. descriptive
study with one time interview and pretested questionnaires‘ from 230 employee who were
working in different eight leather industries and cluster sampling methodology were used to
collect data. Finally the result showed that workplace environment have an effect on the health
status of workers and require adequate measure to improve the facilities and thereby the health
status of workers.

Bhat (2013) investigated the impact of training on employee performance: a study of retail
banking sector in India. The study drew 180 bank employees. The study was elucidated
information by using five point Likert scale. Findings revealed that there is positive and
significant relationship between training and employee performance.

Lankeshwara (2016) studied the impact of workplace environment on employee performance:

with reference to brandex intimate-awissawella. The study has utilized primary data and a
sample of 85 employees has been chosen through proportionate sampling technique using

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 Effects of working Environment on Employee performance 2019

already developed questionnaires‘. Finally the result showed that work environment have
significant effect on employee performance.

Leblebici (2012) studied the on the impact of workplace quality on employee productivity a case
study of a foreign private bank in Turkey. The result of the study showed that employees are
inspired while working in a modernized office, well decorated and well-arranged and with good
storage facilities.

Khan et al. (2011) studied the impact of workplace environment and infrastructure on
employees‘ performance from the education in Pakistan. Finally the result showed that
workplace rewards have a positive impact on employee performance. A study by Ranjan et al
(2017), which undertaken to examine the Impact of Rewards on Employee Performance: A Case
of Indian Oil Corporation, Patna Region revealed that; work place reward has positive and
statistically significant impact on employee performance. A research finding of Aslam (2018), on
the influence of work life balance on employee performance in education sector Pakistan
indicates, work life balance has positive and significant effect on employee performance.

Raziq et al, (2015) studied the impact of working environment in job satisfaction from banking
sector, educational institute and telecommunication industry in Quetta, Pakistan. The study
employed a quantitative methodology; the target population consists of educational institutes,
banking sector and telecommunication industry operating in the city of Quetta, Pakistan. Simple
random sampling is used for collection of data from 210 employees. Finally the result of the
study showed that there is a positive relationship between working environment and job
satisfaction. Al-Omari et al, (2017) conducted research on the influence of work environment on
job performance the case study of engineering company Jordan. The study take 85 employees as
a sample size and quantitative methodology implying cross sectional survey was used. Different
dimensions were examined in relation to the work environment factors, including noise;
temperature; air; light and color; space and employers‘ satisfaction. Finally the Findings revealed
that noise, office furniture, ventilation and light have a negative impact on job performance.

Asante (2012) conducted a research on the impact of office ergonomics in Ghana National
Petroleum Corporation (GNPC). The result of the study revealed that if there is incompleteness
in office ergonomics the performance of the employee is affected by 20-80 percent.

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 Effects of working Environment on Employee performance 2019

Nduku et al (2015) studied the impact of working condition on performance of employees of

Kenya commercial bank head office. A sample of 172 employees was subjected to stratified
random sampling. Primary data was collected by use of questionnaires. Finally the result showed
that, working condition has a positive effect on employee performance. And the study
recommended that the bank should put effort in ensuring that working conditions are favorable
and focus more on the physical conditions which has the greatest effect on employee
performance.

Nzewi et al (2018) conducted a research on the physical work environment and employee
performance in selected brewing firms in anambra state, Nigeria. The sample size was 233
arrived at using yemane formula while questionnaires were allocated using bowely proportion
allocation formula. Finally the finding of study revealed that there is a significant and positive
relationship between physical work environment and employee performance. The study
recommended that employees should be consulted before mounting equipment and adjustments‘
should be built into the design and layout if possible so as to adjust positioning to suits different
categories of workers.

Ushie et al, (2015) examined the effect of work environment on employees‘ commitment in
agro-based industries in Cross River State, Nigeria. The study drew participants from two major
agro industries in the state. One thousand, one hundred and ninety four (1194) respondents were
purposively selected for the study. Information was elucidated from participants using four point
Likert scale questionnaire. Data obtained was analyzed using Pearson Product Moment
Correlation (r). The Findings revealed that work environment such as consistent communication
flow, manageable workload, availability of electricity, and work place that is free from known
dangers are positively associated with employees‘ commitment, and hence performance. The
study recommended among others that management of agro-based industries in Cross River State
should establish and promote good work environments in their organizations so as to boost
employees‘ commitment, wellbeing and overall performance and productivity.

Teklehaimanot et al. (2007) studied on the working condition of health extension workers in
Ethiopia .The overall objective of the study was to assess the working condition of health
extension workers and its impact on job satisfaction. The methods they used was an in depth
field study in 50 health posts from six region,23 zones and 27 woreda the select 60 health

26
 Effects of working Environment on Employee performance 2019

extension workers. Finally the result revealed that, there are difficulties in sustaining staffing
pattern and fulfilling favorable working condition is critical to enhance employee satisfaction.

Omoh, et al., (2015) evaluated workplace discrimination and its influence on employees
‗performance in Ghana. Questionnaires were collected from 159 employees drawn from 5
different organizations in 5 different sectors on whether discrimination at the workplace has any
influence on employees‘ performance. Finally, the finding of the research indicates that
discrimination has significant negative impact on employee performance. Khan et al, (2013),
have undertaken research on the determinants of employee performance in corporate sector: case
of an emerged market, Pakistan. The study collected data through questionnaire from three
different eight companies. The study used Convenience sampling technique to select 240
respondents. The researchers came up with the result that there is positive and statistically
significant relationship between leadership and employee performance.

27
 Effects of working Environment on Employee performance 2019

2.7. Conceptual Framework of the Study

The conceptual model formulates to show association of working environment and employee
performance. In this study employee performance is dependent variable while working
environment dimensions, namely; physical environment, reward, democratic leadership style,
work life balance, training, work load and discrimination are independent variable.

Onen and Oso (2009) note that an abstract framework could be delineate presentation of a theory
which it‘s presented as a model once analysis variables and also the relationship between them
are translated into a visible image for instance the inter connections 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 subsequent figure illustrates the schematic conceptual
framework for the independent and dependent variables.

Figure 1; Conceptual Framework of Working Environment Factors and Employee

Performance.
Factors of working environment

Physical Environment H1 (+)

Reward H2 (+)

H3 (+)
Democratic Leadership style
H4 (+) Employee Performance
Work life balance
H5 (+)
Training
H6 (-) Dependent variable

Work load H7 (-)

Discrimination

Independent variables
Source: Nduku (2015)

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 Effects of working Environment on Employee performance 2019

CHAPTER THREE: RESEARCH METHODOLOGY

3.1. Introduction

This section basically describes how the study was undertaken, the data collection methods used,
and its analysis and presentation techniques. It is a very essential portion as it provides reasons to
why a specific method of research, sampling, data collection and data analysis is chosen; it also
gives the design of the study, population, and validity and reliability test. Clearly speaking, this
chapter is deals with research methodology, which are the master plan specifying methods and
procedures for collecting and analyzing collected data.

3.2. Research Design

A research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure
(Kothari, 1990). A research design is also a plan for study that provides specification 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). For the purpose of this study, Explanatory
research design was employed to explain effect of independent variables, (working environment
dimension) on the dependent variable (employee performance). The research is cross sectional
type; in a sense that data was collected at one point of time due to limit of time and cost.

3.3. Research Approach

According to Creswell (2009), there are three basic research approach; quantitative, qualitative
and mixed approach. Quantitative approach is an approach in which the researcher determines
what to study asks the respondent close ended questions and gather numeric data from the
respondent and analyze this numbers using statistics Creswell (2005). In order to achieve study
objective, this research has undertaken quantitative research approach to analyze data collected
from bole lemi industrial park employee by using close ended questionnaire.

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 Effects of working Environment on Employee performance 2019

3.4. Source of Data

The main emphasis of this research was to investigate the effect of working environment on
employee performance of bole lemi industrial park. The principal source of data for this study
was primary. Primary source of data refers to information obtained first hand by the researcher
on the variable of interest for specific purpose of the study (Sekaran, 2003). The primary source
of data for this research was collected from operational workers of industrial park via self
administered questionnaire.

3.5. Data Collection Instruments and Measurement

Questionnaire

In order to gather data for this study, the researcher used a questionnaire as a method of data
collection instrument. The questionnaire has two sections. With the first section contains
background and demographic information of the respondent, and the second section contains
information about working environment and employee performance.

The researcher used self administered question to gather information about background and
demographic information (regarding sex, age marital status and educational level) and to gather
information regarding with workplace environment factors and employee performance. The
questionnaire, which has acceptable psychometric test score, for independent variable was
adopted from the following previous studies (al-khonzondar, 2015, Buckingham, 2004, WES
REP, 2011, Schwab, 1993 and nzewi et al, 2018). The measurement of employee performance
developed by Hakala (2009) was adopted with slight modification. All the items, except
background and demographic information, is measured in 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 respondent to answer question.

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 Effects of working Environment on Employee performance 2019

3.6. Target Population of the Study and Sample Size

3.6.1 Target Population

Population is the total collection of individuals to be studied and from which sample is drawn
(Sekaran, 2016). Therefore, the targeted populations for this study were operational workers of
bole lemi industrial park. Accordingly, the target population of the study was 14,030 employees.

3.6.2. Sample Size

The main emphasis of this study was to identify the effect of working environment on employee
performance. The target populations for this study were all employee of industrial park under
study. The sample size required for the study is computed based on sample size determination
developed by Carvalho (1984).

Table 3.1: Sample Size Determination

Population size Small Medium Large
51-90 5 13 20
91-150 8 20 32
151-280 13 32 50
281-500 20 50 80
501-1, 200 32 80 125
1, 201-3, 200 50 125 200
3, 201-10, 000 80 200 315
10, 001-35, 000 125 315 500
35, 001-150, 000 200 500 800

Source; carvalhio (1984)

Therefore, based on Carvalhio (1984) sample size determination method, for this study because
of time and budget shortage medium sample size equals to 315, respondents were selected from
the total population of 14,030of 11 factories according to the proportion to each factory
population on the basis of simple random sampling. The sample size selected here is considered
as representative of the target population and large enough to allow for precision, confidence and
generalization of the research findings. The sample taken from each factory is illustrated in table
3.2 below.

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 Effects of working Environment on Employee performance 2019

Table 3.2: Number of Employees and Proportion of Samples taken From Each factories
No Company name Product Target Proportional sample size
type population
1 New wide garment Garment 1571 [(1571/14030) x 315]= 35
2 George shu Ethiopia Shoes 858 [(858/14030) x 315]= 19
3 Arvind life style Garment 835 [(835/14030) x 315]= 19
4 Vestis garment Garment 452 [(452/14030) x 315]= 10
5 Ja,Ja textile Garment 3881 [(3881/)14030 x 315]= 87
6 Lyu shouta factory Garment 353 [(353/14030) x 315]= 8
7 Ever top sportswear Sports 342 [(342/14030) x 315]= 8
plc wear
8 Sumec garment Garment 450 [(450/14030) x 315]= 10
9 Shints ETP garment Garment 3550 [(3550/14030) x 315]= 80
10 K,E,I industrial Garment 28 [(28/14030) x 315]= 1
engineering
11 Ashton apparel Garment 1710 [(1710/14030) x315]= 38
Total 11 14,030 315

Source: internal report of factory and own construction.

3.7. Sampling Techniques

Since the aim of this study is to get actual information about affects of working environment on
employee performance in bole lemi industrial park, so that, the study was focused on operational
employee from each sector. The rationality of focusing on operational employee was to get
accurate and unbiased information about working environment factors. The study was applied
probability sampling techniques in order to give equal opportunity for the target population.
According to Kothari (2004), ―probability sampling is also known as ‗random sampling‘ or
‗chance sampling‘. Under this sampling design, every item of the universe has an equal chance
of inclusion in the sample‖. It is, so to say, a lottery method in which individual units are picked
up from the whole group not deliberately but by some mechanical process. After having the
representative sample size from each factory, the researcher applied simple random sampling

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 Effects of working Environment on Employee performance 2019

techniques to select sample respondents from each factory according to their proportionate to
gather data about working environment and employee performance.

3.8. Method of Data Processing and Analysis

3.8.1. Data Processing

The data collected from questionnaire was processed both in manual and computerized method.
In order to detect errors and omissions the raw data were edited. In order to reduce the response
into limited numbers of categories the raw data were coded by using numerical and other
symbols. The research also used tabulation in order to summarize the raw data and display in the
compact form for further analysis.

3.8.2. Data Analysis

The data collected from the respondents was analyzed by using descriptive statistics such as
mean, percentage and standard deviation and inferential statistics such as Pearson correlation and
regression analysis. In order to know the strength of relationship between independent and
dependent variable correlation test was employed. Finally to test the hypothesis, regression and
analysis of variance was employed. In analyzing the data the researcher used SPSS version 25
software package.

3.8.2.1. Descriptive Analysis

Descriptive analysis was used to interpret a variable which deals with background or
demographic of the respondents and mean score of working environment dimensions and
employee performance. The results are presented in tabular, frequency distribution and
percentage. This was employed through the computation of means and standard deviations of
data gathered for the variables.

3.8.2.2. Inferential Statistics

Inferential statistics was used to show the relationship between the variables and to analyze the
effect of working environment on employee performance. As stated in Kothari (1990), ―amongst
the measures of relationship, Karl Pearson‘s coefficient of correlation is the frequently used
measure in case of statistics of variables‖. Field (2006), states that the output of correlation

33
 Effects of working Environment on Employee performance 2019

matrix can be the correlation coefficient that lies between -1 and +1 within this framework, a
correlation coefficient of +1 indicates a perfect positive relationship, and a correlation coefficient
of -1 indicates a perfect negative relationship; whereas a coefficient of 0 indicates no linear
relationship at all. Therefore to find out the relationship between working environment
dimensions and employee performance Pearson product moment correlation was applied.

Multiple regression analysis refers to the analysis concerning relationship between the dependent
and independent variables; with the multiple regressions equation describing the relationship
(Kothari, 1990).This approach was used in this study to analyze effect of working environment
dimensions on employee performance.

3.9. Model Specification

It could be inferred from the works reviewed in the previous sections; that employee
performance is determined by some factors of working environment. Thus in respect of the
hypotheses stated above, the main issue is an investigation of relationship that exists between
employee performance and each of explanatory variables that had been identified through
literature and theories i.e. physical work environments, reward, democratic leadership style,
work life balance , training, workload and discrimination. Other factors that are not explicitly
included in the model were captured by the error term in the model. Therefore, the general model
which incorporates all of the variables to test hypotheses of the study was;

EP=β0+β1(PE)+β2(R)+ β3(DLS)+ β4(WLB)+ β5(TR)+β6(WL)+ β7(DS)+µ

Where;
EP=Employee Performance (Dependent Variable)
β0= constant term
PE=Physical Environment
WPR= Reward
LS=Democratic leadership style
WLB= work life balance
TR= training
WL= workload
DS= discrimination

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 Effects of working Environment on Employee performance 2019

µ= error term
β: coefficients associated with each independent variable which measures the
change in value of Y, per unit change in their respective independent variables.

3.10. Factor Analysis

Factor analysis was first conducted on a pre selected set of measures derived. Factor analysis
help in revealing underlying factors and assist in identifying what the factors represent
conceptually. The analysis was performed using SPSS 25 based on the principal components
factoring method with varimax rotation on the correlations of the observed variables. The
following criteria were used in making decisions about inclusion or exclusion of items in scales
and sub scales. Items with loading less than 0.40 were excluded from further analysis as they
were considered to be weak (Hair, Black, Babin, & Anderson, 2010). In case of an item cross
loaded on two different factors with a loading of less than 0.40 on the second factor, it was also
excluded (Refer Appendix: C)

3.11. Reliability and Validity of Instruments

3.11.1. 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.

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 Effects of working Environment on Employee performance 2019

Table 3.3: Rule of Thumb of Cronbach’s Alpha

Cronbach’s Alpha Description
>= .9 Excellent
>= .8 but < .9 Good
>= .7 but < .8 Acceptable
>= .6 but < .7 Questionable
>= .5 but < .6 Poor
<= .5 Unacceptable

Source: Zikmund, et al, 2010.

Based on this to ensure the reliability this study used self-administered questionnaire .then the
questionnaires are pre-tested based on pilot study, to guarantee a common understating of
questions among respondents. The alpha results for the items of the questionnaire and their alpha
values have met an acceptable figure (which is >0.75) in relation to the aforementioned
requirement range.

Table 3.4: Reliability Statistics Result of the Study

Variables Cronbach’s alpha No. of items
Physical environment 0.848 5
Reward 0.876 8

Democratic Leadership style 0.882 8

Work life balance 0.869 5

Training 0.898 5

Workload 0.905 5
Discrimination 0.860 6

Employee performance 0.959 7

Source; survey (2019) SPSS output

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 Effects of working Environment on Employee performance 2019

3.11.2. 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 is 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.
So that pre-questionnaire were distributed to the managers of industrial park to check the validity
of questions to further data collection process. As per the comments and the discussion with
industrial park experts the question prepared to primary data collection for the research objective
is found valid by researcher. Further, this instruments or variables of working environment and
employee performance were tested by previous studies for content validation.

3.12. Ethical Consideration

Mugenda (2008) underlines that participation of the respondents should be in voluntary bases
and they have right not to give response without researcher obligation. Therefore, the researcher
was contacted and received informed consent from the respondent. The respondents are not
forced to take part in the study, thus the principle of volunteerism was practiced all through data
collection method. Furthermore, the respondents were informed that information obtained is only
for academic purpose and remain confidential.

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 Effects of working Environment on Employee performance 2019

CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND

INTERPRETATIONS
4.1. Introduction

In the preceding chapters, important literatures related to the topic that may give enough
understanding about the subject matter and the methodology selected to meet research
hypotheses had been discussed. In this chapter, detail analysis about the descriptive statistics and
regression results has been made. Specifically, the chapter has included four sections. The first
section presented descriptive analysis of variables. The second section deals with the correlation
analysis and shows the degree of association between the study variables. Section three presented
the classical linear regression model assumption diagnostic test results. Finally the fourth section
has presented the results of the regression analysis and discussions on regression analysis.

4.2. Questionnaire Response Rate

The researcher distributed 315 questionnaires for eleven factories in the industrial park. Out of
which 298 were completed and returned. The response rate for this study is 94%which is
considered as a very good response rate as described by Babbie (2010).

4.3. Descriptive Statistics

4.3.1. Background Information of the Respondents

The demographic characteristics include: gender, age, marital status and level of education. This
aspect of the analysis deals with the personal data on the respondents of the questionnaires given
to them. Therefore in order to validate the reliability of data collected its mandatory to analyze
the demographic profile of the respondent.

Table 4.5: gender of respondents

Gender Frequency Percent
Male 163 45.3
Female 135 54.7
Total 298 100
Source; survey (2019) SPSS output

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 Effects of working Environment on Employee performance 2019

As indicated in the above table 4.5 the gender proportion of male respondents represented
54.7%, on the other hand 45.7% were females. The survey showed that there were more female
as compared to males.

Table 4.6: age category of the respondents

Age range Frequency Percent

18-25 172 57.7

26-33 111 37.2

34-41 15 5

Total 298 100

Source; survey (2019) SPSS output

In the above table 4.6 the age distribution of the respondent who participated in this study is
provided. From the table we can observe that 57.7%of the respondent lies within 18 up to 25 age
group.37.2% of the respondents are in the range of 26-33 and 5% of the respondents are within
34-41 age group. From this we can say that most of bole lemi industrial park employees are very
young.

Table 4.7: Marital Status of the Respondents

Frequency Percent
Marital status
Single 193 64.8
Married 104 34.9
Divorced 1 0.03
Total 298 100

Source; survey (2019) SPSS output.

As far as composition of marital status is concerned 193 (64.8%) of the respondents are single,
104 (34.9%) are married, and 1 (0.03%) is divorced. From this, it can be understood that

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 Effects of working Environment on Employee performance 2019

employees working in bole lemi industrial park consists of all types of marital status with
majority of single people with 64.8%.

Table 4.8: level of education

Educational level Frequency Percent
Below12 145 48.7
12th 38 12.8
Diploma 84 28.2
Degree 31 10.4
Total 298 100
Source: survey (2019) SPSS output

As far as composition of level of education is concerned 145 (48.7%) of the respondents are
below 12, 38(12.8%) are grade 12th, 84 (28.2%) are in the diploma level, 31 10.4%) are in the
degree level as revealed from the table. From this, it can be understood that employees working
in bole lemi industrial park consists of all levels of educated people with majority of below 12.

4.3.2. Descriptive Statistics of the Variables

The computed summary of descriptive statistics for dependent (employee performance) and
independent (physical environment, reward, democratic leadership style, training, workload and
discrimination) variable that were included in the questionnaires were indicated in this part. The
mean and standard deviation of all variables collected from the respondents were discussed.

Table 4.9: Descriptive Statistics of the Variables

Variables Minimum Maximum Mean Std. Dev

Employee performance 1.00 5.00 3.97 1.150

Physical environment 1.00 5.00 3.47 .977
Reward 1.00 5.00 2.63 1.100
Democratic Leadership 1.00 5.00 3.55 0.907
style
Work life balance 1.00 5.00 3.33 1.095

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 Effects of working Environment on Employee performance 2019

Training 1.00 5.00 3.49 1.083

Workload 1.00 5.00 2.39 1.100

Discrimination 1.00 5.00 3.02 1.149

Valid N (list wise)

Source; survey (2019) SPSS output

Table 4.9 depicts the overall arithmetic mean and standard deviation of dependent and
independent variables as responded by the respondents. The finding of this study indicates that
most of employees were sufficiently agreed with democratic leadership style with a mean value
of 3.55 and 0.907 standard deviation, training with a cumulative mean value of 3.49 and 1.083
standard deviation, physical environment scored a mean value of 3.47 and 0.977standard
deviation. This indicates that, bole lemi industrial park should maintain its strength on physical
environment, democratic leadership style and training in order to have competent employee and
improved performance. However, employees on other variables such as work life balance agreed
with a cumulative mean value of 3.33 and 1.095 standard deviation and Discrimination with a
mean value of 3.02 and 1.149standard deviation. This implies that, bole lemi industrial park has
to work in balancing work personal life of the employees and avoid the prevalence of work place
discrimination.

On the other hand, workload scored a mean value of 2.39 and 1.100standard deviation; reward
scored a mean value of 2.63 and 1.100 standard deviation. This implies that, bole lemi industrial
park have to give due attention to give reasonable workload, sufficient breaks for its employee.
Additionally, it should give due attention in terms of providing fair reward for its workers.
Finally, employee performance scored a mean value of 3.97 and 1.150standard deviation. The
mean and standard deviation for all items are shown in appendix B

4.4. Inferential Statistics

In this section the result of inferential statistics employed in the study supported on Pearson
correlation coefficient and multiple regressions were elaborated.

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 Effects of working Environment on Employee performance 2019

4.4.1. Correlation Analysis

Correlation describes the strength of association between variables. According to Brooks (2008),
correlation analysis measures the degree of linear association between dependant and
independent variable. The value of correlation coefficient ranges from -1 to1. A correlation
coefficient of 1 indicates that there is perfect positive relationship between two variables; while -
1 indicates that there is perfect negative relationship between two variables. On the other hand, a
correlation coefficient of zero indicates no relationship between variables.

According to McDaniel and gates (2006), a value of correlation coefficient between 0.1and 0.29
indicates the association among the items is poor. A correlation coefficient between 0.3 and 0.49
implies there is moderate relationship correlation coefficient greater than 0.5 implies strong
relationship between two variables. Based on this as noted by gujarati,2004, most generally used
bi-variant correlation coefficient, normally known as Pearson correlation were utilized in order
to find out the relationship between working environment dimensions and employee
performance. Table below 4.10 presents the result of Pearson correlation between variables.

Table 4.10: The Relationship between Working Environment Dimensions and Employee
Performance

EP PE R DLS WLB TR WL DS
PE .689** 1
R .557** 0.562 1
DLS .552** 0.619 0.446 1
WLB .527** 0.600 0.534 0.594 1
TR .583** 0.625 0.433 0.618 0.578 1
WL -.526** (0.454) (0.353) (0.339) (0.401) (0.377) 1
DS -.442** (0.318) (0.311) (0.270) (0.292) (0.276) (0.511) 1

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

Source: survey (2019) SPSS output.

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 Effects of working Environment on Employee performance 2019

The result in table 4.10 indicates that, there is significant positive correlation between physical
environment and employee performance with a correlation coefficient r=.689 and sig. (2-tailed)
is .000, which is <.05. Therefore there is strong and statistically significant relationship at 5%
significance level. Reward is positively related to employee performance with a Pearson
correlation coefficient r=.557 and sig. (2-tailed) is .000, which is <.05. Therefore there is strong
and statistically significant relationship at 5% significance level. The correlation coefficient
between democratic leadership style and employee performance is r=.552 and sign. (2-tailed)
.000, this implies strong, positive and statistically significant relationship at 5%significance
level. Work life balance is positively related to employee performance with a Pearson correlation
coefficient r=.527and sig. (2-tailed) .000, which indicates strong, positive association and
statistically significant at 5% significance level. The correlation coefficient between training
employee performance r=.583 and sig. (2-tailed).000, which indicates strong, positive
association and statistically significant at 5% significance level.

On the other hand, the correlation coefficient between workload and employee performance is -
.526 and sig. (2-tailed).000, this indicate strong, negative association and statistically significant
at 5% significance level. Discrimination is negatively related to employee performance with
correlation coefficient r=-.442 and sig. (2-tailed) .000, which is <.05. Therefore there is moderate
and statistically significant relationship between discrimination and employee performance.

4.4.2. Testing Assumptions of Classical Linear Regression Model (CLRM)

In order to estimate the parameters in multiple linear regression models and minimize the sum of
squared error or the difference between observed value and predicted value ordinary least square
method (OLS) method were employed for this study. While using OLS method in order to have
correct estimator value the five key underlying assumptions should be satisfied. When the
assumptions are violated OLS estimators produce biased, inconsistent and in efficient result.
Therefore tests of hypothesis are no longer valid, since the standard errors are wrong. Therefore,
in order to protect against the chance of getting and interpreting wrong regression results the
researcher conducted a diagnostic test. To make sure that the model is unbiased, consistent,
efficient and valid the following tests are conducted.

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 Effects of working Environment on Employee performance 2019

4.4.2.1. Test for Residual Has Zero Mean

Classical 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.

4.4.2.2. Test for Hetroscedasticity

Classical 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
hetroscedastic. 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 hetroscedasticity. Conversely if the plots depict a
pattern there is no evidence for the presence of hetroscedasticity. As illustrated in the figure, 4.2,
below the graph looks like a random array dots or the plots have no pattern. So, homoscedasticity
assumption is not violated.

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 Effects of working Environment on Employee performance 2019

Figure 4.2 hetroscedasticity test

Source: survey (2019) SPSS output

4.4.2.3. Test for Autocorrelation

Classical linear regression model assume cross-sectionally the covariance between the error term
is zero. In other word it assumes there is no serial correlation among error terms. The research
applied Durbin Watson test, which is most commonly used techniques of detecting
autocorrelation. Thus, if the value of DW test is between 1.5 and 2.5 there is no evidence for the
presence serial correlation among error terms (Hassen et al, 2017). As illustrated in table 4.11 the
DW test falls in the acceptable range, which implies absence of serial correlation among errors.

Table 4.11: Durbin Watson test result

Model Durbin Watson

1 1.524

Source: survey (2019) SPSS output

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 Effects of working Environment on Employee performance 2019

4.4.2.4. Test for Multicollinearity

CLRM model assume no correlation between explanatory variable. Multicollinearity 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 multicollinearity is ideal the regression
coefficients of independent variables are undetermined and difficult to measure their standard
error. In order to test the multicollinearity problem the researcher applied variance inflation
factor (VIF) and correlation coefficient of explanatory variables. If the VIF of the variables
exceed 10%, multicollinearity can be a potential problem (Hair et al., 2013). As illustrated in
table 4.12 the value of variance inflation factor for all explanatory variables is less than 10%.
Therefore, it implies that there is no multicollinearity between explanatory variables.

Table 4.12: VIF and Tolerance Statistics for Multicollinearity

Collinearity statistics
Model
Tolerance(1/VIF) VIF (%)

Physical environment 0.424 2.357

1 Reward 0.611 1.638

Democratic Leadership style 0.490 2.040

Work life balance 0.491 2.035

Training 0.494 2.026

Workload 0.629 1.590

Discrimination. 0.716 1.398

Source: survey (2019) SPSS output

4.4.2.5. Test for Normality

CLRM 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

46
 Effects of working Environment on Employee performance 2019

4.3 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: normality test

Source: survey (2019) SPSS output

4.4.3.Analysis of Variance (ANOVA)

Analysis of variance was also done to establish the overall significance of the model. ANOVA
also tells whether the overall effect of the seven independent variables on employee performance
is significant. As depicted in table 4.13, at 95%confidence interval, significant P-value of .000
and F-value of 62.766 was recorded. This implies the regression model is a suitable prediction
for explaining the effect of working environment on employee performance in bole lemi
industrial park.

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 Effects of working Environment on Employee performance 2019

Table 4.13: Analysis of Variance (ANOVA).

ANOVA
Sum of Mean
Model Squares Df Square F Sig.
1 Regression 236.926 7 33.847 62.766 .000b
Residual 156.384 290 .539

Total 393.310 297

a. Dependent Variable: employee performance
b. Predictors: (Constant), discrimination, democratic leadership style, reward,
workload, training, work life balance, physical environment

Source: survey (2019) SPSS output

4.4.4. Results of Regression Analysis

In accordance with classical 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 4.14: Coefficients of Regression Analysis

Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) 2.010 .294 6.832 .000
Physical environment .388 .067 .329 5.792 .000
Reward .179 .050 .171 3.602 .000
Democratic Leadership .114 .067 .090 1.707 .089
style
Work life balance -.009 .055 -.008 -.154 .877
Training .169 .058 .153 2.912 .004
Workload -.169 .049 -.161 -3.455 .001
Discrimination -.137 .044 -.137 -3.130 .002
a. Dependent Variable: employee performance

Source: survey (2019) SPSS output

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 Effects of working Environment on Employee performance 2019

Thus, the model applied in this study was ordinary least square method. The regression equation
can be stated as:

EP=2.010+0.388PE+0.17R+0.114DLS-0.009WLB+0.169TR-0.169WL-0.137DS+µ

Table 4.15: model summary

Adjusted R
Model R R Square Square Std. Error of the Estimate
a
1 .776 .602 .593 .73434
a. Predictors:(Constant), discrimination, training, work life balance, workload,
Reward, physical environment, democratic leadership style
b. Dependent Variable: employee performance

Source: survey (2019) SPSS output

4.4.5. 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. R 2- also
explains to what extent the variance of one variable explains the variance of other variable. R-
squared value range from 0 to 1and 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 0.602. This indicates that,
60.2% 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

49
 Effects of working Environment on Employee performance 2019

be 59.3%. This implies that, 59.3% 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 40.7%.

4.4.6. Interpretation of Regression Result and Hypothesis Testing

In this part of the study the relationship between the dependent variable and independent variable
were discussed. The dependent variable was employee performance whereas independent
variables were physical environment, reward, democratic leadership style, work life balance,
training, work load and discrimination.

In regression output, the Unstandardized coefficients of determination were used to replace the
unknown beta value of the regression model. Beta indicates that the level of influence of each
predictor variable on dependent variable: as well it indicates the direction of relationship.
Positive beta coefficient indicates the variable has positive effect on dependent variable whereas
negative beta coefficient the variable has negative effect on dependent variable and it tells us on
average when mean score value of independent variable increase by one unit mean score value of
dependent variable increase or decrease by beta amount if the variable is statistically significant.
The significance value (p-value) implies the statistical significance of the relationship. The
constant term of the model indicates the value of employee performance if all explanatory
variables held constant.

As illustrated in table 4.14 the coefficient of regression analysis indicates physical environment,
reward, training showed positive effect whereas workload and discrimination showed negative
effect and statistically significant at 5% significance level. Conversely, work life balance showed
a negative effect but statistically insignificant and democratic leadership style showed positive
but statistically insignificant. Therefore, in the next section the researcher present and discuss the
effect of predictor variables on employee performance.

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 Effects of working Environment on Employee performance 2019

Hypothesis 1

H1:1 physical environment has positive and significant effect on employee performance.

Results discussion; The result of multiple regressions as illustrated in table 4.14 above revealed
that physical environment has positive and statistically significant effect on employee
performance with a beta value of 0.388 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 physical environment
increase by 1 unit, on average the mean score value of employee performance increase by 0.388
unit and statistically significant at 5% significance level.

Decision; the researcher rejects the null hypothesis and accepted alternative hypothesis; that
means physical environment has significant effect on employee performance. This indicates that,
an improvement of physical environment elements (sound, lighting, temperature, work space, design
and layout, equipment and tools) will lead to a correspondent increase on employee performance.

Other researchers finding; The research made by nzewi et al (2018), investigated the
relationship between physical work environment and employee performance in selected brewing
firms in anambra state, Nigeria. 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 2

H1: 2 Reward has positive and significant effect on employee performance

Results discussion; The result of table 4.14 showed that reward has positive and statistically
significant effect on employee performance with a beta coefficient of 0.179 and p-value of 0.000,
which is less than 0.05. This implies that, other explanatory variable remain constant, if the mean
score value of Reward increase by 1unit on average the mean score value of employee
performance increase by 0.179 unit and statistically significant at 5% significance level.

Decision; The researcher rejects the null hypothesis and accepted alternative hypothesis; that
means reward has significant effect on employee performance. This shows that an increase in

51
 Effects of working Environment on Employee performance 2019

Reward elements like; payment, benefits, promotion and recognition will lead to correspondent
increase on employee performance.

Other researchers finding; The research by mansor et al, (2012), studied the effect of reward
towards employee job performance in chemical based industries Malaysia. The research was
applied quantitative approach and conducted on 127 employees. The finding of the study
revealed that reward has significant and positive effect on employee job performance which is in
line with the result of this study. The study of salah, m. (2016), titled on the influence of rewards
on employee performance also concluded that reward has positive and significant effect on
employee job performance.

Hypothesis 3

H1: 3 democratic leadership style has positive and significant effect on employee
performance.

Results discussion; As table 4.14 indicates, democratic leadership style showed positive and
statistically insignificant effect on employee performance with a beta value of 0.114 and p-value
0.089 which is greater than 0.05.

Decision; the researcher fail to accept directional hypothesis in favor of null hypothesis that
means: democratic leadership style has no significant effect on employee performance.

Hypothesis 4

H1; 4 work life balance has positive and significant effect on employee performance.

Results discussion; the result of table 4.14 showed that work life balance has negative but
statistically insignificant effect on employee performance with a beta value of -0.009 and p-value
of 0.877, which is greater than 5% significance level.

Decision; the research fail to accept hypothesis four or directional hypothesis in favor of null
hypothesis that means; work life balance has no significant effect on employee performance.

Other researchers finding; the research by shoaib et al (2013), studied the impact of non
financial reward on employee performance a case study of business institutes of Karachi. The

52
 Effects of working Environment on Employee performance 2019

research was conducted on 217 employees by using questionnaires from nine universities. They
concluded that there is no significant relationship between work life balance and employee
performance with a beta value of 0.430 which is greater than 0.05and it is consistent with the
finding of this study. In this study work life balance showed statistically insignificant effect on
employee performance and the reason is as we observe from the demographic characteristics of
the respondent most of the employee are single and found in young age group, this implies that
there is low level of imbalance or conflict between work activities and non-work activities. The
study of martins‘ et al. (2002) also confirms that individuals who are single and young
experience low work life conflict than married employees.

Hypothesis 5

H1; 5 Training has positive and significant effect on employee performance

Results discussion; as table4.14 depicts that, training has positive and significant effect on
employee performance with a beta value of 0.169 and p-value 0.004 which is less than 0.05. 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 0.169
unit and the relationship is statistically significant at 5% significance level.

Decision; the researcher rejects the null hypothesis and accepted directional hypothesis that
means; training has significant effect on employee performance. This shows that when employee
get on the job as well as off the job training, identified based on skill gap and evaluated after and
before training this will lead to equivalent improvement in their job performance.

Other researchers finding; the study of Afroz (2018), on the effect of training on employee
performance a study in banking sector, tangail Bangladesh, showed that training has a positive
and significant impact on employee performance, which is in line with the finding of this
research.

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 Effects of working Environment on Employee performance 2019

Hypothesis 6

H1; 6 work load has negative and significant effect on employee performance.

Results discussion; the result of multiple regression as presented in table4.14 above revealed
that, work load has negative significant effect on employee performance with a beta value of -
0.169 and p-value of 0.001 which is less than 0.05. This shows that, other explanatory variable
remain constant, if the mean score value of work over load increase by 1 unit, on average the
mean score value of employee performance decrease by 0.169 unit and the relationship is
statistically significant at 5% significance level.

Decision; the researcher rejects the null hypothesis and accepted the directional hypothesis that
means: work load has significant effect on employee performance. This implies that, when work
is evenly distributed, physically manageable and workers get sufficient break in their job, this
will lead to equivalent improvement in their performance.

Other researchers finding; the research finding of kaleem et al (2012), which is titled ―the
effect of work over load on employee performance ―that is conducted in Pakistan water and
power development authority indicate that: work overload has significant negative effect on
employee performance, which is consistent to the finding of this research. Ali et al (2013) also
concluded in their research that work overload has significant negative effect on employee
performance.

Hypothesis 7

H1; 7Discrimination has negative and significant effect on employee performance.

Results discussion: furthermore, the results of table4.14 showed that discrimination has
significant negative effect on employee performance with a beta value of (-.137) and p- value
(0.002) 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 decrease by 0.137 unit and the relationship is significant at 5%
significance level.

54
 Effects of working Environment on Employee performance 2019

Decision; the researcher rejects the null hypothesis and accepted the directional hypothesis: this
implies that, when discrimination based on gender, age, religion and ethnicity increases, the
performance of employee reduces drastically.

Other researchers finding: the research finding of Alagah et al (2017), which is titled ―the
discrimination and employee performance‖ that is conducted in Nigeria food and beverage sector
indicates that: discrimination has negative significant effect on employee performance, which is
similar to the finding of this research. Omoh et al (2015) also concluded that discrimination has
significant negative impact on employee performance.

Generally from the results, all work environmental variables except work life balance and
democratic leadership style used in the study had greatest impact in improving employee
performance. The result of this finding is summarized in table4.16

Table 4.16: Summary of actual and expected sign of explanatory variables on dependent
variable.

No. Explanatory Expected sign and Actual sign and impact Result
variables impact
1 Physical Positive and significant Positive and significant Supported
environment
2 Reward Positive and significant Positive and significant Supported

3 Democratic Positive and significant Positive and insignificant Not Supported

Leadership style
4 Work life balance Positive and significant Negative and insignificant Not Supported

5 Training Positive and significant Positive and significant Supported

6 Work overload Negative and significant Negative and significant Supported

7 Discrimination Negative and significant Negative and significant Supported

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 Effects of working Environment on Employee performance 2019

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS

INTRODUCTION

This chapter presents overall summary of main findings of the analysis part, followed by the
conclusion of the study through which the research objective was addressed. Furthermore, this
part also includes possible recommendations and suggestions for further studies.

5.1. SUMMARY OF FINDINGS

The objective of the study was to investigate and analyze the impact of working environment on
employee performance using major factors of working environment physical environment,
Reward, democratic leadership style, work life balance, training, work load and discrimination.
The research was undertaken in 11factories found in Bole lemi Industrial park. The study was
conducted using self administered questionnaires to the target population of 14,030 operational
employees: out of 315 sampled employees 298 of them responded properly. Furthermore, the
research is analyzed by using statistical package for social science version 25.

The descriptive statistics of the variables revealed that, most of the employees agreed with
democratic leadership style with a cumulative mean value of 3.55 and 0.907 standard deviation,
training with a mean value of 3.49 and 1.083 standard deviation, physical environment scored
mean value of 3.47 and 0.997 standard deviation and employee performance with a cumulative
mean and standard deviation (3.97 and1.150) respectively While employee on other variables
agreed work life balance (3.33and 1.095), discrimination (3.02 and 1.149) mean and standard
deviation respectively. However, work load scored mean value of 2.39 and 1.100standard
deviation; reward scored a mean value of 2.63 and 1.100 standard deviation.

Pearson product moment correlation coefficient results showed a significant positive relationship
between physical environment, reward, democratic leadership style, work life balance, training
and employee performance while negative significant relationship is found between workload,
discrimination and employee performance. The finding further revealed that, strong relationship
is found between physical environment, reward, democratic leadership style, work life balance,

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 Effects of working Environment on Employee performance 2019

training, and workload and employee performance. Moderate relationship is revealed between
discrimination and employee performance.

The model summary of multiple regression revealed that 60.2% of the variation in employee
performance is explained by seven factors of working environment included in the study. The
remaining 39.9% is explained by other variable that is not included in the model. The Anova
table also revealed that, the constructed model is statistically significant even at 1% significance
level. The coefficient table also indicates that physical environment has high impact on employee
performance with a beta value of (.388), followed by reward (.179), training (.169), workload (-
.169), discrimination (-.137), democratic leadership style (.114) and work life balance (-.009).
Moreover, from the finding of this study, coefficient table indicate that physical environment,
reward and training has positive and significant impact on employee performance while
discrimination and workload showed negative and significant impact on employee performance.
However, work life balance showed negative insignificant effect, and democratic leadership style
has positive but statistically insignificant impact on employee performance.

5.2. CONCLUSIONS

 The regression output revealed that Physical environment has positive and statistically
significant impact on employee performance. The correlation analysis also confirmed
positive and significant relationship. From this it was concluded that as suitability of
physical working environment increase it lead to correspondent increase in their
performance.
 The coefficient of reward variable in the model is positive and statistically significant at
5% significance level. Correlation analysis also reveals that, there is significant and
positive relationship between reward and employee performance. Thus, an increase in
reward result in dramatically increased employee performance.
 Democratic Leadership style has positive relationship with employee performance;
however the regression output reveals that it has positive impact and statistically
insignificant. As such, it has been concluded that leadership style has low impact on
employee performance.
 Work life balance found to have a positive and significant relationship with employee
performance. However, the coefficient table revealed it has negative impact and

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 Effects of working Environment on Employee performance 2019

statistically insignificant. Therefore, work life balance has a little impact on employee
performance.
 Regarding training, the coefficient table showed that, the performance of employee
increase when training increase. Thus, training has positive and statistically significant
impact at 5% significance level. Correlation analysis also revealed positive and
significant relationship. The higher workers get training tends to have increased
performance.
 Regarding workload, the coefficient table showed that it has negative impact and
statistically significant at 5% significance level. The correlation analysis also reveals
negative and statistically significant relationship. From this, it was concluded that when
employees overworked, this result in poor performance of employees, as they take work
as burden and start losing interest.
 The regression output of discrimination showed that it has negative and significant
impact on employee performance. Correlation analysis also reveals negative and
significant relationship. Thus, higher discrimination at work place results in equivalent
decrease on employee performance.

5.3. RECOMMENDATIONS

On the basis of the above summary of finding and conclusions of the study, the following
recommendations are forwarded to the management of industrial park.

 Since physical working environment has strong relationship with employee

performance; suitable work environment allow workers to perform better, improve
productivity, and maximize quality in their performance. Therefore, its
recommended that physical environment (in terms of lighting, noise level,
temperature and ventilation) should be made sure that they stay at an acceptable
level so as employees don‘t get distracted or bothered by them on their job).
 Since reward has strong relationship with employee performance; appropriate
reward will lead employee to be encourage at work which also helps to increase
their performance. Thus, the management needs to design a remuneration package
Fair salary, reasonable overtime payment and managers should establish criteria for

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 Effects of working Environment on Employee performance 2019

identifying employees who are eligible for recognition, then recognize anyone who
meets the criteria by being consistently fair.
 When employees get sufficient training related to their work, helps them to
perform better, improve productivity and maximize performance. Thus, the
management within organizations should realize the importance of providing on-
the job as well as off-the job training and evaluating performance after training is
conducted and this will bring a fruitful change in their performance.
 The more employees provided with work which is matched with their physical and
mental ability, the more likely to perform better and improve their performance.
Therefore, the management should make sure that workers are not burdened, to
have sufficient breaks and assigning the right skill at the right job.
 When discrimination prevail in work place employee feel ignored because of their
age, gender, religion and ethnicity and this lead to significant decrease on their
performance. Therefore, the management should enact workplace policy to reduce
discrimination and such policy should be reviewed frequently to ensure that its
effectiveness is maintained. Additionally, the culture of the organization should
inspire employees irrespective of gender, age, ethnic group or religious belief to
participate in decision making as this will help to reduce discrimination in the
workplace.

5.4. SUGGESTIONS FOR FURTHER STUDIES

This research was undertaken only in bole lemi industrial park found around Addis Ababa; as
such the finding of this study may not represent the entire industrial parks through Ethiopia.
Therefore, using the finding of this research as a bench mark other researchers need to conduct
research in this area. 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, work load and discrimination. There could be other relevant
working environment factors that are more important for the issue under study but excluded due
to different 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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 Effects of working Environment on Employee performance 2019

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Appendix A: Questionnaire
Addis Ababa University

College of Business and Economics

MBA Program

Dear respondents: This questionnaire is prepared for a research study purpose entitled ―Effect
of working environment on employee‘s performance‖. The expected respondents for this
questionnaire will be Operational Employees of bole lemi industrial park. The researcher asks
respondents to give sincere and accurate data to make proper analysis of. The researcher would
like to note that data will be kept confidential and will only be used for study purpose. I would
like to thank you in advance for your honest cooperation.

Put a ―√‖on your choice of agreement.

Section one: Demographic Information

1. Gender: Male Female

2. Age 18-25 26-33 34-41 42-49 Above50

3. Marital Status: Single married divorced

4. Education status below grade 12 Grade 12 Diploma Degree

Section two: The table that follows in the next section consist list of items, Please put ―√‖ mark
for every statement based on your level of agreement.

5: Strongly agree 4: Agree 3: Neutral 2: Disagree 1: Strongly Disagree

Description of items strongly disagree neutral agree Strongly

disagree agree
1 2 3 4 5
No 1. Physical work environment.
1 There is an air conditioning facility to control
the heat when the machines are working.
2 The machineries in the organization are
placed in such a way that is appropriate to
operate them.
3 My workplace provides an undisturbed

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environment without any noise that gives me

alone time to perform my duties.
4 The equipment I use suits my posture and I
can easily adjust.
5 I can see very well while working with
machines in the organizations because
lighting issues is considered while Placing
them.
2. Reward
1 The basics of payment, for example, over
time payment are reasonable.
2 I earn the same as or more than other people
on a similar job.
3 My salary is satisfactory in relation to what I
do.
4 The benefit system of the organization treats
each employee reasonably.
5 My medical scheme is satisfactory.
6 The opportunity for promotion exists in this
organization.
7 I am praised regularly for my good work.
8 I have the authority to correct daily problem
when they occur
3. democratic leadership style
3 My immediate supervisor encourages me to
express my opinions in planning and
implementing the work
2 My immediate supervisor concerns the
working procedures and gives me freedom to
choose tasks because he trusts my opinions

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 Effects of working Environment on Employee performance 2019

and decisions.
3 My immediate supervisor encourages me to
be creative in my work and bring new ideas.
4 My immediate supervisor participate me in
decision making process.
5 My immediate supervisor use varied methods
of reward as required by situation and
conditions
6 My supervisor delegates some of his power
to employee working with him
7 My immediate supervisor gives me the
opportunity to initiative in facing difficult
situations.
8 My immediate supervisor follow me when I
am late believing that strict supervision make
me feel the importance of my work
4. work life balance
1 I have support at work to balance my work
and personal life.
2 Work doesn‘t interfere with my time for
family and friends.
3 My work doesn‘t interfere with activities
outside of work.
4 I am satisfied with the number of hours I
work.
5 I am satisfied with the balance between my
work and personal life.
5. Training
1 Workers who need training are identified
based on their skill gap.
2 Our organization provides regular training to

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 Effects of working Environment on Employee performance 2019

develop skills that will help us to work

properly.
3 My organization provide training for
employees by using on-the job training
method.
4 My organization provides training for
employees by using off-the job training
method.
5 My organization conducts training evaluation
after training is conducted.
6. work load
1 I didn‘t work long and difficult working
hours and days
2 I am able to meet the dead line I have for my
work
3 I didn‘t feel over worked by the demand
place on me
4 I didn‘t feel tired by the demand placed on me
5 I am able to take sufficient breaks
7.Discrimination
1 The company hire employee regardless of
their gender
2 Fair treatment is given to all employees,
whether they are male or female.
3 Discrimination based on age doesn‘t prevail
in work place.
4 My supervisor includes all members of
different ethnicity in problem solving and
decision making.
5 The company provides equal opportunity for

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workers regardless of their race.

6 Discrimination based on religion doesn‘t

prevail in work place.
Employee Performance
1 I meet the target quantity required by the
organization.
2 I produce products that are free from defects.
3 I take the appropriate amount of time to
complete my tasks.
4 I produce good results with low cost to the
organization.
5 I am present on work on a regular basis.
6 I came up with creative ideas at work.
7 My work goals are well aligned with that of
the company‘s.

‘THANK YOU FOR YOUR PARTICIPATION’

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 Effects of working Environment on Employee performance 2019

አዲስ አበባ ዩኒቨርሲቲ

የድረ ምረቃ ትምህርት ቤት

የቢዝነስ አስተዳደር ትምህርት ክፍል

የሠራተኞች የስራ ሁኔታ በስራ ችሎታቸው ላይ ያሇውን ተጽእኖ ሇማጥናት ያዘጋጀሁትን መጠይቅ ሇመሙላት ሇሚተባበሩኝ
የቦሌ ሇሜ ኢንደስትርይል ፓርክ ተቀጣሪዎችን በቅድምያ ምስጋናየን እያቀረብኩ ከዚህ በታች ባሇው እና ቀጥሎ ባለት ግጾች
የተቀመጡት ጥያቄዎች ስሇስራ ሁኔታ ያላችሁን አመሇካከት በመስማማት እና ባሇመስማማት የምትገልፁት ነው ስሇዚህም
ያልዎትን ሃሳብ በቀኝ በኩል በተቀመጡት ሳጥኖች የራይት ምልክት(√) በማስቀመጥ እንዲገልፁ በትህትና እጠይቃሇሁ።

I. የግል መረጃ (የምላሽ ሰጭዎች መረጃ) በተመሇከተ

1. ፆታ ወንድ ሴት

2. ዕድሜ 18-25 26-33 34-41 42-49 ከ 50በላይ

3. የጋብቻ ሁኔታ ያላገባ ያገባ የተፋታ

4. የትምህርት ደረጃ ከ12 በታች 12ኛ ዲፕሎማ ዲግሪ

II. በሚቀጥሇው ክፍል ውስጥ ያሇው ሰንጠረዥ የተዘረዘሩ ጥያቄዎች የያዘ ነው, በእውቅና ደረጃዎ መሰረት ሇእያንዳንዱ ጥያቄ
የ "√" ምልክት ያድርጉ.

1=እጅግ አልስማማም

2=አልስማማም

3=ገሇልተኛ ነኝ

4=እስማማሇሁ

5=እጅግ እስማማሇሁ

1 2 3 4 5
No 1. አካላዊ የስራ ሁኔታ.
1.1 ማሽኖቹ በሚሰሩበት ወቅት ሙቀትን ሇመቆጣጠር የሚያስችል የአየር ማቀዝቀዣ አሇ
1.2 በድርጅቱ ውስጥ ያለት የማምረቻ መሳሪያዎች አቀማመጥ ሇስራ አመቺ ነዉ
1.3 የስራ ቦታዬ ምንም አይነት ጫጫታ የሌሇብኝን ቦታ ያቀርብልኛል.
1.4 የምጠቀምባቸው መሣሪያዎች ሇኔ አቀማመጥ የሚመቹ አና በቀላለ የማስተካክላችዉ
ናቸዉ
1.5 ማሽኖቹ በሚቀመጡበት ጊዜ የብርሃን ችግሮችን ታሳቢ አድርገው ስሇሆነ በምሰራበት
ወቅት የእይታ ችግር ኣያጋጥመኝም
2. ሽልማት
2.1 የክፍያ መሰረቶች ሇምሳሌ የትርፍ ሰአት ክፍያ በቂ ናቸው፡፡

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 Effects of working Environment on Employee performance 2019

2.2
እኔ ሌሎች ሰዎች በተመሳሳይ የስራ መደብ ላይ ሆነው ከሚያገኙት ጋር እኩል ወይም
ከዚያ በላይ አገኛሇሁ፡፡

2.3 ደመወዜ ከምሰራው ስራ አንፃር አጥጋቢ ነው፡፡

2.4 የድርጅቱ የጥቅማጥቅም ስርአት እያንዳንዱ ሰራተኛ በምክንያታዊነት ያስተናግዳል፡፡

2.5 የሕክምና ዏቅዱ አጥጋቢ ነው፡፡
2.6 በዚህ ድርጅት ውስጥ የእድገት እድል አሇ፡፡
2.7 ሇሰራሁት ጥሩ ስራ ሁል ጊዜም እመሰገናሇሁ፡፡
2.8 በየቀኑ ችግሮች ሲፇጠሩ የማስተካከለ ስልጣን አሇኝ፡፡
3. ዲሞክራሲያዊ የአመራር አይነት
3.1 የቅርብ አሇቃዬ በስራ እቅድ እና አተገባበር ላይ ሃሳቤን እንድገልፅ ያበረታታኛል፡፡
3.2 የቅርብ አሇቃዬ ስሇ ስራ አሰራሮች ትኩረት ይሰጣል፡፡ እንደዚሁም ሃሳቦቼን እና
ውሳኔዎቼ ላይ ስሇሚተማመን ስራ እንድበልጥ ነፃነቱን ይሰጠኛል፡፡

3.3 የቅርብ አሇቃዬ በስራዬ የፇጠራ ችሎታ እንዲኖረኝ እና አዳዲስ ሃሳቦችን እንዳመጣ
ያበረታታኛል፡፡
3.4 የቅርብ አሇቃዬ በውሳኔ አሰጣጥ ሂደት ላይ ያሳትፇኛል፡፡

3.5 የቅርብ አሇቃዬ እንደ አግባቡ እና እንደ ሁኔታው አስፇላጊነት የተሇያዩ የማበረታቻ እና
የቅጣት ዘዴዎችን ይጠቀማል፡፡
3.6 የቅርብ አሇቃዬ አብሮ ሇሚሰሩት ሰራተኞች የተወሰኑ ስልጣኖቹ ላይ ይወክላቸዋል፡፡
3.7 የቅርብ አሇቃዬ ከባድ ሁኔታዎችን ሇመጋፇጥ እንድንሳሳ እድለን ይሰጠኛል፡፡
3.8 የቅርብ አሇቃዬ ይከታተሇኛል፤ በኋላ ሳምንበት ጥብቅ ቁጥጥር የስራ አስፇላጊነት
እንዲገባኝ አድርጓል፡፡

4. የስራና የኑሮ ሚዛን

4.1 በስራዬ ላይ ስራዬን እና የግል ሕይወቴን እንዳመጣጥን ድጋፍ አሇኝ፡፡
4.2 ስራዬ ሇቤተሰብ እና ሇጓደኞች ካሇኝ ጊዜ ጋር ጣልቃ አይገባብኝም፡፡
4.3 የእኔ ሥራ ከስራ ውጭ ያለ ስራዎችቼን አያስተጓጉልም
4.4 በምሰራው የሰአት ብዛት ረክቻሇሁ፡፡
4.5 በስራዬ እና በግል ሕይወቴ መካከል ባሇው መመጣጠን ረክቻሇሁ፡፡

5.ስልጠና
5.1 ድርጅቴ ሰራተኞችን ባላቸው የሙያ ክፍተት ላይ ተመስርቶ ሇስልጠና ይሇያቸዋል፡፡
5.2 ድርጅታችን በአግባቡ ሇመስራት የሚረዳ ክህሎት ሇማዳበር የሚጠቅሙ መደበኛ
ስልጠናዎችን ይሰጣል፡፡
5.3 ድርጅቴ የስራ ላይ ስልጠና ዘዴን በመከተል ሇሰራተኞች ስልጠና ይሰጣል፡፡

5.4 ድርጅቴ ከስራ ውጪ ስልጠና ዘዴን በመከተል ሇሰራተኞች ስልጠና ይሰጣል፡፡

5.5 ድርጅቴ ስልጠና ከተከናወነ በኋላ የስልጠና ምዘና ያከናውናል፡፡

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6.የስራ ጫና
6.1 ረጅም እና ከባድ የስራ ሰአታት እና ቀናትን አልሰራም፡፡
6.2 ሇስራዬ ያሇኝን የጊዜ ገደብ ማሳካት እችላሇሁ፡፡

6.3 ባሇብኝ ጫና ከልክ በላይ እንደሰራሁ ሆኖ አይሰማኝም፡፡

6.4 ባሇብኝ ጫና የድካም ስሜት አይሰማኝም፡፡

6.5 በቂ የስራ መሃል እረፍቶችን ማድረግ እችላሇሁ፡፡

7. መድልኦ

7.1 ድርጅቱ ሰራተኞችን በፆታቸው ሳይሇያቸው ይቀጥራል፡፡

7.2 ወንድም ይሁን ሴት ሇሁለም ሰራተኞች እኩል መስተንግዶ ይሰጣቸዋል፡፡

7.3 በስራ ቦታ በእድሜ ላይ የተመሰረተ መድልኦ የሇም፡፡

7.4 የቅርብ አሇቃዬ በችግር አፇታት እና በውሳኔ አሰጣጥ ላይ የሁለንም የተሇያዩ ብሄር
አባላትን ያሳትፋል፡፡

7.5 ድርጅቱ ብሄር ላይ ሳይመሰረት ሇሰራተኞች እኩል እድል ይሰጣቸዋል፡፡

7.6 በስራ ቦታ በሐይማኖት ላይ የተመሰረተ መድልኦ የሇም፡፡

የስራ አፇፃፅም
8.1 በድርጅቱ የሚወሰነው የምርት ግብ አሟላሇሁ
8.2 ከእርማት ነፃ የሆኑ ምርቶችን አመርታሇሁ
8.3 የተሰጠኝን ስራ በተገቢው ሰአት እጨርሳሇሁ
8.4 ድርጅቱን ብዙ ወጪ ሳላስወጣ ጥሩ ውጤት አሳያሇሁ
8.5 በስራ ገበታዬ ላይ ሁልጊዜ እገኛሇሁ
8.6 በስራ ላይ በተሻል ሁኔታ የፇጠራ ሀሳቦችን አመጣሇሁ
8.7 የስራ ግቦቼከ ድርጅቱ አላማ ጋር የተቆራኘ ነው

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Appendix B: Descriptive statistics for each items

Physical working environment item

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
PE1 298 1 5 3.44 1.355
PE2. 298 1 5 3.76 1.142
PE3 298 1 5 2.77 1.312
PE4 298 1 5 3.72 1.175
PE5 298 1 5 3.71 1.202
Valid N (list wise) 298

Reward items

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
R1 298 1 5 3.06 1.383
R2 298 1 5 3.13 1.421
R3 298 1 5 2.32 1.309
R4 298 1 5 2.32 1.324
R5 298 1 5 3.14 1.397
R6 298 1 5 3.10 1.405
R7 298 1 5 2.30 1.272
R8 298 1 5 2.29 1.304
Valid N (listwise) 298

Democratic Leadership style items

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
DLS1 298 1 5 3.43 1.238
DLS2 298 1 5 3.42 1.248
DLS3 298 1 5 3.46 1.245
DLS4 298 1 5 3.86 1.247

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DLS5 298 1 5 3.46 1.247

DLS6 298 1 5 3.34 1.234
DLS7 298 1 5 3.51 1.190
DLS8 298 1 5 3.95 1.167
Valid N (list wise) 298

Work life balance items

Descriptive Statistics
Minimu Maximu Std.
N m m Mean Deviation
WLB1 298 1 5 3.27 1.278
WLB2 298 1 5 3.18 1.237
WLB3 298 1 5 3.66 1.336
WLB4 298 1 5 3.21 1.302
WLB5 298 1 5 3.38 1.529
Valid N (listwise) 298
Training items

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
T1 298 1 5 3.55 1.330
T2 298 1 5 3.64 1.093
T3 298 1 5 3.15 1.224
T4 298 1 5 3.56 1.312
.T5 298 1 5 3.58 1.237
Valid N (list wise) 298

Workload items

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
WL1 298 1 5 2.48 1.285
WL2 298 1 5 2.33 1.297
WL3 298 1 5 2.41 1.276
WL4 298 1 5 2.50 1.324
WL5 298 1 5 2.16 1.309
Valid N (list wise) 298

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 Effects of working Environment on Employee performance 2019

Workplace discrimination items

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
D1 298 1 5 3.06 1.562
D2 298 1 5 3.23 1.427
D3 298 1 5 2.69 1.567
D4 298 1 5 3.07 1.445
D5 298 1 5 3.26 1.425
D6 298 1 5 2.84 1.560
Valid N (list wise) 298

Employee performance items

Descriptive Statistics
Std.
N Minimum Maximum Mean Deviation
EP1 298 1 5 4.32 1.275
EP2 298 1 5 3.94 1.257
EP3 298 1 5 4.09 1.290
EP4 298 1 5 3.79 1.307
EP5 298 1 5 4.26 1.310
EP6 298 1 5 3.21 1.119
EP7 298 1 5 4.23 1.416
Valid N (list wise) 298

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 Effects of working Environment on Employee performance 2019

Appendix C: Factor Analysis

Component matrix
Physical environment Factor loading
There is an air conditioning facility to control the heat when the machines are 0.813
working
The machineries in the organization are placed in such a way that is 0.861
appropriate to operate them.
My workplace provides an undisturbed environment without any noise that 0.589
gives me alone time to perform my duties.
The equipment I use suits my posture and I can easily adjust. 0.834
I can see very well while working with machines in the organizations 0.861
because lighting issues is considered while Placing them.

Reward Factor loading

The basics of payment, for example, over time payment are reasonable. 0.804
I earn the same as or more than other people on a similar job. 0.766
My salary is satisfactory in relation to what I do. 0.643
The benefit system of the organization treats each employee reasonably. 0.701
My medical scheme is satisfactory. 0.787
The opportunity for promotion exists in this organization. 0.764
I am praised regularly for my good work. 0.701
I have the authority to correct daily problem when they occur 0.679

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Democratic Leadership style Factor loading

My immediate supervisor encourages me to express my opinions in planning and 0.745

implementing the work
My immediate supervisor concerns the working procedures and gives me freedom to 0.647
choose tasks because he trusts my opinions and decisions.
My immediate supervisor encourages me to be creative in my work and bring new 0.797
ideas.
My immediate supervisor participate me in decision making process. 0.741
My immediate supervisor use varied methods of reward and punishment as required 0.713
by situation and conditions
My supervisor delegates some of his power to employee working with him 0.733
My immediate supervisor gives me the opportunity to initiative in facing difficult 0.81
situations.
My immediate supervisor follow me when I am late believing that strict supervision 0.732
make me feel the importance of my work.

Work life balance Factor loading

I have support at work to balance my work and personal life. 0.858
Work doesn‘t interfere with my time for family and friends. 0.829
My work doesn‘t interfere with activities outside of work. 0.859

I am satisfied with the number of hours I work. 0.886

I am satisfied with the balance between my work and personal life. 0.644

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 Effects of working Environment on Employee performance 2019

Training Factor loading

Workers who need training are identified based on their skill gap. 0.901
Our organization provides regular training to develop skills that will help us to work 0.888
properly.
My organization provide training for employees by using on-the job training method. 0.699

My organization provides training for employees by using off-the job training method. 0.860

My organization conducts training evaluation after training is conducted. 0.869

Workload Factor loading

I didn‘t work long and difficult working hours and days 0.906
I am able to meet the dead line I have for my work 0.892
I didn‘t t feel over worked by the demand place on me 0.914
I didn‘t feel tired by the demand placed on me 0.905
I am able to take sufficient breaks 0.632

Discrimination Factor loading

The company hire employee regardless of their gender 0.806
Fair treatment is given to all employees, whether they are male or female. 0.712
Discrimination based on age doesn‘t prevail in work place. 0.722

My supervisor includes all members of different ethnicity in problem solving and 0.848
decision making.
The company provides equal opportunity for workers regardless of their race. 0.705

Discrimination based on religion doesn‘t prevail in work place. 0.808

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Employee performance Factor loading

I meet the target quantity required by the organization. 0.939
I produce products that are free from defects. 0.892
I take the appropriate amount of time to complete my tasks. 0.944
I produce good results with low cost to the organization. 0.890
I am present on work on a regular basis. 0.939
I came up with creative ideas at work. 0.724
My work goals are well aligned with that of the company‘s. 0.930

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