ORGANIZATIONAL PERFORMANCE WITH EMPLOYEE: LITERATURE REVIEW

LITERATURE REVIEW

Hai Li, Baiyin Yang, Mian Zhang (2011) investigated 362 firms on the two functions of organizational culture link to organizational performance, centering on human resource capability as a mediator and environmental uncertainty as a moderator. McKenzie, K. (2010) examined the relationship between HRM, organizational culture and firm performance. It has primarily explored the relationship and different views between HRM and culture. Liao and Rupp (2005) studied the impact of justice climate and justice orientation on work outcomes (citizenship, satisfaction, and commitment) on a sample of 231 employees from 44 work groups representing nine organizations spanning seven different industries. Fulmer B, Gerhard B, Scott K. (2003) has done a study on the relationship between being a “Great Place to Work” and firm performance. Furthermore, Boselie, Dietz and Boon (2005), by analysing the literature over the last years on the HRM-performance relationship, reported wide disparities in the treatment of the components emphasizing the “black box” stage between HRM and performance. They indicated that the theoretical frameworks which dominated the field were the “contingent framework” (i.e., HRM influences performance in relation to contingent factors such as business strategies) (Schuler & Jackson, 1987), the resource-based view (i.e., HRM influences performance according to the human and social capital held by the organisation) (Barney, 1991) and the AMO theory (i.e., HRM influences performance in relation to employees’ Ability, Motivation and Opportunity to participate) (Appelbaum, Bailey, Berg, & Kalleberg, 2000). Delaney and Huselid (1996) found that some of the more progressive human resource management strategies, 5 including careful selection at appointment, training and incentive compensation, have a positive effect on the organizational performance. Suppress

Harjeet Kaur (2011) analyzed an empirical research addressing employee attitude and behavior as it relates to the implementation of an EMS/ISO14001 is currently lack. The research extends a previous research by proposing and testing an integrative research model which links several HR factors to employee attitudes’. Shah.N and Irani.Z (2010) analyzed on employee workplace and demographic predictors to know the employee attitudes and behaviors regarding organizational change. 556 surveys out of 1000 were returned from full time academics working in public sector universities of Pakistan. Rosenthal (1997) found a positive effect between an attitude-related construct, called “affective customer orientation of salespeople,” and salespeople’s customer-oriented behavior. However, they did not provide evidence for discriminant validity between these dimensions. Tornow and Wiley (1991) investigated the relationship between employee and customer satisfaction and organizational performance for a computer services organization having 30 districts. Surveys of 667 employees and 633 customers of these districts were obtained and compared with district performance indices. Tornow and Wiley found significant relationships between key performance indices (“doing things right the first time” and contract retention) and both customer and employee satisfaction (r’s = 0.32 to .46). Wiley (1991), in a study of 200 retail stores found strong relationships between employee attitudes about working conditions, work obstacles, and he evaluated the relationship between customer and employee satisfaction and two measures of financial performance (net sales and net income), he found only weak and negative correlations. Fishbein and Ajzen (1977) reported that attitudes typically predicted multiple act criteria better than single act criteria. They generalized that attitudes and behaviors must be compatible to ensure a strong relationship.

Many studies have provided cross sectional evidence reporting positive associations between different aspects of employee attitudes and organizational performance, for example, between employees’ perceptions of climate and customer satisfaction and loyalty ( Schneider and Bowen, 1985; Schneider, White and Paul, 1998); employees’ perceptions of the strength of company culture and financial performance (Kotter and Heskett, 1992); employee satisfaction and customer satisfaction (Heskett, Sasserand and Schlesinger, 1997); and between employee satisfaction-engagement and business unit outcomes such as productivity, profit and customer satisfaction (Harter, K. Schmidt, F. L. and Hayes, T. L. 2002). A recent study, conducted by Schneider, B., Hanges, P. J., Smith, D. B., & Salvaggio, A. N. (2003), based on employee attitude data collected from 35 companies using multiple time periods over eight years, showed that two of their attitude measures—overall job satisfaction and satisfaction with security were caused by financial performance (i.e. return on assets and earnings per share) rather than the reverse. The ability of attitudes and behavior to predict organizational performance and employee satisfaction increased over time. The associations between attitude and performance have been examined by researchers in fields such as organizational psychology, strategic human resources management and organizational theory. Historically, numerous studies in the organizational psychology-performance literature have examined the link between employee attitudes (job satisfaction, commitment, and employee engagement) and individual-level performance (Iaffaldano & Muchinsky, 1985; Cook, J. D., Hepworth, S. J., Wall, T. D., & Warr, P. B. (1981) Judge, T. A., Thoresen, C. J., Bono, J. E., & Patton, G. K. (2001)).