ABSTRACT

The objective of this research project was to establish the perceived factors that affect employees’ productivity within Redeemed Integrated Development Agency (RIDA). Specifically, the research sought to assess how the working environment in RIDA affects employees’ reward & motivation, communication, involvement of employees in decision making and job satisfaction.

This research adopted a descriptive census survey design where the researcher collected data from the entire population, which was then analysed. This design was chosen because the researcher was only involved in identifying the characteristics of the population and how their perception affects their productivity. The researcher further explored possible correlations between perceived factors in working environment and how they affect employees’ productivity. The data that was collected was analysed both quantitatively and qualitatively and the results of the analysis were presented in form of charts, graphs and tables. The findings were discussed in efforts to answer the research question. RIDA staff recognize that good working environment is essential in improving the organizations performance, productivity and in attainment of its goals. Effective reward management strategy should be introduced as a matter of urgency to recognize the best performers in the organization. Although there is communication, it is not always and when it is done, the method used is verbal and this is not as effective as it is meant to be. Employees do not get the right message in time and this affects their response to whatever feedback is required. The staff suggested that a participatory management/leadership style should be embraced to motivate them. The following HR practices which are commonly adopted by successful companies should be incorporated in RIDA. They include Employment security, Selective Hiring, Self-managed teams, High compensation contingent on performance, Training, Reduction of status differentials and sharing information.

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TABLE OF CONTENTS

Declaration………………………………………………………………………….. I

Acknowledgements ………………………………………………………………… II

Dedication ……………………………………………………………………… III

Abstract…………………………………………………………………………….… IV

List of tables………………………………………………………………………… IX

List of figures………………………………………………………………………... X

CHAPTER ONE: INTRODUCTION

1.1 Background of Study……………………………………………………… 1

1.1.1 Employee Perception……………………………………………… 2

1.1.2 Redeemed Integrated Development Agency …………………… 3

1.1.3 Factors influencing employees productivity……………………… 3

1.1.4 Employee Productivity …………………………….……………… 6

1.2 Research Problem…………….…………………………………………… 7

1.3 Research Objective… …………………………………………………….. 10

1.4 Value of Study…………………………………………………………….. 10

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction………………………………………………………………… 12

2.2 Employee productivity…………………………………...………………… 12

2.3 Factors influencing employee productivity…………………………………. 16

2.3.1 Reward & Motivation…………………………………………………… 16

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2.3.2 Communication…………….…………………………………………….. 19

2.3.3 Participation in Decision making ………………………………………… 21

2.3.4 Job Satisfaction…………………………………………….……………… 22

2.4 Conceptual Frame work……………………………………………………… 24

2.5 Interpretation………………………………………………………………… 24

2.5.1 Reward & Motivation…………………………………………………… 24

2.5.2 Communication…………….…………………………………………….. 25

2.5.3 Participation in Decision making ………………………………………… 25

2.5.4 Job Satisfaction…………………………………………….……………… 25

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction…………………………………………………………………… 26

3.2 Research Design………………………………………………………………. 26

3.3 Population of Study…………………………………………………………… 26

3.4 Data collection………………………….………………………………………. 27

3.5 Data Analysis…………………………………………………………………… 28

CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION

4.1 Introduction……………………………………………………………………. 29

4.2 Profile of respondents………………………………………………………… 29

4.3 Quantitative Analysis………………………………….………………………. 30

4.4 Interpretation……….………………………………….………………………. 31

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4.4.1 Reward & Motivation motivation………………………………….……. 31

4.4.2 Communication …………………………………………..…………...…. 34

4.4.3 Participation in decision making................................................................ 35

4.4.4 Job satisfaction………………………………………………….………. 37

4.5 Other factors influencing performance & productivity………..……………… 39

4.6 Qualitative Analysis………………………………….………..……………… 42

4.6.1 Reward & Motivation………………………..………..……………… 42

4.6.2 Communication……..………………………..………..……………… 43

4.6.3 Participation in Decision Making..…………..………..……………… 43

4.6.4 Job Satisfaction…………………...…………..………..……………… 44

4.7 Discussion of results…………………………………………………………. 44

4.7.1 Perceived factors affecting employee’s productivity…...……………… 44

4.7.2 Comparison of the study with other studies…………...……………… 45

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS.

5.1 Introduction…………………………………………………………………… 47

5.2 Summary of findings………………………………………………………….. 47

5.2.1 Reward and motivation……………………………………………….…. 47

5.2.2 Communication………………………………………………….……….. 48

5.2.3 Participation in Decision Making ………………………………………. 48

5.2.4 Job Satisfaction………………………………………………….……… 48

5.3 Conclusion………………………………… ………………………………… 48

5.4 Recommendations………………………………………………………………. 50

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5.4.1 Reward and motivation……………………………………………….…. 50

5.4.2 Communication………………………………………………….……….. 51

5.4.3 Participation in Decision Making ………………………………………. 51

5.4.4 Job Satisfaction………………………………………………….……… 52

5.5 Suggestions for further Research……………………………………………… 52

REFERENCES ……………………………………………………………………........ 54

Appendix I ………………………………………………….. Questionnaires

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LIST OF TABLES

Table 3.1 Population of RIDA…………………………………………………. 27

Table 4.1 Education Background…………….…………………………….….. 30

Table 4.2 Reward System in place…………..………………………………… 31

Table 4.3 Reward system is effective…………..……………………….….….. 32

Table 4.4 Employee motivation……………………………………………….. 32

Table 4.5 Availability of training opportunities………………………..……… 33

Table 4.6 Availability of promotion opportunities……………………………… 33

Table 4.7 Effectiveness of communication……………………… …………….. 34

Table 4.8 Appropriate & Timely feedback……………………………………… 34

Table 4.9 Clear grievance handling procedure………………………………….. 35

Table 4.10 Participation in decision making………………………………………. 35

Table 4.11 Involvement in decision making is excellent…..……………………… 36

Table 4.12 Joint consultative meetings……………………..……………………… 36

Table 4.13 Job Satisfaction……………………………..…..……………………… 37

Table 4.14 Job evaluation done often…………………..…..……………………… 37

Table 4.15 Work is challenging & quantity is okay…….…..……………………… 38

Table 4.16 Career advancement opportunities………….…..……………………… 38

Table 4.17 Other factors influencing performance & productivity………………… 39

Table 4.18 Benefits that favour performance & productivity ……………………… 40

Table 4.19 Role ambiguity and/or conflicts……..…….…..……………………… 41

Table 4.20 Working environment, performance & productivity ………………… 42

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LIST OF FIGURES

Page

Figure 3.1 Conceptual framework………………………………………………. 24

Figure 4.1 Date of entry into the organization…………………………..….….. 29

Figure 4.2 Clear terms of reference…………….…….…..……………………… 41

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CHAPTER ONE: INTRODUCTION

1.1 Background of the study Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Employees’ productivity is the heart and soul’ of any organization. Any successful business knows much of its success is due to diligent workers with excellent productivity. Employees who put forth extra effort often make a big difference in company profits. The employees who do only what the job duties require, and no more, can stymie the progress of a company. Increasing productivity is one of the most critical goals in business. Unfortunately, it’s an activity seldom accepted by Human Resource professionals as a legitimate mandate. While most Human Resource professionals acknowledge that their job entails establishing policy, procedures, and programs governing people management, few attempt to connect such elements to increasing employee output (volume, speed, and quality) in terms of revenue per employee. It is important to motivate all employees to reach their full potential and maximal their level of productivity. Companies that recognize and encourage increased productivity are likely to be more successful than their counterparts that don't (Sahay, 2005).

Kauno (2005) says productivity is important because it allows the business to be more cost effective. The more output a business has for a specific cause, the cheaper it is to produce the product. This in turn allows the business to have a higher profit. Productivity on the part of employees is important because getting your job done will help the company's growth. If the company grows and progresses, profits will increase. If profits in the company increase, not only will the bosses be happier but they will hire more people and give raises to those doing a good job and increase benefits for them. If employees are shareholders in the company they will win even

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more benefits since their shares will be worth more and they will have a nice nest egg when they retire. Productivity is good for everyone and important for a company's survival.

1.1.1 Employee perception

Kreitner and Kinicki (2007) stated, “Perception is a cognitive process that enables us to interpret and understand our surroundings”. When employees are evaluating their roles in the workplace, their perceptions of these roles may lead to either an increase or decrease productivity. Whether they develop positive or negative perceptions of their roles in the workplace may lead them to feel valuable, like the make a difference in the workplace, or invaluable and unimportant to the workplace. These varying perceptions are an extremely important concept for managers to understand in order to keep production up and even increase productivity. Managers must not only understand employees’ perceptions of their roles in the workplace, they must also be able to recognize the significance of these perceptions in order to meaningfully interact with employees and encourage them, therefore increasing overall productivity (Kreitner & Kinicki, 2010).

Issues, managerial activities and organizational processes are all affected by an employee’s perceptions developed from their observations and interpretations of managers and their decisions based on how they affect them. If managers are known and recognized to be positive and encouraging this will influence employees in a positive way, and vise versa. Understanding these perceptions and using them to their advantage, managers are able to alter employees’ perceptions of their treatment, equality, value, potential, and overall role in the workplace, again therefore influencing productive behavior and increased productivity.

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1.1.2 Redeemed Integrated Development Agency (RIDA)

Redeemed Integrated Development Agency (RIDA) is a development initiative of Redeemed Gospel Church (RGC) established in 1978. It started as a social programme responding to emergencies in Mathare spreading to Korogocho areas and Huruma in later years. The purpose of the initiative was to express God’s love and address the physical needs of poor people in the community, especially women and children. R.G.C believes in holistic approach to development. Hence its involvement in both pastoral and development work. From a small social unit in 1978, RIDA has grown to a large development program housing four departments, namely: social work, health, vocational training and schools. It has 108 staff headed by a programme director and governed by a Programme Committee reporting to the Executive Board of RGC.

1.1.3 Factors influencing employee productivity

Knowing what factors influence productivity is a prerequisite to improving performance. Over the years, researchers have found that productivity is affected by relatively few influencers, and workers are generally aware of what those influencers are (Armstrong, 2006; Clawson & Newburg, 2005; Hankin, 2004; Newstrom & Bittel, 2002; Williams, 2003). Identification of the specific productivity limiters operative in a workplace can yield opportunities for significant productivity gains in the organizations. From the past into the 2000s, the research into workplace productivity has resulted in consistent indicators. Koretz (1995) cited four key productivity factors: “inadequate supervision and employee involvement in decision-making, too much work, and insufficient rewards and chances to advance”. Leonard (2000) noted surveys indicating that less organizational bureaucracy, a greater sense of purpose, effective communication, clear goals, and being able to see results were essential to productivity.

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Early researchers and writers discovered that a limited number of factors had the most impact on the productivity of workers. Fleishman (1973) identified two primary dimensions of leadership behavior: “initiating structure” and “consideration” Initiating structure involves the extent to which the leader organizes and defines group relationships, establishes communication channels, and specifies methods for job accomplishment. Consideration involves the degree of mutual trust, respect, and warmth between the leaders and followers. Fleishman noted that consideration can be best described as “the tolerance of the leader for two-way communications with the followers” (p. 8). The work of these early researchers led to similar insights by more recent scholars and popular writers. The leadership role in workplace productivity was further emphasized in the 1980s. In their best-selling book, In Search of Excellence, Peters and Waterman (1982) emphasized the role of leadership in guiding an organization toward success. The authors noted, “what we found was that associated with almost every excellent company was a strong leader (or two) who seemed to have had a lot to do with making the company excellent in the first place”. According to Peters (1987), to gain the greatest performance, employees should be closely involved in all aspects of the organization’s operations. He said, “Involve everyone in everything”.

Echoing both Taylor and Peters, Creech (1994) advocated fully involving subordinates in organizational changes. He submitted that centralized control within an organization generally leads to failure and suboptimal performance. His mantra was “organize small to win big”. More recently, Longenecker and Leffakis (2002) found that one overriding factor resulted in improved productivity in the modern workplace. They found that white-collar productivity improvement requires effective leadership on a variety of fronts. Their conclusion is that leadership seems to be the single most influential factor affecting productivity in today’s workplace. The Society for Human Resource Management found that poor management was the primary cause of low

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productivity (St. Charles County Business Record, 2005). An HR Focus (Human Resource Zeroes in on Productivity, 2005) study cited “streamlining procedures and improving communications” as central to productivity improvement. Pomeroy (2006) indicated that “inefficient planning of work and organizational structure by management” followed by “poor management leadership in demonstrating and leading change” are the two greatest obstacles to productivity in U.S. corporations.

From the continuous quality improvement movement, Juran made a concrete connection between quality improvement and productivity improvement: “Thus the improvement in quality results directly in an increase in productivity” (Gryna, Chua, & DeFeo, 2007). Deming’s approach to total quality management showed direct impact on productivity enhancement as well. Among Deming’s 14 points are key elements to improve productivity, including institute training and retraining, institute leadership, break down barriers between staff areas, and drive out fear (Walton, 1986). The point about fear received special emphasis by Deming. “The economic loss from fear is appalling” (Walton, 1986). Deming described the effect of fear on worker performance. “Fear takes a horrible toll. Fear is all around, robbing people of their pride, hurting them, robbing them of a chance to contribute to the company”. Ryan and Oestreich (1991) also described how fear impacts productivity noting that workers may begin to show the following traits: lack of extra effort; making and hiding mistakes; missing deadlines and budgets; poor problem-solving and work methods as well as a loss of creativity, motivation, and risk taking.

1.1.4 Employee productivity

The origin of productivity management is deeply rooted in the context of mass production therefore issues of productivity are mainly analyzed in this sphere. This may be the main reason for the

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prolonged neglect of the productivity issues in the sphere of service. Service organizations are recognized as the largest and fastest-growing segment of the economy in the world (Sahay, 2005). Productivity shows whether the activity of an organization is efficient and effective. Though the terms like productivity, efficiency and effectiveness are used together and practicians sometimes alternate their meanings, however we must not identify productivity with efficiency and/or effectiveness. Productivity requires both efficiency and effectiveness, because a certain activity will not be productive if it is only efficient, but not effective, or effective, but not efficient (Koss, 1993).

Organizations that deliver service must broaden their examination of productivity from the conventional organization-oriented perspective, including employee productivity to a dual organization – customer perspective. This broadened approach can help reconcile conflicts between improving service quality and boosting productivity (Sahay, 2005). According to Parasuraman (2002), customers are often involved into activity of an organization providing some amount of input in the form of time, physical effort and mental energy. Employee productivity is the amount of goods and services that an employee produces in a given amount of time. It is one of several types of productivity that economists measure. It can be measured for a firm, a process, an industry, or a country. It is often referred to as labor productivity because it was originally studied only with respect to the work of laborers as opposed to managers or professional. It refers to the utilization of available, scarce resources to give maximum output. “A poor supervisor is definitely the No. 1 factor that causes low productivity,” (Barry 2007), Employees who do not have a direct connection with the company begin to lose all the reasons for wanting to do that little bit extra and take the additional time to make something right.” Happy employees are productive employees. Negative attitudes can torpedo employee productivity in a very short time. “An employee with a

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positive attitude usually enjoys the work that they do and feels empowered and recognized for their contributions,” said Henning. “An employee that is complacent and does not really enjoy their work, but is simply there for a paycheck usually does not produce at a high level, develops a bad attitude and generally drags a team down”.

1.2 Research Problem

Tangen (2002) argues the term productivity clearly has a profitability component, but profitability is strongly influenced by the prices a company pays for its input and receives for its output. If a company can recover more than the cost of its input from rising prices for its output, its profitability can be increased even in times when its productivity is decreasing. That is also a strong argument for productivity being expressed in physical units (in quantities) instead of monetary units. However, profitability as a performance measure mainly addresses shareholders as the interest group and many researchers therefore claim that using monetary ratios as productivity measures will result in several shortcomings, for instance, induce short-termism and discourage the customer perspective. Profitability can change for reasons that have little to do with productivity, such as inflation and other external conditions that may bear no relationship to the efficient use of resources. Miller (1984) argued that productivity is a more suitable measure to monitor manufacturing excellence in the long run rather than profitability, since profits are influenced by many factors in a short-term perspective. Employee productivity is the amount of goods and services that an employee produces in a given amount of time. It is one of several types of productivity that economists measure. It can be measured for a firm, a process, an industry, or a country. It is often referred to as labor productivity because it was originally studied only with

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respect to the work of laborers as opposed to managers or professional. It refers to the utilization of available, scarce resources to give maximum output.

The working environment in RIDA is quite friendly and warm. However the workers experience delayed services e.g. salary payments, lack of essential benefits like medical cover and lack of overtime compensation. This makes the staff concerned to be less efficient, less productive and very dissatisfied. It also contributes to lack of commitment strategy by the entire staff fraternity. According to Arthur (1990, 1992, 1994) firms with a high commitment strategy have significantly higher levels of both productivity and quality than those with a control strategy. RIDA management has provided medical insurance cover for some of her employees. Sometimes payment of salaries is done fairly and promptly. This makes the workers’ standard of living reasonable and less stressed by the payment of their bills. The project management committee has included some members of the staff in their board meetings so as to involve them in decision-making but this is at a lower level. Again not all workers get pension because the organization relies on donor funds and most of them say that the pension is the responsibility of the local partner who happens to be RIDA. This organization is therefore not able to treat her employees equally. It is this reason that one can find many staff dissatisfied and demotivated. RIDA also does not have a Human Resource department and no performance management system in place.

Recent studies which have been undertaken on employee productivity and similar fields include Kinoti, (2009) undertook a study on “Perceived relationship between motivation practices and employee productivity in Kenya commercial bank (kcb) limited” and found out that employee productivity was highly correlated to compensation and conducive working environment. Muturi (2008) researched on Factors influencing staff turnover at Jertec Junior academy in Nairobi and

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established that teachers would leave because of insufficient pay, working hours, too much overtime, amount of work, working conditions, problems with management, lack of career advancement and Terms of service. Furthermore indications were that the majority of the staff would leave because of Training and development, Contracts and Pay, Working Environment, Substandard Equipment and tools and Management. Katua (2012) researched on Factors affecting the productivity of employees in manufacturing firms in Nairobi and established that that raw material quality, job satisfaction, machine maintenance and high employee turnover significantly affect the overall productivity of a firm.

These studies have focused on different sectors of the economy other than the Faith Based/NGO sector which have different environments and different challenges to deal with. The researcher is not aware of any studies done on the Faith based organizations/NGOs. The study therefore intends to fill the gap by establishing the perceived factors in working environment that affect productivity of employees within Redeemed Integrated Development Agency (RIDA).

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1.3 Research objective

To establish the Perceived Factors that affect productivity of employees within Redeemed Integrated Development Agency.

1.4 Value of study

The assumptions underpinning the practice of Human Resource Management are that people (employees) are the organization’s key resource, and organizational performance largely depends on their productivity. If, therefore, an appropriate range of Human Resource policies and processes are developed such that they are tailored to improve working environment of firms, Human Resource will make a substantial impact on firm’s performance.

The results of this study will enable the organization’s policy makers evaluate the impact of working environment. The management will appreciate both the positive and the negative effects that working environment can have on the productivity of the organization’s employees hence her performance.

The study will also enable the researcher know and understand other reasons that are attributed to productivity of employees in organizations. The researcher will also know the measures that FBOs have adapted to improve their working environment.

The results of this study will help establish whether lack of Human Resource department and its practices can be attributed to lack of awareness about the role and importance of it in FBOs or lack of regard for the same.

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The study will give the donors and all other stakeholders’ confidence to continue ejecting finances and their efforts respectively since their objectives will be realized once the staff feel motivated. The faithfuls will also feel encouraged to identify themselves with the programme including giving their resources more towards the implementation of the programme’s activities once they realize the performance is better.

It will also ascertain the reasons why, however RIDA management considers HRM department important, they have not established such department in their organization. The study will seek to determine whether those reasons can be overcome in one way or another in order to establish such a department.

Holding all other factors constant, the study will attest whether the top management of RIDA would appreciate and adapt a Human Resource Department.