Impact of Organisational, Personal and Interpersonal Factors on Employee Performance in Small and Medium Size Enterprises

Abstract

The purpose of this study is to examine the impact of organisational level factors (management support, dynamic environment and organisational culture), personal level factors (personal effectiveness, locus of control) and interpersonal level factors (transactional styles and conflict management styles) on employee performance. The study also examines the interrelation between organisational, personal and interpersonal factors.In this study, organisational, personal and interpersonal level factors are included in a single model using data from small- and medium-scale enterprises. The structural equation modelling is used to examine the proposed model describing the relationship between employee performance and three-level factors.The results of this study indicate that management support and personal effectiveness have the strongest impacts (direct and indirect) on employee performance, while locus of control and transactional styles directly affect job performance. Overall 29% (first-level analysis) and 38% (second-level analysis) of employee performance (EP) variance can be explained.The findings of this study have implications for practitioners, academicians and policy makers for effective decision making as organisations are facing intense competition for survival and sustenance in the turbulent business environments. The employee performance is considered one of the important factors and there is a need to identify the factors affecting the performance of employees.