THE INFLUENCE OF WORK ENVIRONMENT ON EMPLOYEE PRODUCTIVITY: A CASE STUDY AT P.T. IALK UMPC
By
Alex Andreas, S.T.
2-3212-002
A Master’s Thesis Submitted to the Faculty of BUSINESS ADMINISTRATION AND HUMANITIES
In Partial Fulfillment of the Requirements for the
MASTER’S DEGREE In
BUSINESS ADMINISTRATION Major in Engineering
SWISS GERMAN UNIVERSITY EduTown BSD City
Tangerang 15339 INDONESIA
Revision after the Thesis Defense on 19 July 2014
Alex Andreas STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Alex Andreas
_____________________________________________
Student Date
Approved by:
Dr. rer. nat. Linus Pasasa
_____________________________________________
Thesis Advisor Date
Dr. Dra. Ita Mariza, M.M.
_____________________________________________
Thesis Co-Advisor Date
Prof. Eric J. Nasution, M.B.A., M.A., Ph. D.
_____________________________________________
Dean Date
Alex Andreas ABSTRACT
THE INFLUENCE OF WORK ENVIRONMENT ON EMPLOYEE PRODUCTIVITY: A CASE STUDY AT P.T. IALK UMPC
By
Alex Andreas, S.T.
Dr. rer. nat. Linus Pasasa, Advisor Dr. Dra. Ita Mariza, M.M., Co-Advisor
SWISS GERMAN UNIVERSITY
Business organizations concerns with employee productivity. This kind of productivity is the main source of profitability and sustainability of business. This research will study the influence of employee work environment factors in term of physical work environment and behavior work environment on their productivity.
When the influence of those factors on employee productivity can be understood, the management can make improvements in providing suitable work environment for the employees. Furniture, noise, temperature, lighting, spatial arrangement, performance feedback, supervisor support and job aids have been chosen to be studied due to time limitation of the study. Data were collected from employees of P.T. IALK UMPC in the form of questionnaires which are administered carefully to obtain unbiased data.
The data was analyzed using SPSS, AMOS Structural Equation Model (SEM), and descriptive analysis to see the features of data collected and their relationship towards employee productivity.
Findings of study have shown that work environment has significant influence on employee productivity. Both physical work environment and behavioral work environment influence employee productivity, but the behavioral work environment has greater influence on employee productivity than physical work environment. The company must formulate a strategy which concerns on work environment to ensure high productivity of its employees.
Keywords: Employee productivity, work environment, physical work environment, behavioral work environment.
Alex Andreas
© Copyright 2014 by Alex Andreas All rights reserved
Alex Andreas DEDICATION
I dedicate this works for my family who always supports fully:
my wife Joelianingsih, and our beloved children: Heni and Satria.
Alex Andreas ACKNOWLEDGEMENTS
It is my pleasure to thank my advisor, Dr. rer. nat. Linus Pasasa, and my co-advisor, Dr. Dra. Ita Mariza, M.M. who made this thesis complete with their support, commitment, encouragement and supervision from the research proposal to its conclusion. Their patience and kindness will always be highly appreciated. I have enjoyed working with them and appreciate the support and opportunities their provided.
I also extend my sincere gratitude to all the research study’s respondents for their valuable input and suggestions. Also, I thank the faculty and staff of the Business Administration and Humanities for preparing me to achieve my master’s degree and to succeed in future endeavors.
Special thanks to my mother; my wife: Joelianingsih; our children: Heni and Satria;
friends; colleagues; and God for their continuous support and love.
Alex Andreas TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR ... 2
ABSTRACT……….……..3
DEDICATION ... 5
ACKNOWLEDGEMENTS ... 6
TABLE OF CONTENTS ... 7
LIST OF FIGURES ... 10
LIST OF TABLES ... 11
CHAPTER 1 - INTRODUCTION ... 13
1.1 Background... 13
1.2 Research Objectives ... 21
1.3 Significance of the Research ... .22
1.4 Research Question…………..………..22
1.5 Hypothesis ... 22
1.6 The Scope and Limitation of Thesis ... 23
1.7 Thesis Structure ... 23
CHAPTER 2 – LITERATURE REVIEW ... 25
2.1 Work Environment... 25
2.1.1 Work Environment Definition………...…… ..25
2.1.2 The Importance of Work Environment……….……. ..28
2.2 Employee Productivity………..……...31
2.2.1 Employee Productivity Definition………..….31
2.2.2 Employee Productivity Measurement………..32
2.2.3 Work Environment Influence on Employee Productivity………..…..33
2.3 Previous Studies... 34
2.4 The Conceptual Framework ... ………36
CHAPTER 3 – RESEARCH METHODS ... 38
3.1 Flow of the Research... 38
3.2 Research Design ... 39
3.2.1 Purpose of Study ... 39
Alex Andreas
3.2.2 Extent of Researcher Interference……….………40
3.2.3 Study Setting ... 40
3.2.4 Unit of Analysis ... 41
3.2.5 Time Horizon ... 41
3.3 Research Questions and Hypothesis ... 41
3.4 Research Paradigm... 42
3.5 Research Instruments ... 43
3.6 Research Data ... 45
3.6.1 Type and Source of Data ... 45
3.6.2 Data Collection Method ... 46
3.7 Questionnaires Design and Scale……… ..46
3.8 Survey Sampling Method………. ... ..47
3.9 Data Analysis ... 48
3.9.1 Validity and Reliability Test ... 48
3.9.2 Coefficient of Correlation ... 49
3.9.3 The Criteria to Reject or Accept the Hypothesis ... 50
3.10 Structural Equation Modeling ... 50
3.10.1Path Diagram ... 51
3.10.2Model Measurement ... 52
CHAPTER 4 – RESULTS AND DISCUSSIONS ... 53
4.1 Introduction ... 53
4.2 Company Background ... 53
4.3 The Validity and Reliability Test………...…. ..54
4.3.1 Validity Test (Pre-Test)... 55
4.3.2 Reliability Test (Pre-Test) on 30 Respondents ... 60
4.3.3 Reliability and Validity Test Results for Questionnaire Post-test ... 61
4.4 Respondent’s Demographic Information ... 62
4.4.1 Department ... 62
4.4.2 Gender ... 62
4.4.3 Age (Year) ... 63
4.4.4 Education Background……… .... 63
4.4.5 Year of Working in PT. IALK UMPC………...… ..64
Alex Andreas
4.6 Structural Equation Modelling Analysis……… ..65
4.6.1 Path Diagram………...……..… ..65
4.6.2 Goodness of Fit (GOF)……… .... .66
4.6.3 Path Diagram Interpretation……….……….. ..68
4.7 Hypothesis Analysis ... 69
4.7.1 Hypothesis #1……….. .... 69
4.7.2 Hypothesis #2 ... 74
4.7.3 Hypothesis #3 ... 77
4.7.4 Hypothesis #4 ... 77
4.7.5 Hypothesis #5 ... 80
CHAPTER 5 – CONCLUSIONS AND RECCOMENDATIONS ... 82
5.1 Conclusions ... 82
5.1.1 Descriptive Analysis Conclusions ... 82
5.1.2 Inductive Analysis Conclusions ... 82
5.2 Recommendations ... 83
5.2.1 Recommendations for P.T. IALK UMPC ... 84
5.2.2 Academic Recommendations ... 85
GLOSSARY ... 86
REFERENCES……… .... 89
APPENDICES………..………94
CURRICULUM VITAE ... 111
Alex Andreas LIST OF FIGURES
Page
Figure 1.1 – The Basic Functions of Business Organization………...13
Figure 1.2 – The Operation Function………..………….15
Figure 1.3 – Monthly Employee Productivity………..20
Figure 2.1 – Workplace Factors Affecting Employee Performance…………...…….29
Figure 2.2 – The Conceptual Framework……….…37
Figure 3.1 – The Seven-step Process in the hypothetico-deductive method………. ..38
Figure 3.2 – The Research Paradigm………. ..43
Figure 3.3 – Path Diagram of a Latent Variable Mediation Model………... ..52
Figure 4.1 – Department of Respondents……….. ..62
Figure 4.2 – Gender of Respondents………....63
Figure 4.3 – Age of Respondents………... ..63
Figure 4.4 – Education Background of Respondents………...64
Figure 4.5 – Work experience of Respondents……….. ..64
Figure 4.6 – Path Diagram in AMOS Model………. ..65
Figure 4.7 – Path Diagram in AMOS Output………... 69
Alex Andreas LIST OF TABLES
Page
Table 1.1 – The Scope of Workplace Environmental Psychology……… ... 16
Table 1.2 – Monthly Employee Productivity………. ... 20
Table 3.1 – Research Steps in Gantt Chart ………..42
Table 3.2 – Research Instruments……… 44
Table 4.1 – Questionnaires distribution of Pre-Test and Post-Test………..53
Table 4.2 – Validity Test Result of the Temperature indicators……….... ... 55
Table 4.3 – Validity Test Result of the Noise indicators………... ... 56
Table 4.4 – Validity Test Result of the Lighting indicators………... ... 56
Table 4.5 – Validity Test Result of the Furniture indicators………... 57
Table 4.6 – Validity Test Result of the Spatial Arrangement indicators…….... ... 57
Table 4.7 – Validity Test Result of the Performance Feedback indicators…..…. ... 58
Table 4.8 – Validity Test Result of the Job Aids indicators………... .... 58
Table 4.9 – Validity Test Result of the Supervisor Support indicators……….. ... 59
Table 4.10 – Validity Test Result of the Employee Productivity indicators….. ... 59
Table 4.11 – Validity Test Result of the Summation of all items……….. ... 60
Table 4.12 – Reliability test (Pre-Test) for 30 Respondents……….. ... 60
Table 4.13 – CMIN Table……….. . 66
Table 4.14 – RMR and GFI Table………... 67
Table 4.15 – Rules of thumb about standardized regression values (r)………. ... 68
Table 4.16 – Standardized regression coefficient of Physical Work Environment and Employee Productivity……… ... 70
Table 4.17 – Perception of Physical Work Environment by Department……. ... 71
Table 4.18 – Perception of Physical Work Environment by Years of Working…...72
Table 4.19 – Perception of Physical Work Environment by Age……… ... 73
Table 4.20 – Standardized regression coefficient of Behavioral Work environment and Employee Productivity………. ... 74
Table 4.21 – Perception of Behavioral Work Environment by Department……….... 75
Table 4.22 – Perception of Behavioral Work Environment by Years of Working………..………... .... 76
Table 4.23 – Perception of Behavioral Work Environment by Age………….. ... 77
Alex Andreas Table 4.24 – Standardized regression coefficient of
Employee Productivity factors………... 78 Table 4.25 – Standardized regression coefficient of
Physical Work Environment factors……… ... 79 Table 4.26 – Standardized regression coefficient of Behavioral
Work Environment factors……… ... 80
