Effect of Organizational Culture on Employee Performance: A Mediating Role of Employee Engagement in Malaysia Educational Sector

Document Type: Research Paper

Authors

1 Faculty of Business, Multimedia University, Melaka, Malaysia

2 School of Economics, University of Nottingham Malaysia, Jalan Broga, Semenyih Selangor Darul Ehsan Malaysia

Abstract

The aim of this research is to investigate the effect of organizational culture (OC) on employee engagement (EE) and employee performance (EP) among academic staff of Malaysian Private Universities (MPU). However, studies of such have been given less attention within the context of MPU. Therefore, this paper highlights the issue through a systematic review of previous literature on the subject matter. A questionnaire was used to collect data from the respondents while Partial Least Square-Structural Equation Modeling (PLS-SEM) was used to test the study hypotheses. The results revealed that OC has a significant effect on EP while EE partially mediates the relationship between OC and EP. This study encourages university management to initiate sound OC and at the same time invest in OC in order to actualize EE and achieve a sustainable EP. This research has made a significant contribution to the operationalization of OC, EE, and EP literature which help to develop model, theory, research and practice in the fields of job performance.

Keywords


Abdullahi, M.S. (2018). The Nexus between Leadership Style and Employee Performance in the Office of the Secretary to the State Government, Jigawa State, Nigeria. Asian People Journal, Vol. 1(1), pp.190-213.

Abdullahi, M.S., Ghazali, P.L., Awang, Z. and Mohd Tahir, I. (2015). The effect of finance, infrastructure and training on the performance of small and medium scale enterprises (SMEs) in Nigeria. International Journal of Business and Technopreneurship, Vol. 5(3), pp.421-452.

Abdullahi, M.S., Gwadabe, L.Z. and Ibrahim, B.M. (2018). Effect of Training and Development on Employee’s Productivity among Academic Staff of Kano State Polytechnic, Nigeria. Asian People Journal, Vol. 1(2), pp.264-286.

Abdullahi, M.S., Jakada, B.A. and Sa’ad, B. (2015). Assessing the Influence of Market Orientation and Entrepreneurial Orientation on Business Performance of Women Entrepreneurs in Nigeria. Journal of Technology Management and Technopreneurship (JTMT), Vol. 3(1), pp. 21-40.

Abdullahi, M.S., Raman, K. and Solarin, S.A. (2020). Talent management practices on employee performance among academic staff of Malaysian private universities: employee engagement as a mediator. Journal of Applied Research in Higher Education. In press.

Abdullahi, M.S., Shehu, U.R. and Usman, B.M. (2019). Impact of Information Communication Technology on Organizational Productivity in The Nigeria Banking Industry: Empirical Evidence. Noble International Journal of Business and Management Research, Vol. 3(1), pp.1-9.

Abubakar, L.S., Zainol, F.A. and Abdullahi, M.S. (2015). Lingering challenges of microfinance institutions (MFIS) and the way forward. International Journal of Academic Research in Economics and Management Sciences, Vol. 4(3), pp.31-37.

Albrecht, S.L. (2012). The influence of job, team and organizational level resources on employee well-being, engagement, commitment and extra-role performance: Test of a model. International Journal of Manpower, Vol. 33(7), pp. 840-853.

Anitha, J. (2014). Determinants of employee engagement and their impact on employee performance. International Journal of Productivity and Performance Management, Vol. 63(3), pp. 308-323.

Azeem, M.F. and Yasmine, R. (2015). Role of Human Resource Practices on Employee Performance: Mediating Role of Employee Engagement. Sci. Int. (Lahore), Vol. 27(6), pp. 6403-6412.

Babbie, E.R. (1973). Survey research methods. Belmont, CA: Wadsworth.

Bakker, A.B. and Demerouti, E. (2008). Towards a model of work engagement. Career development international, Vol. 13(3), pp. 209-223.

Barlett, J.E., Kotrlik, J.W. and Higgins, C.C. (2001). Organizational research: Determining appropriate sample size in survey research. Information technology, learning, and performance journal, Vol. 19(1), pp.  43-50.

Baron, R.M. and Kenny, D.A. (1986). The moderator–mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations. Journal of personality and social psychology, Vol. 51(6), 1173-1182.

Blau, P.M. (1964). Exchange and power in social life, New York, Transaction Publishers.

Blegur, S. and Amalia, L. (2019). Analysis the Impact of Organizational Culture and Motivation on Employee Performance with Employee Engagement as an Intervening Variable. International Advanced Research Journal in Science, Engineering and Technology, Vol. 6(3), pp. 9-16.

Burns, T. (1973). A Structural Theory of Social Exchange. Acta Sociologica, Vol. 16(3), pp. 188–208.

Chin, W. W. (1998). The partial least squares approach to structural equation modeling. Mahwah, New Jersey.

Cropanzano, R. and Mitchell, M.S. (2005). Social exchange theory: An interdisciplinary review’, Journal of management. Vol. 31(6), pp. 874-900.

Deal, T.E. and Kennedy, A.A. (1982). Corporate cultures: The rites and rituals of organizational life. Reading/Т. Deal, A. Kennedy–Mass: Addison-Wesley, Vol. 2, pp.98-103.

Denison, D.R., Janovics, J., Young, J. and Cho, H.J. (2006). Diagnosing organizational cultures: Validating a model and method. Documento de trabajo. Denison Consulting Group.

Dobre, O.I. (2013). Employee motivation and organizational performance. Review of applied socio-economic research, Vol. 5(1), pp. 53-60.

Fidyah, D.N. and Setiawati, T. (2020). Influence of organizational culture and employee engagement on employee performance: job satisfaction as intervening variable. Review of Integrative Business and Economics Research, Vol. 9(4), pp. 64-81.

Fithriana, N. and Adi, A.N. (2017). Dominant Effect between Compensation, Leadership and Organizational Culture on Employee Performance Improvement. Jurnal Aplikasi Manajemen, Vol. 15(4), pp. 670-676.

Fornell, C. and Larcker, D.F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, Vol. 18(1), pp. 39-50.

Ganyang, G.M.T. (2019). The Impact of Organization culture and Work Environment on Employee Engagement and its Implication on Employee Performance of the Automotive Industry in Jakarta, Indonesia. Archives of Business Research, Vol. 7(9), pp. 64-70.

Hair, J.F. Jr, Hult, G.T.M., Ringle, C. and Sarstedt, M. (2013). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM), Sage Publications, Thousand Oaks,CA.

Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W.C. (2010). Multivariate Data. 7th ed., Prentice Hall, NJ.

Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E. and Tatham, R. (2006). Multivariate data analysis. Upper saddle River.

Hair, J.F., Hult, G.T.M., Ringle, C. and Sarstedt, M. (2016). A primer on partial least squares structural equation modeling (PLS-SEM): Sage Publications.

Hair, J.F., Ringle, C.M. and Sarstedt, M.  (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, Vol. 19(2), pp.139-152.

Hair, J.F., Sarstedt, M., Pieper, T.M. and Ringle, C.M. (2012). The use of partial least squares structural equation modeling in strategic management research: a review of past practices and recommendations for future applications. Long range planning, Vol. 45(5-6), pp.320-340.

Haque, A.B., Al Mahmud, M.A. and Hossain, A. (2019). Influence of Compensation and Organizational Culture on Employee Performance: A Study on IT Firms of Dhaka, Bangladesh. International Journal of Human Resource Studies, Vol. 9(3), pp. 101-115.

Hendrato, M.L. and Subyantoro, A. (2021). The Effect of Organizational Culture and Information Technology on Employee Performance with Employee Satisfaction as a Mediator in The Electronic Court System (E-Court) in District Court of Sleman, Yogyakarta. In 4th International Conference on Sustainable Innovation-Accounting and Management (ICoSIAMS), Atlantis Press, pp. 242-246.

Homans, G.C. (1958). Social behaviour as exchange. American journal of sociology, Vol. 63(6), pp. 597-606.

Imam, A., Abbasi, A.S., Muneer, S. and Qadri, M.M. (2013). Organizational culture and performance of higher educational institutions: The mediating role of individual readiness for change. European Journal of Business and Management, Vol. 5(20), pp. 23-34.

Johanson, G.A. and Brooks, G.P. (2010). Initial scale development: sample size for pilot studies. Educational and psychological measurement, Vol. 70(3), pp. 394-400.

Kawiana, I.G.P., Dewi, L.K.C., Martini, L.K.B. and Suardana, I.B.R. (2018). The influence of organizational culture, employee satisfaction, personality, and organizational commitment towards employee performance. International research journal of management, IT and social sciences, Vol. 5(3), pp. 35-45.

Krejcie, R.V. and Morgan, D.W. (1970). Determining sample size for research activities. Educational and psychological measurement, Vol. 30(3), pp. 607-610.

Lambe, C.J., Wittmann, C.M. and Spekman, R.E. (2001). Social Exchange Theory and Research on Business-to-Business Relational Exchange. Journal of Business-to-Business Marketing, Vol. 8(3), pp. 1–36.

Lau, C.J.I., Rahmat Aidil, D. and Mohd Zainal Munshid, H. (2020). Impact of organizational culture on employees’ performance: A study in multinational corporations in Sarawak. International Journal of Business and Technopreneurship Vol. 10(2), pp. 133-152.

Lindner, J.R. and Wingenbach, G.J. (2002). Communicating the handling of nonresponse error in Journal of Extension Research in Brief articles. Journal of Extension, Vol. 40(6), pp. 1-5.

Linnenluecke, M.K. and Griffiths, A. (2010). Corporate sustainability and organizational culture. Journal of world business, Vol. 45(4), pp. 357-366.

Maisoni, H., Yasri, Y. and Abror, A. (2019). Effect of Organizational Culture, Leadership and Compensation on Employee Engagement in Coca-cola Amatil Indonesia Central Sumatra. In 2nd Padang International Conference on Education, Economics, Business and Accounting (PICEEBA-2), Atlantis Press.

Malam, S.S., Daji, L.B.D. and Ladan, A.A. (2019). The Relationship between Organizational Culture and Employee Performance in Nigerian Tertiary Institutions: A Proposed Theoretical Framework. Asian Journal of Multidisciplinary Studies, Vol. 7 No. 7, pp. 12-17.

Maryati, T., Astuti, R.J. and Udin, U. (2019). The effect of spiritual leadership and organizational culture on employee performance: The mediating role of job satisfaction. International Journal of Innovation, Creativity and Change, Vol. 9(3), pp. 130-143.

May, D.R., Gilson, R.L. and Harter, L.M. (2004). The psychological conditions of meaningfulness, safety and availability and the engagement of the human spirit at work. Journal of occupational and organizational psychology, Vol. 77(1), pp. 11-37.

Mensah, J.K. (2015). A coalesced framework” of talent management and employee performance: For further research and practice. International Journal of Productivity and Performance Management, Vol. 64(4), pp. 544-566.

Ministry of Higher Education (2019). http://jpt.mohe.gov.my/index.php/ipts/institusi-pendidikan-tinggi-swasta/senarai-daftar-dan-statistik-ipts.

Mkamburi, M. and Kamaara, D.M. (2017). Influence of Talent Management on Employee Performance at the United Nations: A Case of World Food Programme. The Strategic Journal of Business and Change Management, Vol. 2(3), pp. 28-48.

Mohamed, A.I. and Abukar, A.A.S. (2013). The Impact of Organizational Culture on Employees Performance of Mogadishu Universities. Academic Research International, Vol. 4(6), pp. 382-391.

Mohammed, S.A. and Munirah, F.K. (2018) ‘The Effect of Advertisement and Brand Image on Consumer Buying Behaviour in Nigeria’, International Journal of Business and Technopreneurship, Vol. 8(2), pp.217‐226.

Mohd, N.T., Saludin, M.N. and Hanafi, W.N.W. (2018). The Effects of Human Resources Management (HRM) Practices on Employee Performance with the Mediating Role of Employee Engagement. Selangor Business Review, Vol. 3(1), pp.46-60.

Mossholder, K.W., Settoon, R.P. and Henagan, S.C. (2005). A relational perspective on turnover: Examining structural, attitudinal, and behavioral predictors. Academy of Management Journal, Vol. 48(4), pp.607-618.

Muliaty, M., Basri, M. and Jasruddin, J. (2017). Effects of Organizational Transformation and Culture on Employees Performance. Journal of Economic & Management Perspectives, Vol. 11(3), pp. 1287-1292.

Natalia, C., Utamil, T.S. and Prasetyaningtyas, S.W. (2020). The Effect of Job Rotation, Job Characteristics and Organizational Culture on Employee Performance in Millennial Generations in Jakarta and Surroundings Area. Psychology and Education Journal, Vol. 57(9), pp. 341-352.

Nuhu, M.S., Salisu, F.B., Abubakar, S.L. and Abdullahi, M.S. (2018) ‘Effects of Training on Job Satisfaction among Academic Staff of Bayero University, Kano Nigeria’, Noble International Journal of Social Sciences Research, Vol. 3(11), pp.90-96.

Nusari, M., Al Falasi, M., Alrajawy, I., Khalifa, G. S. and Isaac, O. (2018). The Impact of Project Management Assets and Organizational Culture on Employee Performance. International Journal of Management and Human Science (IJMHS), Vol. 2(3), pp. 15-26.

Olawuyi, O. S. (2017). Organizational Culture as Factor Affecting Employee Performance and increased Productivity in Tourism Organizations (Agodi Gardens and University of Ibadan’s Zoological Garden). Afro Asian Journal of Social Sciences, Vol. 8(2), pp. 1-18.

Pallant, J. (2010). SPSS Survival Manual: A Step by Step Guide to Data Analysis Using SPSS. 4th ed., Open University Press, New York, NY.

Podsakoff, P.M. and Organ, D.W. (1986). Self-reports in organizational research: problems and prospects. Journal of Management, Vol. 12(4), pp. 531-544.

Podsakoff, P.M., MacKenzie, S.B., Lee, J.Y. and Podsakoff, N.P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, Vol. 88(5), pp. 879-903.

Pradhan, R.K. and Jena, L.K. (2017). Employee performance at workplace: Conceptual model and empirical validation. Business Perspectives and Research, Vol. 5(1), pp. 69-85.

Priyadharsan, S. and Nithiya, P. (2020). Association between the Organizational Culture and Employees‟ Performance. International Journal of Research and Innovation in Social Science, Vol. 4(8), pp. 692-696.

Purnomo, B.R., Eliyana, A. and Pramesti, E.D. (2020). The Effect of Leadership Style, Organizational Culture and Job Satisfaction on Employee Performance with Organizational Commitment as the Intervening Variable. Systematic Reviews in Pharmacy, Vol. 11(10), pp. 446-458.

Puspita, N., Nugroho, N. and Banun, A. (2020). The Influence of Organizational Culture and Work Engagement Over Employee Performance Mediated by Employee Loyalty. Journal of Multidisciplinary Academic, Vol. 4(5), pp. 289-294.

Ramly, M. (2018). The Effect of Organization Culture, Knowledge Sharing and Employee Engagement on Employee Work Innovation. International Journal of Scientific Research and Management, Vol. 6(1), pp. 57-68.

Rucker, D.D., Preacher, K.J., Tormala, Z.L. and Petty, R.E. (2011). Mediation analysis in social psychology: Current practices and new recommendations. Social and Personality Psychology Compass, Vol. 5(6), pp. 359-371.

Saks, A.M. (2006). Antecedents and consequences of employee engagement. Journal of Managerial Psychology, Vol. 21 (7), pp. 600-619.

Salkind, N. (1997). Exploring Research (3rd Ed.). New Jersey: Upper Saddle River.

Sangadji, E.M. and Sopiah, S. (2013). The Effect of Organizational Culture on Lecturers’ Job Satisfaction and Performance: A Research in Muhammadiyah University throughout East Java. International Journal of Learning and Development, Vol. 3(3), pp. 1-18.

Santoso, T.B. and Soehari, T.D. (2020). The influence of organizational culture, work satisfaction and generation Y characteristics of employee performance (Case Study at DKI Jakarta Regional Office BPJS Employment). Dinasti International Journal of Education Management and Social Science, Vol. 1(4), pp. 454-467.

Santoso, W.E. and Moeins, A. (2019). The Effect of Organizational Culture, Motivation and Training on Employee Performance at the Regional Development Planning Board of West Java Province. Dinasti International Journal of Management Science, Vol. 1(1), 37-56.

Saprudin, S., Rosyaty, T. and Syukron, A. (2019). Relationship between Organizational Culture and Locus of Control with Bogor Regency Employee Performance. International Review of Management and Marketing, Vol. 9(4), 143-148.

Sarwar, A., Ketavan, C. and Butt, N.S. (2015). Impact of eLearning Perception and eLearning Advantages on eLearning for Stress Management (Mediating Role of eLearning for Corporate Training). Pakistan Journal of Statistics and Operation Research, Vol. 11(2), 241-258.

Schaufeli, W.B., Salanova, M., González-Romá, V. and Bakker, A.B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. Journal of Happiness studies, Vol. 3(1), pp. 71-92.

Sekaran, U. (2003). Research methods for business: A skill building approach, (4th ed.), New York: John Wiley & Sons, Inc.

Shah, S.M.A., Memon, M.S. and Laghari, M.K. (2011). The impact of organizational culture on the employees’ job satisfaction: a study of faculty members of public sector universities of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, Vol. 3(8), pp. 847-859.

Shahzad, F. (2014). Impact of organizational culture on employees’ job performance: An empirical study of software houses in Pakistan. International Journal of Commerce and Management, Vol. 24(3), pp. 219-227.

Shahzad, F., Iqbal, Z. and Gulzar, M. (2013). Impact of Organizational Culture on Employees Job Performance: An Empirical Study of Software Houses in Pakistan. Journal of Business Studies Quarterly, Vol. 5(2), pp. 56-64.

Soomro, B.A. and Shah, N. (2019). Determining the impact of entrepreneurial orientation and organizational culture on job satisfaction, organizational commitment, and employee’s performance.  South Asian Journal of Business Studies, Vol. 8(3), pp. 266-282.

Stephen, E.N. and Stephen, E.A. (2016). Organizational Culture and Its Impact on Employee Performance and Job Satisfaction: A Case Study of Niger Delta University, Amassoma. Higher Education of Social Science, Vol. 11(5), pp. 36-45.

Stewart, G.L. and Carson, K.P. (1997). Moving beyond the mechanistic model: An alternative approach to staffing for contemporary organizations. Human Resource Management Review, Vol. 7(2), pp. 157-184.

Straub, D. (1989). Validating instruments in MIS research. MIS Quarterly, Vol. 13(2), pp. 147-169.

Suharti, L. and Suliyanto, D. (2012). The effects of organizational culture and leadership style toward employee engagement and their impacts toward employee loyalty. World Review of Business Research, Vol. 2(5), pp. 128-139.

Syauta, J.H., Troena, E.A. and Margono Setiawan, S. (2012). The influence of organizational culture, organizational commitment to job satisfaction and employee performance (study at municipal waterworks of Jayapura, Papua Indonesia). International Journal of Business and Management Invention, Vol. 1(1), pp. 69-76.

Tampubolon, H. (2017). The relationship between employee engagement, job motivation, and job satisfaction towards the employee performance. Corporate Ownership and Control, Vol. 13(2), pp. 473-477.

Tannady, H., Tannady, H. and Zami, A. (2019). The Effect of Organizational Culture and Employee Engagement on Job Performance of Healthcare Industry in Province of Jakarta, Indonesia. Calitatea, Vol. 20(169), pp. 18-22.

Tansky, J.W. and Cohen, D.J. (2001). The relationship between organizational support, employee development, and organizational commitment: An empirical study. Human Resource Development Quarterly, Vol. 12(3), pp. 285-300.

Taormina, R.J. (2009). Organizational socialization: the missing link between employee needs and organizational culture. Journal of Managerial Psychology, Vol. 24(7), pp. 650-676.

Thibaut, J.W., and Kelley, H.H. (1959). The Social Psychology of groups, New York: John Wiley and Sons Inc.

Wambugu, L. W. (2014). Effects of Organizational Culture on Employee Performance (Case Study of Wartsila-Kipevu Ii Power Plant). European Journal of Business and Management, Vol. 6(32), pp. 80-92.

Weerarathna, R.S. and Geeganage, I.A.P.H. (2014). The Relationship between Organisational Culture and Employee Performance: Case of Sri Lanka. International Journal of Scientific and Engineering Research, Vol. 5(8), pp. 985-90.

Wei, L.Q., Liu, J. and Herndon, N.C. (2011). SHRM and product innovation: Testing the moderating effects of organizational culture and structure in Chinese firms. The International Journal of Human Resource Management, Vol. 22(1), pp. 19-33.

Widodo, D.S. (2017). The effect of compensation, leadership and organizational culture through work motivation on employee performance’, Jurnal Manajemen Dan Kewirausahaan, Vol. 5(2), pp. 1-7.

Zahra, P.F., Kee, D.M.H., Aqilah, N., Ng, X.Y., Lin, J.Y., Vashishth, K. and Quttainah, M.A. (2020). How does Organizational Culture Affect Proton’s Employee Performance?. Asia Pacific Journal of Management and Education, Vol. 3(2) pp. 45-57.

Zhao, X., Lynch, J.G. and Chen, Q. (2010). Reconsidering Baron and Kenny: Myths and truths about mediation analysis. Journal of consumer research, Vol. 37(2), pp. 197-206.