450 Int. J. Business Performance Management, Vol. 19, No.

4, 2018

Factors influencing employee performance:

the role of human resource management practices
and work engagement

R. Krishnaveni and R. Monica*

Department of Management Studies,
PSG Institute of Management,
Coimbatore-641004, Tamilnadu, India
Email: krishnaveni@psgim.ac.in
Email: monica@psgim.ac.in
*Corresponding author

Abstract: This research explores and investigates the effect of robust human
resource management (HRM) practices namely empowerment, competence
development practices, rewards and recognition and work engagement on
employee performance. A comprehensive model has been developed by taking
into account the above mentioned constructs and has been validated in a
developing economy. Though there is research focusing on HRM practices,
work engagement and employee performance in a fragmented way, this
research examines and explores the relationship between these variables in a
cohesive way. The paucity in literature has prompted for this empirical study.
Data has been collected from 205 IT program managers and from 41 senior
managers using a structured questionnaire. Descriptive statistics and partial
least squares-structural equation modelling were implemented to find out the
factors that had the most impact on employee performance. Findings revealed
that HRM practices namely empowerment, competence development practice,
recognition and work engagement have emerged as prominent predictors of
employee performance. This research is distinctive in respect to the
comprehensive model that has been developed and validated.

Keywords: competence development practices; employee performance;

empowerment; recognition; rewards and work engagement.

Reference to this paper should be made as follows: Krishnaveni, R. and

Monica, R. (2018) ‘Factors influencing employee performance: the role of
human resource management practices and work engagement’, Int. J. Business
Performance Management, Vol. 19, No. 4, pp.450–475.

Biographical notes: R. Krishnaveni specialises in organisational behaviour,

human resource management, knowledge management, emotional intelligence
and capacity building. Her areas of research are in the different dimensions of
human resource practices in organisations and exploring the factors responsible
for developing human capital for effective performance. A recipient of many
awards, her publications have found places in renowned national and
international journals namely Performance Improvement, International
Business Management, European Journal of Social Sciences, Vikalpa and
International Journal of Innovation, and Management and Technology. She is
working as a Professor at the PSG Institute of Management. She has 30 years
of work experience in both industry and academia.

Copyright © 2018 Inderscience Enterprises Ltd.

 Factors influencing employee performance 451

R. Monica specialises in organisational behaviour and human resource

management. Her interest areas includes: employee engagement, human
resource development and organisational culture. She is a doctoral candidate at
the Anna University in Chennai, India. She has an excellent academic record
throughout her academic career. She has presented papers at many national and
international conferences and has attended various workshops on statistical
tools and techniques.

1 Introduction

Over the past few years, there has been substantial evidence that links HRM practices and
employee performance (Huselid, 1995). Effective organisations have employees who are
engaged in their jobs (Gruman and Saks, 2011) and thus contribute to organisational
effectiveness. Recent literature reveals that heavy investment in human capital,
implementation of HR practices (Pfeffer and Veiga, 1999; Ang et al., 2013) and having
engaged employees (Kahn 1990, 1992) will contribute to organisational success (Kahn,
1990; Saks, 2006; Anitha, 2014). Likewise, HRM practices are organisational efforts that
are aimed at performance improvement (Ang et al., 2013) and organisation development
which eventually enhances the organisation’s competitiveness and effectiveness.
Effective HR management practices are essential to enhance effectiveness in
organisations and to retain talented employees (Dessler, 1999). Managing the
performance of employees (Gruman and Saks, 2011) and how they deal with their human
capital form a fundamental part of any organisational strategy. Today where each
organisation has to meet its obligations; the performance of employees has a very critical
impact on the whole organisational achievement.
It is notable that there are studies (Wernerfelt, 1984; Carmeli and Tishler, 2004)
which propound the importance of tangible and intangible elements (see Hitt et al., 2001)
based on the resource-based view of the firm as substantial for performance. In which
tangible elements include facilities, raw materials, equipment; intangible elements
comprise of managerial capabilities, human capital, perceived organisational reputation,
internal auditing, labour relations, and organisational culture (Carmeli and Tishler, 2004).
Substantial effort has been devoted to enhancing the theoretical and practical implication
of RBV in the form of tangible and intangible assets to leverage the firm performance
(Wernerfelt, 1984; Barney, 2001). Though, it is imperative to consider the role of
tangible and intangible elements in the role of accentuating employee performance,
however examining this framework is beyond the scope of this study. Indicative studies
(Pfeffer, 1994; Huselid, 1995) that have studied the potential of human resources (HRs)
in the determination of firm performance reveal that employee empowerment, extensive
employee training, and compensation, are substantial to improve the performance of
organisations (Bowen and Ostroff, 2004; Combs et al., 2006). Furthermore Kahn (1990),
(1992) propounded three psychological conditions namely meaningfulness (sense of
return on investments of self in role performances) (May et al., 2004), safety (sense of
being able to show and employ self without fear of negative consequences to self-image,
status, or career) (May et al., 2004) and availability (sense of possessing the physical,
452 R. Krishnaveni and R. Monica

emotional, and psychological resources necessary for investing self in role performances)
(May et al., 2004) as necessary for an employee to exhibit himself fully in his
role performance. Hence, empowerment practices (meaningfulness), competence
development practices (availability), rewards and recognition (meaningfulness) have
been arrived at considering that these HRM practices would lever and reinforce a
program manager to perform better in is day-to-day organisational life. Therefore, this
current study focuses on examining the importance of robust HRM practices and engaged
employees because studies that comprehensively examine the identified variables are
sparse. This study strongly argues that robust HRM practices are quintessential for
employees to perform well and simultaneously they have to be fully engaged in their role
performances to exert their full potential in the role performances (Gruman and Saks,
2011) that they carry out in their day to day activities (Kahn, 1990, 1992; Cortez and
Lynch, 2015). In that context, variables like HRM practices, work engagement and
employee performances have been extensively researched and their prominence in the
organisation has been validated time and again over the years. Though there is abundant
research on these mentioned variables, there is paucity of research in cohesively
examining the impact of HRM practices and work engagement on employee
performance. This study attempts to bridge this gap by using a quantitative method to
empirically test the effect of HRM practices and work engagement on employee
performance. Likewise, employee performance can be accentuated by robust HRM
practices and having employees engaged in the workforce. Similarly, HRM practices are
expected to increase employee performance and in turn these employees will improve the
firm performance. Relationship between variables namely HRM practices, work
engagement and employee performance will be explored in this research paper. Mainly
because, there are studies which have examined the impact of HRM practices and work
engagement (Harter et al., 2002; Schaufeli et al., 2002) on employee performance.
However, it is notable that the studies have been done in different context and with a
different sample.
The key purpose of our study is to contribute to the understanding of the effects of
HRM practices and work engagement on employee performance. This study will be
exploring the impact of HRM practices namely empowerment, competence development
practices, rewards and recognition and work engagement ultimately leading to employee
performance. Studies which have been mentioned above have been done in the developed
countries. Till date, rarely has any research been conducted in a developing economy like
India. In this context, the present study fills this gap by providing substantiation between
HRM practices and work engagement on employee performance, by considering a
sample of IT program managers from India.
For a country like India, Information technology is playing an imperative role today
in raising and sustaining the national GDP and has transformed India’s image from a
slow moving bureaucratic economy to a land of innovation. India’s IT Services industry
was born in Mumbai in 1967 with the establishment of Tata Group in partnership with
Burroughs (SEZ: profit at any cost). India is now one of the biggest IT capitals of the
modern world and all the major players in the world IT sector are present in the country
(Kamdar, 2006). National Association of Software and Services Companies
(NASSCOM) (2015a) prediction says that the IT sector of India is expected to grow by
13% to 14% and it may reach 25 billion by the year 2020. According to NASSCOM
(2015b), Indian IT-BPM sector continues to be one of the largest employers in the
 Factors influencing employee performance 453

country directly employing nearly 3.5 million professionals, adding over 230,000
employees and has got the highest volume of diverse employable talent at the rate of
6.2 million. One of the most critical contributors to the genesis and development of this
industry is human capital (Sharma, 2014). Owing to such large developments and
availability of raw talent, it is critical for organisations to create and nurture employees as
people are the most important assets of a firm. Consequently the success of the IT sector
is eventually reflected in rising and sustaining the national GDP, this can be achieved
only when the employees are working their level best. On that account, from a
governance, practitioners and academicians perspective it is vital to investigate how
employee performance is influenced by HRM practices and work engagement for IT
program managers, as they play a remarkable role in deciding the success of an IT firm.
Therefore, this study offers interesting insights into the significant issues of an IT sector
from the perspective of a developing economy.

1.1 Rationale for the study

First, there have been studies which have examined the relationship of HRM practices
and work engagement on employee performance in a fragmented way, there is paucity of
studies that examines the relationship in a cohesive manner. Second, studies that
examined these variables have been done in a developed economy, whereas this study is
considering a sample of IT program managers in a developing economy. This lacuna in
the literature prompted for this empirical study. This highlights that the influence of
HRM practices, work engagement on employee performance too will vary across the
different economies and it is important to explore the significant relationship between
these variables. In this connection, one of the most prominent sectors that brought the
entire Indian economy into the limelight and has played a major role raising and
sustaining the national GDP is the Indian IT industry (Mittal and Dhar, 2015).
Considering the current employable talent and its future prediction, it is vital to have
robust HRM practices, and maintain an engaged workforce for attaining high levels of
employee performance which will consequently lead to firm performance. This current
study will examine the factors influencing the employee performance of program
managers mainly because; these are the people who are instrumental in deciding the
success factor of an IT firm and they are responsible for the program analysts, team
leaders working under them. From that perspective, it is an overarching need to have
these program managers perform well in their jobs and furthermore, to ascertain factors
that will lever their employee performance. The belief that individual employee
performance has implications for firm-level outcomes has been prevalent among
academics and practitioners for many years (Huselid, 1995; Becker and Gerhart, 1996;
Bowen and Ostroff, 2004; Combs et al., 2006). Interest in this area has recently
intensified, however, as scholars have begun to argue that, collectively, a firm’s
employees can also provide a unique source of competitive advantage that is difficult for
its competitors to replicate (Huselid, 1995). It is in this context, the current study has
identified robust HRM practices and work engagement to understand and explore the
influences they exert on employee performance of a program manager. Finally, the
findings of the study are instrumental for HRD professionals in designing a
comprehensive model for employee performance.
454 R. Krishnaveni and R. Monica

1.2 Objectives of the study

a To explore the existing level of various factors of employee performance as
perceived by IT program managers.
The level of factors here describe the rank associated to the factors identified namely
HRM practices (empowerment practices, competence development practices,
rewards and recognition practices) and work engagement. To identify the level of
factors, descriptive statistics was used to find the mean score of the different drivers
identified for the study. These drivers are measured on a Likert scale ranging from 1
to 5, higher score indicates that employees perceive those factors important for
employee performance and lower score implies least importance. In depth
explanation has been provided in the results Section 5.
b To examine the level of impact of different factors on employee performance of IT
program managers using path modelling technique.
In this objective, the level of impact is associated to examine the impact of the
independent variables namely HRM practices (empowerment practices, competence
development practices, rewards and recognition practices) and work engagement on
the dependent variable (employee performance) using path modelling technique.
Based on the significance of t-value and beta value the level of impact the
independent variables have on the dependent variables has been ascertained and
explained in the results Section 5.

2 Literature review, conceptual model and hypotheses

The overall conceptual model has been arrived at after a thorough literature review
presented in this paper. This study has identified the HRM practices (Huselid 1995;
Pfeffer and Veiga, 1999; Combs et al., 2006; Hur et al., 2015; Debusscher et al., 2017)
namely empowerment, competence development practices, rewards and recognition and
work engagement (Kahn, 1990; Anitha, 2014) as the independent variables and employee
performance as the dependent variable (Anitha, 2014; Nazir and Islam, 2017). From
Figure 1, the above mentioned linkages can be understood.

2.1 HRM practices

According to the strategic human resource management (HRM) standpoint, employee
performance and organisational performance are influenced by a set of robust HRM
practices (Huselid 1995; Huselid et al., 1997; Combs et al., 2006). Efficient HRM
practices encourage employees to execute their jobs efficiently (Huselid, 1995). HRM
practices are the systems and processes through which organisations, teams and
individual employees are able to recognise and gratify learning and development needs.
The impact of HRM policies and practices on firm performance is an important topic in
the fields of HRM. HRM practices influence employee skills through the acquisition and
development of a firm’s human capital (Huselid, 1995). HRM practices can play an
important role in helping employees achieve high-quality service. These practices, on one
hand, provide employees with the skills, resources, and discretion they need to meet
 Factors influencing employee performance 455

customer demands, making them able to deliver high-quality service (Liao and Chuang,
2004). Swanson (1995, p.207) defined HRD as “a process of developing and unleashing
human expertise through organisation development and personal training and
development for the purpose of improving performance”. This explains that HR practices
are seen as signals of the organisation’s intent toward employees. In addition, “HR
practices communicate messages constantly and in unintended ways, and messages can
be understood idiosyncratically, whereby two employees interpret the same practices
differently” [Bowen and Ostroff, (2004), p.206]. Large investments in HR practices infer
that they characterise a major source of competitive advantage to the firm.

Figure 1 Conceptual model of the research

This current study argues that the selected HR practices will affect employee
performance irrespective of the demography, nature of the job and societal and
supervisory actors (Tremblay et al., 1998). These practices signify procedures, plans and
systems that grant and recompense the functionality of employees, causing a significant
impact on the emotional and relational procedures in the organisation (Whitener, 2001).
Employee performance is concerned with approaches for selection and training,
opportunities for promotion and employee perception regarding the fairness of the
promotional process (Ambrose and Cropanzano, 2003), salary level, pay equity and other
wide-ranging job-oriented variables. However, there a number of HRM practices namely
performance appraisal, profit sharing, employment security, voice, and job descriptions
that influence employee performance. This paper will deal with HRM practices with
sub-constructs namely empowerment, competence development practices, rewards and
recognition. Furthermore, these practices have been taken in a cohesive rather than a
fragmented way because scholars propound that a set of combined HRM practices
effectively enhance organisational performance instead of individually, and
recommended to follow these practices (Geringer et al., 2002; Ali et al., 2017). In this
paper, HRM practices comprise of sub-constructs namely empowerment, competence
development practices, rewards and recognition. These factors were arrived at through an
456 R. Krishnaveni and R. Monica

extensive literature review to understand the influence they have on employee

performance.

2.1.1 Empowerment practices

Empowerment has been identified as one of the key HRM practices. Empowerment has
been identified as the means through which organisations allow employees to assume
several roles and responsibilities and thus exert a greater influence at work while
enjoying increased autonomy (Tremblay et al., 1998). For instance, Conger and Kanungo
(1988) explicitly have recognised empowerment as an antecedent of employee
performance in their definition which states that “a process of enhancing feelings of
self-efficacy among organisational members through the identification of conditions that
fosters powerlessness and through their removal by both formal organisational practices
and informal techniques providing efficacy information” (Seibert et al., 2004). The major
component of ‘formal organisational practices’ involves job design focused on increasing
individuals’ influence in workplace decision making (Liden et al., 2000). Furthermore, an
empowered employee feels more competent and is more productive in the job (Ozaralli,
2003). It is projected that empowered employees are subjected to a particular attitude, a
sense of self-worth and ability by performing a job with motivating potentials (Tierney
and Farmer, 2002).
In addition, employee autonomy (Deci and Ryan, 2000) and discretion when provided
to the employees stimulates greater influence at work; provides positive work attitudes
and subsequently stimulates more effort (Morgeson and Humphrey, 2006; Bakker et al.,
2005; Gardner et al., 2011; Debusscher et al., 2017) on the part of everyone involved.
Agarwal and Ferratt (1999) found that flourishing IT organisations are devoting
resources toward empowering IT professionals to take escalating accountability for their
work and for decision making. Hence,
H1a There is a positive significant relationship between empowerment practices and
employee performance.

2.1.2 Competence development practices

Studies have supported the view that human capital is the most significant organisational
asset since it is expected to provide the core facet of sustainable competitive benefit
(Barney, 2001). Today’s competitive circumstances coerce organisations to innovate to
maintain their competitive position but the people who are involved in augmenting their
organisations to accomplish their goals are being abandoned (Kanter, 2006).
Continuous professional development is considered to be pivotal for managerial
workers. In order to stay at the forefront of their professional fields they must be
constantly aware of developments in their exact disciplines and professions and they need
to contribute in activities that offer opportunities to enhance their own professional
development (Tremblay et al., 1998; Robertson and O’Malley, 2000; Gardner et al.,
2011; Chen and Kao, 2012; Hur et al., 2015). Competence development practices that
include, job rotation programs, mentoring, training express to the employees that the
organisation considers HRs as very valuable. Professional development is considered to
be essential for all managerial employees, to stay forefront at their professional fields and
they need to participate in activities that further their professional realm. In addition,
training is one of the most important investments because it enhances the knowledge,
 Factors influencing employee performance 457

skills, attitudes and behaviour of employees: the HR (Bulut and Culha, 2010). These
practices represent major sources of competitive advantage and performance (Gruman
and Saks, 2011) because organisations rely on the key managerial persons to identify and
resolve problems, to instigate changes in work methods, and to take accountability for
quality (Pfeffer and Veiga, 1999). Further implementing these practices will play a
crucial role in establishing a good relationship (Sabuncuoglu, 2007; Bulut and Culha,
2010) in the long run and in retaining productive IT professionals. Hence,
H1b There is a positive significant relationship between competence development
practices and employee performance.

2.1.3 Recognition and rewards

Recognition is generally defined as the assignment of personal non-monetary rewards
(i.e., interest, approval and appreciation) for individual efforts and work accomplishment
to identify and emphasise the desired behaviours displayed by an employee (Brun and
Dugas, 2008; Montani et al., 2017). First, for most IT professionals, a crucial part of their
motivation comes from the recognition they get from the management for an exceptional
job (Agarwal and Ferratt, 1999). In the current study, recognition practices refer to the
means by which an organisation perceptibly signals its approval of the accomplishments
of individuals. Examples of such practices are extended vacations, public word of praise
and organisational recognition events. Second, Agarwal and Ferratt (1999) found that
successful IT organisations are devoting resources toward empowering IT professionals
to take increasing responsibility for their work and for decision making. Non-financial
rewards such as praise and recognition (Montani et al., 2017) are acknowledged as
motivating tools for employees and are therefore leveraged by employers to increase
employee performance (Gardner et al., 2001; Zani et al., 2011). The recognition practices
can take the form of reduced working hours, subsidised meals or services, additional
holidays, and team events to improve employee motivation, encourage loyalty and
commitment to the organisation (Whitaker, 2010).
Rewards play a pivotal role in determining the major performance in job. Flynn
(1998) and Lincoln and Kalleberg (1990) in his work have argued that rewards and
recognition programs keep elevated spirits among employees, boosts up their morale and
create a linkage between performance and motivation of the employees. The essential
reason of recognition and reward program is to delineate a scheme to pay and
communicate it to the employees so that they can link their reward to their performance.
The rewards comprise of financial rewards, promotions, pay and incentives that satisfy
employees to some level. Freedman (1978) articulated that when efficient rewards and
recognition are implemented within an organisation, favourable working environment is
produced which motivates employees to do extremely well in their performance. Hence,
H1c There is a positive significant relationship between recognition practices and
employee performance.
H1d There is a positive significant relationship between rewards and employee
performance.
Hence, we posit that the HRM practices that enhance these four components are likely to
result in increased employee performance. Because once the employees perceive that the
organisations are investing in them via empowerment, competence development practices
458 R. Krishnaveni and R. Monica

rewards and recognition that will result in positive work attitude which will eventually be
reflected in their performances.

2.2 Employee performance

Since the concept of HRM emerged in the early 1980s, research has been developed in
investigating the relationship between HRM practices and organisational performance
(Chand and Katou, 2007). It is observed that HRM practices and/or HRM systems do not
lead directly to business performance, they rather influence firm resources, such as
human capital, or employee behaviours, and it is these resources and behaviours that
ultimately lead to performance. Employee performance is the financial or non-financial
outcome of the employee that has a direct link with the performance of the organisation
and its success. A number of studies show that an important way to enhance employee
performance is to focus on fostering work engagement (Mone and London, 2010; Anitha,
2014). Research (Fleming and Asplund, 2007; Rich et al., 2010; Macey and Schneider,
2008) also suggest that the presence of high levels of work engagement enhances job
performance, task performance, and organisational citizenship behaviour, productivity,
discretionary effort, affective commitment, continuance commitment, levels of
psychological climate, and customer service. This study intended to study the influence
work engagement has on employee performance.
Although the impact of HRM practices on employee performance has been
extensively studied, the added major contribution of work engagement has not been
empirically examined.

2.3 Work engagement and employee performance

In this extremely aggressive and swiftly changing business setting in addition to
recruiting the top talent, capturing the hearts and minds of employees (Fleming and
Asplund, 2007) remains a decisively significant issue facing the organisations striving to
achieve the highest levels of performance. Work engagement has captured the attention
of business practitioners, academicians and researchers alike, because it is considered an
optimal redefinition of the emerging individual-organisation relationship, which, while
augmenting individual loyalty and satisfaction, also contributes to the firm’s performance
(Schohat and Vigoda-Gadot, 2010). Literature posit that when employees are engaged
that reflects in their satisfaction, productivity and performance levels (Harter et al., 2002;
Bakker and Willem, 2004; Bakker and Demerouti, 2008). Engaged employees have
elevated levels of energy, dedication and are most sought after because of the
monumental impact they have at the individual, team and organisation levels. In the same
context, an engaged workforce is considered to be a keystone of sustaining competitive
advantage (Gruman and Saks, 2011). Schaufeli et al. (2002) went on define work
engagement as “a positive, fulfilling, work related state of mind that is characterised by
vigor, dedication, and absorption”. He insisted that engagement refers to a more
persistent and pervasive affective cognitive state than a momentary and specific state,
that is not focused on any particular object, individual, or behaviour. Schaufeli and
Bakker (2004, p.295) defined vigour as “high levels of energy and mental resilience
while working, the willingness to invest effort in one’s work, and persistence even in the
face of difficulties”. The second component dedication as “a sense of significance,
enthusiasm, inspiration, pride, and challenge”. Finally, absorption as “being fully
 Factors influencing employee performance 459

concentrated and happily engrossed in one’s work, whereby time passes quickly and one
has difficulties with detaching oneself from work” [Schaufeli and Bakker, (2004), p.295].
Further, engagement plays an influential role in deciding an employee performance
(Gruman and Saks, 2011) levels because engaged employees invest their physical,
emotional and cognitive energies in their role performances. Therefore, when an
employee is fully engaged in his work it is reflected in his individual performance
(Anitha, 2014; Nazir and Islam, 2017) and eventually has a positive impact on firm
performance. In addition, Rich et al. (2010) posited that work engagement provides a
more comprehensive explanation for job performance and also a better predictor of the
same.
Considering that the sample taken is program managers in IT industry, it becomes
quintessential that they have a sense of feeling empowered, ample scope for competence
development practices and satisfaction in the rewards and recognition domain and further
be engaged in their jobs to perform well in their jobs. Eventually, these managers are
responsible for employees who work under them. Only when they are satisfied in these
prime areas, this will be reflected in their performances and further leverage the firm
performance. Hence,
H2 There is a positive significant relationship between work engagement and employee
performance.
The impact of these different factors on employee performance will be examined by
using path modelling technique.

3 Methodology

Selecting the research population

Researchers (Agarwal and Ferratt, 1999; Kanungo et al., 2001; Bhatnagar, 2007;
Upadhyay et al., 2016; Tiwari and Lenka, 2016; Subash and Kundu, 2017) have
recognised the importance and the need to study the growth of the Indian IT sector. One
of the critical factors that decide the success factor of any firm is the human capital
(Huselid, 1995; Huselid et al., 1997). This study has identified program managers as they
play a fundamental role in the IT set up where team leaders and program analysts are
accountable to them. It is quintessential to have the program managers working to the
fullest potential. Hence, this study attempts to examine the needs and expectations of a
program manager for carrying out his performance via the HRM practices and work
engagement, therefore the study selected program managers as the sample. Furthermore,
there is a paucity of studies which examine the Indian IT sector even though its
prevalence and significance to the global economy is accelerating (IBEF, 2017). Hence,
this study attempts to examine a part of the critical mass in an IT setup by ascertaining
the factors influencing their performance by investigating the role of HRM practices and
work engagement. Furthermore, the employee performance was supervisor-rated. The
organisational setup was such that five program managers were designated under one
senior manager. Consequently, the senior managers used the 16 item scale to rate the
program manager performance.
460 R. Krishnaveni and R. Monica

3.1 Sample
Data to test the hypotheses was obtained through a survey of employees in five different
IT organisations. Initially seven IT organisations were approached the HR department
was contacted and the purpose, objectives, implications of the study was explained. Out
of which five IT organisations accepted to participate in the study and permitted for data
collection. The questionnaires were distributed between 300 IT program managers and
their immediate 60 senior managers. Out of which 205 complete questionnaires (response
rate of 68%) were returned to the researchers. Overall each senior manager rated five
program managers (total of 41 senior managers). The total usable sample size for the
study was 205 employees (IT program managers). The program managers took around
eight to ten minutes to complete the instrument and returned to the researcher.
Six variables namely empowerment, competence development practices, rewards,
recognition, work engagement and employee performance have been considered for the
study. In which employee performance is the dependent variable, whereas empowerment,
competence development practices, rewards, recognition and work engagement have
been identified as the independent variable. It has been assumed that the identified
independent variables will influence the dependent variable to a certain extent.

3.2 Data collection and measures

Data was collected from 205 IT executives from five IT organisations via questionnaire.
To guarantee anonymity, the questionnaire did not include individual data. The
questionnaire was easy to follow and logical for the program managers to rate the
responses.

3.2.1 Measures
In this study, we used previously published scales to collect data related for the study.
Participants indicated their response on a five-point Likert-type scale with anchors (1)
strongly disagree to (5) strongly agree.
a Work engagement
This study has adapted Schaufeli et al. (2002) concept of work engagement as a lever
for employee performance. Hence, it was measured with 17-item Utrecht work
engagement scale (UWES) developed by Schaufeli et al. (2002). The overall
reliability is. D = .91.
b HRM practices
HRM practices which cover empowerment, competence development practices,
rewards and recognition were measured using a scale developed by Tremblay et al.
(1998). Internal consistency reliability estimates for each subscale was as follows:
CDP D = .85 (six items), rewards D = .78 (five items), recognition D = .91 (six
items). The overall reliability is. D = .92 (17 items).
c Employee performance
EP was measured using Lynch et al. (1999) 16-item questionnaire employee
performance scale. The overall reliability is D = .91. The instrument was validated
 Factors influencing employee performance 461

using a pilot data from 65 respondents. Since the overall Cronbach alpha value
(D = 891) is significant, the instrument was used for the main study.

4 Data analysis

4.1 Sample characteristics

Since the study considers a sample of IT program managers, they fall under this span for
a period of five to six years and are accountable for program analysts under them.
Therefore the mean age of the executives is from 34 to 40, with an experience of eight to
ten years. In which 20.1% had completed graduation, 69.8% had completed post
graduation, and the rest 10.1% finished professional courses (N = 205).
The current study includes HRM practices namely empowerment, competence
development practices, rewards and recognition and work engagement ultimately leading
to higher performance.

5 Results and discussions

SPSS software has been used to examine the analysis of descriptive statistics and partial
least squares (PLS) have been implemented to examine path validity and structural
equation model.

5.1 Level of interest in various drivers

Descriptive statistics was used to find the mean score of the different drivers identified
for the study. In Figure 2, the level of the drivers of employee performance has been
depicted. These drivers are measured on a Likert scale ranging from 1 to 5, higher score
indicates that employees perceive those factors important for employee performance and
lower score implies least importance. From Figure 2, it can be understood that the highest
mean is scored by recognition practices (M = 3.86). This articulates that recognition is a
significant tool for enhancing the employee performance of IT executives. Hence, this
finding lends support to H1c.
“Recognition is so easy to do and so inexpensive to distribute that there is no
excuse for not doing it.” (Kanter, 2006) author and management consultant
The significance of recognising individuals can be clearly understood, as they are
detrimental for organisational success. The study’s findings are congruent with studies
(Stajkovic and Luthans, 1997) which posit that social rewards (recognition and attention)
have had as big an impact on employee performance as did monetary rewards.
Further followed by work engagement (M = 3.78), which posit that employees have
to be engaged in their job to exhibit high levels of employee performance (Harter et al.,
2002; Schohat and Vigoda-Gadot, 2010; Gruman and Saks, 2011; Anitha, 2014). Mainly
because only when employees are fully involved in their vigour, absorption and
dedication components they can contribute well to the day to day performances.
Therefore, this mean value lends support to H2. Thirdly, competence development
practices has emerged with a close mean value of (M = 3.76) which propound that
462 R. Krishnaveni and R. Monica

employees who perceive that the organisation is willing to invest in them will show good
employee performance. Thus, this finding lends support to H1b. Fourthly empowerment
(M = 3.75) which states that autonomy and freedom when provided to carry out their jobs
that will result in good employee performance. So, this mean value lends support to H1a.
It can be understood that rewards (M = 3.30) has surfaced with a lower mean which states
that employees are not satisfied with the reward components like salary being fairly
allocated and satisfaction about pay increases. Thus, the mean value lends support to
H1d.

Figure 2 Level of drivers of employee performance

5.2 Impact of various drivers of employee performance

In this portion, the combined effect of the identified drivers on employee performance is
determined through PLS – structural equation modelling (SEM). SEM is implemented to
ascertain the causal relationship between the variables as both measurement and
structural model are tested simultaneously. It is a multivariate technique merging the
facets of multiple regression and factor analysis to estimate a series of interrelated
dependence relationships simultaneously. In this study PLS one of the SEM techniques is
used to examine the importance of the relationship between the drivers of performance
and employee performance. All relationships in the path diagram can be approximated to
calculate the effects between dependent and independent variables even if interrelated
(Hair et al., 2006). The path diagram constructed using visual PLS is estimated using
bootstrapping technique and calculated using the fit indices. Before performing SEM, all
the variables were checked for normality. However, one way to handle the non-normal
data is to use the bootstrap-procedure. Bootstrapping serves as a re-sampling procedure
by which the original sample is considered to represent the population. Multiple sub
samples of the same size as the parent sample are then drawn randomly, with
 Factors influencing employee performance 463

replacement, from this population and provide the data for empirical investigation of the
variability of parameter estimates and indexes of fit (Byrne, 2001). The bootstrap result
approximates the normality of data (Wong, 2013). After the bootstrapping technique was
carried out, the results obtained are discussed below.
Initially, the structural model is tested by observing the co-efficient of determination
value (R2). Hence, as shown below in Figure 3, the R2 value of employee performance in
the study is 55%. This propound that the identified factors explain a variance of 55% of
employee performance. Therefore, the structural model is found to be fit.

Figure 3 Impact of various drivers of employee performance (see online version for colours)

In this study, analysis through PLS regression in Figure 3 lends support to H1a, which
state that empowerment practices which promote great latitude in the organisation of their
work, freedom and autonomy in workplace will accentuate the performance level of a
program manager. This can be understood from the projected values (t value = 4.420,
beta value = 27.6%). Second, in support to H1b, which articulate that competence
development practices in the form of professional development activities (coaching and
training), specialised technical courses and freedom to apply their new skills at work
further lever the performance levels of a program manager. This is reinforced by the
predicted values (t value = 3.660, beta value = 21.9%). Third in support to H2, it can be
inferred that when employees are engaged via their vigour, absorption and dedication
components they exert full energy in their role performances; consequently exhibit good
performance level in the workplace. This can be reinforced by the significant values
(t value = 3.255, beta value = 20.5%). Fourth in support to H1c, it can be comprehended
that recognising program managers in different forms like tangibly (e.g., tickets for
cultural or sports events; dinners at restaurants) recognising them or sending a written
464 R. Krishnaveni and R. Monica

word of recognition or taking their suggestions seriously accentuated their performance

level. This again can be understood from the significant values (t value = 3.104, beta
value = 19.8%). However, it can be inferred that the rewards practices which comprise of
factors like satisfaction with the pay and bonus level has emerged with a negative t value
and a beta value. This signifies that the program managers are not equating rewards
practices to their positive performance levels and also shows scope for tremendous
improvement.
Hence, the results indicate that HRM practices in the form of empowerment practices
(H1a), competence development practices (H1b), recognition practices (H1c) and work
engagement (H2) as important levers for accentuating the performance level of a program
manager in an IT setup.
These findings show that H1a, H1b, H1c and H2 are supported.

6 Discussions

The main objective of this study was to find out the impact of the various HRM practices
namely empowerment, competence development practices, rewards, recognition and
work engagement on employee performance.
The results indicate that the factors empowerment practices (E = 0.276, t = 4.420),
competence development practices (E = 0.219, t = 3.660), recognition (E = 0.198,
t = 3.104), work engagement (E = 0.205, t = 3.255) are the factors that have an impact on
employee performance. The E values also suggest empowerment practices influences up
to 27%; competence development practices influence up to 21%; work engagement
influence up to 20% and recognition influences up to 19% as determinants of employee
performance. The results implicate that the requisite properties of employee performance
are considerably influenced by the selected factors namely empowerment, competence
development practices, recognition and work engagement.
This study depicts that the Indian IT program managers, execute high levels of
performance when they are provided with empowerment practices that comprise of
abundant levels of autonomy, freedom and latitude in the work. In addition, this explains
that the IT executives expect more autonomy in their job as it acts as a lever for their
performance, as it provides them with a sense of responsibility to execute their jobs even
more efficiently. Secondly, competence development practices that can be seen in the
form of skill development, job rotation, professional development, proficiency courses,
etc., also seems to have a positive impact over employees performance. Because, once an
employee perceives that an organisation is investing in him and cares for his career
growth, this instils a sense of gratification in his/her mind and this makes the employee
go further an extra mile to perform his roles in the job given to him. On the other hand,
organisations too have ample scope to improve the quality of employees by providing
comprehensive training and development activities. Hence, competence development
practices have seemed to emerge as a significant factor for employee performance, this
shows that the IT executives consider sub factors like skill development, job rotation,
professional development and proficiency courses are pivotal for harnessing employee
performance in their organisational life. Development practices can take the form of
formal and informal training experiences, such as basic skills training, on-the-job
experience, coaching, mentoring, and management development this can further
influence employee development.
 Factors influencing employee performance 465

Thirdly, recognition practices have emerged as a prominent lever for performance of

IT executives. This finding states that recognising people contribution can take many
forms such as such as employee of the month or year recognition, an annual report or
yearbook which features the accomplishments of employees, and division or company
recognition placards. This result shows that these practices are considered favourable by
IT executives for exhibiting high levels of performance.
Employees who participate in training programs containing the use of empowerment
and acquire suitable levels of recognition are motivated to achieve their work goals. Such
employees are engaged in their work, and in turn, this is reflected in better service quality
productivity and employee performance. In addition, all the identified factors have to be
done simultaneously in a coherent manner for effective employee performance because
empowering employees without training programs would not fabricate the anticipated
outcomes or training employees without empowerment would be ineffective.
The findings of the study are congruent with some of the studies (Huselid, 1995;
Becker and Gerhart, 1996; Bowen and Ostroff, 2004; Combs et al., 2006; Karatepe,
2013) which articulate that HRM practices such as training and empowerment augment
employees knowledge, skills, and abilities and motivate them to reach high levels of
productivity.
Studies suggest that compared to traditional workers, executives are motivated by job
empowerment (Saks, 2006), perceived opportunity for growth and achievement on the
job (Thompson and Heron, 2005), and relationships with co-workers and supervisors
(May et al., 2004). This further reinforces the finding that only paying above or at
market-levels is not sufficient to encourage, motivate, and retain staff (Whitaker, 2010).
He further articulated that employees early motivation and satisfaction might have
enhanced with a pay raise or cash bonus, but the effects were shorter lived than the
motivating effects of non-financial rewards. Because, managers are typically highly
educated, have a team responsibility and engage in cognitively complex tasks. It is
among the function of executives to motivate the employees successfully to achieve
greater organisational efficiency.
Therefore, the findings of this study propound that these HR practices namely
empowerment, competence development practices and recognition and work engagement
have to be cohesively used to sustain and enhance the performance of IT executives.
Further when these practices are used in a coordinated way, they reinforce and support
each other (Combs et al., 2006).

7 Management implications

This is a distinctive study as it examines the role of HRM practices and work engagement
in influencing employee performance in an Indian IT setup comprising of program
managers. There are hardly very few studies that have been undertaken in an Indian IT
setup with special reference to program managers. A very significant contribution of this
paper is the fact that it offers deep insights into how employees perceive the different
HRM practices and their linkages with their individual performance level and the need
for having engaged employees has been substantiated. Given the magnitude of IT
industry and the vast number of employees working, such a study would invariably
provide deeper understanding of the needs of program managers.
466 R. Krishnaveni and R. Monica

The findings articulate that managers should provide employees with training,
empowerment, and recognition and scope for work engagement that would instil a sense
of gratification and make them feel obliged to respond to the organisation via prominent
levels of performance. For instance, attempts like delegating authority and responsibility
to employees should be made by supervisors to let subordinates feel empowered, so as to
direct them toward organisational goals. A positive environment should be created within
the organisation by appreciating individual contributions so that employees can perceive
their worth of being in the organisation. Furthermore, training programs should be
designed to augment the competence level of employees and make them feel capable of
doing work passionately (Kahn, 1990; Anitha, 2014). In that context, the existence of
continuous and effective training and empowerment practices, creating conditions for
ample scope for work engagement, coupled with employees’ perceptions of fairness in
recognition would enable the organisation to retain a very efficient workforce who would
execute their role performances in a very effective and efficient way by eventually
leading to organisational effectiveness which is one of the paramount roles of effective
employee performances. Thus, our results can be used for the improvement of employee
services and can help managers increase or amend their HR policies and practices to
guarantee a higher level of employee performance.

8 Theoretical implications

This study extends current literature on the identified HRM practices and work
engagement and its effect on employee performance. By examining the link between the
HRM practices and work engagement on employee performance among 205 business
executives from five private IT organisations in India, this study adds value to the
existing research. In that context, this study provides insights into the total contribution of
impact of HRM practices and work engagement towards employee performance, which is
a distinctive approach because to the researcher’s knowledge this is the first study which
attempts to examine the impact of HRM practices and work engagement on employee
performance of program managers in an Indian IT setup in a comprehensive way. This
study not only provides a basis for longitudinal studies in IT sectors but is also congruent
to some of the studies undertaken before (Harter et al 2002; Saks, 2006; Bhatnagar, 2007;
Anitha, 2014; Nazir and Islam, 2017). Extending the findings of studies (Huselid, 1995;
Karatepe, 2013) that posit efficient HRM practices as an important lever for employee
performance, this study reinforces the significance of work engagement as a potential
indicator for employee performance. Incidentally, this paper inclusively examines the
impact of HRM practices and work engagement on employee performance. However,
studies done prior have not cohesively examined the selected HRM practices impact on
employee performance. This study propounds that HR practices (Huselid, 1995; Bowen
and Ostroff, 2004; Combs et al., 2006; Karatepe, 2013; Debusscher et al., 2017) and work
engagement (Kahn, 1990, 1992; Bhatnagar, 2012; Anitha, 2014) influence employee
performance (Nazir and Islam, 2017), in a way by improving efficiency (Kahn, 1990;
Fleming et al., 2005; Anitha, 2014) and contributing to revenue growth (Huselid, 1995;
Harter et al., 2002; Towers, 2003, 2007; Fleming et al., 2005; Davies and Crane, 2010).
Even though employee performance is a vital aspect for the IT employees, very few
studies have been done to examine the factors influencing the performance levels of
program managers. In addition to the HRM practices that are considered for the study we
 Factors influencing employee performance 467

have studies (Kahn, 1990; Schaufeli and Bakker, 2004; Richman et al., 2008) that
articulate that robust HRM practices and engaged employees generate positive attitudes
in their work which leads to enhanced performance levels and eventually good employee
and quality of life. In that context, one unique contribution to the study would be that the
variables namely HRM practices and work engagement were considered fully as
independent variables and employee performance as the dependent variable.

9 Conclusions

In conclusion, the primary need of the current study was to provide empirical evidence
that HRM practices namely empowerment, competence development practices, rewards
and recognition and work engagement as factors that influence performance level of
program managers from the perspective of an Indian IT setup. A structural model is
proposed and then analysed using SEM. The results showed positive relationship that
effective HRM practices in the form of empowerment, competence development
practices and recognition and work engagement play a crucial role in leveraging
employee performance. Under these terms, the comprehensive model developed in our
study imply that the management has to grant fair recognition (H1c), opportunities to
learn and develop (H1b), attainment of new levels of responsibility (H1a), empowerment
and keep their employees engaged (H2) to expect good individual performance from the
program managers. However, the findings exhibited a negative t value and beta value for
the reward aspect. This signifies that estimation of salary being fair and satisfaction with
the compensation levels are not positively perceived by the program managers and
reflects scope for areas that require substantial contribution and improvement. This
research shall provide valuable feedback to the Indian IT HR managers on the importance
of crafting HRM practices and the need to create, sustain and enhance engagement
among the workers. Hence, the firm has to fully invest in these identified factors to fully
demonstrate good quality performance.

10 Limitations and future study

There are some limitations to the present study. First, this study used cross-sectional data
for evaluating the research hypothesis. This practice does not permit definite conclusions
in terms of causality. In future studies using longitudinal data for testing the relationships
reported in this study would be beneficial. Second, empowerment, competence
development practices, rewards and recognition were selected as the HRM practices and
work engagement were identified as factors to ascertain the influence on employee
performance. Nevertheless, there are also other indicators of HR practices such as
employment security, internal career/promotion opportunities, staffing selectivity, and
work-family balance. The inclusion of these factors will shed more light on their
association with employee performance. Third, this study considers a sample of IT
program managers from five private MNC firms have been taken, further this study can
be done across the top management band namely the vice-president, managing directors
were not included in this study. A further detailed study inclusively done across the top
management may offer a deeper understanding of the relationships explored in the study.
468 R. Krishnaveni and R. Monica

Ultimately, replication studies with big sample sizes in different sectors like finance,
textile or insurance in India or other countries would allow for generalising the research
findings and contribute to the performance literature.

Acknowledgements

The authors would like to thank the editor and the anonymous reviewers of the earlier
manuscript of this research paper. The comments and suggestions improved the quality of
the manuscript. The authors would also like to thank Iraivan, Anubhav N. Ravi and
Ranjani, R. for their invaluable guidance throughout.

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Appendix

Factors-measured on a Likert scale 1-strongly disagree to 5-strongly agree.

Work engagement
1 At my work, I feel bursting with energy. (Vigour)
2 I find the work that I do full of meaning and purpose. (Dedication)
3 Time flies when I am working. (Absorption)
4 At my job, I feel strong and vigorous. (Vigour)
5 I am enthusiastic about my job. (Dedication)
6 When I am working, I forget everything else around me. (Absorption)
 Factors influencing employee performance 473

7 My job inspires me. (Dedication)

8 When I get up in the morning, I feel like going to work. (Vigour)
9 I feel happy when I am working intensely. (Absorption)
10 I am proud of the work that I do. (Dedication)
11 I am immersed in my work. (Absorption)
12 I can continue working for very long periods at a time. (Vigour)
13 To me, my job is challenging. (Dedication)
14 I get carried away when I am working. (Absorption)
15 At my job, I am very resilient, mentally. (Vigour)
16 It is difficult to detach myself from my job. (Absorption)
17 At my work, I always persevere, even when things do not go well. (Vigour)

Employee performance
1 This employee performs tasks that are expected of him or her.
2 This employee exhibits punctuality in arriving at his/her work station on time after
breaks.
3 This employee spends time in idle conversations (R).
4 This employee adequately completes assigned duties(R).
5 This employee fulfils responsibilities specified in his/her job duties.
6 This employee’s attendance is above the norm.
7 This employee works co-operatively with his or her supervisor.
8 This employee meets formal performance requirements of the job.
9 This employee gives advanced notice when unable to come to work.
10 This employee makes constructive suggestions to improve the overall functioning of
his/her work group.
11 This employee encourages others to try new and more effective ways of doing their
job.
12 This employee keeps well informed where opinion might benefit the organisation.
13 This employee continues to look for new ways to improve the effectiveness of his or
her work.
14 This employee takes action to protect the organisation from potential problems.
15 This employee goes out of his/her way to help new employees.
16 This employee volunteers for things that are not required.
474 R. Krishnaveni and R. Monica

HRM practices
Empowerment practices
1 Employees are given great latitude for the organisation of their work.
2 Employees in my work unit have much autonomy in project management.
3 In my work unit, employees have considerable freedom regarding the way they carry
out their work.

Competence development practices

1 Employees can develop their skills in order to increase their chances of being
promoted.
2 Employees can rotate jobs to develop their skills.
3 Several professional development activities (e.g., coaching. training) are offered to
employees to improve their skills and knowledge.
4 Proficiency courses such as specialised technical courses and professional
certification are encouraged by management.
5 I am able to apply my new skills in my work.
6 Managers encourage employees to apply their new abilities and skills in the context
of their daily work.

Recognition practices
1 Employees’ suggestions are seriously taken into consideration.
2 In my work unit, employees’ suggestions are followed up regularly.
3 When an employee does good quality work. His colleagues regularly show him their
appreciation.
4 In my work unit, supervisors tangibly recognise employees’ efforts in different ways
(e.g., tickets for cultural or sports events; dinners at restaurants).
5 In my work unit, employees receive written recognition from their supervisors (e.g.,
memos).
6 In my work unit, supervisors regularly congratulate employees in recognition of their
effort.
 Factors influencing employee performance 475

Fair rewards practices

1 I estimate my salary as being fair internally.
2 My salary is fair in comparison with what is offered for a similar job elsewhere.
3 In my work unit, our supervisors assign mandates in a fair manner.
4 In my work unit, employees consider that their compensation level adequately
reflects their level of responsibility in the (name of organisation).
5 The pay increases and/or bonuses I received in the last two years adequately reflect
my recent performance evaluations.