Research Thesis Review

SAUDI ELECTRONIC UNIVERSITYCOLLEGE OF BUSINESS AND FINANCIAL SCIENCES
Postgraduate Thesis Manual
(For Students and Supervisors)
2020
[Copyright@ Saudi Electronic University]
1. Plagiarism Policy
Regarding Plagiarism, please note the following:
o Student shall submit the report online after Supervisor’s approval.
o Supervisor will check the work for possible plagiarism.
o If the report is acceptable the Anti-plagiarism report shall be generated, which
would be verified and approved that the plagiarism index 25%, the supervisor is requested to
submit the work to the college research committee for review.
o If the college research committee deemed the work to be extensively plagiarized
and violates the University’s ethical rules and regulations, the committee may
recommend the termination of the project and fail the student in the course. No
other chance will be given to the students who are found to be plagiarizing.
2. Formatting of the Project Report
Note: The approved thesis template contains all the settings as per the following guidelines.
You need to simply place your text without changing the format. However for your
reference, the same guidelines are discussed below:
a.
Length, Spacing and Font Size
The Research Project will be ideally between 60 to 80 pages; Times New Roman 1.5 line
spacing and a standard font size of 12 point size. It should be used for the text and front matter
materials except for the title page, chapter headings and tables where different line spacing and
fonts may be used. The print quality should be dark and clean.
b.
Margins
The margins throughout the report or manuscript should be at least 25mm or 1 inch on the right,
top and bottom. The left hand margin must be set to 1.2 inches to allow for binding. See template
also.
c.
Numbers and Percentages
Numbers in texts should be written in “Arabic numbers”. For instance, chapter 1, chapter 3
table 2.1 or figure 4.1.
d. Version of English
The department recommends the use of US English language. If the candidate is using a spellcheck facility he/she should ensure that it is set to “US English”. This is very important because
a number of words are spelt quite differently in US English.
e.
Research Project/Thesis Contents
Students are expected to compile their proposals to follow the format shown below:
Preliminary pages:
 Title page
Required
 Declaration Certificate
 Acknowledgement (Optional)
 Table of contents
 List of tables
 List of figures
Required
 Abstract
The text
 Chapter One: Introduction
 Chapter Two: Literature review
 Chapter Three: Methodology
 Chapter Four: Analysis and Results
 Chapter Five: Discussion and Conclusion
 References
 Bibliography
 Appendices
The discussion on what to include within each heading, section and sub-section along with an
example is mentioned in the approved thesis template. Further, you can consult your supervisor
for any clarification on formatting of your project.
3. Evaluation
The Project will be graded through a comprehensive assessment rubric. To learn about the
criteria of evaluation, you can review the rubric at annexure- 1. Therefore, the project will be
evaluated on the basis of quality of project work and its presentation given by the student in
front of a committee consisting of two members between specified dates.
1)
Project Supervisor
2)
Supervisors’ Coordinator
EFFECT OF PERFORMANCE MEASUREMENT ON EMPLOYEE
ENGAGEMENT IN MULTINATIONAL CORPORATIONS IN SAUDI
ARABIA
Thesis Submitted in Partial Fulfillment of the Requirements for the Award of the Degree
of
MASTER OF BUSINESS ADMINISTRATION
By
Shaima Nasser Arishi
Under Supervision
Supervisor Name:
Dr. ArwaAbdulelahHaizan
COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
SAUDI ELECTRONIC UNIVERSITY
Saudi Electronic University
Declaration Certificate
The work entitled, ‘‘Effect of Performance Measurement on Employee Engagement in
Multinational Corporations in Saudi Arabia”, embodies the results of the original
research work carried out by me in the College of Administrative and Financial Sciences,
Department of Business Administration Saudi Electronic University. This research work has not
been submitted in part or full for the award of any other degree at SEU or any other university.
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Table of Contents
………………………………………………………………………………………………………………………………….. 0
Declaration Certificate …………………………………………………………………………………………………….. 1
List of Tables …………………………………………………………………………………………………………………. 4
Abstract …………………………………………………………………………………………………………………………. 5
1.
2.
INTRODUCTION …………………………………………………………………………………………………… 8
1.1.
Background ………………………………………………………………………………………………………. 8
1.2.
Statement of the problem ……………………………………………………………………………………. 9
1.3.
Research Questions ………………………………………………………………………………………….. 11
1.4.
Project Objective ……………………………………………………………………………………………… 11
1.5.
Research Hypothesis ………………………………………………………………………………………… 12
1.6.
Significance of the study …………………………………………………………………………………… 12
LITERATURE REVIEW ……………………………………………………………………………………….. 15
2.1.
Theoretical Background ……………………………………………………………………………………. 15
2.1.1.
Theory of Expectancy …………………………………………………………………………………. 15
2.1.2.
Goal setting theory …………………………………………………………………………………….. 16
2.2. Empirical review ………………………………………………………………………………………………… 17
2.2.1. Performance measurement methods ………………………………………………………………… 17
2.2.2. Significance of Performance Measurement ………………………………………………………. 24
2.2.3. Performance measurement and employee engagement ………………………………………. 25
2.3.
3.
Summary and conclusion ………………………………………………………………………………….. 27
METHODOLOGY ………………………………………………………………………………………………… 29
3.1. Introduction ………………………………………………………………………………………………………… 30
3.2. Research approach ………………………………………………………………………………………………. 30
3.3.
Research Design ………………………………………………………………………………………………. 30
3.4.
Target Population …………………………………………………………………………………………….. 31
3.5.
Sampling Technique and Sample Size ………………………………………………………………… 31
3.6.
Research Instrument …………………………………………………………………………………………. 32
3.6.1.
4.
Validity and Reliability ………………………………………………………………………………. 33
3.7.
Data Collection Methods …………………………………………………………………………………… 34
3.8.
Data Analysis ………………………………………………………………………………………………….. 34
RESULTS …………………………………………………………………………………………………………….. 37
4.1.Introduction …………………………………………………………………………………………………………. 37
4.2. Reliability Test ……………………………………………………………………………………………………. 37
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4.3.
Demographic information …………………………………………………………………………………. 38
4.4.
Descriptive statistics …………………………………………………………………………………………. 39
4.4.1.
Use of Balanced Scorecards………………………………………………………………………… 39
4.4.2.
Management by objectives …………………………………………………………………………. 41
4.4.3.
Key performance indicators ………………………………………………………………………… 42
4.4.4.
Employee engagement ……………………………………………………………………………….. 43
4.5.
4.5.1.
Correlation analysis …………………………………………………………………………………… 45
4.5.2.
Regression analysis ……………………………………………………………………………………. 46
4.6.
5.
Inferential statistics ………………………………………………………………………………………….. 45
Hypothesis measurement…………………………………………………………………………………… 49
DISCUSSION AND CONCLUSION ………………………………………………………………………. 51
5.1. Introduction ………………………………………………………………………………………………………… 51
5.2. Discussion ………………………………………………………………………………………………………….. 51
6.
5.3.
Conclusion………………………………………………………………………………………………………. 55
5.4.
Implications of the study …………………………………………………………………………………… 55
5.5.
Limitations and suggestions for further studies ……………………………………………………. 56
References …………………………………………………………………………………………………………….. 59
Appendix ……………………………………………………………………………………………………………………… 64
Questionnaire ……………………………………………………………………………………………………………. 64
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List of Tables
Table 4.2. 1: Cronbach’s Alpha ……………………………………………………………………………………….. 37
Table 4.3. 1: Demographic information ……………………………………………………………………………. 39
Table 4.4. 1: Use of Balanced Scorecards ………………………………………………………………………… 40
Table 4.4. 2: Management by Objectives …………………………………………………………………………. 42
Table 4.4. 3: KPIs …………………………………………………………………………………………………………. 43
Table 4.4. 4: Employment engagement ……………………………………………………………………………. 44
Table 4.5. 1: Correlation Analysis …………………………………………………………………………………… 46
Table 4.5. 2: Model Summary ………………………………………………………………………………………… 47
Table 4.5. 3: ANOVAa ………………………………………………………………………………………………….. 47
Table 4.5. 4: Coefficientsa ……………………………………………………………………………………………… 48
Table 4.6. 1: Hypothesis Analysis …………………………………………………………………………………… 49
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Abstract
Background: Performance measurement is one of the most leading agenda for many firms
today. It allows the organizations to be able to do more than just monitor the progress of the
organization in the dynamic landscape of multinational corporations (MNCs), optimizing
employee engagement is critical for sustained organizational success. Research has shown that
Performance measurement systems, such as balanced scorecards (BSCs), management by
objectives (MBO), and Key Performance Indicators (KPIs), are instrumental in shaping
employee engagement strategies. Despite their widespread implementation, review of existing
studies shows that there have been very limited studies on the effect of performance
measurement on employee engagement in KSA MNCs and hence there is a research gap.
Purpose: This study aims to investigate the impact of performance measurement systems on
employee engagement within MNCs operating in KSA. By examining these dimensions, the
research sought to enhance understanding of the relationship between performance measurement
practices and employee engagement in a multinational context.
Research Design and Method: A quantitative research approach was used employing structured
online questionnaires gather data from employees across various MNCs in Saudi Arabia.
Convinience sampling was used to select a sample size of 240 respondents. Statistical analyses,
including regression analysis and correlation studies were conducted to evaluate the impact of
performance measurement systems on employee engagement.
Findings: Preliminary findings of the study concludes that performance measurement tools have
positive and significant effect on the employee engagement levels in multinational corporations
in KSA. The findings show a positive correlation between the utilization of BSCs, MBO, and
KPIs and levels of employee engagement within MNCs operating in KSA. Specifically,
organizations that effectively implement these systems tend to experience higher levels of
employee motivation, satisfaction, and commitment.
Practical Implications: The findings of this study hold significant implications the top
management of the MNCs in KSA as it provides them with more insights on the importance of
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different performance measurement tools to appraise their workers and measure their
performance which has been found to be essential for promoting employee engagement. By
understanding the impact of performance measurement systems, they can design their strategies
to foster a more engaged workforce, thereby improving overall productivity and organizational
performance.
Limitations:The study’s employed the use of a cross-sectional design which limits causal
inference. Hence, researchers could improve this by using longitudinal or experimental designs
to provide deeper insights into the causal relationships between performance measurement and
employee engagement.
Originality Value: This study contributes to the existing literature by providing empirical
insights into the relationship between performance measurement systems and employee
engagement specifically within the unique context of MNCs operating in Saudi Arabia. By
examining multiple dimensions of performance measurement, this research offers a
comprehensive understanding of the factors influencing employee engagement in a multinational
setting.
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CHAPTER 1
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1. INTRODUCTION
1.1.Background
Performance measurement is one of the most leading agenda for many firms today. It allows the
organizations to be able to do more than just monitor the progress of the organization.
Striteska&Spickova (2012) states that the first requirement to enhance organization success is
develop an effective performance measurement system. Ideally, they are regarded as information
systems that firms use to evaluate organization and individual performance. Over the years, there
have been many performance measurement systems such as the Balance Scorecard. Over the years,
firms have used these performance measurement models to improve performance and today, many
scholars argue that it is most essential activity with the organization performance management
cycle (Striteska&Spickova, 2012; Na, &Alqdah, 2023). In this regards, the modern and highly
dynamic and competitive business environment requires organizations to devote their resources to
measure the performance to achieve their goals.
To gain a competitive advantage in today’s rapidly changing global economy, all organizations
are encouraged to continuously enhance the levels of employee performance and engagement
through effective performance appraisal and management systems (Riyanto, Endri, &Herlisha,
2021). Performance management systems have been identified by researchers as critical and
strategic human resource management practices that is increasingly being used by organizations,
including Multinational Corporations (MNCs), to evaluate and increase employee engagement and
performance. In line with Vision 2030, the Kingdom of Saudi Arabia (KSA) has become a key
destination for many MNCs and this presents a unique area to explore the link between
performance measurement and employee engagement. According to Franco-Santos, Lucianetti,
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&Bourne, (2012), effective performance measurement is essential in making sure that firms’
strategies are successfully implemented and entails monitoring the effectiveness of the firm in
meeting its goals. Hence, every firm has to work to establish a performance management system
that will ensure it meets its performance demands.
According to Sistonen, (2016), firms that invest in understanding the drivers of employee
engagement must measure and drive the performance of the employees in an effective way and
this study will seek to provide better insight into the Saudi Employee engagement that results from
the performance management of the MNCs. Overall, studies have shown that performance
appraisals and management systems by MNCs are usually hard to carry out compared to domestic
appraisals due to a lack of systematic information and similar objectives and differences in
environmental factors. Such differences include changes in economic trends, issues regarding legal
frameworks, technical changes etc. Hence, as MNCs in KSA seek to optimize their operations in
the country’s dynamic market, understanding how performance measurement strategies affect
employee engagement is crucial.
1.2.Statement of the problem
In the study by Memon et al. (2020) on Performance appraisal satisfaction and turnover intention
and the mediating role of work engagement in Malaysia oil and gas sector, their findings showed
a strong causal relation between performance appraisal and measurement and workers
engagement. The findings showed that performance appraisal in firms were a predictor of
employee engagement. This is also supported by a study by Lamphon, &Abunar, (2021) on effect
of performance measurement and appraisal on employee motivation in KSA private sector. The
study showed that many of the firms use performance appraisal systems and majority of the
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respondents agreed that it is effective in enhancing their motivation which includes engagement.
In an empirical study by Yadav, (2020) on Impact of Performance Appraisal System on Employee
Engagement in Banking Industry in India, the study findings showed that there are positive effect
on employee engagement. The study
concluded that most
significant
impact
of
performancemeasurement and appraisal on employee engagement in the banking sector was when
the workers report that their feedback is used o enhance company improvements and change their
behavior.
However, review shows that there also exist mixed empirical findings. For example,
Shrivastava&Purang, (2011) noted that the performance measurement and appraisal systems are
linked to deteriorating the performance of employees and most of them are ineffective. This is also
supported by the more recent study by Ductoc, (2020) on “Relationship between Employee
Opinions about Their Performance Appraisals and Their Motivation.” The findings showed that
many employees have negative opinions towards performance measurement as it negatively
affects their performance and motivation. The literature review by Sah& Srivastava, (2021) on
performance measurement and teachers’ engagement also showed mixed findings as some state
that it has positive effect while others note that it negatively affects their performance.
Overall, there are limited studies specifically focusing on employee engagement and
understanding how performance measurement practices in MNCs in KSA affect engagement
levels. A review of existing studies shows that there have been very limited studies on the effect
of performance measurement on employee engagement in KSA MNCs and hence there is a
research gap. Hence, this study will play a key role in identifying how specific performance
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measurement tools adopted by KSA MNCs affect employee engagement and subsequently
improve overall performance.
1.3.Research Questions
The study was guided by the following main research question;
•
What is the impact of performance measurement tools on employee engagement in KSA
MNCs?
The study sought to answer the following specific research questions:
•
What is the impact of balanced scorecards on employee engagement in MNCs operating in
Saudi Arabia?
•
What is the impact of management by objectives on employee engagement in MNCs
operating in KSA?
•
What is the effect of Key Performance Indicators on employee engagement in MNCs
operating in KSA?
1.4. Project Objective
It will be guided by the following specific objectives:
•
To assess the impact of balanced scorecards on employee engagement in MNCs operating
in Saudi Arabia
•
To determine the impact of management by objectives on employee engagement in MNCs
operating in KSA
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•
To determine the effect of Key Performance Indicators on employee engagement in MNCs
operating in KSA.
1.5.Research Hypothesis
i.
H1: There is significant relationship between balanced scorecards andemployee engagement in
MNCs operating in KSA.
ii.
H1: There is significant relationship between management by objectiveson employee
engagement in MNCs operating in KSA.
iii.
H1: There is significant relationship between the effectiveness of keyperformance indicators on
employee engagement in MNCS operating in KSA.
1.6.
Significance of the study
The study will be of great importance to different stakeholders including the MNCs and the human
resource departments, KSA government and research and scholars. For the MNCs, they are an
important part of KSA economy and the vision 2030 as they create employment and promote
innovation. They provide diverse work environment that offer their workers with many learning
opportunities and exposure and in this regard, the study findings will provide them with insights
into how the performance measurement systems may affect employee engagement which is
essential for their overall performance. Through this, they can enhance employee loyalty. The HR
departments will be informed of how they can use performance measurement to better improve
their policies to enhance employee engagement. To the KSA government, they can use the findings
to create a more engaged public service of the KSA economic and social goals are to be realized.
They can use the findings to shape the policy decisions made in regards to labor and employment
laws and hence improve performance.
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Researchers and scholars will use the findings of the study to increase their knowledge and
understanding of the relationship between performance measurement and the employee
engagement. Scholars can use the findings to prove their hypothesis and also use it as basis for
their further studies.
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CHAPTER 2
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2. LITERATURE REVIEW
2.1. Theoretical Background
Different scholars have come up with different theories to study the relationship between
performance measurement and employee performance and engagement. This section reviews
some of the key theories that inform the current study as follows.
2.1.1. Theory of Expectancy
The expectancy theory was proposed by Vroom in 1964 (Kuhl, 2021). The theory states that
employees will enhance their performance when they put in a significant amount of effort and
are confident that this effort will result in increased benefits like promotions, salary raises, or
bonuses. This means that employees typically have expectations regarding the outcomes of their
actions and assess the potential rewards they can gain from their efforts.
Vroom (1964) proposed that employees are likely to exert more effort in their work if they
believe it would lead to better performance and recognition from the business in the form of
rewards (Kuhl, 2021). Hence, employees expect their hard work to lead to improved
performance measurements, which in turn will be rewarded by the firm with bonuses, salary
increases, or promotions, among other incentives.
This hypothesis suggests that employees will modify their conduct depending on the satisfaction
they experience from the organization. When individuals anticipate positive rewards, they
modify their behavior to demonstrate the accomplishment of more significant objectives.
Overall, the expectancy theory proposes that workers in organizations are motivated to act based
on their expectations of the outcomes of their actions (Kuhl, 2021). Hence, It can be used to
understand how employees perceive the relationship between their performance and the tied to
performance measurement, influencing their engagement levels. In this study, it is applied to
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assess the effect of balanced scorecardsand KPIs on employee engagement whereby workers
perceive that their efforts in aligning with the various BSC metricsand KPIs will lead to
improved performance (Yusuf, 2023). This theory provides a framework for understanding how
workers beliefs about the relationship between their efforts and outcomes influence
theirmotivation and engagement in management practices. Overall, this theory hence posits that
employees’ performance and engagement is influenced by their expectations about performance
measurements and the entire process.
2.1.2. Goal setting theory
Theory of Goal Setting was developed by Edwin Locke in 1979 and involves establishing
objectives for future achievements by a person or group. According to this theory, goals are
future desired results. The theory covers all elements of constructing organizations with
effectiveness (Koppes, 2014). Lock states that there are five fundamental elements that enhance
the effectiveness of goal setting and they are made up of distinct and measurable goals that can
be accomplished within specific timeframes; Challenge: setting goals of a moderate level of
difficulty to motivate both the individual and the organization to work towards achieving
positive outcomes. Commitment- is about individuals and organizations making intentional
efforts to achieve goals; Feedback- the act of offering information or insights into the
advancement towards reaching goals; and Task complexity-facilitates goal achievement by
establishing processes and steps.
Goal setting theory has been criticized for being time-consuming and costly to implement (Julnes
et al., 2007). This is due to the fact that organizations need to address multiple factors in order to
achieve their goals, such as selecting individuals with the necessary abilities, providing training
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for career advancement, and managing budgets. It introduces internal competition among
personnel, leading to a danger of undermining company objectives. However, Goal setting is
widely used by organizations and is often preferred above other management strategies.
However, many scholars agree that goals in organizations are essential tools to helping shape the
behavior of employees at the place of work and hence in this case, it can be used to evaluate and
understand how performance measurements affects employee engagement. The goal setting
theory suggests that specific goals lead to higher performance when they are accepted by
employees and accompanied by support and hence the theory is applicable in answering these
research study questions as it can be used to understand how setting clear performance metrics
influences employee engagement. As noted by Ogochukwu, Amah, &Okocha, (2022),
integrating the goal setting theory on their study on Management by Objective and
organizational productivity helped to enrich their comprehension on its impact on the
organization performances. It also shed light on how MBO influence their productivity of the
firms through individual productivity. Therefore, the goal setting theory can also be linked to this
study whereby it can inform the study by highlighting the importance of different performance
management practices, such as Management by Objectives (MBO), in setting clear and
challenging goals for employees whereby by examining how effectively goals are set,
communicated, monitored, and revised can shed light on their impact on employee engagement
2.2. Empirical review
2.2.1. Performance measurement methods
Multinational companies around the world will use varying performance appraisal systems based
on their goals and sectors of operation (Asamoah, 2012). Performance measurement
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methodsmay vary based on cultures and each methods cannot be equally applied every cultures.
Different appraisal methods would be considered to have different effects. The following are
some of the common used performance measurements and appraisal techniques used;
•
Management by objectives (MBO)
Management by objectives (MBO) is a performance evaluation technique that guides and directs
personnel inside an organization (Mwema&Gachunga, 2014). It includes establishing goals,
planning, and providing reviews. The senior management directs the establishment of goals by
defining the organization’s mission, vision, and objectives and the goals are subsequently passed
down to individual employees at the lowest level. However, Mwema&Gachunga (2014) assert
that employees should have personal objectives that ultimately align with the organization’s
mission, vision, and strategic goals. They should work with their bosses to establish goals and
develop precise performance standards for evaluating their overall performance. The employee
and supervisor collaborate to identify potential hurdles that may impede the employee’s goal
achievement and devise solutions to overcome them. Hence, the involved parties have to meet
regularly to assess the employee’s development and address any necessary modifications in
goals.
According to Mio, Costantini, &Panfilo, (2022), Management by Objectives (MBO) is the most
equitable approach to efficiently plan for and develop a high-performing staff when implemented
accurately. Its overall premise is to involve all members of the organization in setting goals,
ensuring a clear grasp of the firm’s objectives, and being aware of their individual responsibilities
in achieving those objectives. The approach is about management and an empowered staff
working together to achieve their ambitions, which in turn align with the goals of the company.
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However, the model has some limitations as noted by Akrani (2010).He argues that the model is
usually a lengthy process where objectives are established at all organizational levels after
thorough consideration of the advantages and disadvantages and this may result in a significant
time commitment. Secondly, MBO is pressure-driven and relies on principles of reward and
punishment psychology and the management in such firms may encounter difficulties in
measuring objectives when the objectives are unclear and unrealistic. Also, the software appears
easy but is actually more complex than it seems and the people using it may miss out on new
chances by strictly sticking to predetermined goals. A lot of studies have been carried out on its
effectiveness and the results mainly supports the use of the model to influence teams to selfregulate (Kyriakopoulos, 2012). This study aims to investigate how various techniques improve
performance resulting from high levels of employee engagement.
•
360-degree feedback
The 360-degree feedback method involves obtaining performance outcomes from various
department employees who engage with the individual while performing activities, including line
managers, group members, peers, consumers, and self, with varying importance assigned to each
set of raters (Murphy, 2020). Hence, through 360-degree appraisal, employees can provide
feedback and information about their direct supervisor and other managers. Senior management
staff may also share information about junior employees, colleagues, service providers, and
customers within a corporation. Research shows that many organizations have found this
strategy to be extremely beneficial and effective and is commonly used to determine customer
satisfaction, interpersonal skills, and teamwork abilities (Al-Jedaia&Mehrez, 2020). This
strategy ensures that evaluators are unable to overlook any components and must show complete
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results. However, it has been criticized of being intimidating, alarming, expensive, and timeconsuming.
The research by Mbugua, (2021) argues that team leaders should provide constructive feedback
to team members in a manner that promotes high performance and motivation, thereby allowing
the workforce to enhance their overall capabilities. Feedback involves encouraging the
development of self-confidence, discussing areas that require more work or a different approach,
and clarifying immediate objectives.
Mishra (2022) describes 360-degree performance appraisal as a systematic procedure that can
improve the overall performance of a company which can be achieved by enhancing the
engagement of individuals within a group structure, leading to increased productivity.
Supervisors can concentrate on behaviors and outcomes by directly observing, rather than
focusing on personalities. Direct observation will be defined by the supervisors, the levels of
employee contact, and the performance indicators used. The management can assess the levels of
participation inside the firm by utilizing work standards through the feedback system.
•
The Balanced Scorecard (BSC)
The Balanced Scorecard (BSC) was created in the early 1990s as a novel method for
performance evaluation to address issues related to short-term focus and historical perspective in
management. It was created by Kaplan and Norton as a performance measuring method that
emphasizes company strategy in response to the given situation at hand (Waruhiu, 2014). If the
strategy is well designed and created, they noted that new performance indicators will
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significantly impact business performance and that of the employees. In this line, they proposed
that performance metrics should monitor shifts in the market environment, evaluate and track
progress towards business unit goals, and confirm the attainment of performance targets. To
achieve their strategic aims, senior management should use a balanced approach to assess
performance by considering both financial and non-financial criteria.
Research shows that many companies around the world including MNCs use the Balanced
Scorecard (BSC) and they have benefited a lot (Tuan, 2020). Some of the key benefits include
enhanced staff alignment with organizational objectives, boosted financial performance and
improved partnerships. For example, Sarigül, &Coşkun, (2021) states that the BSC is one of the
most used strategic performance measurement approach and most modern methods. The study
showed that it has had major impact on the performance of a major multinational bank in Turkey
as it has been successfully linked with the company strategies and roles of eh business unit.
In a study by Turshan, Karim, & Ramallah, (2020) on the effect of BSC on financial
performance of banks in Palestine, their study showed that the BSC model can be used to
improve the performance. However, they noted the need to focus on the different perspectives of
BSC which might impact differently. For instance, they noted that, customers’ perspective did
not have the same effect as other perspectives. Overall, they recommended the need for firms to
integrate BSC into their strategic management and means of decision making.
However, to be effective and have the desired impact, the businesses have to have the
appropriate tools to create a successful BSC. The Balanced Scorecard incorporates a variety of
four multidimensional performance metrics.
Financial perspective: the financial viewpoint outlines an organization’s long-term goals related
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to improving profitability and other financial objectives by setting the business strategy, which
may focus on fast expansion, support, and financial success (Kaplan & Norton, 1996). Hence,
the perspective is mainly about how a given strategy and decisions impacts the financial effects
to show whether they are contributing to the improvement of the company bottom line
(Aryani&Setiawan, 2020). It should be noted that the financial benefits cannot be well realized
until all other perspectives according to BSC are working effectively. Overall, by using the
financial perspectives, firms are able to measure their employee performance in regards of
efficiency when using the company resources e.g. growth in sales and productivity.
Customer perspective: this perspective considers a business’s ability to provide high-quality
goods and services to its clients, as well as its efficiency in delivering these services (Brzaković,
Đorðević, &Mastilović, 2022). It also focuses on addressing customer issues to establish
continued support. In this line, the client satisfaction measurements may encompass client
loyalty and the influx of new customers (Kaplan & Norton, 1996). Hence, the goal is to create
valuefor the customers and address the issue related to customer retention and satisfaction and
the measures might include loyalty indices, and market segment growth etc.
Internal Business Perspective: this is accomplished by recognizing the customers’ wants and
creating new products and services through innovation to fulfill their requests (Kaplan & Norton,
1996; Brzaković, Đorðević, &Mastilović, 2022). An efficient organization should function like a
customized comprehensive system. Here, an organization outlines its internal business process,
and things it has to do well to push performance as well as the goals. This can include the quality
optimization and process improvements.
Learning and Growth perspective:Kaplan& Norton (1996, 2000) identified three sources of
corporate learning and growth: individuals, data systems, and operational procedures. The
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learning and growth perspective focuses on the capacity of employees, information systems, and
organizational alignment to effectively manage the business and respond to changes. Skilled and
motivated employees, equipped with precise and timely information, play a crucial role in
driving this process. According to Wahjudewanti et al. (2021), ‘learning’ goes beyond ‘training’
and encompasses elements such as mentors, tutors and technological resources. Some of the
indicators that a firm can use in this case include turnover rate, training durations, frequency of
cycle updates, and quantity of new elements.
The study aims to determine how the combination of these factors influences the level of
employee engagement among employees at multinational firms in Saudi Arabia.
•
Key Performance Indicators
Many firm have a disconnect between the metrics they use and the outcomes they anticipate in
regards to performance. This is one of the reasons that firms are encouraged to use Key
Performance Indicators (KPIs). These are measures that provide explicit guidance to the
organization on how to significantly improve the firm’s performance. According to Parmenter,
(2015), they focus on the most critical strategic characteristics of a company that are essential for
both its current and future success. In many organizations, KPIs are used to evaluate operational
efficiency, productivity, and staff performance in order to achieve company goals and enhance
productivity.
To identify the relevant KPIs for assessing an organization’s success, the firms need to review
the organization’s vision statement, mission statement, and objectives (Padmakusumah,
Armaeny, &Fardani, 2021). Performance measurement aids the organization in maintaining
consistency in decision-making to align operational activities with the business’s vision and
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objective. Measuring market share, customer demand, and customer satisfaction are crucial for
the firms to assess their current status and implement necessary changes to reach their goals.
An effective key performance indicator must be quantified and agreed upon by both management
and employees to ensure compliance and alignment with corporate objectives (Al Dakheel et al.
2020). A good Key Performance Indicator (KPI) should align with the organizational goals to
guarantee that it is achievable depending on the resources and skills of the company. A good Key
Performance Indicator (KPI) should be aligned with the organizational culture to prevent
frequent changes that may not be easily accepted by the staff. However, as the organization
progresses towards its objectives, the indicator may be adjusted to further involve employees in
their work.
2.2.2. Significance of Performance Measurement
For organizations to be successful in modern highly competitive market, they need to identify
and measure the critical performance elements that contribute to their success. Performance
measurements have historically been utilized to evaluate the effectiveness of organizations.
Periodic evaluation of a company’s performance is carried out for reasons such as to assists
investors in predicting the future profit potential of companies and assists managers in resource
allocation and provides feedback on goal achievement (Venanzi&Venanzi, 2012).
However, it should be noted that Performance measurements can stimulate competition among
teams, people and departments (Liyai, 2014). The measurement system can facilitate
benchmarking across internal divisions or with large competitors while promoting collaboration.
The measuring system can either promote transparency and knowledge sharing between projects
or encourage unity within a team or facilitate collaboration across different functions.
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Non-financial performance measurements have a significant influence on a company’s future
economic performance. Their use is linked to an innovation-focused strategy, a quality-focused
strategy, industry regulation, and the extent of financial distress (Kaplan & Norton, 1996; Nelly,
2007) (cited by Mumbi, 2015). The relationship between non-financial metrics and firm
performance depends on whether the non-financial measurements align with the firm’s
operational and competitive environment. Overall, it is evident that performance measurement is
crucial for the success of business organization including MNCs.
2.2.3. Performance measurement and employee engagement
The reviewed literature has shown that engaged employees are some of the most important
factors of an organization success. They are described as employees who always seek to provide
the best possible services and output whenever required to, always dedicated and more
productive all of which contributes to possible performance of the firm (Smith &Bititci, 2017).
Research has shown that engaged workers will always desire to know what is expected of them
to meet and beat the expectations (Smith &Bititci, 2017). They will always put an extra time to
complete the tasks at good standards. Hence, organizations have to always seek to ensure that
their employees are well engaged.
Many studies have shown that performance measurement and appraisal systems may have either
positive or negative effect on employees’ engagement and performance. For example, the study
by Mustapha &Daud, (2012) showed that performance measurement is effective when
expectations are well laid out and founded on a specific criterion that all employees agree on.
This means that they are effective when the organizations collaborates with the employees to set
the goals and managers carry out the measurement in fair manner. Hence, they need to always be
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held accountable of how the performance measurement is carried out based on how the
employees achieve the set goals.
Many researchers have stated that the relationship between perceived effectiveness of
performance measurement in an organization and the performance and engagement of employees
is direct. It results in engaged employees as it helps identify training needs, and improve
relationship between leaders and employees and enhance satisfaction (Rahman & Shah, 2012).
However, some scholars have argued that performance measurements might be an emotionally
charged procedure and in most cases fail to meet the desired outcome (ALI, 2022). They noted
that many leaders may not be always excited about the whole performance measurement process
and the emotional aspect that is involved in the process may make it hard to realize the desired
and accurate results.
Research has also shown that some people see the performance measurement process as unfair in
many cases which may create employee dissatisfaction and affect the productivity (ALI, 2022).
Hence, when deemed unfair and becomes ineffective, it negatively affects employee
engagement. This shows that there exists mixed results on the effect of performance appraisal on
engagement and hence the need for the current study. Hence, there is need for an empirical
analysis in the context of KSA to determine the effect of performance measurement on employee
engagement in KSA MNCs.
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Figure 1: Conceptual Framework
2.3.Summary and conclusion
Overall, Effective performance measurement is important in making sure that the strategy of an
organization is implemented successfully as shown in the following reviewed studies. As noted by
Aboramadan et al. (2020), it is about monitoring the effectiveness of a firm in meeting its
predetermined goals. According to Franco-Santos, Lucianetti, & Bourne, M. (2012), the use of
performance management systems is recommended to facilitate the implementation of strategy
and improve performance. The contemporary performance measurement is comprised of the use
of financial and non-financial performance measures that are linked to the business strategy such
as balance scorecards and multi-criteria key performance indicators (KPI). As noted by Riyanto,
Endri, &Herlisha, (2021), the performance measurement systems provide workers with clear
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feedback mechanisms, clear objectives and employee recognition, which foster a sense of
commitment. The review showed that there are a number of Performance measurement methods
that are used by organizations around the world. Some of the most commonly used include
Management by objectives (MBO) which includes establishing goals, planning, and providing
reviews; The 360-degree feedback method involves obtaining performance outcomes from various
department employees who engage with the individual while performing activities, including line
managers, group members; The Balanced Scorecard (BSC) and Key Performance Indicators
(KPIs).
These are measures that provide explicit guidance to the organization on how to
significantly improve the firm’s performance.
Overall, the review shows that although there have been a number of studies conducted in this
field, there are very few studies focusing on multinational companies in the context of KSA and
this forms the basis of this study. As noted by researchers such as Venanzi&Venanzi, (2012);
Yahiaoui, Nakhle, &Farndale, (2021); Padmakusumah, Armaeny, &Fardani, (2021), the
effectiveness of the performance measurement systems vary based on factors such as
organizational culture and leadership and contextual factors and studies specific to the Saudi
Arabian context are limited. The review shows the importance of performance measurement
practices, such as balanced scorecards, Management by Objectives (MBO), and Key Performance
Indicators (KPIs), in influencing employee engagement. Overall, while they have the potential to
enhance employee motivation and engagement, their effectiveness depends on various factors,
including employee involvement, feedback mechanisms, and organizational culture.
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CHAPTER 3
3. METHODOLOGY
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3.1. Introduction
This chapter discusses the methods of data collection including the research design, research
approach, study population, data collection methods and the data analysis.
3.2. Research approach
Three main types of research approaches are used in research studies including quantitative
research approach, qualitative research approach, and mixed methods research approach
(Taherdoost, 2022). The quantitative research approachmainly focuses on surveys collecting
numerical data, qualitative collects non-numerical data e.g. through interviews while mixed
methods use both the quantitative and the qualitative methods. This study employed the use of a
quantitative research approach to examine the impact of performance measurement on employee
engagement in multinational corporations (MNCs) operating in the KSA. Quantitative methods
were the main focus of this study as they allow for the systematic collection and analysis of
numerical data, enabling the exploration of relationships between variables and the
generalization of findings to the target population (Vogt et al. 2014). Also, the data is easier to
analyze by use of statistical methods.
3.3.Research Design
Research design is the blueprint on which a study is based as it provides guidelines on how the
study is carried out and the process to answer the research question (Haydam&Steenkamp,
2020). This study is a survey research that will employ a descriptive research design. A survey
will be used as it will allow determining and comparing eh effect of the performance
measurement systems on employee engagement among the different MNCs in KSA. According
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to Mõttus et al. (2020), Descriptive research helps to describe the characteristics, behaviors, or
phenomena under investigation without manipulating variables and hence, in this study,
descriptive research facilitated the exploration of performance measurement practices and their
relationship with employee engagement within MNCs in KSA. In addition, this design is
dependable, generalizable and valid for this type of study as it has been used in several similar
studies.
3.4.Target Population
The research population in a study is the entire group of people, items, or things that the
researcher is interested in studying to answer the research question (Rahman et al. 2022). In this
study, the research population include Multinational Corporations that have their operations in
Riyadh, KSA and across different sectors of the economies. The researcher sought to draw about
5-10 employees per corporation. The inclusion was MNC companies that have been in operation
in KSA for not less than five years. The study targeted a population of about 600 individuals
working in the MNCs in Riyadh KSA.
3.5.Sampling Technique and Sample Size
Sample refers to a group of units or people from a larger group. In many studies, the target
population is usually too large and to make it manageable and feasible, the researcher has to
select a representative group of the entire population from which to collect the data (Lakens,
2022). This study used a convenience sampling method to select the sample. This allows for the
selection of readily available and accessible participants based on convenience and accessibility.
It should be noted that many workers in MNCs can be very busy and hence, hard to access them.
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Hence, convenience sampling will play an important role. The Employees from the MNCs were
recruited through organizational contacts, professional networks, and online platforms such as
LinkedIn. To get the sample size, the study used the Slovins formula (Anugraheni, Izzah, &Hadi,
2023):
n = N / (1 + Ne^2)
Whereby:
•
n = Sample size
•
N = Population size
•
e = Desired margin of error (5% margin of error)
Hence;
n=600/ (1+600*0.052).
n=600/ (1+600*0.0025)
n=600/ (1+1.5)
n=600/2.5= 240
Hence the sample size was 240 respondents who will be distributed across different MNCs.
3.6.Research Instrument
A research instrument is a tool that is used by researchers to collect data for a research study. It
can take different forms depending on the research methodology, including surveys,
questionnaires, interviews, observation protocols, and tests (Taherdoost, 2016). The purpose of a
research instrument is to systematically gather information from research participants to address
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the research questions or hypotheses, analyze the data, and draw meaningful conclusions. In this
study, the study sought to collect primary data and this was collected by use of a structured
questionnaire designed to collect quantitative data on performance measurement practices,
employee engagement levels, and demographic information. The questionnaire included
validated scales and items adapted from existing studies on performance management and
employee engagement. The structured questionnaire was chosen for the study as it allows for
efficient data collection from a large sample size, is more cost-effective compared to methods
such as interviews, they are easy to quantify, and allowsfor statistical analysis (Taherdoost,
2016). Hence, the use of a structured questionnaire as the data collection instrument in this study
provides an efficient, reliable and practical method for data collection,
3.6.1. Validity and Reliability
The aspects of validity and reliability will be considered during the study. Reliability is the
extent to which the research measurement is able to produce outcomes that are consistent and
stable (Walker et al. 2017). In this case, the Cronbach’s alpha will be calculated to determine the
reliability of the questionnaire. Cronbach’s alpha is a statistical tool specifically used to assess
internal consistency, which is a type of reliability in questionnaire design. It was used to evaluate
whether the various items within the study questionnaire that supposedly measure the same
underlying concept i.e. performance measurement and employee engagement are actually
consistent with each other. The value produced is between 0 and 1 whereby higher alpha values
(above 0.7) reflect better internal consistency.
Validity on the other hand represents how much the findings of the study truly get the
phenomenon that is being studied (Walker et al. 2017). Validity can be categorized into internal
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and external validity. Internal validity is determined by evaluating the construct and content
validity. Content validity was used whereby the questionnaire questions are adopted from
previous studies that have been verified. Also, input from the supervisor Dr. ArfiaAman Assistant
Professor, College of Administrative and Financial Sciences,Riyadh Female Campus,Saudi Electronic
University, KSA was used to make improvements and enhance validity.
3.7.Data Collection Methods
The data was collected through the distribution of online surveys to employees working in
MNCs across various sectors in KSA. The survey was created using Google documents and a
link to the survey sent to the respondent through online platforms including email or their social
media platforms. The link to the quantitative questionnaire was sent to 240 potential respondents
who had agreed to take part in the survey. The respondents were given a period of two weeks to
fill in the questionnaire after which it was closed to allow enough time for analysis. A reminder
email was sent after first week to maximize response rates.
By opening and answering the questions, the respondents were informed to have consented to be
a part of the survey. However, they were reminded that they can exit at their will without any
repercussions. They were also be informed that the data will be anonymous and only used for
academic purposes. Overall, the Participants were provided with clear instructions for
completing the questionnaire and assured of the confidentiality and anonymity of their responses.
3.8.Data Analysis
The data from the questionnaire was first cleaned and coded in the Microsoft Excel platform. It
was then entered for analysis using SPSS (Statistical Package for the Social Sciences).
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Descriptive statistics, including means, frequencies, and percentages, was employed to
summarize the demographic characteristics of the sample, performance measurement practices,
and employee engagement levels. Inferential statistical techniques including correlation analysis
and regression analysis was used to examine the relationships between performance
measurement variables and employee engagement outcomes. The findings will be interpreted to
draw conclusions and implications for theory, practice, and future research
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CHAPTER 4
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4. RESULTS
4.1.Introduction
This section of the study provides the results of the study analysis from the SPSS
and organized based on the study variables. The findings are presented in Tables for
easier interpretation.
4.2. Reliability Test
Cronbach’s Alpha test was used to assess the internal consistency of the survey items. It was used
to assess the reliability of the questionnaire, particularly for employee engagement, management
by objectives, and key performance indicators constructs. As shown in Table 4.2.1 below, the
Cronbach Alpha of the four variables was a low of .669 and a high of .802 which are greater than
0.7 which shows that all the constructs used in the study were reliable.
Table 4.2. 1: Cronbach’s Alpha
Use of Scorecards
Cronbach’s Alpha
.750
N of Items
8
Management by objectives
.802
7
Key performance indicators
.669
4
Employee engagement
.784
8
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4.3.
Demographic information
The researcher first sought to gather the demographic background of the respondents taking part
in the survey. As shown in Table 4.3.1 below, majority of the respondents were female participants
(80.5%) compared to male participants (19.5%). In regards to Age bracket, majority of participants
were within the age range of 25-30 years (42.9%), which indicates a relatively young workforce.
37.6% were within the age range of 31-34 years, 11.2% within the range of 35-40 years, 3.6%
were within the age range of 41-45 years, 3.0% within age range of 18-24 years and 1.7% were
aged more than 45.years.
In regards to Period Worked in Current Company, majority of the respondents in the study have
worked in the current company for 1-5 years (54.8%) followed by 19.8% who have worked in the
current firm for 6-10 years.. This suggests that there is a relatively stable workforce with moderate
tenure which influence the effectiveness of performance measurement strategies due to experience.
In terms of education, majority of respondents in the study stated that they have a Bachelor’s degree
(52.5%) and 25.1% have a Master’s degree. This shows that the respondents were well educated
which could influence how they tend to perceive and engage with performance measurement
systems.
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Table 4.3. 1: Demographic information
Gender
Age bracket
Period worked in the current company
Education
Male
Female
18-24 yrs
25-30 yrs
31-34 yrs
35-40 yrs
41-45 yrs
More than 45 yrs
less than 1 yr
1-5 yrs
6-10 yrs
11-15 yrs
More than 15 yrs
Secondary school
High school
Diploma
Bachelors degree
Masters
PhD
N
%
59
244
9
130
114
34
11
5
45
166
60
23
9
5
27
26
159
76
10
19.5%
80.5%
3.0%
42.9%
37.6%
11.2%
3.6%
1.7%
14.9%
54.8%
19.8%
7.6%
3.0%
1.7%
8.9%
8.6%
52.5%
25.1%
3.3%
4.4.Descriptive statistics
4.4.1. Use of Balanced Scorecards
Table 4.4.1 below shows the descriptivestatistics of the use of scorecards among the respondents.
The data shows the respondents in the survey agreed that; ‘Improved efficiency in resource
utilization is used to measure employee engagement’ (Mean=4.2244), ‘Employee engagement
will participate in Reducing the number of complaints, (mean=4.0132 ), ‘Improved revenue
growth is used to evaluate the levels of employee engagement,’ (mean=3.9868), ‘Improved
adherence to the internal controls and policies is used to measure employee engagement,’
(mean=4.0594), ‘Increased operational efficiency is used to evaluate employee engagement,’
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(mean=3.9571), ‘There is increased employee recognition within the firm.,’ (mean=3.7591), and
‘Empowerment and growth measures have been adapted within the firm,’ (mean=3.9472).
However, the respondents remained neutral to the statement that ‘Employee engagement will
improve customer satisfaction,’ (mean=3.1353). These data shows that there is moderate positive
perception of score cards in the MNCs and its effect on employee engagement.
Table 4.4. 1: Use of Balanced Scorecards
Descriptive Statistics
N
Employee engagement
will improve customer
satisfaction
Employee engagement
will participate in
Reducing the number of
complaints.
Improved efficiency in
resource utilization is
used to measure
employee engagement
Improved revenue growth
is used to evaluate the
levels of employee
engagement
Improved adherence to
the internal controls and
policies is used to
measure employee
engagement.
Increased operational
efficiency is used to
evaluate employee
engagement.
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Minimum Maximum
303
1.00
5.00
Mean
3.1353
Std.
Deviation
.77514
303
1.00
5.00
4.0132
.96965
303
1.00
5.00
4.2244
.73858
303
1.00
5.00
3.9868
.75456
303
2.00
5.00
4.0594
.66842
303
1.00
5.00
3.9571
.74683
40
There is increased
employee recognition
within the firm
Empowerment and
growth measures have
been adapted within the
firm.
Valid N (listwise)
303
1.00
5.00
3.7591
.85624
303
1.00
5.00
3.9472
.77021
303
4.4.2. Management by objectives
Table 4.4.2 below shows the perception of the respondents towards use of themanagement by
objectives element and how it affects engagement. The data shows the respondents agreed with
all the statements regarding the use of management by objectives in the MNCs with means
ranging between 3.8350 and 4.1353. The respondents agreed that, ‘The management has clearly
outlined its goals to the personnel, (mean=3.8350), ‘Management is highly concerned with the
well-being of the personnel,’ (mean=4.1353), ‘The management has offered a conducive work
environment,’ (mean=3.9373), ‘Management offers adequate training and development to align
employee’s competence to the desired objectives,’ (mean=4.0429), ‘The values, policies and
procedures of the firm are well outlined and consistent with the objectives of the management,’
(mean=3.9703), ‘Management involves employees in strategic decision making,’ (mean=3.9175)
and ‘Management offers constant feedback on the attainment of the laid-down objectives,’
(mean=3.9868).
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Table 4.4. 2: Management by Objectives
Descriptive Statistics
N
The management has
clearly outlined its goals
to the personnel.
Management is highly
concerned with the wellbeing of the personnel.
The management has
offered a conducive work
environment.
Management offers
adequate training and
development to align
employee’s competence
to the desired objectives.
The values, policies and
procedures of the firm are
well outlined and
consistent with the
objectives of the
management
Management involves
employees in strategic
decision making
Management offers
constant feedback on the
attainment of the laiddown objectives.
Valid N (listwise)
Minimum Maximum
303
1.00
5.00
Mean
3.8350
Std.
Deviation
.71351
303
2.00
5.00
4.1353
.77085
303
1.00
5.00
3.9373
.82150
303
1.00
5.00
4.0429
.80240
303
1.00
5.00
3.9703
.76930
303
1.00
5.00
3.9175
.82377
303
1.00
5.00
3.9868
.69518
303
4.4.3. Key performance indicators
The respondents were also asked to rate extent to which they agree or disagree with statements
regarding the use of Key performance indicators and their effect on employee engagement. As
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shown in Table 4.4.3 below, the respondents agree with all the statements with mean ranging
between 3.7855 and 4.0660. The respondents in the study agreed that; ‘Sales indicators are used
to measure the levels of employee engagement,’ (mean=3.7855), ‘Efficient Customer service
delivery is used to measure the level of employee engagement,’ (mean=4.0495), ‘Time used to
deal with customer complaints is used to measure employee engagement,’ (mean=4.0660) and
‘The management has laid down key performance indicators,’ (mean=3.9901).
Table 4.4. 3: KPIs
Descriptive Statistics
N
Sales indicators are used
to measure the levels of
employee engagement.
Efficient Customer
service delivery is used to
measure the level of
employee engagement.
Time used to deal with
customer complaints is
used to measure
employee engagement.
The management has
laid down key
performance indicators
Valid N (listwise)
Minimum Maximum
303
2.00
5.00
Mean
3.7855
Std.
Deviation
.62258
303
1.00
5.00
4.0495
.75524
303
2.00
5.00
4.0660
.74291
303
1.00
5.00
3.9901
.74356
303
4.4.4. Employee engagement
Table 4.4.4 below shows how the respondents rate various statements to determine the employee
engagement in their organizations. The data shows that the respondents in the survey agreed with
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all the statement in the employee engagement variable with mean ranging between 3.4191 and
3.9472.
Table 4.4. 4: Employment engagement
Descriptive Statistics
N
I frequently make
suggestions to improve
the work of my
team/department/service.
I try to help others in this
organization whenever I
can.
I always do more than is
actually required.
I volunteer to do things
outside my job that
contribute to the
organization’s objectives.
I speak highly of this
organization to my
friends.
I am proud to tell others I
am part of this
organization
I find that my values and
the organization values
are similar.
This organization really
inspires the very best in
me in the way of job
performance
Valid N (listwise)
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Minimum Maximum
303
1.00
5.00
Mean
3.7789
Std.
Deviation
1.14247
303
1.00
5.00
3.7393
1.11046
303
1.00
5.00
3.6898
1.08090
303
1.00
5.00
3.9472
1.08749
303
1.00
5.00
3.4950
1.17612
303
1.00
5.00
3.5215
1.20376
303
1.00
5.00
3.4752
1.17022
303
1.00
5.00
3.4191
1.23386
303
44
4.5.Inferential statistics
4.5.1. Correlation analysis
The researcher carried out Pearson correlation analysis to determine if there are significant
associations between the research variables including use of scorecards, management by
objectives, KPIs and employee engagement. This is important in assessing the nature of the
relationships that exists between the study variables before conducting more analysis. Pearson
correlation ranges between +1 and -1 whereby r=+0.7 and above shows a very strong
relationship and r=+0.5 and below 0.7 shows a strong relationship. R=0.3-0.49 shows a moderate
relationship and r=0.29 and below shows a weak relationship and r=0 shows that there exists no
relationship (Esther- Smith, Thorge and Love, 1999).
Table 4.5.1 below presents the correlation coefficient whereby the results shows that all three
performance measurement techniques used in this study (balanced scorecards, management by
objectives, KPIs) have a significant positive correlation with employee engagement. Correlation
between Management by objectives and employee engagement in the MNCs had strongest
correlation (r=.346**, p˂0.01), followed by the correlation between KPIs and employee
engagement (r=.338**, p˂0.01). Correlation between Score Cards and employee engagement was
the least (r=.289**, p˂0.01). Overall, the findings shows that the performance measurement has a
moderate and positive relationship with employee engagement which suggests that when these
methods are implemented, employee engagement tends to increase.
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Table 4.5. 1: Correlation Analysis
Correlations
Scorecards
managemen
Scorecard
t by
s
objectives
1
.524**
Pearson
Correlation
Sig. (2-tailed)
N
303
management by
Pearson
.524**
objectives
Correlation
Sig. (2-tailed)