SILCON VALLEY COLLEGE

DEPARTMENT OF BUSINESS ADIMINSTRATION

(MBA) PROGRAM

THE INFLUENCE OF EMPLOYEES RELASHINSHIP MANAGEMENT

ON EMPLOYEES’ PERFORMANCE: THE CASE OF SUB SUB CITIES IN
ADDIS ABABA CITY

A PROPOSAL SUBMITTED TO SILCON VALLEY COLLEGE

DEPARTMENT OF BUSSNESS ADIMNSTRATION IN PARTIAL
FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
DEGREE IN MASTER OF BUSINESS ADMINISTRATION (MBA)

BY:Yelfadam Shumet Taye, Gezu Korme Gelan, Woinishet Lakew Erken ,

Yanet G/Egziabher , Hirut Ashagrie, Yeshi Atinafu, Mulu Gezahegn

ADVISOR: Abel Desta (Asst. Prof.)

DECEMBER /2023

ADDIS ABABA, ETHIOPIA

 Table of contents Page
List of Figures ...................................................................................................................................i

Acronyms ......................................................................................................................................... ii

CHAPTER ONE ............................................................................................................................. 1

1. Introduction ............................................................................................................................. 1

1.1. Background of the Study .................................................................................................. 1

1.2. Statements of the problem ................................................................................................ 3

1.3. Objectives of the Study .................................................................................................... 6

1.3.1. General Objective ..................................................................................................... 6

1.3.2. Specific Objectives…………………………………………………………………6

1.4. Research questions ........................................................................................................... 6

1.5. Significance of the Study ................................................................................................. 7

1.6. Scope of the study ............................................................................................................ 7

1.7. Limitation of the Study .................................................................................................... 7

1.8. Organization of the Paper................................................................................................. 8

CHAPTER TWO ............................................................................................................................ 8

2. Related Literature Review ....................................................................................................... 8

2.1. Theoretical Review .......................................................................................................... 8

2.1.1. The Concept of Employee and Employee Relation ......................................................... 8

2.1.2. Definition of Employee Relationship Management ................................................. 9

2.1.3. Employee’s performance .......................................................................................... 9

2.1.4. The relationship between Employee Relationship Management and Employees

Performance ........................................................................................................................... 10

2.1.5. Employee Relationship Management Components ................................................ 11

2.1.5.1. Trust .................................................................................................................... 11

2.1.5.2. Communication ................................................................................................... 11

2.1.5.3. Leadership Style .................................................................................................. 12

 2.1.5.4. Shared Goals and Values: ................................................................................... 12

2.1.6. Theory related to employee relationship management ........................................... 12

2.1.6.1. Adams’ Equity Theory ........................................................................................ 12

2.1.6.2. Scientific management theory ............................................................................. 13

2.1.6.3. Human relations theory ....................................................................................... 14

2.1.6.4. Systems Theory ................................................................................................... 14

2.1.6.5. Strategic choice theory ........................................................................................ 15

2.2. Empirical Studies on employee relationship management on employee performance .. 16

2.2.1. Critiques and Research Argument on ERM component and Employee’s

Performance ........................................................................................................................... 19

2.2.1.1. Communication and Employee’s performance ................................................... 19

2.2.1.2. Leadership Style and Employee’s performance .................................................. 19

2.2.1.3. Shared goal and value and employee’s performance .......................................... 21

2.2.1.4. Trust and Employee’s performance .................................................................... 22

2.3. Research Gap and Conceptual frame work .................................................................... 22

CHAPTER THREE ...................................................................................................................... 24

3. Research Methodology .......................................................................................................... 24

3.1. Research Approach ........................................................................................................ 24

3.2. Research Design ............................................................................................................. 24

3.3. Source of data ................................................................................................................. 25

3.4. Data collection method…………………………………………………………………………..…………………………………25

3.5. Population,Sampling technique and Sample size…………………………………………………………………………25

3.5.1. Target Population .................................................................................................... 25

3.5.2. Sampling Technique ............................................................................................... 25

3.5.3. Sample Size determination ..................................................................................... 26

3.6. Data Analysis ................................................................................................................. 26

3.6.1. Correlation Analysis ............................................................................................... 26

 3.6.2. Multiple Regression Analysis ................................................................................. 27

3.7. Reliability and Validity Test .......................................................................................... 27

3.8. Ethical Considerations.................................................................................................... 28

CHAPTER FOUR………………………………………………………………………………………………………………………………………28

4.Budget and Time Schedule………………………………………………………………………………………………………………….28

4.1. Time Schedule….…………………………………………………………………………………………………………………………….28

4.2.Budget……………………………………………………………………………………………………………………………………………..29

REFERENCES ............................................................................................................................. 31
 List of Figures
Figure 1: Conceptual Relationship of the study Variable ............................................................. 23

i
 Acronyms
ERM employee relationship management

HRM human resource management

HR human resource

UK United Kingdom

USA united states America

ii
 CHAPTER ONE

1. Introduction
1.1. Background of the Study

Employees are the focal point in the success of every organization. If the employees work
together and share a good relationship with employers, they can achieve their tasks much faster.
Managing employee relationship is important and valuable to the organizational success and
achieving competitive advantage. It is necessary to have a strong relationship between
employees and employers that leads to productivity, motivation, and better performance(Al-
khozondar, 2015).

Employee relation is simply defined as the relationship between employees and employers.
(Rose, 2008) defines Employee’s relations as the study of the regulation of the employment
relationship between employer and employee, both collectively and individually, and the
determination of both substantive and procedural issues at industrial, organizational and
workplace levels. Employee relations is traditionally concerned with the institutions of job
regulation and generation of employment rules and led to focus on trade unions, collective
bargaining and collective agreements. Employee relations is both events driven by government
change, technological change, demographic change, management change and changes in
ownership of organization and also structure driven by economic trends, political trends and
changes to social institutions.

The concept of ERM had it root in UK, USA, the economic and political challenges and
recessions occurred in UK, and USA during 1980s had laid ground for the emergency of the idea
of employee relation as separated and distinctive field of study in area of human resource
management and organizational relationship. According to CIPD (Chartered Institute of
Personnel & Development) Employee relations is a broad term that incorporates many issues
from collective bargaining, negotiations, employment legislation to more recent considerations
such as work-life balance, equal opportunities and managing diversity. It comprises of the
practices or initiatives for ensuring that Employees are happy and are productive. Employee
Relations offers assistance in a variety of ways including employee recognition, policy

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development and interpretation, and all types of problem solving and dispute resolution. It
involves handling the pay work bargain, dealing with employment practices, terms and
conditions of employment, issues arising from employment, proving employees with a voice and
communicating with employees. Employee relations is concerned with maintaining employee-
employer relation, which contributes to satisfactory productivity, increase in employee morale
and motivation. In most case ERM discussed in association with HRM functions, ERM as major
component of management, it has benefit for employees and employer, it provide good working
environment and satisfaction for employees and increased attraction, retention, motivation and
performance improvement for employers(Strohmeier, 2013). Moreover as of (R. Bajaj, Sinha, &
Tiwari, 2013) expression, ERM promotes Commitment, facilitates employees in achievement of
organizational objectives, minimizes workplace conflict and increases trust, which will promote
organizational improvement.

The concept of employee relationship management in the workplace has been observed globally
across the organizations of various industries. It is essential to have a sturdy association between
employees and employers that leads to efficiency, enthusiasm, and improved performance.
Employee relationship denotes the relationship amongst employees and management as a
background of organizational fairness or justice comprising of organizational culture and
management style as fit as guidelines and routine arrangement for complaints and conflict
management. Indeed, the goal of employee relationships is to attain harmonious employee
association and reduce conflict activities in employment with reward playing a moderating role
(Torrington, Hall, Atkinson, & Taylor, 2017).

An organization can only achieve all its objectives through people. The nature of the relationship
of people at work is therefore, fundamental to the effective management of an organization. The
way various human resources in all parts of an organization are combined together into relatively
fixed relationship and defined patterns of social relations determine their performance.
Organizations have to create positive work environment to make the work interesting and
flexible and to motivate and develop employees if they are to be competitive in a changing and
dynamic environment (Dauda, 2010). Effective employee relation strategies encourage
individual and group commitments to excellence and help in creating favorable environment at
workplace. The fact that organizations are subjected to constant change makes it imperative for
both management individual employees to constantly evaluate the relevance and achievement of

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the organization’s vision at all times. (Oguwa, 2011), lists staffing and promotions, employee
training and development, employee performance appraisal, job analysis and description, and
reward as components of employee relation strategies.

Specifically, ERM refers to the communication management between enterprise and the staff,
this kind of communication adopts flexibility, encouraging, and non-compulsory means to
improve staff's satisfaction, support enterprise to realize the goal. ERM runs through every
aspect of human resource management, which begins from the first day of employing the
staff(M. S. Rahman & Taniya, 2017). Managing employee relationship is imperative and
precious to the organizational success and achieving spirited benefit. It is required to have a
sturdy relationship between employees and employers that leads to productivity, motivation, and
better performance. According to Rahman & Taniya (2017), ERM is a dynamic method of
handling the relationship between knowledge worker and corporation such that knowledge
workers exchange intellectual properties in a way that delivers value to the corporation and are
deterred from participating in activities that are unprofitable to the corporation. ERM is all about
effective organizational communications, which can build employee confidence, trust, and
loyalty, enabling management to realize the potential of the skills and knowledge within the
organization. The problem that this study intends to address will be whether employee’s
performance may vary based on the level of interaction they have with their employee to
employee, employee to employer, this study will intend to determine whether there is an effect of
ERM on performance at the selected sub cities in Addis Ababa city.

1.2. Statements of the problem

It has almost become an indubitable fact that most employees at business private sectors do not
discharge their performance at their level best when there is unhealthy relationship between them
and their employers. When employees are not happy, it follows that they will unlikely make the
customers happy. The organization is in the way scaring away its business and losing its profits.
It is for this reason that management is reminded now and then to give outmost care in crafting
strong relationship with their employees. This must be so as on one hand human resources are
the most important asset in the organization; and on the other hand, management is responsible
for organizing, coordinating, planning ,staffing and other organizational resources in order to
achieve the stated goals and objectives. This situation generates a necessity of employer-

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employee relationship, which is central for the development of any organization(Bratton, Gold,
Bratton, & Steele, 2021).

Organizations cannot perform better and achieve their objectives if there is a bad relationship
between employees and employer, therefore it is very important for managers to create and
maintain good relationship with their employees. Effective employee and management
relationship is vital to the workplace whether at the time of recruitment, during an employees’
tenure or at the time of separation(Rose, 2008). Good employer-employee relations is essential to
the organization because it inspires employees to work better and produce more results(Prescott,
2012). The application of human relations in managing human resource is critical in today’s
business competitive environment(Christen, Iyer, & Soberman, 2006). Factors such as job
satisfaction are achieved when there is a great working relationship between labor and
management(Boyle, 2006).Organizations can have competent, qualified and motivated
employees if there is agood relationship between employee and employeers but if there is no
peace and harmony at the work place their performance will be in danger. Because the
relationship between the employer and the employee is very crucial, employers need to pay
attention to this relationship if they want their businesses to grow and succeed and that firms
should actively seek good employee relations whether or not they are bound by union
contracts(Bhattacharya, Sen, & Korschun, 2008). Employee relationship management has man
documented positive effect in organizations. such as, strengthening corporate communication
and culture, fostering about company products, services and customer providing real-time access
to company training, targeting information to an employee based on their needs(Wargborn,
2008).

Performance of employee depends upon job satisfaction, compensation and benefits structure,
reward plans, promotions, motivation, conductive working environment, training and succession
planning. Along with this, modern tools, techniques and sophisticated technology used by
organizations for employee relations create competitive advantage over competitors.
Performance management of employee is a complex and integrated process of setting up a
common employee understanding about targets to achieve in an organization and aligning the
corporate objectives with the measures like skills, competencies required for a job, employee
development plans and the ultimate results delivered by them. Indeed, this study endeavors to
collect and review based on the facts and findings of various articles to draw logical statements

4
about employees’ relations and its effects on employee performance & to propose further studies
to triumph over the drawbacks of earlier studies carried out on the issues of employee
relations(Brhane & Zewdie, 2018).

Researchers also argued on components of ERM and their effects on employee‘s performance,
which has lead researchers to adopt and use various independent variables to measure their effect
even though there had been empirical studies conducted to measure the effect of communication,
trust, leadership style ,shared goal/value and conflict management on employees performance
(Manjula & Prakash, 2019) (Brown, Gray, McHardy, & Taylor, 2015) and (Babatunde & Emem,
2015) respectively. Today, most employees at public sector do not maximize their effort to
achieve organizational objectives if there is no harmonies relationship between them and their
employers. If employees are not happy, then it is unlikely that they will make the customers
happy. The organization is therefore throwing its goal achievement. For that reason management
should care of managing strong relationship with their employees.

Therefore, effective employee relationship for a public organization is essential to realize its
performance to achieve the intended purpose of an organization. To do this, employee
relationship and their performance has a stake.

Many studies on this topic were conducted in developed and emerging countries. such as,
(Florence & Anthony, 2016) in the telecommunications subdivision in Nigeria, (Samwel, 2018)
in the small organizations in Tanzania. Abura Phyllis Achieng(2018) in public universities in
western Kenya. (Al-khozondar, 2015) at Telecommunication and Banking Sectors and others in
Islamic university Gaza. However such studies have contributed to the literature on employee
performance,Some of their findings may not be very applicable to other countries like
Ethiopia.Aset of employee relationship components that have a significant role in employee
performance in one nation may be insignificant in another due to differences in cultural
difference, economic situation, customer perceptions, geographical location, rules of the country,
and environments.

The glob study had conducted on the private sectors or profit oriented organizations but
employees are not the same thing across cultures and their performance had perceived differently
in different settings.

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In addition to their geographical similarity both the previous studies did not consider the
influence of employee to employee relationship and not consider descriptive analysis, but only
inferential analysis, not consider interview . This study will particularly intend to examine the
influence of employees’ relationship management on the employees’ performance in selected
sub cities in Addis Ababa.Therefore, the study will address the problem by providing
information about the influence of employee relationship management on employee performance
replicating the existing in the Ethiopian context.This study will fill the gap in literature by
scrutinizing the influence of employees’ relationship management on the employees’
performance in selected sub cities in Addis Ababa city.

1.3. Objectives of the Study

1.3.1. General Objective

The general objective of the study will be to examine the influence of employee’s relationship
management on employees’ performance in the case of selected sub cities in Addis Ababa city.

1.3.2. Specific Objectives

The specific objectives of the study will be

A. To examine the influence of Communication on the performance of employee's of sub
cities in Addis Ababa city.
B. To determine the influence of leadership style on the performance of employee's of sub
cities in Addis Ababa city..
C. To investigate the influence of shared goales and values on the performance of
employee's of sub cities in Addis Ababa city.
D. To examine the influence of trust on the performance of employee's of sub cities in
Addis Ababa city.

1.4 Research questions

The Study will address the following research questions:

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1,What are the influences of Communication on the performanc of employee's of sub cities in
Addis ababa city?

2,What are the influences of leadership style on the performance of employee's of sub cities in
Addis ababa city?

4,What are the influences of shared goal and value on the performance of employee's of sub
cities in Addis ababa city??

4,What are the influences of trust on the performance of employee's of sub cities in Addis ababa
city?

1.5. Significance of the study

Conducting this study will provide an insight for the decision and policy makers (government
officials and public organization about the contribution of employee’s relationship on employee
performance. Specifically, the results of the study will help to inform government officials’ in
the public organization to be aware of the influence of employee’s relationship on the
performance of employees. In a sense the results of the study will provide information to the
leaders in order to make sound decisions concerning employee’s relationship and the employee
performance in leading their organization towards success. It will also add value in employee’s
relationship and employee performance literature. It will provide up-to date information for
academicians and other researchers who want to conduct further studies.

1.6. Scope of the study

Geographically, the scope of this study will to investigate the influence of employee’s
relationship on employee performance in the case of sub cities in Addis ababa city. Its
conceptual scope will be on the influence of employee’s relationship on the employee
performance.

1.7. Limitation of the Study

No research may be free from limitations. Thus, this research will have the following limitations.
First,the researcher will face aproblem of access to the right data due to un willingness of the
7
employees to give the right information.the samples selected from the total may not fully
represent the whole popolation in the study area therefore the result of the study may not
generalized to the total population of the study ares. the data will be collected from employees of
sub cities in Addisababa city; so the results of the study will not generalized to other dynamic
environments.

. Second,the resaercher will use cross-sectional data rather than longitudinal data.Time and
budget will also the other limitation of the study to collect data.

1.8. Organization of the Paper

The final thesis will organized into five chapters. Chapter one will deal with the introduction.
Chapter two will deal with related literature review, chapter three will deal with the methodology
of the study, chapter four will be about data analysis and interpretation and finally chapter five
will contain summary, conclusions and recommendation.

CHAPTER TWO
2. Related Literature Review
2.1. Theoretical Review

2.1.1. The Concept of Employee and Employee Relation

Employees are one of the major stalk holders for every organization, both commercial and
nonprofit organizations. Employees give the best part of their lives to organization; there is
therefore a moral obligation to let them know how they are performing. At the same time
organizations have to measure the performance of all their resources unlike technology and
capital. This resource peoples has expectation and interests and they are manifested in behavior
which impacts performance. Employee relation is a kind of interpersonal relationship concept
that drawn by western scholars in the 20th century to replace the industrial relation. It focuses on
the right and responsibility, management and obeying caused by the interest between the
organization and the employees as a total of cooperating, conflict, strengthens and power
relations and is influenced by economic, technology, legal system and socio cultural background
in a certain community(Yongcai, 2010). Employee relation is defined as the relationship between
employees and managers to enhance moral, commitment and trust of employees and to create
suitable working environment which enables them to exert their at most effort for the

8
achievement of organizational goals(R. Bajaj et al., 2013). An effective employee relation
involves creating and cultivating a motivated and productive workforce.

2.1.2. Definition of Employee Relationship Management

Employee Relationship is defined as a relationship between employer or the representative

manager and employees, aimed towards maintaining commitment, morale and trust so as to
create productive and secure workplace environment (R. Bajaj et al., 2013).

ERM is a dynamic process of managing the relationship between knowledge worker and
corporation such that knowledge workers elect to continue a mutually beneficial exchange of
intellectual assets for compensation in a way that provides value to the corporation and are
dissuaded from participating in activities that are unprofitable to the corporation(Bergeron,
2003). ERM can be defined as a specific field of human resource management(Yongcai, 2010).
It is the process of adopting various controlling methods and practices to regulate the relations
between company vs. staff and employee vs. employee, and enables the company to achieve its
goals(Jing, 2013). Employee relationship management is relatively a recent term defined as a
strategy to effectively manage employees in a way they can attain organizational
objectives(Lagergren & Andersson, 2013).

ERM is all about effective organizational communications, which can build employee
confidence, trust and loyalty, enabling managements to realize the potential, the skills and
knowledge within the organization. It is a powerful business tool that enables employees to do
their job better(Pareek & Rai, 2012).

2.1.3. Employee’s performance

According to (Nuhu, 2010), performance was perceived as the ability of employees to meet
organizational tasks, requirements and objectives through strategic investment in to organizing,
executing and accomplishing rules and duties in the minimum time possible.

The Effective people resourcing includes not only the acquisition of the appropriate quantity and
quality of people but also the management of employees to ensure that the performance is
constantly reviewed and at a level that is consistent with the achievement of organizational

9
objectives. Employees should know what is expected, not just in terms of duties and
responsibilities but also in standards of performance (Aktar, Sachu, & Ali, 2012). Employees
play a pivotal role in organizational success. Perceived employee performance represents the
general belief of the employee about his behavior and contributions to the success of the
organization. Employee performance may be taken from the perspective of three factors that
make it possible to perform better than others; determinants of performance may be such as
declarative knowledge, procedural knowledge, and motivation(Ahmad & Shahzad, 2011).

Managing employee's performance is an indispensible for the accomplishment organizational

goals. Assessing an employee's capability and measuring his or her productivity is the crucial in
the overall plan of the organization. When organizations fail to measure employees’ potential
and ability to perform the given tasks, it is difficult to enhance the production level of the
organization. As employees’ performance is directly related to organizational productivity and
success, it is essential to measure employee performance since each employee creates results
which mainly comprise the correlation among the quality of production and dedication of
employees at work place (Shahzad, Sarmad, Abbas, & Khan, 2011).

2.1.4. The relationship between Employee Relationship Management and Employees

Performance

Success in a scientific endeavor depends significantly on imaginative and flexible systems of

management and administration, which will help in the realization of the full potential of the
gifted, trained, and highly valuable work force resources, and ensure conditions for the highest
level of performance. It is imperative to have dynamic and sensitive management, and
appropriate working conditions and incentives that will attract, retain and deploy in a patently
efficient manner these precious human resources. It commonly accepted that employees
constitute an important resource of completive advantage for organization. As a result, an
organization needs to adopt ERM that makes the best use of its employees (R. Bajaj et al., 2013).

Employee relationship is the major factor determining the performance of employees through
motivating employees, effective communication, and good working conditions. An organization
should have proper and effective Employee relation management since this enables the
personalizing of Employee Relations. Good Employee Relationships contribute significantly to
the success of the organization and create an excellent organization. In every organization, some

10
unidentifiable issues lead to productivity gaps. These gaps can be filled through Employee
Relations as it acts proactively on those issues which retard productivity(Kuzu & Özilhan, 2014).

2.1.5. Employee Relationship Management Components

2.1.5.1. Trust:

Trust is a critical variable influencing the performance, effectiveness, and efficiency of the
organization(Dirks & Ferrin, 2002). Trust is considered one of the most influential variables on
organizational performance. Trust may grow, decline, or even reemerge over the course of a
relationship. Trust at the organizational level involves the aggregated degree of trust shared with
sufficient consensus among members in an organization. In employee employer relationship trust
is the level of reliance one can place upon the information received from another person and
confidence in the relationship partner. As such, trust is a key relationship element (Herington,
Johnson, & Scott, 2009). According to (Dirks & Ferrin, 2002) trust is a critical variable which
influence the performance, effectiveness and efficiency of the organization. Trust promotes
cooperative behavior, minimizes conflict and develops employees‘ positive perceptions to their
managers which in turn enhance employee job satisfactions and cultivates a positive work
environment, which consecutively promotes good employee relationship in organization. If
employees do not trust their managers, the flow of upward communication will be compromised
(or simply will not happen); likewise, if managers do not trust the employees who work for them,
the downward flow of communication will be negatively affected(Daniel, 2003).

2.1.5.2. Communication

Communication is important in organization. It serves as the coordination link between people

and organizational functions. Ongoing, frequent two way communication is one of the most
important components of a comprehensive employee relations strategy. Interactive
communication is giving both a message and actively listening to what is being said in response
build trust between employees and their managers(Daniel, 2003).

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 2.1.5.3. Leadership Style:

Leadership is considered a factor that has a major influence on the performance of organizations,
managers and employees (Wang, Law, Hackett, Wang, & Chen, 2005). Leadership style, often
called ‘management style’, describes the approach managers use to deal with people in their
teams. There are many styles of leadership; and the performance of employees varies according
to the styles of the leadership they are within(Armstrong, 2009).

2.1.5.4. Shared Goals and Values:

In the business context, a goal is most commonly viewed as something that a firm “values” and
the extent to which employee’s value the same goal provides a sharing of something of value
between employees and the organization. Shared values is defined as the extent to which partners
have beliefs in common about what behaviors, goals, and policies are important or unimportant,
appropriate or inappropriate, and right or wrong(Herington et al., 2009).

2.1.6. Theory related to employee relationship management

2.1.6.1. Adams’ Equity Theory

Theory According to Adams’ Equity Theory, the inputs and the outputs should be fair to ensure
the high level of job satisfaction and performance among the employees in an organization.
Remarkably, the human resource practices in every organization should follow the procedural
justice for high job satisfaction and performance (Deutsch, 1975). The training & development,
reward, recruitment & selection, job analysis, employee relations, employees’ empowerment,
and social support are identified as key factors that determine employees’ job satisfaction and
employee performance. These factors are viewed as independent variables that determine
whether the employees are satisfied and deliver good performance at the workplace or not.
Through Adams’ Equity Theory, the job satisfaction of employees and its relation with the
employee performance are rationalized (Montana & Charnov, 2008).Accordingly, Adams’
Equity Theory suggests the need for equity between the employees’ expectations (inputs) and
what the employees gain in return (outputs) and the significance of the organization to strike a
balance between inputs and outputs to realize maximum employee performance(Rothmann &
Cooper, 2015). In other words, the inputs can be viewed as effort (to perform their job and
improve their job performance) while the outputs (outcomes of performing their job) are deemed
12
as reward. Hence, it is imperative that the maximum impact of training & development as well as
other organizational functions of human resource practices delivered at the Saudi ports.
Moreover, employees exhibit diverse behaviors, which should be comprehensively considered.
Over the years, Saudi ports have demonstrated successful attempts in their training &
development for the employees given their keen interest to satisfy the needs of their employees.
With respect to this particular theory, employees who express job satisfaction are more likely to
demonstrate enhanced employee performance and productivity of organization (Montana &
Charnov, 2008) because their needs are considered by the organization, making them feel
appreciated and acknowledged. Essentially, the organization should provide high-quality training
& development to equip the employees with the job skills (Ahmad & Schroeder, 2003), resulting
in elevated satisfaction and performance at the workplace. Through training & development, the
employees are able to acquire the necessary knowledge and enhance their capacities to sustain
and improve their performance (Atteya, 2012). Besides that, the equipment provided during
these training & development courses should be adequate to ensure all employees have similar
training opportunity (Al-Qudah et al., 2014) and to clear any doubts that the employees may
have by exposing them to all key areas of the industry. The individual who is responsible for the
training and development should be well-informed and possesses the expertise and capacity to
address all questions posed by the employees. Moreover, it becomes even more difficult for the
employee to put in effort for the assigned duties when the organization does not offer reward to
the employee. At this point, it is plausible that the employee expresses the intention of quitting,
which may influence other employees to follow suit. With that intention, the employee seeks a
different career opportunity that offers job satisfaction (Montana & Charnov, 2008). Apart from
training & development, this study also views reward as another independent variable that
significantly influences the employees’ job.performanc

2.1.6.2. Scientific management theory

Unitarist assumptions and values have played a significant role in three schools of theoretical and
practical thought. The first is Taylor’s (1974) theory of scientific management. As a management
practice, this particular theory holds that the employment relations choices of management must
start from the assumption that employees are immature in the ways of work, are prone to avoid it
whenever possible, and have limited, self-centered aspirations and time-horizons. In so far as this
conflicts with the aspirations and time-horizons of organizations, efforts to reduce the outward

13
manifestation of internal tension are to be undertaken by direct and highly rigid control of the
workplace activities of employees. when recruiting and directing workers, to have a clear
understanding of the tasks employees are expected to perform, and to have untrammelled
prerogatives to control the pace and processes under which they work. Companies subscribing to
this form of management practice should reduce work to its basic elements, such that the skills of
workers necessary to undertake tasks are kept to a minimum. Employees should be treated
impersonally and collectively, with any workplace issues being referred to management. Under
these conditions the management approach to employee relations is one that seeks to suppress
internal tension over the distribution of organizational power by ensuring that management
retains superior knowledge about the structure and organization of work, and has the authority to
direct workers as it sees fit.

2.1.6.3.Human relations theory

The third theory comes from the so-called human relations school (Abbott, 2006). In this case
the reduction of organizational tension is held to rest on the ability of individuals to achieve self-
fulfillment in the workplace. Workers are regarded as qualitatively different to other resources
used in production. Thus, if workers are denied autonomy on the job, or are reduced to acting as
mere extensions of the machinery they operate, or are given work that inhibits their capacity to
create and think, it is argued that they will invariably find ways to subvert the methods of control
that enforce these conditions. The principal task of management on this conception is to
manipulate workplace relations in ways that enable employees to feel personal satisfaction with
being involved with the organization. To this end, companies operating on this basis are expected
to recognize the right of employees to have a say in how they are governed. They are also
expected to take an active interest in developing the skills of employees as a means of
demonstrating a commitment to their personal well-being. In whatever form, the aim of this
managerial approach to employee relations is one that seeks to reduce internal tensions by
developing the sense of workplace satisfaction felt by employees through techniques that involve
them in the organization and regulation of work.

2.1.6.4. Systems Theory

The most famous theory drawing on a pluralist frame of reference is Dunlop’s (1958) systems
theory, which argues that industrial relations are best regarded as a sub-system of the wider
14
social system. The theory holds work to be governed by a wide range of formal and informal
rules and regulations, which cover everything from recruitment, holidays, performance, wages,
hours, and a myriad of other details of employment. It asserts that these rules are what industrial
actors try to determine, that their establishment is influenced by the wider environmental context
in which the actors operate, and that the actors themselves share an interest in maintaining the
processes of negotiation and conflict resolution. On the back of these assertions four elements
are held to make up the system of industrial relations rule-making. The first is industrial actors,
which consists of employers and their representatives (i.e., employer associations), employees
and their representatives (i.e., trade unions), and external agencies with an interest in industrial
relations (i.e., government departments and labour courts). The second is the environmental
context, which was made up of prevailing economic and technological conditions, as well as the
distribution of power in wider society, each of which is thought to influence or constrain the
actions of actors engaged in industrial relations. The third is a so-called ‘web of rules’ that
governs the employment relationship and is held to be the outcome of interactions between the
actors. The last is a ‘binding ideology’, which is a set of common beliefs and understandings that
serve to encourage compromises on the part of each actor for the sake of making the system
operable. An important aspect of this framework conceives the industrial relations system as self-
adjusting towards equilibrium. In so far as change in one element had repercussions for the other
elements, they are held to set in motion a range of processes that invariably restores a sense of
order on the system.

2.1.6.5. Strategic choice theory

Another widely used and more recent theory drawing on pluralist assumptions is (Kochan,
McKersie, & Chalykoff, 1986). This particular theory picks up on the systems concept developed
by Dunlop (1958) and advanced on it by accommodating a number of contemporary changes in
the way industrial relations was being practiced. Three such changes are noted as being
influential in determining the way manager’s deal with industrial relations issues. The first is
identified in the recent decline in union membership and the rise of new industries not covered
by unions. The second is noted in the way collective bargaining structures and outcomes
involving trade unions have altered. And the third is recognized in the emergence of new
managerial values and human resource strategies that encouraged information sharing,
workplace cooperation, performance incentive schemes and autonomous work teams. The theory

15
argues that these changes have made dealing with industrial relations matters far more complex
than has traditionally been the case. First, the decline of trade unionism, the increasing
decentralization of bargaining processes and the advancement of human resource management
practices have caused a redistribution of decision making authority over workplace relations. In
this regard orthodox industrial relations specialists are held to have lost significant power to
human resource and line managers when dealing with issues in this area. Second, the growing
popularity of unitarist ideas in techniques used by human resource managers have encouraged
organizations to take a more proactive approach to the management of employees. This was
reflected, the theory argues, in the way senior executives are taking a more integrated approach
to the development of human resource and business strategies. Third, and as a consequence of
this, it is asserted that managers can no longer be regarded as merely the passive reactors to
demands and initiatives put forward by organized labour. Indeed the integration of human
resource and business strategies means that decisions about marketing, production, finance,
investment, and so on, are all having more and more influence over the day-to-day management
of workplace relations. An important element of this theory is that it recognizes the
interrelationship between decisions and activities across different levels of the industrial relations
system.

2.2. Empirical Studies on employee relationship management on employee

performance

Most recent studies revealed the dynamism of the work environment and its fast-moving
changes, which has resulted profound shift of work and its management. The significant change
over the past couple of decades occurred due to the national contexts being increasingly subject
to global economic influences is changing the working and employment conditions. Managers,
as a consequence, are being asked to think in new and more sophisticated ways about how to
better organize and allocate work, and how to better direct and utilize those in their charge,
specially employees of the organization(Abbott, 2006).

According to(Brhane & Zewdie, 2018) good employees relation motivates employees for better
performance and contributes to the overall success of the organization. It also concluded that
employee relations management components such as communication, participative leadership,
shared goals and value, mutual trust, motivation and conflict management have significant effect

16
on the performance of employees. Organizations are realizing that employee relationship
management facilitates building strong relationship with their employees. When employee
relationship management can build, strengthen & reinforce commitment, it enhances employee
performances which in turn boost up organizational effectiveness.

As Arabic countries studies, most organizations considered employees the most important assets
in an organization, it’s important to ensure effective management of employees. The Research
tries to discuss the influence of employee relationship management and its component on
employees’ performance. Through reviewing the previous studies in employee relationship
management the research noticed the lack of ERM particularly. Several local, Arabic, and
foreign studies are reviewed and the general findings are: - employee relationship management
is a new emerging concept and there is no clear definition and strong literature review for it,
Many studies focused on the employee relationship management components and its influence
on employees’ performance, The previous studies agreed on that good relationship between the
employee and employer leads to better performance, Most previous studies agreed on the
influence of employee relationship management components on employees’ performance,(Al-
khozondar, 2015).

Employee relationship management components have positive effect on the employees’

performance in banking sectors. Organizations are realizing that ERM helps them to build
stronger relationship with employees. As such ERM can build and enhance relationships and
reinforce commitment to the company and improve the employees’ performance. From this
research it becomes evident that ERM can bring benefits for organizations. ERM can work by
strengthening and increasing the relationship between organizations and their employees. To
reap the required objectives from ERM there is a need to implement them according to strategy.
Many companies built strategy by keeping an eye on their employees. The results of the research
reveal that if ERM components (HR practices, communication, trust, shared goals and values and
leadership styles) are implemented in organizations and managers give it high attention it can
enhance ERM status in organizations through help employees in achieving tasks and targets set
for their job positions and helps in developing effective communication channels and systems so
that information needs of employees are met. It emphasizes on performance, growth and
development of employees for creating competitive advantage. It helps in improving working
conditions, establishing healthy relations among employees; it inculcates a sense of

17
belongingness among employees. ERM components are ordered according to their effect on the
employees’ performance where noticed that HR practices has the most approval from the
viewpoint of the members of the sample, and then Leadership Style, Shared goals/values, Trust
and finally the Corporate Communication Organizations in both sectors practicing ERM, without
necessarily labeling these practices ERM. In this case, ERM would actually exist within the
organization on top of everyday processes and practices which are known to employees and
organization. In other words, just because organizational practices which aid ERM are not
actively managed on documented within companies, does not mean they are not actually there.
Organizations in both sectors focus in HR practices, Leadership Style and Shared Goals and
values which are considered prerequisite and foundation to improve employees’ performance.
An HR practice has the biggest effect on the employees’ performance where employees perform
their tasks very well(M. S. Rahman & Taniya, 2017).

Maintaining harmonious relations is very important for the survival, prosperity and growth of the
organization. Good and healthy employee relations lead to better organizational performance.
The study found that small organizations are aware of the benefits of maintaining good employee
relations and correct remedial actions to minimize poor employee relations in the organization.
Similarly, the study found that there is a positive significant relationship between employee
relations and employee performance as well as between employee relations and organizational
performance. Moreover, the study found that the use unfair labor practices is a major cause of
poor employee relations in the small organizations in Tanzania(Samwel, 2018).

Managing employee relations is critical to motivate employees toward better performance and
organizational success. Factors such as recognition, counseling, mentoring among others help in
boosting the morale of employees and organizational citizenship behavior required for
organizational success. The result showed strong positive association between managing
employee relations and organizational success, which is frequently measured by performance
and profitability(Ugoani, 2020). In this study Overall body of reviewed literatures revealed the
presence of significant effect of employee relationship management as well as its components on
employee‘s performance.

18
 2.2.1. Critiques and Research Argument on ERM component and Employee’s
Performance

2.2.1.1.Communication and Employee’s performance

Nevertheless numerous studies have resulted positive relationship between internal

communication, job and employee‘s performance (Abuwarda, 2017; Bartoo & Sias, 2004;
Chinomona & Sandada, 2013; Gray & Laidlaw, 2002; Rosenfeld, Richman, & May, 2004;
Zucker, 2002). However, scholars on different occasions have also revealed opposite results
about the same issue, some empirical studies that indicated negative relationship between
communication and employee performance includes; Goris et al. (2000), where the researcher
found negative correlation between communication direction (upward, downward, and lateral)
and job performance and job satisfaction. The same argument was also presented by Appel baum
et al. (2005), arguing that communicating all types of information results damaging of
individual‘s job security and career aspirations.

2.2.1.2. Leadership Style and Employee’s performance

According to (Mui, Basit, & Hassan, 2018)conducted a research on title the impact of leadership
style on employee performance. A sample size of 100 was used from one private organization in
Selangor, Malaysia using convenience sampling technique. The study used quantitative
approaches, and a questionnaire was designed. A five-point Likert scale questionnaire was used
to determine the impact of leadership style on employee performance. Descriptive statistics show
that the most significant value associated with employee performance is democratic leadership
style followed by laissez-faire leadership style and autocratic leadership style. Based on the
findings of this research, democratic leadership style has greater impact than laissez-faire
leadership and autocratic styles in terms of employee performance.

(Dalluay & Jalagat, 2016)conducted a research on title Impacts of Leadership Style effectiveness
of Managers and Department Heads to Employees’ job Satisfaction and Performance on Selected
Small-Scale Businesses in Cavite, Philippines. The sample size used is 150. Survey
questionnaires were designed to study the effects of manager leadership styles on employees’
performance and satisfaction. Weighted mean were used to survey questionnaires on leadership
19
styles, and correlation coefficient and multiple regression were used to study the relationship
between variables on leadership style, job performance and job satisfaction. The finding
concluded that corporations should constantly making the most of leadership style which
enhances employees performance and employee job satisfactory level even though there is still
rooms for improvements.

(Sakiru, Enoho, Kareem, & Abdullahi, 2013)conducted a research on title in Relationship

between Employee Performance, Leadership Styles and Emotional Intelligence in an
Organization in Malaysia. Sample size used by the researchers is 180. Data was collected using
three instruments; Multifactor Leadership Questionnaire, ECP and parasternal performance
evaluation process. Work performance was taken and recorded using organization’s performance
evaluation process. ECP factors are used to measure emotional intelligence. Cronbach’s alpha
reliability coefficient is used for MQL factors. Linear regression analysis is used. These findings
concluded that there is a substantial relationship between worker performance with emotional
intelligent and leadership style.

(Ojokuku, Odetayo, & Sajuyigbe, 2012)) conducted a research on the Impact of leadership Style
on Organizational Performance: A Case Study of Nigeria Bank in Nigeria. The sample size used
by the researchers is 60. The study contained twenty of random picked banks in Ibadan, Nigeria.
A structured questionnaire was used to collect data from the heads of accountants, heads of
operations, and branch managers on face-to-face basis. Inferential statistical tool was used and
one hypothesis was formulated to analyses data. Regression analysis was used to study the
dimensions of significant effect of leadership style on followers and performance. The findings
showed that there was positive and negative correlation between performance and leadership
style. There was 23 percent variance of performance found in leadership style jointly predict
organizational performance. This study concluded that transformational and democratic
leadership styles have positive effect on both performance and followers, and are highly
recommended to banks especially in this global competitive environment.

The significance of effective management is widely announced and communicated among

organizations and other entities, however its direct impact on performance remain poorly
understood (Babatunde and Emem, 2015). Studies illustrated both positive and negative
relationship between leadership style and the consecutive employee‘s performance. EranVigoda
(2007),MacKenzie et al. (2001), Parry (2003) studies resulted transformational leadership has
20
stronger positive effect on employees‘ attitudes towards their job, job environment, and
ultimately affects their work performance than transactional leadership. The contradicting
conclusion drawn from other empirical studies revealed transactional leaderships is most
influential style of leadership for determining employee‘s performance than transformational
leadership (Wang et al., 2005). On other arguments Limsila and Ogunlana (2008); they argued
that organizational cultural and environmental contexts determine the style of leadership that can
influence employee‘s performance. On base of the above argument under this study proposed to
test following hypothesis;

Ha2: Leadership style has significant positive effect on employee’s performance in bahir dar
public office

2.2.1.3. Shared goal and value and employee’s performance

Shared value and Goal is part of organizational non-visual corporate identity, which includes;
company values, company objectives; and company structure. Most researches concerned with
corporate identity focused on the visual corporate identity management elements (the company
name; logo; corporate colors; corporate signs and billboards; environment; architecture; and
facilities; and vehicles) (Alesandri, 2001; Cornelissen and Elving, 2003; Steyn et al., 2004;
Garman, 2006; Denize and Young, 2007). Contrary to the above argument Holtzhausen‘s (2008)
claimed that visual corporate identity management elements has less impact and influence on
employee relationship management and his argument support the importance of non-visual
elements, his study also revealed that company value and objective impacts employee-employer
relationship management than visual elements of corporate identity managements. On top of this
Holtzhausen and Fourie, (2009), recommended non-visual elements to be given attention and
further steps to be taken to empirically prove how this elements impact employer-employee
relationship management and employee‘ performance. On base of the above argument the
researcher under this study proposed to test following hypothesis;

Ha3: Shared goal and value has significant positive effect on employee’s performance in bahir
dar public organization.

21
 2.2.1.4.Trust and Employee’s performance

Based on empirical studies on trust have revealed positive correlation between trust and three
measures of employee performance; financial performance, labour productivity and product or
service quality and four measures of employee trust based upon the average level of trust in
managers within the work place (Brown et al., 2015). The existing positive relationship between
trust and employee‘s performance was explored and confirmed by the following (Grund &
Christine, 2013). Additional study by (Schoorman, Mayer, & Davis, 2007) implied that trust is
subjective to individual experience and environments, which justify the lack of empirical
evidence in generalizing its relationship to a given situation.

2.3. Research Gap and Conceptual frame work

ERM constitutes an emerging trend of managing human resources by building and maintaining
individualized and mutually valuable relationships with employees. However, given the early
and still emerging state, there is little knowledge and agreement regarding ERM (Strohmeier,
2013). On the other hand there are also arguments on the component of ERM and their effects on
employee‘s performance, which has resulted researchers to adopt and use various independent
variables to measure the effect of employee relationship management. Even though there had
been empirical studies conducted to measure the effect of communication, trust, shared value,
leadership style and conflict management on employees performance, Kumar and Manjula,
2017; Brown, (Brown et al., 2015), Taylor, 2015; Babatunde and Emem, 2015; and Okechukwu,
2013) respectively, but there is no attempt and studies taken to understand the comprehensive
effect of all variables together on employee‘s performance. Review of up-to-date literature
resulted null research finding on ERM concept in public organization and the area left with
shortage of evidence and literature, however there are literature and empirical evidence about
ERM in banking, health, telecommunication, construction, software, manufacturing, hotel,
education and small and medium sectors (Sahedu and Khatun 2017; Ritesh and Mehrotra, 2017;
Indranil, 2013; Harshani, 2017; ). There are plenty of studies performed in Ethiopian to measure
and examine how employee‘s performance is influenced by diversified factors, however review
of local literature ascertained that ERM and its effect on employee‘s performance had not given
attention by researchers and academicians and therefore the area lacked empirical evidence to
22
examine the practice of ERM and its effects from public organization. In the reviewed body of
knowledge, communication, human resource practice, leadership style, shared goal and value
and trust had not been analyzed with relation to public organization as basic components of
employee relationship management. The related studies were carried out mainly in developed
countries outside Africa. Public organization is among social service delivery that provide job
opportunities and manage risks for other sector of the economy as a consequence of that it must
ensure availability of productive and committed employees. On the other hand, the studies are
conducted in different cultural context which means the context of Bahir Dar public organization
may not be the same with the other organizations’ context. Therefore this study seeks to fill this
gap. On the base of identified research gap the objective of this particular study is to examine
understanding of the influence of ERM on employee‘s performance in Bahir Dar city
administration civil servant in selected public organization. The study were expected to fill the
existing research gap through analysis of variable and drawing conclusion from the study,
additionally it presumed to provide future research direction for scholars in the area.

Figure 1: Conceptual Relationship of the study Variable

HR practice

Shared goals & value

Communication Employee’s
performance

Employee trust

Leadership style

Source; (M. S. Rahman & Taniya, 2017), based on review literature

23
 CHAPTER THREE

3. Research Methodology

Research methodology is the philosophy or general principle which guides the research and a
way to systematically solve the research problem. Research methodology deals with the logic
that use behind the methods in the context of our research. Research methods refer to the
behavior and instruments used in selecting and constructing of research techniques. Generally,
research methods are tools and techniques to do the research(Kothari, 2004) .

3.1. Research Approach

The researcher will use both qualitative and quantitative research approach. The reason for
choosing this approach includes;data will be collected from respondent by using close ended
questionnaire and structured interviews. The close ended questionnaires will used to limit the
respondents to the variables of the study while the structured interviews will enable respondents
to freely give their opinions in a more pragmatic way. It will be possible to gather large amount
of data from large number of respondents and quantitative research have high statistical power
which allows to acquire objective results,unlike qualitative research approach is concerned with
subjective assessment of attitudes, opinions and behavior. According to (Kothari, 2004), claimed
that quantitative research involves the generation of data in quantitative form which can be
subjected to rigorous quantitative analysis in a formal and rigid fashion unlike qualitative
research. It will used because; it allows respondents to answer the same set of questions in a
predetermined order and enable to get the direct response and feedback from the respondents.

3.2. Research Design

The researcher will use descriptive & explanatory research design to examine the relationship
between employee relationship management and employee performance and job satisfaction in
sub cities in Addisababa city. Explanatory research design seeks to explain the variable by
associating it with the study and this will be used because of the researcher has an interest in
explaining why and how the variable behave the way they do. Descriptive design will be suitable
to accurately and systematically describe a population, situation or phenomenon and it can
answer what, where, when and how questions (Creswell & Clark, 2017).

24
3.3. Source of data
For the achievement of the objective of the study, the research will use primary data. The
primary data will be collected from the employees of sub cities in Addis ababa city. The major
advantage of primary data collection is that it can obtain first hand data from the sample
respondents with the researcher‘s purpose in mind.

3.4. data collection method

The primary data will be collected by using close-ended questionnaire and structured interview
data gathering techniques. The close ended questionnaires will be rated on the five points Likert
scale ranged from strongly disagrees, allocate a scale of 1, to strongly agree, allocate a scale of 5
and it will be divided into two parts. Part I will contain demographic information of the
respondents (gender, age range, educational level, and experience), part II will contain a series of
questions which will be designed to answer the research questions.

3.5. Population, Sampling Technique and Sample Size

3.5.1. Target Population

Population is the entire group of people, events or things of interest that the research wishes to
investigate(Cooper, Schindler, & Sun, 2006). This research will aim to examine the influence of
employee relationship management on employee performance and job satisfaction in sub cities in
Addis ababa city Therefore, the target population of this research will be employees of eleven
sub cities in Addis ababa city.

3.5.2. Sampling Technique

probability sampling technique particularly simple random sampling technique will be applied
to select representative sample and to avoid bias. There are eleven sub cities in Addis Abab city,
and then to select sample respondents the researcher will apply proportional stratified random
sampling technique using the sub cities as a stratum.Finally, each respondent will be selected
using simple random sampling technique.

25
 3.5.3. Sample Size determination

There are 11 sub cities in Addis ababa city simple random sampling will be conducted to select
samples. Five sub cities will be selected as asample.these five sub cities have atotal of 1750
employees due to the population is large samples will be selected by using aformula (Yamane,
1967); assuming 95% level of confidence and 5% probability of error.

n= N/1+ (N*e2), where, n is sample size, N is the population, and e is the probability of error.

Therefore, based on the formula the total sample respondents will be

=
+ ( )

n = 1750

1+1750(0.05)
n=326

Therefore the research sample size will be 326.

3.6. Data Analysis

After the relevant data collects, necessary coding and insertion of the data will be made, and the
data will be analysed by using Statistical Packages for Social Science (SPSS- Version 23). To
analyses the data, both descriptive statistics (mean, standard deviation, percentage and
frequency) and inferential statistics (correlation and multiple regression analysis)will be used.
Descriptive analysis will be used to measure the respondent’s demographic data that will be
achieved through summary statistics such as frequency and percentages, and the practice of
employee relationship management will be analyzed by using mean value and standard
deviation. The data will be also presented using tables and charts.

Inferential statistics will be the second data analysis technique. Including pearson,s correlation
will be used to determine the degree of relationship between variables(Regression analysis will
be used to determine the contribution of the independent variable to the dependent variable).

3.6.1. Correlation Analysis

A correlation is a design in which investigators use the co-relational statistic to describe and
measure the degree relationship between two or more variables or sets of scores (Creswell &

26
Creswell, 2017). Correlation coefficient will be used to investigate the strength in relationship
between two or more variables, which was measured by Pearson‘s correlation coefficient (r) and
the summery of correlation analysis will be presented in data analysis part and it wiil be also
attached on appendices.

3.6.2. Multiple Regression Analysis

Multiple regression analysis is used when the study had one dependent variable, which is
presumed to be a function of two or more independent variables. Since the objective of the study
will be to investigate the influence of ERM on employee ‘s performance, this method will be
more suitable. therefore the study will establish multiple linear regression relationship between
dependent variable (employee performance) and independent variable employee relationship
management components (communication, leadership style, shared goal and value and trust).
The multiple linear regression equation that will be used is presented here below.

Y=βo+β1X1+β2X2+β3X3+β4 X4 + +εi

Where, Y= Dependent Variable (Employee‘s Performance), X=Independent variables

(Components of Employee Relationship Management; where; X1;Communication,
X2;Leadership Style, X3; Shared goal and value, X4;Trust), β0= constant coefficient, β1= un-
standardized regression coefficient of communication , β2= un- standardized regression
coefficient of leader ship style, β3= un- standardized regression coefficient of shared goal and
value, β4= un- standardized regression coefficient of trust , εi=error term

3.7. Reliability and validityTest

In order to diminish the likelihood of getting the response inaccurate, attention will be needed to
pay on validity and reliability. Reliability and validity are essential to the effectiveness of any
data gathering tools(Hair, Ortinau, & Harrison, 2010). Reliability (internal consistency) and
validity (face and construct validity) will be considered when the research design instruments.
Accordingly, to check the validity and reliability of the questionnaire the research will employ
different techniques as mentioned below.

Data reliability will be measured using Cronbach‘s alpha coefficient which ranges between 0 and
1 (Sekaran, 2006). If the Cronbach coefficient value realized is higher than 0.7, it means that the
scales are reliable (Klein & Ford, 2009). A commonly accepted rule of the thumb for describing

27
 internal consistency is using Cronbach alpha and the scale for making decision for Cronbach
alpha coefficient is presented in Decision rule for Cronbach alpha Value Internal consistency ɑ
≥ 0.9 Excellent 0.7 ≤ ɑ < 0.9 Good 0.6 ≤ ɑ< 0.7 Acceptable 0.5 ≤ ɑ < 0.6 Poor ɑ < 0.5(Klein &
Ford, 2003). to measure the validity of instruments such as quesrionaries apretest will be made to
40 samples.

3.8. Ethical Considerations

In conducting this study harm will not be occured to any of the participants that will be involved;
both psychologically and physically. The privacy of the participants will be ensured at all times,
and no information will be disclosed without the prior permission of the participants.
Furthermore, no participant will be forced to participate in the study. The confidentiality of
participants will be ensured throughout the study

CHAPTER FOUR

4.Budget And Time Schedule

4.1. Time Schedule

Tasks Timeline

DEC. JAN. FEB. MAR. APR. MAY.

Title selection √

Read literature √ √

Problem definition √

Finalize objectives √

Draft literature review √ √

Read methodology literarure √ √

Devise research approach √ √

28
 Draft research proposal √

Contact advisor √ √ √ √ √ √

Develop questionnaire √

Pilot test and revise √

questionnaire

Administer questionaire √

Enter data into computer √

Analyze data √

Draft findings chapter √

Update literature

Complete remaining chapter √

Submit to the advisor √

Rvise draft and format √

Print and bind √

Submit √

4.2. Budget

Unit quantity Unit price Total cost in birr

measure

birr cent birr cent

COMPUTER no 1 25000 00 25000 00

Paper pack 3 300 00 900 00

Pen no 10 20 00 200 00

29
Pencil no 3 10 00 30 00

ruler no 3 20 00 60 00

calculator no 1 300 00 300 00

Flash disc no 1 450 00 450 00

Note book no 5 50 00 250 00

Hand bag no 1 1200 00 1200 00

Duplicating questionnaire page 100 5 00 500 00

Photo copy page 100 5 00 500 00

Printing proposal page 40 5 00 200 00

Re-Printing final proposal page 40 5 00 200 00

Printing research page 60 5 00 300 00

Re-Printing final research page 60 5 00 300 00

Email and fax expense page 300 1 00 300 00

Mobile card item 60 50 00 300 00

contingency NO - - - - -

total 30690

30
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