31-05-2013, 02:13 PM
The role of physical and financial, social, human and natural capitals in explaining work performance of employees in Malaysian public sector
ABSTRACT
In this paper, we investigated the influence of four basic types of capital: physical and financial, social,
human, and natural on work performance of the employees in public sector at federal ministry level in
Malaysia. A structured research instrument was utilized to survey a sample of 1253 employees from 19
federal ministries in Malaysia. Pearson correlation was employed to analyze the relationships between
the independent variables and dependent variable. Enter method regression was employed to
determine to what extent these capital factors explain the variation of work performance among
employees. Analysis shows that there are positive linear relationships between the four capitals and
work performance. Only three of the four capitals considered in the regression model namely human,
social, and physical and financial capitals were significant in explaining the variation of work
performance. Natural capital did not show significant contribution. Human capital made the highest
contribution in explaining variation of work performance, followed by the three nonhuman capitals:
social, and physical and financial capitals. Natural capital made an insignificant contribution.
INTRODUCTION
Employees’ work performance is the most relevant and
appropriate tool in determining the quality and quantity of
outputs in public sector organizations. The productivity of
an organization highly depends on the performance of its
employees. It has been frequently emphasized that the
success of an employee depends on three types of
capital: physical capital, human capital, and social capital.
However, all of them can facilitate production activities
and their final success. A number of studies have
demonstrated the importance of the three types of
capitals (social, human, physical and financial) on
performance (Zhang and Fung, 2006; Putnam, 1993;
Portes,1998; Portes and Landolt, 1996).
Capitals and performance
Human capital refers to the investment undertaken by
individuals in the form of education and training in skills.
As with any investment, the objective is to increase
productivity (Becker, 1964). The theory of human capital
states that the differences in the performance of
individuals are due to some of the characteristics of the
individuals themselves such as skill, knowledge and
talent. Currently, the linkage between human capital and
performance is well established. Results of study
conducted by Seleim et al. (2007) revealed that human
capital indicators had a positive association on
organizational performances. There is large evidence that
demonstrates a positive relationship between human
capital and performance (Switzer and Huang, 2007; Hitt
et al., 2001). It is vivid that as employees acquire more
education and training, human capital drives the
production of goods and services.
Research framework
Variables of study
The dependent variable for this study is work performance. The
work performance scores consist of three dimensions: quality of
work (4 items), quantity of work (7 items) and timeliness (6 items),
which gives a total 17 items. The composite scores were computed
by adding the responses of 17 items used and then the mean of the
composite scores were calculated to give the work performance
scores needed for analysis. There are four independent variables in
this study namely: physical and financial capitals, human capital,
social capital, and natural capital. The physical and financial capital
was measured by 21 items indicating the extent of adequacy and
usability of resources in organization such as budget, tool and
equipment, infrastructure, material and supplies, and ICT
(computer, fax, telephone, and internet). While human capital was
measured using 27 items representing the extent of employees’
knowledge and skills at work, discipline, implementation of policy
and procedures, communication skill and ability to organize the
work. The social capital consists of 27 items measuring the extent
of employees’ relationship and cooperation with colleague, social
community interaction, and work family balance. The natural capital
comprises 10 items quantifying the extent of air quality, water
quality, green reserve area, soil conservation, maintenance of
sewage system, noise pollution, industrial waste pollution,
household waste pollution, traffic congestion and connectivity, and
epidemic diseases.
The instrument response scale
The response scale was also decided during the first phase of the
instrument development. To break monotony of 5-point-anchors, it
was decided that the scale instrument used be the 10-point version
as this multipoint scale yields more data variability. There are
several reasons to the usage of this scale point. On a 10-point
scale, the wider distribution of scores around the mean gives us
more discriminating power. For instance, a respondent that
routinely receives 90% top-two box scores on a five-point scale will
likely only enjoy about 85% top-two box score on a seven-point
scale. On a 10-point scale, the same respondent would expect a
score of only about 75%. According to Allen and Rao (2000), the
second reason a seven-point or 10-point scale is preferred involves
covariance. In general, it is easier to establish covariance between
two variables with greater dispersion (that is, variance) around their
means. It is this covariance that is so critical to establishing strong
multivariate dependence models. Thus, from a model development
perspective, the 10-point scale is preferred.
Conclusion
Although, this study was not designed to determine,
whether, an increase in one variable caused an increase
in the value of a second variables. It would seem logical
that to imply that the work performance score is more apt
to increase when the physical and financial, human,
social, and natural capital increase. This study has
contributed to the literature on physical and financial
capitals, human capital, social capital and natural capital
by examining the relationship between capitals and work
performance. The results suggest that there are
relationships between the four capitals and work
performance. Hence, employee’s work performance is
expected to increase if employees have physical and
financial capital, human capital, social capital and natural
capital. However, the data does not fully support the
proposed four-predictors multiple linear regression
model. In other words, not all four capitals can influence
work performance. The result supports the importance of
human capital and social capital, and physical and
financial capital for work performance.