What Is the Impact of Technology on Employee Productivity - Case Study Example

What is the impact of technology on employee productivity? Table of Contents Table of Contents 2 Workplace and Productivity 3 Relationship between Office Design and Productivity 5 Linkages between Technology and Job Satisfaction 6 Technology as a Competitive Advantage 8 Technology and Manufacturing sector 10 References 12 Bibliography 15 Literature Review Productivity Managing employee productivity is one of the major issues faced by organizations operating in the competitive environment. The classical definition of productivity defines this aspect as the ratio of output obtained to the input provided. Gaining higher productivity involves generation of a larger amount of output using the same inputs (resources). Productivity has been used as an effective tool by managers in determining organizational efficiency (Prokopenko & International Labour Office, 1987, p.965). Hameed & Amjad (2009) conducted a study on the issue of employee productivity in the banking sector. The authors quoted Rollos who has defined employee productivity as the productivity that can be generated by individuals by using minimal amount of efforts. The authors also quoted Sutermister who in the year 1976 added the aspect of quality in the definition of employee productivity as given by Rolllos. The authors of the study also pointed out that productivity is being used by organizations to understand their performance with regards to the utilization and efficiency of its resources (Hameed, Amjad, 2009, p.2). A study conducted by Case Western Reserve University links the aspect of performance management with employee productivity. Most of the performance management systems use employee productivity as a performance metric of an employee. Employees having a higher productivity are generally rewarded for their performance thorough various incentives (Case Western Reserve University, 2009). Workplace and Productivity The workplace of an employee has a direct linkage with the productivity of an individual. An efficient workplace often serves as a way of attracting individuals to their workplace. Hameed and Amjad (2009) stated that the physical layout of an office premise plays a major role in enhancing the productivity of employees. The coupling of an efficient management system with a good workplace leads to greater productivity of employees in an organization (Hameed, Amjad, 2009, p.2). Croome (2006) conducted a study on the relationship between the performance of an employee and the workplace. The author quoted Heerwagen in his study that showed that employee performance is a sub-set of opportunity, ability and motivation. He stated that employee performance requires three major factors namely the ability of individual to perform a particular task, a strong motivation to efficiently complete the task and finally necessary infrastructure to achieve the task. The absence of any of the above stated factors results in a loss of productivity on the part of the employee. Office infrastructure and technology constitutes an important part in determining the productivity of an employee. Organizations must resort to provide employees with an efficient and modern workplace which provides them with the necessary infrastructure to perform their tasks efficiently. The ambience of the workplace often serves as a motivation for individuals to give their maximum inputs for a particular job. The author also quoted Boyce who stated that there is a direct relationship between the different kinds of stimuli and performance of an employee. Boyce stated that stimuli affect the motivation, personality and other cost associated factors which affect the output of an individual. Various support systems like communication systems, office lighting serves as important technological functions that define employee performance. The use of advanced technology like Wi-Fi, intelligent building and green buildings often provide a pleasant ambience to the individuals at the workplace which enhances the speed and efficiency of the employees. Improper conditions at the workplace often lead to a situation where the employee is unable to concentrate on his/her task at hand. This reduces the efficiency of the individual to perform a task. The use of improvised technology at the workplace often leads to enhanced concentration as much of the time wasted in using traditional technologies is used to generate productive work. The advent of technological advances in the field of communications has lead to the reduction of time spent in communicating with the fellow employees. Technology has enabled fast and efficient means of transmitting information which has created a situation in which employees have greater time to perform their core tasks. The use of technology also enhances the motivation levels of the employee which in turn enhances the efficiency of the organization (Croome, 2006, p.25-28). Relationship between Office Design and Productivity The use of advanced technologies in the workplace has often been used by organizations to maximise their outputs. Enterprise Resource Planning is one such technology that has been effectively used by organizations to achieve organizational excellence in the form of enhanced productivity. ERP packages help in integrating the various departments of organizations which enables real time information sharing among the different departments in an organization. This has helped in reducing the time required to perform a particular task (Baird, 2008, p.159). Bodin (1998) conducted a study on the use of technology to maximise employee performance. The author quoted an example where the use of sophisticated IVRS technology helped a cal centre based in Upper Midwest to gain strategic competitive advantage (Bodin, 1998, p.17-19). The age of competition has necessitated the need for organizations to achieve efficiency in their business processes. Techniques like Six-Sigma and Total Quality Management are being increasingly adopted by organizations to enhance employee and organization productivity by minimising the defects. The implementation of techniques like Six Sigma and TQM requires the use of high technology. This use of high end technological products in the field of communication, software has led to conditions where the employee is in a better position to deliver efficient results. The implementation of such techniques often creates organizational excellence as employees feel motivated to give their level best as they have an impression that they are being backed by high end technologies that tend to reduce the time and effort in doing a particular task (Bertels, Rath & Strong, 2003, p.401). Leon (2007) conducted a study on the linkage between implementation of high end technological systems like ERP and employee productivity. The author stated that the use of ERP in organizations leads to elimination of duplication errors that are generally committed by employees. Duplication of work leads to wastage of time and at times it also has a demoralising effect on the employee performing the job. ERP packages tend to create a situation where technology prevents employees from committing such errors. This enhances employee motivation and also prevents wastage of productive time and resources for the organization (Leon, 2007, p.188). Linkages between Technology and Job Satisfaction The business world is experiencing continual changes due to the advancements and developments in technology. Innovations and creativity in the technology can change the way business activities are carried out. With the increased competition, the organizations are now required to engage the employees. Rapid market changes, introduction of new technologies have forced the organizations to examine the linkages between the technology and job satisfaction of the employees. Looking at the competitive global market, the organizations are giving their best to efficiently use their resources, enhancing the processes by using the technology to speed up the operation. Research studies have been carried out to examine the link between employee satisfaction and technology. Danziger and Dunkle have carried out a research study to find out the satisfaction among the workers who use computer on a regular basis. It has been noticed that there is enough evidence of possible negative influences on the generalized job satisfaction (Danziger & Dunkle, n.d.). The employees, who use the computer technology heavily, are noticed to be associated with lower level of job satisfaction. However, a debate can arise regarding the impact of technology on the employee satisfaction as there are many indirect evidences available, which indicates a positive relationship between the technology and job satisfaction. There are certain factors which are significant to promote job satisfaction within the employees. Even examining different theoretical models can provide evidences that the technology and job satisfaction, both have a positive relationship. Frederick Herzberg’s ‘Two Factor Theory’ aims to explain the employee satisfaction and motivation in the workplace. According to the theory, job satisfaction and dissatisfaction are driven by both the motivation and hygiene factors. Hygiene factors are the factors related to the work environment of the employees (Riley, n.d.). Office environment or office design is a significant factor which can promote the job satisfaction among the employees. For an example, Google has used enhanced technology to build up the exterior and interior of its office; the outcome is surely an improved job satisfaction among the Google employees. A happy workplace can be built up with the advent of new technologies, which, in turn, is expected to enhance the employee’s job satisfaction. Apart from this, there are certain other factors which can put an impact on the job satisfaction. Some of these factors are controlled by the management. One significant factor is the ‘opportunities for advancement’ (Ramatulasamma, 2003). Technology has given enough opportunity to the employees to enhance their skill set which has been crucial for their further career development. Now- a -days, employees can gather the required skill sets through the use of internet. So, in turn, this is expected to enhance the job satisfaction as employees are now able to groom them more easily with the help of technology. It has been noticed that there are evidences to prove both the positive and negative linkages between the technology and the job satisfaction of the employees. Technology has been significant to enhance the working conditions as well as it has helped the employees to have more opportunities of advancements. However, with the advent of technology, some of the activities have become automated which create a feeling of boredom among the employees. This boredom has, in turn, created job dissatisfaction among the employees seeking challenges in work. However, this can be primarily mitigated with the help of measures involving job empowerment and job enrichment, which have a positive relationship with the job satisfaction within employees. Technology as a Competitive Advantage With the rising competition among the firms worldwide, companies are looking for sustainable competitive advantage. Technology has been the bludgeon of many companies to secure sustainable development over their competitors. For an instance, companies like Microsoft, Google, Apple and Intel have used their enhanced technology to kill the competition and stay ahead of their competitors. However, this is also true for other companies. According to Michael Porter, companies can take two positions: cost leadership and product differentiation. In both the cases, technology can emerge as a significant component of the whole process. While talking about the companies who look for cost leadership like the low cost airlines, it can be noticed they use enhanced technology to lower their overall cost of operation. Companies like Easy Jet, Southwest Airlines use technology as their competitive advantage to beat the competition in low cost airlines market. With the advent of information technology a number of activities have been automated, which have, in turn, reduced the overall operational cost (Ong & Ismail, 2008). Technology is a powerful tool which can be used to leverage the resources a company has (Griffith, 2004). Information technology is bringing in changes in the way companies operate. The entire process is affected by which the companies develop the products. “Furthermore, it is reshaping the product itself: the entire package of physical goods, services, and information companies provide to create value for their buyers” (Porter & Miller, 1985, p.3). One of the significant roles of information technology is the development of the firms’ value chain. The ‘value activities’ can be performed more efficiently with the introduction of technological advancements. A business can only be able to add value to this value chain if the value created exceeds the cost of performing these value activities. As said earlier, to fetch the competitive advantage over the competitors, companies are required to either perform the value adding activities at a lower cost or perform them in a way to create differentiation with that of their rivals. Technology is not only used to connect the value activities with the companies, but it also helps to establish an effective coordination its value chain with that of its suppliers and distribution channels. For an instance, Xerox provides the manufacturing data to the suppliers electronically to help them in delivering the required materials. Information technology has changed the relationship between the scale, automation and flexibility. There is no need to have large production to introduce automation in the process. For an instance, General Electric re-established the “Erie Locomotive facility as a large scale, yet production factory using its computers to store the design and manufacturing data” (Porter & Miller, 1985, p.8). The above all activities have enhanced the productivity of the employees in the company. Technology and Manufacturing sector Technology has changed the way of operation in every industry; manufacturing is not an exception to that. A survey has been carried out on the usage of technology in the US manufacturing sector. The following table lists a number of hard and soft technologies used in the manufacturing sector with a brief explanation of the same. Around 67 % of the manufacturers have reported that they have been benefited by using advanced technology. In a study it has been reported that the sales per employee has been increased in the manufacturing sector (Swamidass, 2000). This means that the productivity has increased in this sector. Apart from that, even the rejection and rework rate has been decreased, which is the ability of the manufacturing process to produce quality products. Decrease in the same would mean increase in efficiency and productivity in the sector. The increased use of management information system has enabled the manufacturing companies to integrate their activities only to increase the efficiency of their workforce. (Sources: Swamidass, 2000) Certain other studies have found enough evidence that computer may not increase the productivity. However, it cannot be said that increased use of information technology would decrease the productivity as so many other factors may intervene in the evaluation process (Brynjolfsson & Yang, 1996). These debates will go on; however, this is for sure that the use of advanced technology has increased the demand of skilled labor in the sector. References Baird, L. 2008. Siebel Crm 100 Success Secrets - 100 Most Asked Questions on Siebel Customer Relationship Management Applications Covering Oracle Enterprise Crm, on D. Lulu.com. Bertels, T, Rath & Strong. 2003. Rath & Strongs six sigma leadership handbook. John Wiley and Sons. Bodin, M. 1998. Maximizing Call Center Performance: 136 Innovative Ideas for Increasing Productivity and Customer Satisfaction. Focal Press. Brynjolfsson, E. & Yang, S. February, 1996. A Review of the Literature. [Pdf]. Available at: http://ccs.mit.edu/papers/CCSWP202/ [Accessed on October 26, 2010]. Case Western Reserve University. 2009. Increasing Employee Productivity – Case Western Reserve University Performance Management Process. [Ppt]. Available at: http://www.case.edu/finadmin/humres/erelations/attachments/SBS-August09-Perf.ppt [Accessed on October 20, 2010]. Croome, D.C. 2006. Creating the productive workplace. Taylor & Francis. Danziger, J. & Dunkle, D. No Date. Information Technology and Worker Satisfaction. [Pdf]. Available at: http://www.crito.uci.edu/papers/2005/itworkersatisfaction.pdf [Accessed on October 20, 2010]. Griffith, I. August, 2004. Technology as a Competitive Advantage. [Pdf]. Available at: http://www.bevnetwork.com/talkingtech_issue_article.asp?ID=14 [Accessed on October 20, 2010]. Hameed, A & Amjad, S. 2009. Impact of Office Design on Employees’ Productivity: A Case study of Banking Organizations of Abbottabad, Pakistan. [Pdf]. Available at: http://www.scientificjournals.org/journals2009/articles/1460.pdf [Accessed on October 20, 2010]. Leon, A. 2007. Erp Demystified, 2/E. Tata McGraw-Hill. Ong, W. J. & Ismail, B. H. 2008. Sustainable Competitive Advantage Through Information Technology Competence: Resource Based View on Small and Medium Enterprises. [Pdf]. Available at: http://www.ibimapublishing.com/journals/CIBIMA/volume1/v1n7.pdf [Accessed on October 20, 2010]. Porter, E. M. & Miller, E. V. 1985. How Information Gives You Competitive Advantage. [Pdf]. Available at: http://zaphod.mindlab.umd.edu/docSeminar/pdfs/Porter85.pdf [Accessed on October 20, 2010]. Prokopenko, J & International Labour Office. 1987. Productivity management: a practical handbook. International Labour Organization. Ramatulasamma, K. 2003. Job Satisfaction of Teacher Educators. Discovery Publishing House. Riley, S. No Date. Herzberg’s Two Factor Theory of Motivation Applied to the Motivational Techniques within Financial Institutions. [Pdf]. Available at: https://dspace.emich.edu:8443/dspace/bitstream/1970/17/2/thes_hon_05_RileyS_1.pdf [Accessed on October 20, 2010]. Swamidass, M. P. 2000. Encyclopedia of production and manufacturing management. Springer. Bibliography Liberman, M.A, Selig, G.A & Walsh, J.J. 1982. Office automation: a managers guide for improved productivity. Wiley. Tennant, G. 2001. Six Sigma: SPC and TQM in manufacturing and services. Gower Publishing, Ltd. Werner, J.M & DESimone, R.L. 2008. Human Resource Development. Cengage Learning. Read More