The Role of Employee Relations Management in Improving

Employee Performance
Mohamed Essa1 and Rami Abu Wadi2
1HR Zain Bahrain, Manama, Kingdom of Bahrain
2Ahlia University, Department of Accounting and Economics, Manama, Kingdom of

Bahrain
mohamed.isa@bh.zain.com
rwadi@ahlia.edu.bh
DOI: 10.34190/KM.19.267

Abstract: This research investigates the relationship between Employee Relationship Management (ERM) and employees’
performance in the telecommunication sector in the Kingdom of Bahrain. ERM’s main components considered in this
research include improving retention, internal culture, supporting creativity and job security. The data of the research was
collected using a questionnaire which was distributed to 343 employees working in the telecommunication sector. The
findings indicated that there is a positive relationship between employee relationship management components and
employee performance. Thus, the researchers recommend that firms should pay special attention to ERM components by
carefully incorporating them into their strategy to develop and maintain employees’ skills, abilities, motivation to enable
them to carry out their duties and tasks as essential variable components of its great effect on employee performance in the
long term.

Keywords: employee relationship management, employee performance, knowledge management, telecommunication

sector

1. Introduction
Human resource management is an important department in many organizations, its function in an organization
is to ensure that human resources are deployed to enable success of planned activities (Wright and McMahan,
1992). Human resource practices in organizations should be consistent and in-line with the set strategic goals in
order to enhance organizational efficiency and increase employee performance (Huselid, 1995). Furthermore,
the practices of human resources should always aim at acquiring, motivating and developing employees.
Strategies placed by human resource practices play a significant role to the firms overall performance concerning
finances and operations (Delaney and Huselid, 1996).

The knowledge-based view concerns knowledge as a valuable resource of the firm (Grant, 1996). The knowledge
embedded in human capital enables firms to enhance distinctive competencies and discover opportunities
(Wright et al., 2001). When firms develop new products and improve management processes, they require the
motivation and ability of human capital to produce creative ideas, develop innovative approaches, and exert
new opportunities (Scarbrough, 2003). The human resource management (HRM) function can influence and
modify the attitudes, capacities, and behaviors of employees to achieve organizational goals (Collins and Clark,
2003) and it plays a crucial role in nurturing the necessary conditions for catalyzing and channeling individuals
towards the development of innovation activities (Laursen and Foss, 2003). Firms can use some HR practices,
such as improving retention, internal culture, supporting creativity and job security, as means to motivate
employees' commitment and get them involved in creative thinking and innovation (Laursen and Foss, 2003).
The HR practices affect employee’s performance through their capacities in knowledge management. That is,
firms can use a set of HR practices to cultivate the level of capacity in knowledge acquisition, sharing, and
application, which, in turn, promote employees' propensity to innovate and enhance their performance. Thus,
this study argues that HR practices would play a critical role in affecting employee’s performance.

2. Literature review and hypothesis development

Employee Relationship is defined as a relationship between the employer or the representative manager and
the employees, aimed towards maintaining commitment morale and trust so as to create productive and secure
workplace environment (Bajaj and Sinha, 2013).

Employee relations management (ERM) includes the acquisition of suitable amount and excellence of people
and an effective people resourcing to make sure that the recital is continually reviewed and at a level which is

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stable with the achievement of organizational objectives (Wargborn, C., 2008). Therefore, the employee
relations management ensures that all HR policies, procedures and strategies are consistently implemented in-
line with the organization’s stated values through certain performance level of employees. (Pareek and Rai
2012).

One of the important studies in the area of managing knowledge from a human resource management
perspective is that carried out by Scarbrough and Carter (2000). They argue that human resource practices ‘can
influence but not command crucial mediating factors such as desired behavioral responses from employees, or
the stock of human and social capital available to the firm’ (Scarbrough and Carter, 2000). They utilize existing
human resource management literature to suggest that human resource practice best contributes to managing
knowledge by combining ‘congruence’ and ‘human and social capital’ approaches. Through the congruence
approach they emphasize that human resource management practices need to be internally consistent so that
they mutually reinforce each other, reinforce the overall management system in the organization and ‘fit’ with
the external business environment. Specifically, they highlight human resource practices in the areas of career
structure and reward systems as worthy of attention for the purpose of managing knowledge (Randle and
Rainnie, 1997). Through the human and social capital approach, they emphasize the importance of ‘the long-
term development of skills, culture and capabilities within the organization’ (Scarbrough and Carter, 2000).
Based upon the assumption that people are carriers of much of the organization-specific knowledge, they
suggest that human resource practitioners focus upon, first, the retention of personnel. Second, they suggest
that employees’ expertise be built into the organizational routines through learning processes. Third, they
suggest that mechanisms are established for the distribution of benefits arising from the utilization of this
expertise.

2.1 Employee relations management and employee performance

The best way to bridge the productivity gap of an employee is to build a cordial relationship with the employee.
This promotes the employee personal effectiveness and productivity because when the manager takes the time
to develop these relationships and guides employees in their work, more quality work will be able to be
produced. It is evidently true that it is only through good relationships coupled with strong, sensitive leadership
can a unified department be built (Chapman and Goodwin, 2001). It is imperative to have a dynamic and
sensitive management, and appropriate working conditions and incentives which will attract, retain and deploy
in a patently efficient manner these precious human resources. It is now commonly accepted that employees
constitute an important resource of competitive advantage for firms. As a result, it is important for a firm to
adopt ERM that makes the best use of its employees (Chandra and Zupan, 2009). More specifically, ERM allows
HR professionals to more accurately identify employee’s motivations, needs and preferences as well as better
align employment practices to real needs, which minimizes staff turnover and at the same time maximizes staff
retention by the definition of more appropriate recruitment profiles. The final results promoted by ERM
adoption are better equipped managers, employee loyalty, empowered employees, improved employee
satisfaction, preferred employer status, and reduced costs, (Bannister et al., 2003).

2.1.1 Employee relations and improving retention

The progression and the achievement of an organization's objectives and goals appeared to be tied up to the
retention of skilled employees. One of the most basic workforce administration difficulties of the present future
are the employee retention issues. Researches have concluded that in future, effective organizations will be
those which alter their authoritative conduct to the substances of the present workplace where achievement
and lifespan rely on creativity, adaptability and development. Statically, the flow of the workplace should mirror
an assorted populace contained people whose inspirations, convictions and esteem structures contrast
tremendously from the past and from each other. The long tenure of the employees was essential because of
inaccessibility of occupations in the economy (Das and Baruah, 2013). The Retention factor can be divided into
three broad dimensions, social, mental and physical. The mental dimension of retention consists of work
characteristics, employees always prefer flexible work tasks where they can use their knowledge and see the
results of their efforts which, in turn, helps in retaining the valuable resources. The social dimension consists of
the contacts that the employees have with other people, both internal and external. Parker and Wright (2001)
have rightly observed that organization must utilize an extensive range of human resource management factors
to influence employee commitment and retention.

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2.1.2 Employee relations and internal culture

Internal culture is the attitude of individuals that recognize them from each other, inside the organization or
outside the organization. This includes behavior, values, and beliefs of the employees that distinguish them from
the other association (Awadh and Saad, 2013). An organization culture is extremely useful to improve the
outcomes of the employees that works towards the objective accomplishment. As indicated by Hogan and Coote
(2014), values and norms of the organizational culture exceptionally impact on the individuals who are working
with the organization. Even though these features are invisible, it has a greater impact on the performance and
profitability of the employees. The most critical characteristic is shared values and knowledge. Empirical
evidence suggests that organizational culture significantly influences market-oriented behaviors, and market
and financial performance (Homburg and Pflesser, 2000), employee attitudes and organizational effectiveness
(Gregory et al., 2009), and has a greater contribution to knowledge management and organizational
effectiveness than organizational strategy and structure (Zheng et al.,2010)

2.1.3 Employee relations and support creativity

Creativity has been characterized in a large number of courses in various studies. As indicated by Joo et al. (2014),
creativity "alludes to unique and novel work, underlining the age of new and unique thoughts". Be that as it may,
creativity alone isn't what enhances organizations. The author stresses the distinction amongst implementation
and creativity: they are two one of kind strides in the development procedure. Coming up with smart thoughts
is not any sufficiently more these innovative thoughts must be swung to activity: implementation is required.
Moreover, research has demonstrated the positive impact of leaders in the work environment, about creativity.

The role of creativity in firms' execution and development can't be disregarded in an aggressive powerful
condition. Analysts have proposed that creativity is the basic part for association's survival and competency. In
this manner, firms require inventive workers to start authoritative development. Employee creativity is
perceived as the key factor for creating an upper hand. The part of employee’s inventiveness of the frontline
workers is of specific significance in is the service firms as they fill in as the boundary workers and appreciate
selective appropriate to accumulate direct market data. Further, frontline service employees confront clients
with very assorted needs inferring that they should be more inventive (Liu. 2016). Creativity is not only an
important determinant of a firm’s performance, but also facilitates effective work among employees. When
employees exhibit creativity at work, they produce more novel and useful ideas and improved working methods
(Shalley et al., 2004). If these ideas are applied in their work, the performance of individuals will be greatly
enhanced. Some researchers believe that positive mood is significantly associated with performance and it has
been empirically proved that people in a positive mood will be more productive (Brief and Weiss, 2002).

2.1.4 Employee relations and job security

Job security can be characterized as security against work loss. This is a major worry for the person. Job security
is related to an individual and it implies the security inside the organization. In short, employer stability needs
to do with how much a man feels secure and ensured in the reality of losing his job (Fernandez et al, 2012). At
the point employees don't feel secure in their work, expanded pressure and negative feelings affect their work
execution. Job insecurity is unavoidable in the present job market. I have analyzed the connection between job
performances, job insecurity and found that expanded sentiments of job insecurity related to low levels of
employee performance. Therefore, the organization needs to do with the approaches and techniques set up to
influence workers to feel just as they are dealt with decently (Shahzad et al, 2011). The studies found that
insecure feeling of occupation bringing about a diminished employee performance, increase feelings of
insecurity first prompted less business-related positive emotions, which is a significant element of work
commitment (Fernandez et al, 2012).

2.2 Research hypotheses

H1: There is positive relation between Improving retention and the employee’s performance in the
telecommunication sector in Bahrain.
H2: There is positive relation between Internal culture and employee’s performance in the
telecommunication sector in Bahrain.
H3: There is positive relation between Supporting creativity and the employee’s performance in the
telecommunication sector in Bahrain.

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H4: There is positive relation between Job security and the employee’s performance in the
telecommunication sector in Bahrain.

3. Research methodology

3.1 Study population, sample and resources of data

The population of the study is closely associated with the employees working in the telecommunication sector
in the Kingdom in Bahrain. Based on the telecommunication regulatory authority (TRA), the total employees in
the telecommunication sector in Bahrain is 3230 employees, according to the latest statistics in 2016-2017. The
respondents included the top, middle management, and employee level will be invited to participate in the
questionnaire, as the data collected from all employees’ level will provide greater value for data content.
Therefore, based on the sample size calculator and 95% confidence level as well as 5% confidence interval, the
sample size needed is 343. The total of 343 questionnaires have been distributed among the participants and
254 questionnaires got returned with responses, and the response rate calculated was 74%.

3.2 Validity and reliability study instrumentation

The reliability test was done depending on the variables for this research, as the reliability tables provide the
figures for Cronbach’s alpha for the sample responses for 254 participants have been derived from SPSS version
20. All values are accepted since they are more than 0.7 (Hair et al., 2013).
Table 1: Reliability and internal consistency – main sample
Factors Questions Cronbach's alpha
Employee’s Performance Q1-Q9 0.903
Improving Retention Q10-Q16 0.868
Internal Culture Q17-Q24 0.900
Support Creativity Q25-Q30 0.905
Job Security Q31-Q35 0.905

4. Findings:

4.1 Descriptive analysis

The sample responses were explored through the derivation of Means and Standard Deviations. The results are
as follows:
Table 2: Means and standard deviations for sample’s responses toward the variables
Statement Mean S. Deviation
Employee’s Performance 3.91 0.74
Improving Retention 3.78 0.69
Internal Culture 3.79 0.75
Support Creativity 3.71 0.85
Job Security 3.59 0.91
This Table 2 indicates that there are positive attitudes towards the above variables because their means are
above the mean of the scale (3). Before we proceed to the hypotheses test using simple linear regression model,
we will check person correlation between the independent variables (Improving Retention, Internal Culture,
Support Creativity and Job Security) and the dependent variable (Employee’s Performance).
Table 3: Person correlation analysis
Correlation with Employee’s Performance
Improving Retention Person Correlation 0.871**
Sig. (2 tailed) 0.00
Internal Culture Person Correlation 0.845**
Sig. (2 tailed) 0.000
Support Creativity Person Correlation 0.789**
Sig. (2 tailed) 0.00
Job Security Person Correlation 0.823**
Sig. (2 tailed) 0.00
** Correlation is significant at the 0.05 level (2-tailed)

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This table 3 indicates that all correlations are exceeding 0.7 referring to high relationships between the
independent and dependent variable, in addition to p-values which are less than 0.05 reporting that the
correlation is significant and leads to affecting of the independent variables on the dependent variable
(Employee’s Performance).

4.2 Hypotheses testing:

H1: There is positive relation between Improving retention and the employee’s performance in the
telecommunication sector in Bahrain.
Table 4: Simple linear regression model summary

Model F Adjusted R2 β P-value (β)

789.79 0.757 0.926 0.00

Simple regression is used to test above hypothesis; it is found that a calculated (F-value) is significant at (0.01)
level. This means that we accepted the hypothesis, which means there is positive relation between Improving
retention and the employee’s performance in the telecommunication sector in Bahrain with moderate Person
correlation 0.757. Employee-retention is ‘the intention of the employee to faithful to their current-workplace’
(Huang et al.,2006). It is when employees are encouraged to remain in the organization for a long-period or
until the ongoing-project is complete (Das and Baruah, 2013). Thus, as cited by Govaerts et al (2011), the survival
of organizations was highly dependent on their human-assets. then, a mandatory requirement for organizations
to retain those human-assets (Horwitz et al.,2003).
H2: There is positive relation between Internal culture and the employee’s performance in the
telecommunication sector in Bahrain.
Table 5: Simple linear regression model summary

Model F Adjusted R2 β P-value (β)

628.26 0.713 0.832 0.00

Simple regression is used to test above hypothesis; it is found that a calculated (F-value) is significant at (0.01)
level. This means that we accepted the hypothesis, which means there is positive relation between Internal
culture and the employee’s performance in the telecommunication sector in Bahrain with moderate Person
correlation 0.713. Huat et al., (1998) refers to the relationship between employees and management as a
framework of organizational justice consisting of organizational culture and management style as well as rules
and procedural sequence for grievance and conflict management indeed, the objective of employee relationship
is to achieve harmonious employee relations and minimize conflict practices in employment.
H3: There is positive relation between Supporting creativity and the employee’s performance in the
telecommunication sector in Bahrain.
Table 6: Simple linear regression model summary

Model F Adjusted R2 β P-value (β)

416.82 0.622 0.685 0.00

Simple regression is used to test above hypothesis; it is found that a calculated (F-value) is significant at (0.01)
level. This means that we accepted the hypothesis, which means there is positive relation between Supporting
creativity and the employee’s performance in the telecommunication sector in Bahrain with moderate Person
correlation 0.622. The result which were attained in the linking of employee’s creativity with performance of the
firm had a very inclusive effect, it had a positive effect on each other explaining the fact that it does takes some
processes to go through to get new knowledge but in due time the individual is able to come up with new
techniques which tends to be creative & efficient having positive relation on the organization performance
(Jaussi and Dionne 2003). Firms image is the most important benchmark of the company's, to assess its key value
& measure its performance, which increases and decreases with market competitors, a company can increase
its performance by empowering their employee, so they can achieve more better performance of the firm,

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customer satisfaction (Kotha et al., 2001). The organization knowledge, skills, ability to make use of its maximum
potential of its employees, due to modern research it is known know that capabilities now a days are more
important than having surplus resources (O’Cass and Sok, 2012).
H4: There is positive relation between Job security and the employee’s performance in the
telecommunication sector in Bahrain.
Table 7: Simple linear regression model summary

Model F Adjusted R2 β P-value (β)

528.21 0.676 0.664 0.00

Simple regression is used to test above hypothesis; it is found that a calculated (F-value) is significant at (0.01)
level. This means that we accepted the hypothesis, which means there is positive relation between Job security
and the employee’s performance in the telecommunication sector in Bahrain with moderate Person correlation
0.676.

5. Conclusion and recommendations

From the data collected, the analysis and the literature review made to meet the main objective of the study
which is to examine the extent to which employee relationship management would contribute to improve
employees’ performance; the following are put as the conclusion of the findings:
 There is a positive relationship between employee relationship management components and the
employee’s performance.
 The ERM components can enhance ERM status in firms through helping employees in achieving tasks and
targets set for their job positions and in developing effective communication channels, sharing knowledge
and systems, so that information needs of employees are met.
 The knowledge management will change the face of human resources management and find a path towards
firm’s growth and success.
Based on the findings and conclusions, the recommendations are drawn as following:
 Pay special attention to the role of ERM involving improving retention, internal culture, supporting creativity
and job security as essential variables components of its great effect on employee performance on the long
term.
 Organizations should have clear model to follow for their ERM. This model must contain every aspect for
the employee relation where ERM must be a new concept the organizations adopt and implement where
the employees are the key success of any organization.
 Managers also should clearly share their knowledge and values with the employees and make their efforts
to actively clearly explain them are more likely to be successful and maintain good relationships with the
employees.

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