EFFECT OF ORGANIZATIONAL CULTURE ON EMPLOYEE JOB PERFORMANCE: THE CASE OF WEGAGEN BANK S.C

Abstract

This study aims to examine the relationship between organizational culture and employees’ performance. The researcher used explanatory research design with quantitative research approach in order to meet the objective of the study. The target population for this study was employees of Wegagen Bank S.C. located in Addis Ababa, Head Quarter. Out of 600 permanent employees, 240 respondents were selected using Stratified Random Sampling Technique. The four components of the organizational culture Involvement, Consistency, Adaptability and Mission were visualized based on Denison’s Model. A total of 240 questionnaires were used for this study and the data were analyzed using descriptive and inferential statistics. The data collected was then summarized, classified, tabulated and analyzed using SPSS and Microsoft office tools. The study revealed that there is statistically significant positive relationship between all the four organizational culture dimensions (i.e. involvement, consistency, adaptability and mission) and employees’ performance. The result of multiple regression Analysis revealed that 39.9% of the variation of employees’ performance can be predicted by the independent variables i.e. involvement, consistency, adaptability and mission. In addition, the three organizational culture dimensions (i.e. consistency, adaptability and mission) had significant and positive contribution to employees’ performance at 95% confidence level. However, involvement had a positive but statistically insignificant contribution towards employees’ performance. Accordingly maintaining the organizational culture with significant contribution towards employee performance (i.e. Identification with mission and adaptability) by communicating its mission and vision to the newly hired employees consistently and rewarding innovation to encourage employees for further creativity is recommended by the researcher. The need to establish clearly defined and visible expression of organizational culture is also recommended by the researcher.