Analysis of Factors Affecting Operation Labor Productivity: (In Persia Energy Exploration Company)

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MASTER'S THESIS

Analysis of Factors Affecting Operation Labor Productivity

(In Persia Energy Exploration Company)

Gholamreza Ghasemi Davoud Taheri

2016

Master of Arts (60 credits) Business Administration

Luleå University of Technology

Department of Business, Administration, Technology and Social Sciences

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Analysis of factors affecting operation labor productivity

(In Persia Energy Exploration Company)

By:

Gholamreza Ghasemi

Davoud Taheri

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ABSTRACT

Productivity plays an important role in the non-production companies. Poor productivity of non- production companies’ workers is one of the causes of cost and time overruns in those companies’ projects. It helps non-production companies to be competitive, to achieve goals and to meet the stakeholder value propositions.

A common goal is to establish a continuous improvement process to achieve the same added value with reduced resource utilization. The decision on which optimization approaches are to be used as well as the order of their application is often based on the management’s experience or actual trends in the practice of services management or lean production. The above objectives have been achieved through the analysis of 72 questionnaires and the result of this analysis this analysis has been presented.

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Chapter 1. Introduction

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1.1. Introduction

This chapter presents the background of the topic for the thesis, after which a problem discussion is introduced. Finally, the purpose and research questions will be established for this thesis, and lastly delimitations and expected contribution are presented.

1.2. Background

Nowadays, in highly competitive market, traditional management methods and systems cannot be considered appropriate strategies and cannot survive anymore. Recently achieved developments in database management systems, Internet technology and office automation systems encourage managers to apply these methods to their firms for surviving and competing with their competitors and rivals. One of the most important decision tools for managers is the evaluation and analysis of factors affecting operation labor productivity.

Many studies have attempted to improve labor productivity via different ways for examples:

studying the factors affecting labor productivity measuring, evaluating labor productivity, modeling labor productivity; and comparing labor productivity based on economic considerations or costs (Refaat et al., 2007).

Mahapatro (2010) described,It was understand that some factors provoke employees of different companies. The most important ones were related to salary, transparency and monetary benefits.

Also some other factors were noticed as increasing of salaries, good salaries, ESOPs (Employee Stock Ownership Plan) and performance based pay.

One of the method in recent research to provide HR value information in external corporate reports has interested using HR professionals since the late 1960s. From those days, there have been repeated efforts to include intangibles such as HR value and intellectual capital in corporate reports. They believe it is vital to have more corporate financial transparency, and concerns that the omission of the value of human, structural and intellectual capital as organization assets results in an under evaluation of the knowledge based firms that drive the new economy.

(Mahapatro, 2010)

Productivity is defined as the amount of output produced with certain combinations of input resources (e.g., capital, labor, etc.). While there can be many possible input resources, labor and capital have been the two primary input resources considered in most productivity research in

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the fields of economics and operations management. (Gray and Jurison, 1995; Gunasekaran et al., 1994; Kang and Hong, 2002; Krajewski and Ritzman, 2004).

Due to the significance of this issue, many researchers in various disciplines (e.g., economics, operations management, and engineering) have continuously studied the subject of productivity.

There are various research issues pertaining to productivity including productivity measures, factors that affect productivity, office vs. factory productivity, and ways to improve productivity (Stevenson, 2004).

This thesis presents a method for the comprehensive analysis of operation labor productivity in service environments by examining the relative impact of several input resources on labor productivity within Persia Energy Exploration Company.

The petroleum industry in each country is among the most important industry of the country's national income. In Iran, the Iranian petroleum industry is the engine of industry and economy.

So we selected the petroleum industry which includes workforce of this industry. Petroleum industry has several upstream and downstream areas.

The largest service firms in the petroleum industry are including upstream firms and employees have the main role in service firms in this industry for this reason the upstream firms are selected for this study.

The upstream firms have several areas of work such as drilling, geological logging and etc.

According to studies that we have conducted upstream petroleum industry, Logging services, drilling services are the most important asset of any company's workforce.

Employees who want to work in this area should also have experience with high technical knowledge in all areas of drilling, geological, petroleum engineering, physics, and especially in the electronics and instrumentation .Expensive technology tools of this kind of service which comes from abroad and also working with specialized tools and expertise needed to have employees such as engineers with education and work experience, who are logging familiarity with specialized tools, for this reason a high expertise in this area is needed.

In order to be able to raise the nation's human resource in Logging services, it’s necessary to focus more on expert human resource productivity in the field of logging which is required from oil industry thus this kind of research will be useful for its productivity growth . For this reason,

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we were identified all companies that were active in this field. In our country, there are eight companies (OTS Kish, NIDC, WSI, Persia Energy Exploration, Sealand, Asmary, Kandanan, and PDK) that provide this service. The first two companies listed are state companies and six other companies are private. Due to our interest in increasing potential of Iranian nationality workforce, selecting an Iranian company was a priority for us, so the company which had the highest ranked among private companies in the field of services with completely Iranian nationals were selected. Among the eight companies, Persia Energy Exploration is selected as a private company with one hundred percent of Iranian nationality staff that has the highest ranked projects in specialized logging.

1.3. Problem Discussion

The presence of labor with high productivity at each stage of a project's development plays a significant role in project success.

As Mahapatro (2010) mentioned, Employers will be more competitive by improving productivity and by improving their financial capacity, they can be more able to increase their employee’s life standards.

Improving productivity can go some way toward eliminating time and cost overruns (Kaming et al., 1998).

It is obvious that productivity does not only depend on individual and personal efforts alone.

Many other mechanisms which contribute towards productivity gains, are applicable only where there is teamwork and cooperation e.g., small group activities and joint consultation mechanisms. Therefore labor management relations should be utilized for creating the situation which is suitable to secure the cooperation necessary for productivity growth. (Mahapatro, 2010) Project managers define productivity as a ratio between earned work hours and expended work hours, and work hours used. (Ibid) For the current research, labor productivity is defined as the ratio between completed work and expended work hours to execute the project.

A better understanding of the factors influencing labor productivity can enable site management teams to more effectively allocate their limited resources, provide craft workers with better support, increase craft workers' motivation, and enhance craft workers' commitment to productivity improvement. It is important to know what craft workers need and what affects

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their performance in order to accomplish productivity improvement (Dai et al., 2009a; Oglesby et al., 1989).

Although several researches have been conducted to determine the effects of different factors on labor productivity, they are faced with some major defects. The previous studies had investigated the effects of one of the influencing factors on the labor productivity and they are not able to account for the effect of all the influencing factors. The labor productivity is influenced by several factors which have complex interactions with each other.

Problems to increase productivity have long been a concern of researchers. Based on previous studies, key factors that can affect labor productivity have been obtained from works by Oglesby et al. (1989); Langford et al. (1995); Motwani et al. (1995); Lim and Alum (1995); Zakeri et al.

(1996); Lema (1995); Kaming et al. (1997); Olomolaiye et al. (1998); Makulsawatudom and Emsley (2002).

1.4. The Purpose of the Thesis

The purpose of this thesis is to gain a deeper understanding of Analysis of factors affecting operation labor productivity in Persia Energy Exploration Company, so that guidelines for top manager can be formed. Thus, the following research questions have been developed for this thesis:

(1) What are the factors effecting on operation labor productivity?

(2) What is the most important factors effecting on operation labor productivity?

1.5. Delimitations

This thesis has a specific limitation of improving labor productivity in Persia Energy Exploration.

1.6. Expected Contribution

Productivity is an index that measures output relative to input. Plants with higher productivity produce more output for a given level of input than plants with lower productivity. This higher productivity results in lower input levels to produce the same good or service, giving the firm a potential competitive advantage in the international marketplace. (Lowe and Fernandes, 1994;

Grubbstro¨mand Olhager, 1997; Mefford, 1991).

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The aim of this thesis is to create guidelines for top managers of Persia Energy Exploration Company on how to create labor that increase company's profit.

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Chapter 2. Literature Review

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2.1. Topic in general

A quick improvement of labor productivity and performance happened in the mid-1990s (Ceccobelli et al., 2012). Griliches (1979), has specified knowledge as a key parameter of economic growth on Total Factor Productivity (TFP), but because of the differences between technology levels in countries there are significant heterogeneity in productivity effects (Sterlacchini and Venturini, 2013). Human capital plays a significant role in managers’ decisions.

As the conclusion of studies it has been confirmed that human resources influence organizational performance (Patzelt, 2010), for example Eisfeldt & Papanikolaou, (2013) have proved that talented employees are the important factor for company’s performance. Also, trained employee or human resource consist valuable (Wright, Dunford, & Snell, 2001). Company's unique resources bring competitive advantages (Kraaijenbrink, Spender, & Groen, 2010). Holzer and Callahan (1998) believed productive firms are Human-based organizations.

The importance of Human capital factor is more than other capitals (Iwamoto& Takahashi, 2015), for firms. The presence of high productivity labor plays an important and significant role in firm success (Nasirzadeh & Nojedehi, 2013). There are many factors affecting and contributing labor productivity. A better understanding of these factors that influence labor performance will enable management teams for allocating their limited resources (Dai, et al., 2009), affectively.

In this regards we try to take a glimpse look to productivity, human capital and their linkage to better understand of this relationship.

2.2. Productivity

Hong and Kirk (1995, p. 54): “productivity refers to the efficient utilization of resource including people, machines and money”. Also, productivity defined as production measurement, with regard the ratio of input to output by the numerical means (Greenberg, 1973). Recently, the meaning of productivity expand to cover some dimensions of organizational structure and quality management (Heap, 1992). Mill (1989), indicated that different kinds of industries have made variety definitions of productivity ratio. For example, construction labor productivity is defined as the ratio among completed work and expended work hours to execute the task (Nasirzadeh & Nojedehi, 2013).

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Hong and Kirk (1995) in his research found that as the size of organization increases might the employee productivity increases, too. Recently, Venturini, (2015), determined education and Information and Communication technology as new factors which impact productivity.

2.3. Human resource

In a dictionary, human capital factor has been defined as: “the collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value for the individuals, their employers, or their community” (dictionary.com). For the first time Schultz (1961), used this concept to show importance of people in wealth of nations. He believed that: “what labor contributes to output, the productivity of human beings is now vastly larger than all other forms of wealth taken together”.

Investigating in people’s skills and knowledge in the field of organizations is a topic which originated by human capital theory. This theory introduces the value of the firm’s human resource base in the concept of performance. Human capital focuses on the value that is added to an organization's business activities, ultimately in terms of productivity and profitability, solely by its stock of human resources (Brown et al., 2007).

In the research literature, human capital is classified into two types. A group is identified ‘human as work force’ which used in classical economic context. This means depicts that input of labor added value in economic such as other production factors like financial capital, land, machinery, and labor hours. The importance of work force had been supported by economists in creating products, until economic growth in 1950’s. It is based on this assumption that improving physical capital may have the same effectiveness that investigating on education and training in human capital have (Little, 2003). ‘Human as creator’ is another a concept that frames knowledge, experience, skills and competency, originated by relation between ‘environment’ and ‘self’. The importance of first word is recognized absolutely, important than the latter (Beach, 2009). There are a few researchers that show human capital linked to abilities, skills, knowledge and education (Youndt et al., 2004). Typically, researches have categorized human capitals’ impact into three parts: impacts’ on society, individual and organizations.

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2.4. Linking

Brown (2007) believed that Human capital will influences the firms’ performance. There is positive impact between higher level of human capital and firms’ competitive advantages (Penrose, 1959). Also, the strategic importance of human capital in context of achieving aims, goals and enhanced firm performance is increasingly recognized. Despite this, a detailed understanding of the way human capital plays significant role in firm performance, still is uncertain and has been changed the more research subjects in various countries and industries (Hitt, 2001). So, identifying the impact of human capital on performance will be more helpful for managers as Becker (1962, p.

9) said: “A concern with investment in human capital ties in closely with the new emphasis on intangible resource and may be useful in attempts to understand the inequality in income among people”.

In the concept of individual, individual productivity will increases individual income as the result (Sidorkin, 2007). Because of an individual’s productivity in human capital, for maximizing organizational profits, around all employers prefer to attract high productive individuals for their jobs. However this is acceptable that individual increases owing to the development of productivity in internal labor market. High-productive workers, possibly move to higher levels of organization in the workplace, because of productivity increasing (Sicherman & Galor 1990).

Likely, wages rates will affect productivity, it means that a better paid workforce may be happier than the other employee and will work effectively (Hong & Kirk, 1995).

We found a lot of research in this field that investigated different variables in productivity, human capital and the relation between human capital and its productivity. Some of them are presented as follow.

Hong and Kirk (1995), in their research evaluated labor productivity in hospital, that the results shows some of human capitals’ variables influence significantly labor productivity level, specially supervision ratio and labor cost, that the relation was reverted, when one decreased, the other increased.

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In the field of productivity, Venturini (2015), in his research he looked for new and modern drivers of productivity. In this regard he claims that information and communication technology and research and development are the newest affecting factors that will explain trends to trade in high- tech international and specialization.

Samudhram, et al., (2014), stated that in emerging economy labor productivity along with other variables such as analyst coverage and audit quality, will moderate the value relevance of voluntarily disclosed human costs.

Backer, and Gerhart, (1996) established that United States’ firms were not more productive than Japanese firms on account of implementing HRM practices .it means that Japanese firms were more productive in a comparative study of United States and Japan.

Chang and Chen (2002) found that in the high technology firms of Taiwanese some factors have significantly affected productivity such as HRM practices of workforce planning, performance, training and development, teamwork, benefits. Also it found the negative relationship between human resource planning and employees’ turnover.

Higher educated employee's level is needed for any firms which they are looking for high productivity. As Black and Lynch (1996) founded, firms which their productivity to be higher than others, it is clear that they have a higher average educated employee level.

See and Li (2015) found total factor productivity in the UK airport industry brings an average annual growth around %0.32 for UK private airports rather than those in public sector or mixed ownership. Also, Regulation and size of airport have significant effects on productivity level.

In this part we try to introduce the main variables of our research. As we discussed there are some factors that influence human productivity. In this regard the factors which we choose to evaluate are considered as job, environment, personal and befriend in the prioritization of factors affecting the productivity of human resources in line with strategic objectives and vision and also different variables and their relationships are mentioned. The variable of job factor is challenging job, motivation for job, job security, and quality of job, fit job for staff, satisfaction, and clarity of roles.

The variable of environment factor is suitability physical conditions in the workplace, appropriate

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facilities, and attractive physical environment in the workplace, feelings safety and comfort in the workplace, presenting social services, supportive space among employees, mental health in the workplace, availability of welfare services. The variable of personal factor is being fit of employees with their job, seriousness job, commitment to moral and ethical, having necessary expertise and skills, mental and physical health. The variable of befriend factor is close relationships between staffs, being honorable at work, feedback from staff in a variety problems of organizational and team working.

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2.5. Discussion

The following Section will provide a developed conceptual framework is based on the previous section. The literature review suggests the main theories and models that the focus will be on. The focus will be on effectiveness factors on labor productivity. The following Section describes that a conceptual framework should explain either graphically or in narrative form the main things to be studied. The conceptualization is presented below according to the questionnaire.

2.5.1. Case Study (Introduction of Persia Energy Exploration)

Persia Energy Exploration Company has been established in 2008. This company is now able to provide domestic and international logging services, for both onshore and offshore projects. This company provides a full services and solutions in logging oil, gas and geothermal projects with premier products and services for reservoir and formation evaluation. Persia Energy Exploration Co. is registered and located in Iran, with Tehran Head office, operational bases in Ahwaz. Today Persia Energy Exploration Co. has 72 employees. The respondents were all of staffs in this company.

2.5.2. Frame of Reference

To answer to the research questions, the following frame of reference has been adapted. The frame of reference for this study will survey the effect of human capital on productivity.

According to previous researches, the number of factors affecting labor have been identified as 113 and were divided into 15 groups, according to their characteristics. The above mentioned groups are listed as: 1. design (5 factors); 2. Execution plan (5 factors); 3. Material (8 factors); 4.

Equipment (6 factors); 5. Labor (18 factors); 6. Health and safety (4 factors); 7. Supervision (6 factors); 8. Working time (6 factors); 9. Project factor (15 factors); 10. Quality (3 factors); 11.

Financial (6 factors); 12. Leadership and coordination (5 factors); 13. Organization (12 factors); 14.

Owner/consultant (4 factors); 15. External factor (10 factors). Previous researches identified factors which have been used as a basis to prepare a questionnaire to evaluate its influence on the labor productivity and performance (Soekiman et al., 2011).

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This section is presenting the framework in a graphic form. The framework brings together both of the research questions. The needed model was constructed by two comprehensive variables. Job, Environment, Personal, Befriend are used as Four critical factors for representing the Human capital and they are extracted by review of academic literatures.

Thus, based on the theoretical framework, the linkages between variables are developed. This model is extended to present the answers for research questions.

Factors affecting Human Capital

Productivity

Increasing Productivity

Job Environment Personal Befriend

Figure 2.1. Frame of Reference

As mentioned in the literature, factors affecting labor productivity has been identified. After further investigations, as well as consultations with experts and department managers, a number of factors and components of the research background as the factors and parameters examined in this study were chosen in Table 2.1 below.

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In this research the new model will be introduced as a suitable model especially for services companies in petroleum industry based on the frame of reference which is the factors affecting of labor productivity. This new model will describe the priority affective factors with different variable that affecting operation labor productivity. This model can response for this research question that is based on employee needed which can cover all manpower needs and satisfaction for improving their productivity.

The prioritization of factors affecting the productivity of human resources in line with strategic objectives and vision.

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Table 2.1.: Factors affecting the labor productivity

Factors Variable

Factors affecting Human Capital Productivity Job

Training Course (Stonenhuis,2006; Francalanci, 1998)

Motivation for job (Sledge, 2015; Grant, 2008)

Challenging Job (Carette,2013)

Quality of Job (Stainer, 1995)

Job Security (Böckerman, 2011)

Satisfaction (Sledge, 2015; Grant, 2008)

Fit job for staff (Vuolo,2012) Clarity of roles (Javed, 2004)

Environment

Appropriate facilities (Stonenhuis,2006; Francalanci, 1998)

Feelings safety and comfort in the workplace (Kath, 2010) Suitability physical conditions in the workplace (Kath, 2010) Attractive physical environment in the workplace (De haan, 2012) Presenting Social services (Chen, 2003)

Supportive space among employees (Hersy & Blanchard, 1983) Mental health in the workplace (Chen, 2003)

Availability of welfare services (Chen, 2003)

Personal

Being Seriousness job (Dai, 2009)

Fit of employees with their job (Hosie,2013)

Having necessary expertise and skills (Stonenhuis,2006; Konrad,2013)

Commitment to moral and ethical (Dai, 2009) Mental and physical health (Hilton, 2010)

Befriend

Being honorable at work (Heap,1992)

Close relationships between staffs (Stainer, 1995)

Team Working (Ellis & Dick,2001)

Close relationships with managers ( Crament, 2006)

Feedback from staff in a variety of organizational problems ( Crament, 2006)

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Chapter 3: Methodology

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This chapter describes the research methods used for this thesis. These include the purpose of the research, research approach, sample selection, data collection and analysis together with validity and reliability, which are discussed below.

3.1. Research Purpose

According to Saunders, Lewis & Thornhill (2009), there are three major types of research purposes: exploratory, explanatory or descriptive. Exploratory purpose can be used when the researcher want to get more knowledge of the area to discover possible execution that is likely to be developed in the population. Exploratory studies seek to find out what is happening in the chosen area (Saunders et al., 2009). Explanatory approach is also practical when the chosen area can be measured and also how to best measure the area. Explanatory research also wishes to establish causal relationships (Saunders et al.,(2009). Descriptive studies aims to describe a portray events of situations. The purpose is to distribute fact and not to test previous theories (Saunders et al., 2009). The present research has a practical aim and is descriptive. Because in descriptive studies we can evaluate the characteristics of the population by using survey, so the present research is descriptive and is a kind of survey. As according to this thesis uses the mathematical modeling, as you know the dependent variable is studied to see if and how much it varies as the independent variables vary theory model is decency. In this thesis, productivity is dependent variable on main factors such as job, environment, personnel, befriends. This research survey affecting factors on productivity in medium companies.

3.2. Research Approach

According to Cohen (1980) quantitative research is defined as social research that employs empirical methods and empirical statements. He states that an empirical statement is defined as a descriptive statement about what “is” the case in the “real world” rather than what “ought” to be the case. Typically, empirical statements are expressed in numerical terms; another factor in quantitative research is that empirical evaluations are applied. Empirical evaluations are defined as a form that seeks to determine the degree to which a specific program or policy empirically fulfills or does not fulfill a particular standard or norm. Based on the data collection in this thesis the

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research approach will be quantitative. Since it collects quantitative data, it is a quantitative research.

3.3. The Population study

The population of this research is the employees of Persia Energy Exploration Company in Tehran

& Ahwaz and in the fourth season in 2014. The number of the company employees is 72. Because the number of the population study in this research was low, the method of census was used and the questionnaire was distributed among all the employees. But 59 questionnaires were verifiably.

3.4. The tools of collecting data

The tools for collecting data, is questionnaire in the survey researches. Questionnaire is a collection of questions that a respondent complete the questions. The researcher needs these responses. The main tool for collecting data in this study is questionnaire. This questionnaire is made by researcher. The questions are written based on the operational definitions of the research problem.

3.5. Technical characteristics of the tools for data collection

Two main features of measurement that should be considered in the appropriateness and usefulness of the measuring tools are validity and reliability. Face validity is determined by the experts and professors.

In this research, the reliability is calculated based on Cronbach Alpha. Cronbach Alpha coefficient is calculated by SPSS and it is 0.745 for the questionnaire. Regarding that the Alpha value of the variables and the total questionnaire is more than the acceptable value (0.7), so the reliability is good and acceptable.

3.6. The scales

The most common form of the response for measuring the variables, is classification scales and among these scales, Likert Scale is the most desirable scale. (Miller, 2002; Fox, 1998). Likert Scale is common in surveys. In the present research, five-point likert scale is used for answering the questions. In the following a sample of the responses is presented;

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Table 3.1.: Likert Scale

(Source: Fox, 1998)

3.7. The method of data collection

Data can be obtained using different methods and places and from various sources. The method of data collection includes interview, telephone interview, computer interview, questionnaire (posting or Email), observing people or events by video or sound recording and the other various motivational techniques such as projection tests. The method of data collection in the present research is through questionnaire, books, thesis, articles and internet. In other words, data collection includes two parts; one is though studying the articles, books and thesis and the other is by questionnaire.

3.8. Data Analysis

First the researcher identifies the method and then collected the necessary data for testing hypotheses though appropriate tools. Next he can classify and analyze the collected data using appropriate statistical techniques which is consistent with the method and types of variables.

Finally he can test the hypotheses that have led the research and at last can find a solution for the question that research is designed based on it. In this research, descriptive and inferential statistics is used for addressing the research questions. Statistical methods in the present research include:

1. Descriptive statistics:

Descriptive statistics and frequency table is used to display descriptive information regarding the responses to questions.

2. Inferential statistics:

Inferential statistics is used to test statistical hypotheses and inferential theory statistics is used for data analysis and hypotheses testing. Kolmogorov-Smirnov test is used for measuring normality of data distribution.

The reliability and the effect of questions and independent variables on workforce productivity are measured by Cronbach Alpha and T test respective.

Strongly Agree Agree No Idea Disagree Strongly Disagree

5 4 3 2 1

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Chapter 4. Empirical data & Analysis

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First the researchers identify the method and then collects the necessary data though appropriate tools. For collecting data, we went to Persia Energy Exploration Company and distributed the questionnaire by acquiring the consent of managers of departments. After coordination with company management, then, the questionnaires were distributed among the population study and they received the instruction of completing it. Two days after the distribution of questionnaire, the researchers again referred to the Persia Energy Exploration Company and collected the completed questionnaire. Finally the data were analyzed through SPSS to clarify the research findings.

Data analysis as a scientific step is one of the main features of each research, whereby all research activities are directed to findings and results. In this chapter the data that are collected among population are analyzed and then each research question is answered.

4.1. Descriptive statistics

First the data should be described prior to the other statistical analysis, to clarify the nature of population and understanding the variables. Descriptive statistics of data is a step toward identifying the main pattern and is a base for explaining the relationships among the research variables. Regarding the results of the first part of the questionnaire (demographic characteristics) this information are presented about the features of the population study.

Table 4.1.: Descriptive Statistics

Frequency Percent Valid Percent Cumulative Percent

Sex ^Male

Female

50 9

84.7 15.3

84.7 100

Age

<30 30 - 40 40 – 50 50 & > 50

8 21 20 10

13.6 35.6 33.9 16.9

13.6 49.2 83.1 100

Education

Diploma Associate BSc

MSc & Higher

15 19 22 3

25.4 32.2 37.3 5.1

25.4 57.6 94.9 100

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The results of the 4-1 table show the descriptive statistics of demographic variables. The results show that most of the respondents are male (84%). Regarding the age, the most of percent of respondent is 40-50 and the least percent is less than 30. The most frequency of education is BSc degree (37.3%0) and the least percent is for the category of Master of Art and higher degree (5.1%).

4.2. Analyzing statistics

At first we address the normality of the variables using Kolmogorov-Smirnov test. This test is used to examine the normality of a quantitative variable. Before doing statistical tests we should determine whether the data is obtained through a normal population. In this research normality of each index would be examined by Kolmogorov-Smirnov test. After examining the normality of each variable, mean comparison test is used for addressing the effect of each variable and factors on workforce productivity.

In the next sections we would address the research questions using the relevant statistical tests.

4.3. Normality test of research variables

If the significance value is high (more than 0.05) we may conclude that the distribution of the variable is normal and otherwise the variable has an abnormal distribution.

Table 4.2.: One-Sample Kolmogorov-Smirnov Test

Job Environment Personal Befreind

N 59 59 59 59

Normal Parameters^a Mean 3.6110 3.2842 3.43831 3.8676

Std. Deviation .42990 .54943 .632780 .49137

Kolmogorov-Smirnov Z 0.971 0.784 0.437 0.812

Asymp. Sig. (2-tailed) .302 .570 .991 .525

a. Test distribution is Normal.

Regarding table 4-2 all of the significant coefficients are more than 0.05. So, all of four variables are normally distributed.

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4.4. Measuring reliability of data collection tool (questionnaire)

Cronbach Alpha was used to measure the reliability of data collection tool. Cronbach Alpha Coefficient of the questionnaire is 0.745. Since this value is higher than the acceptable value (0.7), so the data collection tool has appropriate and very good reliability.

4.5. Examining the influential factors of workforce productivity

Every hypothesis test requires the analyst to state a null hypothesis and an alternative hypothesis.

The hypotheses are stated in such a way that they are mutually exclusive. That is, if one is true, the other must be false; and vice versa. Regarding the fact that all research variables are normally distributed, one sample T test is used for testing research hypotheses.

𝐻₀= The mean of responses is less or equal to the tested value (3) Rejected 𝐻₁= The mean of responses is higher than tested value (3) Accepted

In case the significance level is less than 0.05, so null hypothesis (H0) is rejected in the 0.95 confidence level and (H1) is accepted. It means that the desired factor is important in workforce productivity.

Table 4-3: One-Sample T-Test

Test Value = 0

t Mean Sig. (2-tailed)

Training Course 35.804 3.780 .000

Motivation for job 35.772 3.695 .000

Challenging Job

31.922 3.559 .000

Quality of Job

31.726 3.569 .000

Job Security 34.197 3.661 .000

Satisfaction 32.700 3.559 .000

Fit job for staff 38.718 3.542 .000

Clarity of roles 38.270 4.186 .000

Appropriate facilities

31.042 3.136 .000

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Feelings safety and comfort in the workplace 27.734 3.288 .000

Suitability physical conditions in the workplace 24.439 2.983 .000 Attractive physical environment in the workplace

38.488 3.525 .000

Presenting Social services 29.654 3.305 .000

Supportive space among employees 27.175 3.288 .000

Mental health in the workplace 26.491 3.390 .000

Availability of welfare services 24.186 3.339 .000

Being Seriousness job

27.439 3.627 .000

Fit of employees with their job 26.875 3.458 .000

Having necessary expertise and skills 24.520 3.475 .000

Commitment to moral and ethical 23.836 3.475 .000

Mental and physical health

22.531 3.407 .000

Being honorable at work

34.451 3.797 .000

Close relationships between staffs 38.033 4.220 .000

Team working

41.947 4.458 .000

Close relationships with managers 40.510 4.034 .000

Feedback from staff in a variety problems of organizational

38.014 4.119 .000

Table 4-3 shows that all variables (Sig > 0.05) are important and impact the workforce productivity but Suitability physical conditions (mean<3) is the weakest factor affecting workforce productivity. Variables such as Clarity of roles, Close relationships between staffs, Team working and Feedback from staff in a variety problems of organizational with the mean more than 4.1 are the most influential factors on workforce productivity and factors such as Appropriate facilities, Suitability physical conditions in the workplace, Supportive space among employees, Feelings safety and comfort in the workplace are the weakest factors which affect workforce productivity.

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Table 4.4.: One-Sample T-Test

Test Value = 0

t Mean Sig. (2-tailed)

Job 52.940 3.65085 .000

Environment 45.915 3.28424 .000

Personal 41.737 3.438305 .000

Befriend 60.459 3.86763 .000

Table 4-4 shows that all factors (Sig < 0.01) are important and affect workforce productivity.

Befriend (mean: 3.86) is the most influential factor on workforce productivity in Persia Energy Exploration Company and Environment (mean: 3.2) is the weakest factor affecting workforce productivity in Persia Energy Exploration Company.

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Chapter 5. Conclusions

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In this competing world, productivity as a philosophy and a perspective based on improvement strategy is the main aim of each organization and can involve all activities of a society as a chain. So the basic aim of managers in the organizations is effective and optimized use of various resources and facilities such as workforce, capital, material, energy and information. This has led to the right and effective productivity in all countries and productive factors (goods and services) will change to a national priority and all societies would believe that vitality is not possible without productivity. Our country is not excluded from this rule and paying attention to productivity is very important in its development. Since among production factors, workforce factor contrary to other organizational factors is regarded as a coordinating factor and also is the most important factor in decreasing and increasing the productivity of organization, so it has a special position and should be considered important.

Therefore, in the present research the influential factors of workforce productivity in Persia Energy Exploration Company are examined.

5.1. Findings and discussion

The findings show that among the influential factors of workforce productivity that are mentioned in the second chapter, all factors are important and affect workforce productivity in Persia Energy Exploration Company except Suitability physical conditions in the workplace.

Findings about job factor show that all variables except satisfaction may affect workforce productivity. The most important influential factor on operational workforce productivity is clarifying the roles (mean: 4.19) and the least important influential factor on operational workforce productivity is fit job for staff (mean: 3.54). Clarifying (understanding or the image of the role): it refers to understanding and acceptance of mode of work, place and the way of doing it. Since the subordinates have a complete understanding of the problem, the main aims and intentions, the ways of getting to that aims and the priorities should be completely clear for them (i.e. which aims in what times are the most important). Therefore, the precise determination of staff duties, giving information about these duties, determining the goal and the way of reaching it can have effective impact on their productivity.

Findings of environmental factor show that all variables except Suitability physical conditions in the workplace affect workforce productivity. The most important affecting variable on operational workforce productivity is Attractive physical environment in the workplace (mean:

3.52) and the least important influential factor on operational workforce productivity is Suitability physical conditions in the workplace (mean: 2.98). Access to Attractive physical

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environment in the workplace is an important factor in promoting motivation and the performance of employees. When the employees have appropriate access to Attractive physical environment in the workplace, they can retrieve their lost energy in workplace and become more energetic and motivated in the workplace.

The findings about personal factor show that all variables affect workforce productivity. The most important influential factor in operational workforce productivity is Being Seriousness job (mean: 3.63) and the least important factor on operational workforce productivity is mental and physical health (mean: 3.40). Being Seriousness job is a very important factor affecting the right way of doing work. The employees, who have Being Seriousness job, are more affected and have a better performance and therefore show more appropriate productivity in operational work. The employees who have Being Seriousness job, consider the organization as their belonging and consider themselves belong to organization and like their job and have accepted common values and goals and do their duties exact. When motivating factors (financial and non-financial) increase in organization, the carful and dependence of the employee increases and so promoting their productivity.

Findings of Befriend show that all variables affect the workforce productivity. The most important influential factor on operational workforce productivity is Team Working (mean:

4.46) and the least important influential factor on operational workforce productivity is Close relationships with managers (mean: 4.03). Team Working is an influential factor in increasing effectiveness, motivation, performance of the employees and finally leads to more productivity. Team building provides the opportunity for using skills and various expertise and using these skills appropriately, the productivity increases.

Findings regarding the analysis of main factors show that all four factors affect workforce productivity. The most important influential factor on operational workforce productivity is befriend (mean: 3.87) and the least important factor on operational workforce productivity is environment (mean: 3.28). Team building and having appropriate job relationship between human resources is a very important factor in promoting productivity of human resource. The existence of an appropriate atmosphere of teamwork, desirable protection and the relationship based on cooperation and trust among employees leads to the solutions of organizational problems, increasing the speed and accuracy of the work, removal of defects and performance improvement.

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The employees should participate in decision making and designing goals.

This may cause the more sense of responsibility in doing works and reaching to organizational goals.

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High work quality: the concept of life work quality expresses the importance of admiring for people in their workplace. Briefly we may say that: the factors that affect the work life quality include:

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One of the limitations is lack of measurement of organizational productivity, regarding what we have got of the studies about influential factors. Therefore we should

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Analysis of Factors Affecting Operation Labor Productivity: (In Persia Energy Exploration Company)

MASTER'S THESIS

Analysis of Factors Affecting Operation Labor Productivity

(In Persia Energy Exploration Company)

Gholamreza Ghasemi Davoud Taheri

2016

Analysis of factors affecting operation labor productivity

(In Persia Energy Exploration Company)

By:

Gholamreza Ghasemi

Davoud Taheri

ABSTRACT

Contents

Chapter 1. Introduction

1.1. Introduction

1.2. Background

1.3. Problem Discussion

1.4. The Purpose of the Thesis

1.5. Delimitations

1.6. Expected Contribution

Chapter 2. Literature Review

2.1. Topic in general

2.2. Productivity

2.3. Human resource

2.4. Linking

2.5. Discussion

2.5.1. Case Study (Introduction of Persia Energy Exploration)

2.5.2. Frame of Reference

Chapter 3: Methodology

3.1. Research Purpose

3.2. Research Approach

3.3. The Population study

3.4. The tools of collecting data

3.5. Technical characteristics of the tools for data collection

3.6. The scales

3.7. The method of data collection

3.8. Data Analysis

1. Descriptive statistics:

2. Inferential statistics:

Chapter 4. Empirical data & Analysis

4.1. Descriptive statistics

4.2. Analyzing statistics

4.3. Normality test of research variables

4.4. Measuring reliability of data collection tool (questionnaire)

4.5. Examining the influential factors of workforce productivity

Chapter 5. Conclusions

5.1. Findings and discussion

5.2. Practical suggestions

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5.3. Suggestions for future research

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5.4. Research limitations

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Reference