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Factors that affect the performance of employees

Factors that affect the performance of employees within oil and gas companies within

developing states such as Qatar

Literature Review

After the decision of the Gulf Cooperation Council (GCC) member states in the year
2014 not to cut the production of oil following the drop in oil prices, the cost of a barrel of oil
has significantly fallen to its lowest since 2015. According to Milmo (2016), the drop in oil
prices in this case affects the economy of Qatar since the stock markets around the world are
significantly affected by these drops (pp.38). The decrease in oil prices in Qatar was brought
about by several factors that include the following: changing policy objectives of the GCC
member states, the increasing decline in global oil product demands, and an increase in oil
production from other oil producing economies. Additionally, the decrease in GCC’s
geopolitical concerns that appertain to supply disruptions in other countries that depend on oil
from Qatar is another challenge that has resulted in the drop in oil prices.

Krane (2015) supports the views of Milmo (2016) by stating that in as much as
several O+G importing countries have immensely benefited from the drops in oil prices, the
effects and impacts of these price drops may not be positive worldwide (pp.16). This can be
depicted in the fact that some of the leading oil producing states such as Qatar struggle in
maintaining their economy and stability as a result of declines in oil revenues (United Arab
Emirates Oil & Gas Report 2015, pp.110). As a result of the destabilizing effects that result
from a drop in oil prices, serious implications for companies and their workforce are
considered to be immense.
Smead (2015) states that a decrease in oil prices has the capacity to significantly
strengthen the dollar, a factor that would affect other corresponding currency of Qatar as a
result of the state’s dependence on commodity exports (pp.85). As a result of oil drops to a
state’s financial assets to oil, widespread default on companies are likely to be experienced.
This is attributed to the fact that the precipitation of financial contagion may lead to
instabilities in such organizations.
However, Marais (2016) contrasts to the views of other authors since he alleges that
Qatar significantly seems to be immune to the effects of price drops in its oil products.
According to this author, the economic performance of Qatar is still strong even with the drop
in oil prices, an aspect that is attributed to the state’s expansion in other entities such as the
non-hydrocarbon industry (Qatar Oil & Gas Report 2015, pp.65). This industry is considered
to drive the state’s economic momentum, thus propelling the spending made on investments.
Breunig and Tse Chern (2015) also point to Qatar’s construction and banking industries as
robust in recording the state’s economic growth (pp.114).
Webb, Jeffrey and Schulz (2011) pointed out to the fact that employees are the
organizations most important resource and need to be properly compensated in order to
achieve the goals of an organization. As detailed initially, the development of the human

resource management (HRM) approach is vitally based on approaches aimed at utilizing
people and treating them as resources in order to realize an organizations objectives (Webb,
Jeffrey & Schulz 2011, pp.212). This clearly denotes the functional role of HRM within these
organizations, an effort directed towards initiating high performance work systems. This
aspect consequently entails linking the workforce in different departments within an
organization. Thus, O+G companies incorporate the use of effective HRM systems to
increase their competitive nature through an investment in employee development.
The concept of employee performance is often associated with the workforce’s ability
to achieve quality in relation to output, the presence of employees on the job, the timeliness
of the output, and the effectiveness of the work completed. Fedor and Rensvold (2012,
pp.790) stated that an efficient leadership style has a bearing that encourages employee
performance. The views of Lin (2011) are in support of those of Fedor and Rensvold (2012).
According to Lin (2011), employee performance involves the successful completion of duties
and responsibilities as developed by the supervisors and top managers of an organization
(pp.895). In this case, the performance of employees according to these authors may be
considered in the perspective of three elements that enables them to perform better, with the
determinacy of their performance considered as wholly dependent on their declarative
knowledge, motivations and procedural knowledge. In short, it is essential to establish that
efficient human resource practices have a positive impact on the performance of employees
within an organization.
As a result of the drops in oil prices in Qatar, Das et al. (2013, pp. 52) noted that there
are five internal human resource management practices that affect the performance of
employees. This consequently includes organizations efforts directed towards eliminating
recruitment packages and competitive compensation levels, the elimination of training and
development, including personal appraisals and the layoff of staff members with the aim of

stabilizing the functions of these organizations. In this case, organizations are forced to
restructure their systems and functions during such periods in order to remain competitive in
the market as stated by Hu and Kaplan (2015). The sharp decline in oil prices has tipped
several companies into recession, an aspect that has slumped investment levels within the
O+G industry. Several employees have been laid off as a result of this slump, thus affecting
the functions of HRM within the organizations (Hu & Kaplan 2015, pp. 125). In their article,
Hu and Kaplan (2015) have clearly pointed out how the layoffs of employees within this
sector affects various operations of oil and gas companies, including a decline in production
of goods and services within these projects such as O+G ripping services, engineering and
construction services.
The decline in oil prices has caused employees in O+G organizations in the state of
Qatar to experience various external issues that impact their performance. Jaffe and Elass,
(2015) purported that the drop in oil prices has in fact led to the cancellation of a series of
projects within the energy companies’ proposals, which has in turn resulted in significant job
cuts. Several foreign expatriates have also left Qatar for holidays and also to take their
families back to their home nation. According to Jaffe and Elass (2015), this results from the
outcome of the efforts of O+G corporations that are aimed at establishing the right sizing of
their organizations human resources. In essence, oil companies in this region have taken steps
in downsizing their workforce and cancelling their projects as an approach of cushioning the
workforce on the impact of the falling oil prices. Hu and Kaplan (2015) support these views
when they pointed out that several companies in Qatar demurred on the renewal of their
contracts with other companies worldwide.
In addition to this, the depression in oil prices has also seen oilfield service companies
and their sub-contractors suffer from some huge drops in their organizational activities, thus
impacting the performance of employees. There are many instances of reductions in spending

on staffs on pertinent activities such as training and development, motivation and
empowerment by organizations as a result of low incomes received by these companies
(Salehi, Save, Nel & Almquist, 2015, pp.47). The drop in oil prices has also seen several
employees in companies dealing in the O+G sector encounter an increase in financial
pressures. This results from swelling prices of products and services within the emirates
economy of this nation, an aspect that has affected these employees immensely. As a result of
the scope of staff cuts, many Qatari citizens working in these companies have been rendered
jobless, thus their survival has turned out to be challenging.
The low levels of oil prices are likely to result in a new market equilibrium that is
depicted to last longer as compared to the short-term price limitations that occurred in 2008-

  1. As a result of this current situation, all the net oil exporters in Qatar are predicted to
    face challenges in adjusting to the macro-and microeconomic factors, an element that affects
    several oil producing companies and their employees.
    Qatar primarily depends on oil for many purposes that include planting its fields,
    powering cars, operating some of its oil-powered irrigation systems and to be used as raw
    materials in the production of different products that include fabrics and medicines (Kilian, &
    Lewis, 2011, pp.1048). Several industries have therefore been developed that produce
    products that are consumed by the population both at home and abroad, an aspect that has
    seen the employment of many workers from the country.
    When the prices of oil are low, the production of several products is likely to decline,
    thus leading to a series of secondary effects such as job looses, debt defaults as a result of
    deflation, the loss of letters of credit that are required by exporters and the decline in oil
    exporters (Kilian, & Lewis, 2011, pp.1049).The low oil price makes it more challenging for
    drillers to repay their loans that are taken to enhance the process. These results in lower cash

flows and interest rates on some of the new loans that is consequently higher thus affecting
different individuals who would require loans from banks.
Once the lowering of oil prices are experienced in states such as Qatar, the prices of
different commodities also fall to levels that make different products available for consumers,
an element that cuts down the shares of production on different commodities (Kilian, &
Vigfusson 2011, pp.336). When the production of commodities drops and prices are fixed on
the concept of affordability, an aspect that cuts back on several aspects such as housing, food,
and cars, thus impacting the employees of different organizations is experienced.
Employee performance
Human resources, or employees, are the back bone a company. They are the most
vital asset of an organization. Proper use of a company’s employees could improve the
bottom line of the firm and lead the company from bottom to up. Performance is understood
as the accomplishment of a particular duty or job measured against predetermined known
standards of speed, cost, completeness and accuracy (Richard et al. 2012). Employee
performance is of great importance given that the success of an organization is directly
associated with the employee’s job performance. Various researchers have reported that the
success of staff members at their functions would further the organization’s success (Richard
et al. 2012). Human resource managers in O+G companies in Qatar and other oil producing
countries in the region need to first hire people who have the right qualifications and skills for
the job. Following the completion of the hiring process, the HR professionals should seek to
make sure that the work of a staff member is aligned closely with the objectives and goals of
the company. In order to attain strong employee work performance, HR managers execute
training and development programs, carry out employee performance evaluations, and choose
when to reassign and/or promote staffs (Hsin-Hsi 2012).

The job performance of employees within an organization is affected in a negative
and positive way by various factors. Example of these factors include organizational culture,
style of leadership used, training and development, personality trait of employees,
motivation, workplace environment, job stress, job satisfaction, as well as organization
structure among other factors. Managers in O+G companies need to be aware of the many
factors affecting the work performance of their employees and strive to improve them
(Dutton & Kleiner 2015). Business organizations are dependent on their human resources to
deliver and produce high quality services and/or products. Ewenstein, Hancock and Komm
(2016) pointed out that as they attempt to carry out their job tasks, workers are affected by
both external and internal forces. Employers who recognize these internal and external forces
and who are ready to counter or leverage them would be able to increase employee
performance, loyalty as well as productivity.
External and external factors affecting employee performance
Each employee in any O+G company in Qatar or any other O+G producing and
exporting country has to work in accordance with what is expected of him or her. Most
definitely, there are a number of things that these employees have to achieve in performing
their employment functions. Training and education – Dutton and Kleiner (2015) reported
that staff members who are trained and educated according to their field generally tend to
work better, smarter and more efficiently than others. It is important that O+G companies in
Qatar and in other oil producing and exporting nations in the region allocate sufficient
amount of money for training their employees in order to improve their skills as well as
knowledge regularly. As the skills and knowledge of employees increases, so does their job
performance and achievement.
The working environment – according to Root (2014), the working environment has
a great influence on the achievement and performance of employees in O+G companies. A

positive working environment includes colleagues who are supportive and friendly, leaders
and top managers who give positive motivation in the workplace, and comfortable work
environment. In an uncomfortable working environment with leaders who undervalue
workers and colleagues who are hostile, the work performance of an employee is likely to
reduce (Root 2014). On the whole, the workplace environment is an important factor in terms
of keeping staff members in an O+G company satisfied.
In their survey, Hsin-Hsi (2012) found that 10 percent of the surveyed workers
reported that the workplace environment was a vital factor in keeping them contented
whereas other crucial aspects included compensation, recognition and praise as reported by
29 percent of those surveyed. Employees who are satisfied and contented with their
workplace environment are inclined to exhibit high work performance. Other important
factors are promotions and engaging in recreation activities at the workplace which are
helpful in improving health, increasing self-esteem and confidence, reducing stress, and
relaxing the mind. In essence, recreation at the place of work has a positive effect on the
performance of workers since employee job satisfaction will increase, their quality of service
would increase, and their work productivity also increases (Saira et al. 2016).
Leadership style: there are many styles of leadership including participative,
charismatic, transformational, democratic and autocratic styles among others. The
performance of employees comprises meeting the set deadlines, carrying out the defined
functions and tasks, efficiency and effectiveness in carrying out work, as well as employee
competency. Richard et al. (2012) pointed out that top managers and leaders in O+G
companies need to have strong styles of leadership that would stimulate the performance of
their workers. Researchers have reported that there is a strong correlation between the
behavior of a leader in an organization and the level of performance of her subordinates: a
leader who motivates and inspires her followers tends to bring out the best in those

employees (Lepine et al. 2016). On the whole, the leader influences workers toward attaining
the goals and objectives of the company. As such, a leader’s behavior and the leadership style
they adopt could have a noteworthy effect on work outcomes, and on how jobs are done.
Organizational culture: the culture of an organization defines how the staff members
carry out their job tasks and interact with one another within the company. In any business
organization, the cultural paradigm consists of different symbols, rituals, values and beliefs
governing how people in the organization operate (Nag 2011). A company’s organizational
culture has a great impact on how workers conduct themselves with suppliers, customers, and
their fellow employees. Organizational culture, as Lefifi (2015) pointed out, includes more
than simply a work environment. It also includes empowerment/autonomy given to workers,
growth plans of the company, and attitude of the company’s management toward employees.
Furthermore, tone at the company’s senior management level is utilized in describing the
culture of an organization. While a negative tone could result in absences, employee
dissatisfaction, vandalism and even theft, a positive tone could help the workers to become
happier and more productive, which in turn help to improve their job performance (Lefifi
Organizational cultures could have different impacts on the levels of motivation and
performance of the workers. In many instances, staff members work harder to attain the goals
and objectives of their company if they see themselves as being part of the organizational
culture. The culture of an organization offers a framework regarding the behavior of workers
within the organization. The effect of culture on the performance of employees could either
be negative or positive. According to Nag (2011), the culture of an organization in which
staff members are seen as a vital element of the company’s growth process promotes
commitment of staffs toward the company. They align their objectives as well as goals with
the goals/objectives of their company and feel responsible for the company’s overall well-

being. As their efforts are consequently recognized by the organization’s top managers and
rewarded, the workers have great job satisfaction. In such corporate cultures, workers are
dedicated to attaining their goals/objectives; hence they have a positive effect on the
company’s overall performance (Root 2014).
Conversely, in companies in which managers are taskmasters rather than being
facilitators, staffs live in mistrust and fear, and work is a dull and unexciting chore. Given
that they are not involved in the company’s overall goals and objectives, they do not actually
recognize the implication of their tasks and might therefore not be dedicated to attaining them
(Lefifi 2015). An O+G company in which various departments do not cooperate will end up
having staff members working in silos. The workers may also end up working toward
undercutting or denting the efforts of other departments. These are both damaging to the
company’s overall health. To a large extent, the culture of an organization determines
employee performance. For this reason, negative factors that hold back the job performance
of workers should be eliminated so as to promote a positive corporate culture or positive
workplace environment (Root 2014).

Motivation: to obtain the best work performance from workers in O+G companies, it
is important to have some type of motivation besides the monthly payment. Saira et al. (2016)
stated that motivation could be in the form of a career path which actually leads to
management, a chance to take part in company projects, or even monetary incentives.
Effective motivation could make employees more productive. If there are no motivating
factors however, workers could be left looking for reasons to do their best at work and give
their maximum effort. Hsin-Hsi (2012) reported that motivation is an essential driving force
to attain any given task.

The two kinds of motivation are extrinsic and intrinsic motivation. While extrinsic
motivation is founded upon external sources, intrinsic motivation is understood as the inner
force of the employee to achieve a particular objective or goal (Hsin-His 2012). The level of
employee motivation has a direct impact on the performance of workers in O+G companies
in Qatar. It is notable that together with skills, abilities, and knowledge, motivation is a vital
aspect that actually contributes to job performance of an employee. Researchers have found
that positive reinforcement improved employees’ level of performance from 44% to 96%,
since regular feedback as well as recognition gave the workers the psychological feeling that
in fact influenced their work performance positively and strongly (Ewenstein, Hancock &
Komm 2016).
Motivations can also be categorized as fear motivation, incentive motivation or
achievement motivation. Fear motivation – punishment and fear of punishment greatly
influence workers to carry out their tasks effectively. If an employee breaks some rules, does
not follow the set down company policies, behaves in an unacceptable manner, and/or fails to
complete his or her work tasks within the required timeframe, that employee is likely to face
disciplinary action for instance suspension or firing. As such, since many workers tend to fear
punishment, they will strive to complete their tasks properly, on time and in accordance with
the requirements and description to avoid punishment (Dutton & Kleiner 2015). This in turn
helps to improve their job performance. Incentive performance – in general, behaviors that
are positively reinforced would become strengthened by the employee. Root (2014) noted
that fiscal or non-fiscal incentives and rewards are crucial in motivating workers to work in
an efficient and productive way. If workers are aware that they would be rewarded or that
achieving a particular job assignment would give them benefit, then they are very likely to try
their best and make their best effort to carry out the work effectively and satisfactorily (Root
2014). Achievement motivation – every person has a need for achievement. The need for

achievement is an essential aspect of human personality. People who have a high level of
achievement motivation generally have the willingness of going very far to attain their
objectives and goals, in spite of hurdles and impediments in their way (Lefifi 2015).
Organizational structure: Organizational structures define the departmental structure,
supervisory relationships, as well as workflow in an organization. The structure of an
organization is focused not just on the layout of departments within an organization, but also
on work responsibilities in the context of reporting relationships (Latifi & Shooshtarian
2011). There are various sorts of organizational structures including innovative, divisional,
professional, bureaucratic and flat organizational structure. Lefifi (2015) reported that the
performance of employees are inhibited in companies with organizational structures such as
bureaucratic organizational structure where work is very structured and formalized, typified
by a lot of standards, procedures, policies and routines. Conversely, the performance of
workers tends to be promoted in O+G companies with organizational structures that are
informal and unstructured, and where employees have autonomy with regard to how they
perform their job tasks (Lefifi 2015).
Job stress: Job stress is understood as the damaging emotional and physical responses
that take place whenever job requirements do not fit with the needs, resources and abilities of
the employee (Karasek & Theorell 2012). Work stress is a significant challenge to individual
physical and mental health, as well as organizational health. In his study, Park (2012) found
that employees who experience work stress have a higher likelihood of being poorly
motivated, unhealthy, less safe at the workplace, and less productive. As a result, O+G firms
in Qatar with stressed workers tend not to succeed within a competitive market. In Qatar, it is
estimated that stress related to work costs the nation’s economy a substantial amount in
litigation, healthcare, sick pay, as well as lost productivity costs (Karasek & Theorell 2012).

Training and development: This is of great importance in enhancing employee job
performance. Even new staffs will benefit very much from orientations programs as well as
training and development programs that are aimed at helping them attain the company’s
performance objectives. While training activities will help the staff members to improve their
work performance at the present time, development activities help to prepare staffs for their
future responsibilities and roles (Root 2014). Rapid changes in consumer preferences,
technology and regulations necessitate many business organizations to implement continuing
employee training and development efforts. In their study, Hsin-Hsi (2012) learned that
training and development programs help staff members to acquire skills and knowledge that
they require in order to stay up to date in their fields and help the organization to sustain a
competitive edge. Managers may carry out a needs analysis for the purpose of ensuring that
training and development activities are actually matched to the employment tasks and skills
of the employee. No staff member would like to take part in a training activity that does not
relate to his or her performance objectives and goals.

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