Managerial Coaching Model and the Impact of its Activities ... Employee Satisfaction and Company Performance ... of its activities on employee satisfaction and on ... for increasing added value in company’s business

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  • Managerial Coaching Modeland the Impact of its Activitieson Employee Satisfactionand Company Performance

    petra cajnkoUniversity of Maribor, Sloveniapetra.venisnik@gmail.com

    sonja trevenUniversity of Maribor, Sloveniasonja.treven@uni-mb.si

    polona tomincUniversity of Maribor, Sloveniapolona.tominc@uni-mb.si

    The article tries to answer the research question: What is the po-tential additive effect on employee satisfaction and overall com-pany performance when using managerial coaching model and itsactivities? The purpose of the article has been to form a model ofmanagerial coaching and of the influence of its activities on em-ployee satisfaction and overall company performance based ontheory review and field study results. We have confirmed the twomain hypotheses and all the secondary hypotheses with two em-pirical studies, one focused on the managers and the other on theemployees. The topic is of practical value and it will help man-agers in Slovenia and abroad to understand the effect of the ac-tivities of coaching on employee satisfaction and overall companyperformance.

    Key words: coaching, employee satisfaction, companyperformance, management, model

    Introduction

    Economy has shown its extreme instability in recent years. It is be-coming increasingly difficult to reach the set goals. On the otherhand, this crisis presents an excellent opportunity to increase thecompanys performance. Investing in human capital is nowadays themost lucrative and also the safest the human capital can be end-lessly ennobled, its value can only increase and, most importantly, itis the only form of capital that cannot be stolen (Mihalic 2006, 1).People, therefore, are becoming more and more important in the

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  • Petra Cajnko, Sonja Treven, and Polona Tominc

    company; managers and employees alike represent the companysadvantage over others. It is important that employees feel well whendoing their job, are motivated, or satisfied. Of equal importance ismanagers correct usage of his or hers managerial skills as it ef-fects employee satisfaction and company performance. The purposeof the article has been to form a model of managerial coaching andof the influence of its activities on employee satisfaction and overallcompany performance based on theory review and field study re-sults.

    Theoretical Framework

    There are many factors (Turk et al. 2001; Dimovski and Penger 2008;Arens and Loebbrecke, 2000; Vukasovic and Ruman 2013; Forte2014) that influence company performance. It is inherent that all em-ployees have good understanding of the strategy of their companyand of the key initiatives in place in order to realize said strategy;the management also has to implement suitable ways of measuringperformance. When measuring, it is of key importance to measurein a manner the employees understand (Cokins 2006, 42).

    Skilled personnel is therefore one of the key factors in achievingcompany performance. A successful business pays a lot of attentionto training its staff and updating their practices. It also encouragesemployees. A successful operation is based on teamwork, i. e. all theteam members pursue the same goals and values.

    Measuring company performance is of key importance to be ableto strategically update, train, and change the company. If incorrectindicators are used for measuring company performance, there is nodrive for change. Choosing correct indicators for measuring com-pany performance is therefore very important, because the man-agers and the leadership base their actions on those measurements.

    Based on company performance definition and theoretical ba-sis for its measurement, we define the following key indicators ofcompanys performance: (i) cost management, (ii) product prof-itability, (iii) profit, (iv) income growth, (v) cash flow, (vi) customersatisfaction, retention and acquisition, and (vii) employee satisfac-tion, retention and productivity. There have already been severalmeasurement instruments described in available literature (Bodlaj2009; Gruca and Rego 2005; Arh 2010; Jorritsma and Wilderom 2012;Burian et al. 2014); we have modified the established measurementscales to fit our study.

    Employee satisfaction is a complex concept; it demands knowl-edge and various skills for its interpretation. It is the sum of partial

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    (dis)satisfactions that sway one way or the other. Authors have dif-ferent definitions of employee workplace satisfaction (George andJones 1996, 70; Hollenbeck and Wright 1994, 176; Cahill 1996, 164;Maister 2003, 272; Oakley 2004, 15; Topolsky 2000, 128). Managerialaspect of employee satisfaction forms one of the basic constructs inour study (constructs in the coaching framework, employee satisfac-tion construct and company performance construct).

    Every manager who wants to pride himself with his businessachievements knows that satisfied employees are a key prerequi-site. A manager and a company are only as strong as the humancapital in it.

    Numerous studies (Pohlmann 1999; Oswald and Clark 1996; Des-marais 2005; Parent-Thirion et al. 2007; kerlavaj et al. 2007) havebeen carried out in order to determine the factors that influence em-ployee satisfaction. People are different: what one may perceive assatisfactory the other perceives as dissatisfactory. Lawler (1994, 83)states that there is an infinite number of factors, just as there is aninfinite number of needs.

    Our study focused on managerial aspects of employee satisfac-tion. Based on that and the theoretical framework describing mea-surement of employee satisfaction, we define the following factorsof employee satisfaction: (i) job content, (ii) individual creativity,(iii) salary, extras and benefits, (iv) organization of work, (v) team-work, (vi) working conditions, (vii) independence at work, (viii) jobstability and safety, safety at the workplace, (ix) relationships, (x)possibility for training and education, (xi) ownership participation,(xii) communication, (xiii) personality, and (xiv) societal influences.We used the stated factors when measuring employee satisfaction.We used established measurement scales in the available literature(Porter and Steers 1973; Brayfield and Rothe 1951; Cammann et al.1983; Gounaris 2006) and modified them to fit our study.

    Company performance from the managerial point of view can beimproved with employees that are satisfied with their job. The otherbasis of every successful business, in our opinion, is employing qual-ified people that are able to take part in highly creative and suc-cessful teams and are instrumental in realization of the companysstrategic plan.

    In recent years, many companies (and especially managers) in theUnited Kingdom and Western Europe have started studying and im-plementing coaching in order to contribute to: (i) personal and pro-fessional development of the employees, (ii) building pleasant rela-tionships, (iii) building career, (iv) managing the business, (v) plan-

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    ning the development, (vi) setting of strategic goals, (vii) setting ofbusiness plans, (viii) building of values, and, last but not least, (ix)employee workplace satisfaction.

    The word coach originates in the French word coche, whichmeans a carriage. In the past coaching was used to describe travel-ling with a carriage. Coach is therefore a vehicle that drives an in-dividual or a group from a starting point to a suggested goal (Stem-berger 2008).

    There are various definitions of managerial coaching (Cec 2006;Megginson and Clutterbuck 2007; Lehinsky 2007; Stemberger 2008).We could say there are as many definitions of coaching as there areschools for it. Stemberger (2008) claims that the key element thatdiffers coaching from other disciplines that help individual employ-ees and companies to evolve, is the manager coach that helps eachindividual and company to find an independent solution that leads inthe right direction. The manager does not consult on the best path,but instead helps employees get there on their own.

    Managerial coaching, in our conviction, is a process in whichcoaching has to become a way of private as well as professionallife. Coach has to see the potential in his employees, see what theycan evolve into. The key mission a coach has is guiding employeesso they can take advantage of their hidden talents and skills, andcreating an environment that drives employees to evolve into betterand more successful people.

    Authors (e. g. Jarvis 2006) are citing numerous advantages andbenefits of managerial coaching: (i) progress in mission, (ii) progressin activity reflection, (iii) increased self-awareness and awareness ofconsequences of actions, (iv) progress in balanced decision makingwhen multitasking, and, (v) progress in communication.

    Our study defines managerial coaching as a method that providessupport and opportunity for consulting to individual employees aswell as entire staff by managers coaches so that individual em-ployees and entire staff become aware of the way to improve theirjob performance and workplace satisfaction. Determining activitiesthat are the foundation of measurements of effectiveness of coach-ing is of key importance; it is the only way to bring focus to actionsthat can bring desired effects and results. Based on definition andtheoretical foundation for measuring managerial couching we de-fined the following activities (constructs) of managerial couching:(i) empathy, (ii) assertive communication, (iii) decision making abil-ity, (iv) strategic thinking, (v) delegation, (vi) work optimization, (vii)broadening of horizon, (viii) conflict resolution, (ix) effective meet-

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    EmployeeSatisfaction

    CompanyPerformance

    Managerial Coaching

    h 1 h2

    Employee satisfactionfactors:

    RelationshipsIndividual creativityJob contentTeamworkOrganisation of work

    Managerial coachingactivities:

    EmpathyAssertive communic.Strategic thinkingDelegationWork optimisation

    Company performancefactors:

    Product profitabilityCost managementJob contentProfitIncome growth

    hi,k hi,j

    figure 1 Managerial Coaching Model

    ing conduction, (x) improved public appearance skills, and (xi) in-creased employees commitment to the company. We used the statedactivities to measure managerial coaching effectivness. We used es-tablished measuring instruments and scales (Spector 1997; Gounaris2006; Moina 1992; Boles et al. 2007; Covin, Slevin and Schultz 1994;Porter and Steers 1973) for measuring managerial couching effec-tiveness and modified them to study the effect of managerial couch-ing on employee satisfaction and company performance. Based onthe available literature, studies already carried out, and establishedmeasurement scales, we developed a model of managerial coachingand of the effects of its activities on employee satisfaction and oncompany performance. Figure 1 presents our managerial coachingmodel.

    It stems from the thesis: companies can, with some care put intoimplementing components of managerial coaching model, signifi-cantly influence employee satisfaction and company performance.We took five managerial coaching constructs and measured their ef-fect on the constructs of employee satisfaction and company per-formance. That was followed by analysis of the effect of the five man-agerial coaching constructs on five components of employee satis-faction construct and on four components of the company perform-ance construct.

    With this model, the management will be able to use new criteriaof company performance that were traditionally hidden and, in our

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  • Petra Cajnko, Sonja Treven, and Polona Tominc

    opinion, represent untapped potential for increasing added value incompanys business.

    The purpose of the empirical part of our study was to use themanagerial coaching model to determine and present guidelines thatmanagers can use to extract the best possible results from their em-ployees, and to suggest a managerial style that will result in betteremployee satisfaction, more efficient managers and higher companyperformance.

    Methodology

    Here we describe empirical testing of the managerial coachingmodel and the hypotheses that we had posed. The empirical start-ing point was designing measuring instruments (both for managersand employees) and compiling a sample of companies in Sloveniawith more than ten employees. The study is based on the theoret-ical foundation, managerial coaching model, both discussed above,research methodology, and on the thesis, the two main hypothesesand the secondary hypotheses hi,j and hi,k (i= 1,2,3,4,5; j= 1,2,3,4,5;k= 1,2,3,4).

    As stated in the article, we deal with human resources. After re-viewing available literature in the field and synthesizing the knowl-edge into new realizations, we tried to answer the fundamental re-search question: What is the potential added effect of using managerialcoaching model and its activities on employee satisfaction and companyperformance?

    Thesis

    The thesis tries to answer the research question. It states:

    Companies can, with some care put into implementing componentsof managerial coaching model, significantly influence employeesatisfaction and company performance.

    To confirm the thesis we tested the following two hypotheses:

    h1 Implementing managerial coaching model positively influencesemployee satisfaction.

    h2 Implementing managerial coaching model positively influencescompany performance.

    We tested the correlation among the constructs of coaching andthe individual components of employee satisfaction and companyperformance:

    hi,j Implementing activity i of the managerial coaching model posi-tively influences factor j of the employee satisfaction.

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    hi,k Implementing activity i of the managerial coaching model posi-tively influences factor k of the company performance.

    i= 1,2,3,4,5; j= 1,2,3,4,5; k= 1,2,3,4. Here we state all the hi,j andhi,k hypotheses we tested in order to confirm the two main hypothe-ses and, consequently, the thesis. We separately state the secondaryhypotheses we tested on the sample of managers and the sample ofemployees.

    The sample of managers was tested for the following hypotheses:

    h1 Implementing managerial coaching model positively influencessatisfaction of managers.

    Construct i of managerial coaching model positively influences sat-isfaction of managers.

    h11 Empathy positively influences general satisfaction of managers.

    h21 Assertive communication positively influences general satisfac-tion of managers.

    h31 Strategic thinking positively influences general satisfaction ofmanagers.

    h41 Delegation positively influences general satisfaction of man-agers.

    h51 Work optimization positively influences general satisfaction ofmanagers.

    h2 Implementing managerial coaching model positively influencescompany performance.

    Construct i of the managerial coaching model positively influencescompany performance.

    h12 Empathy po...

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