Examining the Effects of Work Environment on Employee Job performance: The Case of Ethiopian Health Insurance Service

Abstract

This study investigates the effect of the work environment on employee job performance at the Ethiopian Health Insurance Head Office (EHIS), focusing on four key factors: physical environment, psychological environment, social environment, and organizational culture. Using a census approach, data were collected from all 190 employees, with 188 responses received using questioners and quantitative research approach and explanatory research design was flowed. The findings reveal generally positive perceptions regarding the physical and psychological work environments, with employees reporting satisfaction with aspects such as workstations, lighting, airflow, and supervisor support. However, challenges such as noise levels, workspace adequacy, workload complexity, and stress were identified as areas of concern. The social environment showed mixed responses, particularly regarding professional development opportunities and worklife balance. Organizational culture was perceived positively in some areas but indicated significant room for improvement in terms of workload management, communication, and employee wellbeing. The study further established a strong positive relationship between the work environment and employee job performance, with physical environment factors having the most significant impact, followed by organizational culture. Regression analysis confirmed that work environment factors account for 74.1% of the variation in job performance. The study concludes that improving workload management, professional development opportunities, work-life balance, and fostering a supportive organizational culture can significantly enhance employee job performance and overall well-being.