Advances in Social Science, Education and Humanities Research, volume 229

2nd International Conference on Intervention and Applied Psychology (ICIAP 2018)

A Virtuous Company Makes Me Engage! The Mediation Role of

Organizational Identification in the Workplace

Inggil Sholata Syaa and Arum Etikariena Hidayatb

a
Faculty of Psychology, Universitas Indonesia, Depok, Indonesia; bDepartment of Industrial
and Organizational Psychology, Faculty of Psychology, Universitas Indonesia, Depok,
Indonesia

*Corresponding author:
Arum Etikariena Hidayat
Department of Industrial and Organizational Psychology
Faculty of Psychology, Universitas Indonesia
Depok, Jawa Barat, Indonesia
Email address: [email protected] / [email protected]

Copyright © 2019, the Authors. Published by Atlantis Press.

This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). 870
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A Virtuous Company Makes Me Engage! The Mediation Role of

Organizational Identification in the Workplace

Abstract—This study shows the effect of perceived organizational virtuousness

on work engagement. Based on social identity theory, the researchers
hypothesize that organizational identification mediates the relationship between
perceived organizational virtuousness and work engagement. This study
analyzes data from online and offline questionnaires given to 84 participants
from various work sectors. The measurements of the study are the Short Utrech
Work Engagement Scale (UWES-9), Organizational Identification Scale, and
Organizational Virtuousness Perceived Scale. The data were analyzed with
regression analysis using SPSS 25.0. The results show that perceived
organizational virtuousness significantly affected work engagement, perceived
of organizational virtuousness was significantly related to organizational
identification, organizational identification was significantly related to work
engagement, and the relationship between perceived organizational
virtuousness and work engagement was fully mediated by organizational
identification. These findings support the social identity theory that
organizational identity mediates the relationship between perceived
organizational virtuousness and work engagement. This study provides a
needed step forward to building a virtuous climate in an organization.

Keywords: organizational identification, perceived organizational virtuousness,

work engagement, regression analysis

Introduction
In recent decades, the majority of psychology researchers have focused on negative phenomena
such as stress, anxiety, and depression (Seligman, 2002). Ugwu (2012) changed the perspective
of research from the negative aspects of behavior to positive aspects in the field of psychology,
investigating the development and growth of individuals, organizations, and society. Research
revealed a positive approach that increases work productivity and controls negative work
factors. This approach, called Positive Organizational Behavior (POB), emphasizes the
development of human resources in the workplace. Human resources are considered the most
valuable assets of an organization, where they play an important role (Bouckenooghe, Raja, &
Abbas, 2014One aspect that is relevant to POB is work engagement.

Schaufeli et al. (Bernt, 2016) explained that “work engagement is understood to be a

motivational construct defined as a positive, fulfilling, work-related state of mind that is
characterized by vigor, dedication, and absorption.” Schaufeli et al. stated that, “Vigor was
regarded as a physical component, which entails high levels of energy and mental resilience
while working, the willingness to invest effort in one’s work, and persistence even in the face
of difficulties” (Bernt, 2016). Schaufeli et al. explained, “dedication is an emotional component
characterized by a sense of significance, enthusiasm, inspiration, pride, and challenge at work”
(Bernt, 2016). According to Bakker, Hakanen, Demerouti, and Xanthopoulou, “Absorption is

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considered a cognitive component, which consists of being fully concentrated, happy, and
deeply engrossed in one’s work, experiencing that time passes quickly, and difficulty detaching
oneself from work” (Bernt, 2016).

Work engagement is neither a momentary nor a specific condition because it is more permanent
and can penetrate the level of cognition. It motivates employees to feel commitment,
enthusiasm, and passion because they have energy and a positive relationship with their work.
In addition, they have a strong self-identification with their work and see their workplace as
meaningful.

Employees are engaged in their work and motivated to foster strong emotional bonds when their
perception of the organization in which they work is that it has a culture that cares for employee
well-being, demonstrates prosocial behavior (Rhee, Dutton, & Bagozzi, 2006), and can improve
work effort. Cameron, Bright, and Caza (2004) stated that organizational virtue can be defined
as the actions, desires, and processes of individuals or groups that spread goodness in an
organization to create positive emotions in employees and motivate them to help and respect
one another (Bagozzi, 2003). The organizational context that fosters working relationships can
be trusted. In addition, Bakker et al. (2011) found a significant relationship between an
organization’s failure to realize its values and lack of integrity, and a decreased level of
employee work engagement.

Tyler (2012) argued that “when organizational membership contributes to a positive social
identity, employees will be psychologically involved with the organization and work.” In
addition, Dutton, Dukerich, & Harquail (1994) stated that an organization’s positive qualities
such as virtues and value characteristics are related to organizational identification (Karanika-
Murray, Duncan, Pontes, & Griffiths, 2015). Ashforth and Mael described “the perception of
oneness with or belongingness to an organization, where the individual defines him or herself
in terms of the organization in which he or she is a member” (Hur, Shin, Rhee, & Kim, 2017).
A sense of unity and belonging in organization can be built by employees who identify with the
organization, called organizational identification. Organization members can build a stronger
positive self-image by identifying with organizations that have interesting, valuable attributes
and seeing similarities between themselves and the organizational attributes. Grant argued that
“when employees see their organization showing optimism, forgiveness, trust, compassion, and
integrity, employees tend to generalize their perceptions as decisive organizational property”
(Hur et al., 2017).

Hur et al. (2017) asserted that perceived organizational virtues and involvement are derived
from organizational membership and can promote effective work and facilitate motivated
behavior. According to Martin and Cullen (2006) “This is consistent with the context-attitude-
behavior framework which shows that employees who are embedded in the organizational
context influence their attitudes and behavior.” Cameron (2003) stated that organizations
characterized as virtuous contribute to behavioral friendliness and employee motivation. Tajfel
(Hur, Rhee, & Ahn, 2016) described organizational identification as a connecting mechanism
between the perception of organizational creativity and work engagement. As mentioned in

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Singh, David, and Mikkilineni (2018), Bagozzi suggested that positive organizational features
(e.g., organizational virtues and strengths) improve organizational identification, lead to
absorption, and promote vigor and dedication. There are four hypotheses proposed in this
research.

H1: Perceived organizational virtuousness is positively related to work engagement.

H2: Organizational identification is significantly related to perceived organizational
virtuousness.
H3: Organizational identification is significantly related to work engagement.
H4: Organizational identification fully mediates perceived organizational virtuousness and work
engagement.

Fig. 1. Research model

Methods
Participant and Procedures
A convenience sampling method was used to select the participants because it is convenient,
simple, not time consuming, and economical (Huysamen, 1994). The participants were 84
employees (57% female) in Indonesia from four sectors (BUMN, civil service, public
employees, and ministries) who had worked for a minimum of two years at their organization.
Their typical education level was undergraduate degree (76%). Table I shows the means (M),
standard deviation (SD), Pearson correlation (r), and Cronbach’s α for all variables. In this
research, Cronbach’s α implies a high measure of internal consistency of the variables.
Furthermore, it has a moderate and significant correlation among the constructs. Baron and
Kenny (1986) stated that if there is a significant correlation among constructs, the researcher
can propose mediation analysis.
Table I. Mean, Standard Deviation, Correlation, and Cronbach’s α
M SD 1 2 3 4 5 6 7
1. Sex 1.57 0.50 -
2. Age 30.79 6.72 0.05 -
3. Education 2.76 0.63 0.06 .23* -
4. Work Sector 2.11 0.94 -.29** 0.04 0.16 -

5. Work Engagement (WE) 43.63 9.41 0.08 0.16 -0.01 0.02 (.93)
6. Organizational Virtuousness (OVP) 46.86 5.73 -0.07 0.01 -0.02 .22* .47** (.90)
7. Organizational Identification (OI) 15.5 2.16 -0.08 0.05 0.02 0.17 .54** .75** (.72)
* Notes: n = 84. *p ≤.05 **p ≤.001 (two-tailed)

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Measurements
The perception of organizational virtuousness was assessed with 15 items adapted from the
scales of Hur et. al (2017). There are five sub-dimensions of the questionnaire: compassion,
optimism, trust, integrity, and forgiveness. The scales were adapted to Bahasa Indonesia. The
participants were asked to rate their perception of their organization’s culture on four-point
Likert scale (from 1 = strongly disagree to 4 = strongly agree). The Cronbach’s α was.90.

Organizational identification was determined by the Organizational Identification Scale adapted

from Ashforth and Mael (1989). The scale was adapted to Bahasa Indonesia. It assessed how
much the participants defined themselves in the terms of their organization. The questionnaire
consisted of five items in which the participants indicated their level of agreement on a four-
point Likert scale (from 1 = strongly disagree to 4 = strongly agree). The Cronbach’s α was
about.72.

Work engagement was measured by the short version of the Utrech Work Engagement Scale,
with nine items (UWES-9; Schaufeli, Bakker, & Salanova, 2006). The questionnaire consisted
of three subscales: vigor, dedication, and absorption. The scales were adapted to Bahasa
Indonesia. The participants were asked to indicate their feelings about work on a seven-point
Likert scale (from 0 = never to 6 = always). The Cronbach’s α was.93.

Data Analysis
The data were analyzed by regression analysis using SPSS 25.0. Following Baron and Kenny
(1986), when a predictor variable and an outcome have a relationship, mediation analysis can
be performed to determine the need for mediation analysis. A series of standard multiple
regression analyses were completed to examine whether organizational identification mediated
perceived organizational virtuousness and work engagement.

Results
Simple linear regression was used to analyze the mediation effect between variables for
unmediated pathways. Table II shows the results of testing hypotheses 1 to 3. The first model
indicated that perceived organizational virtuousness was a significant predictor of work
engagement, F (1, 82) = 23.28, p <.005, R2 =.22. Perceived organizational virtuousness
explained 22% of the variance in work engagement. The second model indicated that
organizational identification was significantly predicted by perceived organizational
virtuousness, F (1, 82) = 108.09, p <.05. Further, 57% of the variance in organizational
identification was explained by perceived organizational virtuousness (R2 =.57). Additionally,
organizational identification positively predicted work engagement, F (1, 82) = 33.53, p <.05,
R2 =.29. Twenty-nine percent of the variance in organizational identification was explained by
work engagement.

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Table II. Analysis of Simple Linear Regression for How Perceived Organizational Virtuousness
Affects Organizational Identification and Work Engagement
Variables R2 F β
Perceived Organizational Virtuousness -
.22 23.28 .47
Work Engagement
Perceived Organizational Virtuousness -
Without Mediation .57 108.09 .75
Organizational Identification
Organizational Identification - Work
.29 33.53 .54
Engagement
Note. R2: adjusted R-square; degrees of freedom (df) = 83; R2: regression coefficient. p <.05

Table III shows the results of the mediation analysis using multiple regression. Organizational
identification fully mediated perceived organizational virtuousness and work engagement, F (2,
81) = 17.33, p <.05, R2 =.30. In addition, organizational identification mediated 30% of the total
effect.

Table III. Results of Multiple Regression for How Perceived Organizational Identification Mediates
Organizational Virtuousness and Work Engagement
Variables R2 F β
With Mediation of
Perceived Organizational Virtuousness -
Organizational .30 17.33 .55
Work Engagement
Identification
Note. R2: adjusted R-square; degrees of freedom (df) = 83; R2: regression coefficient. p <.05

Discussion
The mediation mechanism of organizational identification underlaid how perceived
organizational virtuousness related to work engagement. As expected, perceived organizational
virtuousness significantly affected work engagement, and employees become engaged in their
work based on their perception of how the organizational culture cared for employee well-being
and demonstrated prosocial behavior (Cameron et al. 2004). Ugwu (2012) explained that an
organization with a strong culture of values (e.g., forgiving employees’ mistakes) inspires
employees to self-identify with these virtues and to act out the virtues with others. This builds
their interest and affection for the organization and ultimately leads to stronger work
engagement.

Organizational identification has a significant relationship with work engagement. When

employees self-identify with the values of their organization, their attitudes and beliefs are
positive and they are motivated to improve their work performance. Social identity theory shows
that strong ties between employees and their organizations strengthen their motivation to exert
effort for (and on behalf of) both their peers and their organizations (Ashforth & Mael, 1989;
Dutton et al., 1994). In turn, a strong psychological bond with the organization can strengthen
their willingness to work better and be bound by the work itself.

Perceived organizational virtuousness had a positive relationship with organizational

identification. Organizations that have a unique culture affect employees’ self-identification,

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especially when the employee believes the organization’s values are the same as his or her own.
Ashforth and Mael described “the perception of oneness with or belongingness to an
organization, where the individual defines him or herself in terms of the organization in which
he or she is a member” (Karanika-Murray et al., 2015).

The relationship between perceived organizational virtuousness and work engagement was fully
mediated by organizational identification. Within organizations, employees should foster high
quality connections with each other. These can be built based on the understanding that a
positive picture of the organization produces positive emotions (Dutton & Heaphy, 2003).
Positive interaction with other employees in the organization allows employees to create a
positive spiral of meaning in the workplace (Csikszentmihalyi, 2003) and foster job
involvement. Based on social identity theory (Tajfel in Hur 2017), organizational identification
is the connecting mechanism between perceived organizational creativity and work
engagement. Bagozzi (Singh et al., 2018) stated that positive organizational features (e.g.,
organizational virtues and strengths) enhance organizational identification, lead to absorption,
and promote vigor and dedication.

Conclusion
The study found that perceived organizational virtuousness significantly affected work
engagement and organizational identification, organizational identification significantly
predicted work engagement, and fully mediated perceived organizational virtuousness and work
engagement. A positive culture can be established through organizational identification, and this
may be used to build employee engagement.

Theoretical Implications
The findings of this research have implications for education. One one hand, the research on
organizational virtuousness is the first study of its kind in Indonesia. The results show that
perceived organizational virtuousness affects employee work engagement. At the same time,
the findings support the social identity theory that organizational identification is a relevant
framework for explaining how perceived organizational virtuousness is associated with work
engagement.

Practical Implications
Other findings have implications for management. Rego, Ribeiro, & Cunha. (2010) stated that
employees’ divarication can be increased by raising their perception of the organization’s
values. Managers should be aware of and care about employees’ perception of the organizational
climate. They should seek to build a virtuous climate within the organization. Employees’
perception of the organizational climate should be known and evaluated by management
because it is fundamental to employees’ well-being. Therefore, management must focus on
developing an atmosphere that encourages virtuousness in the organization.

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Future Research
Future research should investigate the relation of the five dimensions of organizational
virtuousness and three dimensions of work engagement, identify boundary conditions where
certain types of work become more prominent than others, and explore cross-linking from
various organizations.

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