Selangor Business Review Vol. 5, No.

1, 2020

The Effectiveness of Employee Engagement on Organizational Success in

Selangor Darul Ehsan

Nor Azilah Husin1, Farah Afieza Mohd Jefri2, Mong Faay Jeyakumar Periyannan3
1
Faculty of Business and Accountancy, Universiti Selangor, Malaysia
E-mail: [email protected]
2
Selangor Business School, Universiti Selangor, Malaysia
E-mail: [email protected]
3
Faculty of Business and Accountancy, Universiti Selangor, Malaysia
E-mail: [email protected]

Abstract

The employee engagement issue has become a great concern in societies, as well as business and
non-business organizations all around the world. An engaged employee is mindful of the business
context and works with his colleagues to improve the performance and the well-being of a
company. In 2017 employee engagement trends have decreased for the first time in four years.
Why is the turnover rate of Malaysian employees high and why do they admit to contributing little
in their work? Therefore, the reason why the employees are disengaged needs to be identified.
Hence, the research objectives of this study are to determine the link between work performance,
leadership, and well-being towards employee engagement and to investigate the most and the
least influencing factor towards employee engagement. A total of 100 questionnaires was
employed as a tool for the extraction of the effectiveness of Employee Engagement. The data were
analysed by employing the Statistical Package for Social Science (SPSS). The results showed that
all the independent variables are significantly related to employees’ engagement.

Keywords: Employee, employee engagement, work performance, leadership, well-being

1.0 Introduction

Employee engagement is the main idea to comprehend and predict, both subjectively and
quantitatively, the nature of the connection between an organization and its employees. An
engaged employee is portrayed as one who is overwhelmed by and energized for his work to
make a positive move to propel the reputation and interests of the affiliations. Kruse (2018)
claims that an attractive delegate has an elevating appearance towards the organization and its
characteristics. In the present time, employee engagement is normally associated with
expressions such as representative involvement and employee satisfaction. Bakker and
Demerouti (2018) clarify that engaged employees perform better than those who are not
because they are emotionally more positive in the sense that they are happy, joyful, and
enthusiastic. The pertinence is generously more due to most by a wide margin of new-age
specialists in the workforce who have a higher inclination to be 'diverted' and 'withdrew' busy
working. Representatives with the most significant level of duty perform 20% better and 80%
were less inclined to leave the association, which shows that commitment is related to
organizational performance (Lockwood, 2018).
The present changing workplace, loaded with work vulnerability and continuous
mergers and acquisitions, adds to an absence of trust and worry for the shared government

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

assistance among employees and employers. Numerous businesses presently cannot seem to
completely comprehend the focal significance of good associations with workers to lessening
non-appearance just as upgrading devotion to authoritative goals and expanding execution.
Robertson (2019) reiterates that employee engagement can improve the goal-setting process.
In this way, employee engagement is fundamental and furthermore, it can be considered as an
imperative element for an organization to succeed and it can be expected to be set up if the
representatives are happy to help and sincerely propelled to participate (Khan, 1990). When
consideration is expanded, individuals will perform better since they are sincerely connected
to their activity (Baard, Deci & Ryan, 2004). Thus, the purpose of this study is to consider three
(3) unique factors that influence employee engagement.

2.0 Literature Review

These days’ employee engagement has become a hot topic for human resource researchers,
positive psychologists, and management practitioners to research this is due to the development
of positive psychology, work engagement, and the importance of occupational health
psychology (Sun & Bunchapattanasakda, 2019). According to Schaufeli and Bakker (2004),
engaged employees will be energetic and has an effective connection with their work and they
will look up to themselves as someone who can fulfil their job demands. Hence, various factors
on how to foster employees' engagement need to be considered to establish good employee
engagement in an organization. Allameh, Barzoki, Ghazinour, Khodaei, and Abolghasemian
(2014) have identified that employee engagement has a critical connection with employee
performance but good human resource (HR) practices are required to positively influence
employee attitudes that will foster good engagement relationships among employees, while at
the same time it would increase employees' job performance. It has been found that the theory-
driven operationalization of how connections can be invigorating is demonstrated by construct
and theoretical advancement of social vitality. Therefore, this can lead to better employee
engagement and performance. Anitha (2014) has also confirmed that employee engagement
has a significant effect on employee job performance. This study also shows that social vitality
is positively related to employee engagement and job performance (Owens, Baker, Sumpter,
& Cameron, 2016). Various studies also have indicated positive relationships between
employee engagement and employee performance such as employees who are engaged with
the organization can obtain high customer satisfaction and loyalty, have high commitment and
productivity. Studies also indicate that employees who are engaged can perform well which
enables their organization to perform above the industry average and generate high revenue
(Kompaso & Sridevi, 2010). Moreover, leadership that is employed by an organization can
also affect employee engagement. Breevaart, Bakker, Hetland, Demerouti, Olsen, & Espevik
(2014) carried out a study about the effects of transformational leaders towards employee
engagement in an organization and found that transformational leader contributes to employees
work engagement daily. Hence, leaders who use contingent rewards are also able to influence
employee engagement.
Similarly, a positive relationship has been identified in leadership with employee
engagement among banking sector employees. The study has proven that by practicing
transformational leadership leaders can build trust and intrinsic motivation among employees
and foster good employee engagement (Besieux, Baillien, Verbeke & Euwema, 2018). A large
portion of the explored investigations is predictable in contending that leadership is altogether
related with as well as is affecting employees’ engagement directly (Carasco-Saul, Kim & Kim,
2014). Moreover, there is also a significant relationship between leadership and employee
engagement (Xu & Cooper. Thomas, 2011) which leads to attractive outcomes, for example,

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organizational performance or individual well-being. Additionally, another key driver such as

well-being can also affect employee engagement in an organization, and in this case, Brunetto,
Teo, Shacklock, and Farr-Wharton (2012) have identified a positive relationship between
employee well-being and employee engagement. The study illustrates that if the emotional
intelligence of the police officers increases they will have better well-being which would lead
to good employee engagement and work commitment. Also, according to the employee
engagement and well-being model, if the reported employees' engagement is high in an
organization the employees have a good psychological workplace climate which will lead to
an improved well-being (Shuck & Reio, 2013). A study done by a group of researchers from
the Philippines has found a positive correlation between employees' well-being and employee
engagement. Such as work satisfaction, employer care, employees' respect towards the
organization, autonomy needs, relatedness needs, and competence needs are linked with
employee engagement. This indicates that an organization can further improved its employees'
engagement by making sure their employees are satisfied with everything in their organization
which would enable them to have a sound well-being. If the organization fail to give priority
to employees’ well-being then it would be difficult for the organization to stand-in employees
engagement (Abun, Magallanes, Foronda & Encarnacion, 2020).

2.1 Research Framework

The framework below is illustrated to provide a better understanding on the drivers of

employee engagement in organizational success.

Independent Variables Dependent Variable

Job
Performance

Leadership Employee Engagement

Well-Being

Figure 1: Research Framework

The framework consists of three main drivers comprising job performance, leadership,
and well-being. These independent variables affect the employee engagement on
organizational success.

3.0 Method

This study utilizes a quantitative research approach, specifically focusing on the

quantitative measurement of the interval scales on employee engagement, job performance,
leadership, and well-being. Questionnaires have been employed for data collection and the
sample size is determined based on the approach recommended by Krejcie and Morgan (1970).

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

The total population is 132, thus a minimum sample size needed for this study is 97. A total of
110 questionnaires was distributed to the employee of XYZ Company and only 100 are
returned and useable, hence the response rate is 91 percent. The questionnaire comprises five
sections (A, B, C, D, E). Section (A) contains the Demographic profile of the respondents.
Section (B) is about the dependent variable which is employee engagement and sections C, D,
and E are about independent variables namely job performance, leadership, and well-being. A
6-point Likert scale ranging from 1 (strongly disagree) to 6 (strongly agree) is used to measure
all the variables. Section F is about the respondents’ opinion on the employees’ engagement
towards organizational success. The results are analysed by using Statistical Package for Social
science (SPSS 20.0). All dependent and independent variables are measured using Cronbach’s
Alpha Reliability Testing, Pearson Correlation, and Multiple Regression Analysis.

4.0 Results

Table 1 shows the results of Cronbach Alpha which indicate that all variables are above
0.700, conforming that the items employed for this study are reliable.

Table 1: Reliability Test

Items Cronbach’s Alpha No of items

Employee Engagement 0.873 7
Job Performance 0.922 5
Leadership 0.945 6
Well-being 0.930 6

4.1 Demographic Analysis

This section illustrates the demographic characteristics of the respondents of this study
comprising the gender, age, level of position, length of service with the current position,
respondent’s marital status, and education level. Table 2 below shows the demographic results.
The total number of participants in this study is 100, whereby 67% are female and 33% are
male. The frequency and percentage of age show that in terms of age, the highest number of
respondents in this study is 20 to 40 years old with 88%, followed by more than 40 years old,
11%, and less than 20 years old, with 1%. Most of the respondents are in a middle management
position, the highest respondents in this study are middle management with 46%, followed by
the bottom level with 43% and 11% from top management. Furthermore, for the working
experiences category, the highest in more than 2 years with 45%, followed by more than 6
months (23%), 1 to 2 years (19%), and 6 to 12 years with 13%. Next, the data also demonstrate
that (56%) of the respondents are single and (44%) of the respondents are married. For the
education level, the majority of respondents have completed STPM/ Diploma (38%), followed
by Degree’s (36%) SPM and Masters (12%) and Ph.D. (2%).

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

Table 2: Demographic of Respondents

Items Frequency Percent (%)

1) Gender
 Female 67 67.0
 Male 33 33.0
2) Age
 Less than 20 years 1 1.0
 20 – 40 years 88 88.0
 More than 40 years 11 11.0
3) Position Level
 Top Management 11 10.0
 Middle Management 46 80.0
 Bottom 43 10.0

4) Tenure
 Less than 6 months
 6 – 12 months 23 23.0
 1 – 2 years 13 13.0
 More than 6 years 19 19.0
45 45.0
5) Marital Status
 Married 44 44.0
 Single 56 56.0
6) Education Level
 SPM 12 12.0
 STPM / Diploma 38 38.0
 Degree 36 36.0
 Master 12 12.0
 PhD 2 2.0

4.2 Employee Engagement

Questions are asked on a 6-point Likert scales to measure the employee engagement
(Table 3) consisting of seven questions regarding employee engagement. Table 3 below shows
that the average employee engagement is in the range of 3.84 to 4.46. The mean of respondents
agreed that they are proud to work for the organization is as follows; (M= 4.46, SD=1.158). It
is followed by the statement, “I am satisfied with my work” (M= 4.17, SD=1.111). While the
lowest mean for employee engagement is “I rarely think about looking for a job at another
company” (M=3.84, SD=1.529). We conclude that most respondents find their job interesting,
the organization motivates them to go beyond in whatever situation, their work gives them a
feeling of accomplishment, and they like to recommend their organisation as a great place to
work.

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

Table 3: Items of Employee Engagement

Items N Mean Std.

Deviation
1. I am proud to work for my organization 100 4.46 1.158
2. I would like recommend my organization as a great 100 4.00 1.189
place to work
3. My work gives me a feeling of accomplishment 100 4.17 1.111
4. I am satisfied with my work 100 4.40 1.054

5. My current job is interesting 100 4.28 1.147

6. I rarely think about looking for a job at another 100 3.84 1.529
company
7. This organization motivates me to go beyond what 100 4.24 1.102
I would in a situation

4.3 Job Performance

Table 4 shows the items of Job Performance. The overall mean items denote the Job
Performance is in the average range of 4.57 to 4.81. Most of the employees believe that
they perform towards the results of their work (M=4.81, SD=0.971). They also believe that
they manage to plan their work so that it is done on time (M=4.77, SD=1.118). They also agree
on the statements, Ï could complete my work on time (M=4.76, SD=.976), “I keep in mind the
results that I have to achieve in my work” (M=4.75, SD=1.067). These respondents also believe
that they have no problem setting priorities in their work (M=4.57, SD=1.139).

Table 4: Items of Job Performance

Items N Mean Std.

Deviation
1. I manage to plan my work so that it is done 100 4.77 1.118
on time
2. I keep in mind the results that I have to 100 4.75 1.067
achieve in my work
3. I could complete my work on time 100 4.76 .976
4. I have no problem setting priorities in my 100 4.57 1.139
work
5. I work towards the end results of my work 100 4.81 .971

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

4.4 Leadership

The findings in Table 5 shows the items of leadership. Six questions of leadership are asked on
6-point Likert scales. The overall items denote the leadership in the average range of 3.81 to
4.26. Most of the respondents agreed on the statement that “My leaders have high expectations
for all staff to make good decisions” (M=4.26, SD=1.368). They also believe that their leaders
have communicated a vision that motivates them, keeps people informed about what is
happening, and understands their needs as an employee respectively (M=4.04, SD=1.399;
(M=4.02, SD=1.31; (M=3.98, SD=1.255).

Table 5: Items of Leadership

Items N Mean Std.

Deviation
1. My leaders understand my needs as an employee 100 3.98 1.255
2. My leaders have high expectations for all staff to 100 4.26 1.368
make good decisions
3. My leaders keep people informed about what is 100 4.02 1.231
happening.
4. My leaders are a great role model for employee 100 3.89 1.406
5 My leaders have communicated a vision that 100 4.04 1.399
motivated me
6 My leaders are consistent with their words 100 3.81 1.331

4.5 Well-Being

Six questions of well-being are asked on 6-point Likert scales. The findings in Table 6
exhibit the items of well-being that affect employee engagement in the organization. The
overall items show that well-being has a significant impact on employee engagement, which is
in the average range of 3.94 to 4.36. Majority of respondents agreed on the item of “I can
accept change in my life” (M=4.36, SD=1.106), “My work brings a sense of satisfaction and
the lowest” (M=4.33, SD=1.120), “I feel safe in my company” (M=4.33, SD=1.120), “I am
able to balance the demands of my work and personal life” (M=4.23, SD=1.205). They also
feel in order to have sound well-being; they need to have enough rest” (M=3.94, SD=1.369).

Table 6: Items of Well-Being

Items N Mean Std.
Deviation
1. My work brings sense of satisfaction 100 4.33 1.120
2. I have enough rest 100 3.94 1.369
3. I feel safe in my company 100 4.23 1.205
4. I am able to balance the demands of my 100 4.03 1.235
work and personal life
5. I can accept change in my life 100 4.36 1.106
6. I can enjoy lot of little things everyday 100 4.15 1.274

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

4.6 Correlation Coefficient Analysis

Next is the correlation analysis. It is found that the correlation between the employee
engagement in XYZ Company in Shah Alam and the job performance has a positive correlation
of .610 and it correlates strongly. Next, the correlation between employee engagement and
leadership of XYZ Company and has a positive correlation of 0.736 and correlates in a strong
relationship. It also has a significant level of 0.000 which is less than 0.05. Based on the same
table above, the correlation between employee engagement of XYZ company and the well-
being factor has a positive correlation at 0.837 and correlates in a very strong relationship. In
short, the correlation coefficient is a statistical measure that calculates the strength of the
relationship between the relative movements of the three variables.

Table 7: Correlation Coefficient Analysis

Employee Job Leadership Well-being

Engagement Performance
Employee Pearson .610** .736** .837**
Engagement Correlation
Sig. (2-
.000 .000 .000
tailed)
N 100 100 100
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

4.6 Multiple Regression Analysis

To better understand the relationship between employee engagement and the selected
variables, multiple regression approaches are used to further explore the relationships (Uyanık
& Güler, 2013). Based on this model, the adjusted R square is 0.762, as shown in Table 7,
which means that the R-square value indicates that 76.2% of the dependent variable - employee
engagement can be explained by the independent variables: job performance, leadership, well-
being.

Table 7: Model Summary

Model R R Square Adjusted R Std. Error of The Estimate
Square
a
1 .877 .769 .762 .43847
a. Predictors: (Constant), Job Performance, Leadership, Well-Being

Table 7 above shows the R square value is 0.769 or 76.9%. The R-square value indicated
that 76.9% of the Employee Engagement can be explained by the job performance, leadership,
and well-being.

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 The Effectiveness of Employee Engagement on Organizational Success in Selangor Darul Ehsan

Table 8: Regression Results

Model Unstandardized Coefficient Standardised t Sig.
Coefficients
B Std. Error Beta
(Constant) .505 .240 2.103 0.38
Job .211 .057 .217 3.738 .000
Performance
Leadership .197 .054 .259 3.628 .000
Well-being .457 .065 .534 6.990 .000
a. Dependent Variable: Employee Engagement
Table 8 shows the results of the full model. The study found that the largest
standardized coefficient beta is 0.534, which is contributed by the well-being factor, followed
by a leadership factor that has a beta coefficient of 0.259, and the lowest beta coefficient is job
performance factors which have 0.217. This result indicates that well-being, leadership, and
job performance have a strong, unique contribution in explaining the employee engagement
with a significant value of 0.000 less than 0.05.

5.0 Discussion

Based on the findings, all three independent variables; job performance, leadership, and
well-being are significant drivers to XYZ company’s employee engagement. This study is
consistent with previous studies (Owen et al, 2016; Breevaart, 2014; Besieux et. Al 2018;
Brunetto et al., 2012; Shuck & Reio, 2013; and Abun et al., 2020). The majority (76.2 per cent)
of the variances come from these three factors. It is considered as a substantial amount. Of all
variables, well-being factor has contributed the biggest contributor to the employee
engagement. The XYZ company has taken care of its employees’ well-being. The employees
of XYZ company feel safe, satisfied and enjoy working in the company. Employee
engagement is successful in valuing the employees. Secondly, the leadership in XYZ company
also plays an important role. The leaders seem to understand the need of the employees, they
also communicated the company’s vision that motivates the employees to work better. The
employees’ job performance also affects the XYZ company’ engagement. The respondents are
able to complete the task and perform on time. They have no problem in setting priorities in
their work. Satisfied employees lead to good performance with high productivity. So basically,
most of them are giving the answer about communication towards employee and the employee
welfare. One of the most difficult challenges for any organization today is to find ways to
effectively speak to its employees. Communicating with employees regularly helps ensure
everyone understands the business objectives and goals, as well as their place in achieving
organisational success. Every person will have his own way of communicating, and each
person will have an individual way in which they want to be communicated to. Also, leadership
is a key precursor of numerous factors including employee engagement. In a conclusion,
employee engagement is a positive attitude held by individuals toward their organization and
its culture. Satisfied employees lead to a good performance with high productivity.

6.0 Conclusion

On the whole, employee engagement is a crucial variable in an organization and

practice. Employee Engagement likewise alludes to an inspirational disposition held by people
toward their association and its way of life. Therefore, all the three factors that have been

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concentrated thus far give a decent establishment to cultivate employee engagement in an

organization. For instance, the organization can concentrate on open and straightforward
correspondence and communication with the representatives to improve employee
engagement.
Assessing employee engagement is a test because an association needs to ascertain a way
that they can speak with culturally various representatives sufficiently so everybody can
comprehend the message viably. By discussing consistently with employees and the
organization can assure that its employees realize the organization's objectives and targets and
their obligations in accomplishing them. Subsequently, by setting up great correspondence and
communication, prosperity, boundless authority and legitimate occupation execution the
organization can accomplish high employee engagement which will prompt organizational
success. Thus, this study also shows that there is a significant link between wellbeing and
employee engagement. High levels of psychological well-being and employee engagement
play a key role in delivering some of the significant outcomes that are related to successful,
high performing companies. However, if the organization does not emphasize on employees'
wellbeing, the organization's productivity will be affected and employee turnover will increase.

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