Nidhi Shridhar Natrajan
Symbiosis Centre for Management Studies (SCMS), India
E-mail: nidhi.natrajan@scmsnoida.ac.in
Rinku Sanjeev
Symbiosis Centre for Management Studies (SCMS), India
E-mail: drrinkusanjeev@gmail.com
Sanjeev Kumar Singh
Apeejay Institute of Management, India
E-mail: singhssk@gmail.com
Submission: 22/10/2018
Revision: 29/10/2018
Accept: 06/11/2018
ABSTRACT
In present scenario, business
organization understood the importance of sophisticated employee behavior for
the development of overall job performance.
It is important for an organization to perform effectively for that it
enhances their employee’s job performance. Many study supports that an
empowered employee recognizes and attaches himself or herself with the wider
extent of organizational objectives. An engaged employee has more ownership and
able to contribute towards his/her own growth and overall productivity. Boston focuses
on implementing feedback given by employees with immediate effect and has
43% employees who are highly engaged. Facebook has a culture of contribution
and each employee is recognized for his contribution to the overall goal of the
company “to make the world
more open and connected". This policy of contributing culture is
communicated to all the candidates during recruitment process. That
is why Facebook is not only known for being one of the most popular social
networking platforms but for its highly engaging culture as well. Under
this study, the focus is to understand the relationship between employee
empowerment and job performance. The study also tries to explore empirically
the mediating effect of employee engagement in this regard. It was conducted on
IT sector in Delhi NCR region with a sample size of 182 employees. The finding of the study reflects that
engagement has its mediation effect on job performance with respect to employee
empowerment.
Keywords: Employee
engagement, Employee empowerment, Job Performance, Mediation, Regression
1. INTRODUCTION
Globalization and liberalization
have led to many changes in the way organizations work and people dynamics.
With the changing trends companies are compelled to understand the task force
behavior and need. The overall productivity of the organization depends upon
the individual performance.
Employees spend major portion of
their day in the organization and hence it is important to take care of them
for the success of the organization. As
per the 2018 Deloitte Global Human Capital Trends report the millennial
task force needs to be empowered and engaged in order to perform well[1]. In the current era employees need
flexibility and involvement in decision making for being creative and
contributing in a better way.
According to economics time
“Companies with engaged and committed employees are frequently rewarded with
better worker performance, higher productivity, less absenteeism, lower
turnover, and higher customer satisfaction”.[2] Empowerment involves
strengthening individuals’ feelings of their own effectiveness among other
members of an organization (CONGER; KANUNGO, 1988).
Effective decision making requires
participation of all the stakeholders, this leads to decentralization of power
and empowerment of the employees (CARLESS, 2004). Employee engagement
contributing to the empowerment leads to better performance. An engaged
employee is passionate about his work and work in line with the overall goal of
the company (TRUSS, et al., 2013).
As per McKinsey Global Institute
survey (2017) engaged employees work harder. It was highlighted in the
study that productivity improves by 20-25% in organizations with connected
employees. This level of productivity growth has the potential for revenues of
approximately $1.3 trillion per year[3].
2. LITERATURE REVIEW
An engaged employee contributes to
the organizational success through significant contribution. However in absence
of sufficient engagement strategy the results could be otherwise.
Decentralizing the decision making power leads to empowered employee, this is
very important in the current era. The companies have realized this and are
formulating strategies for empowering and engaging the employees for better
performance.
2.1.
Empowerment
The concept of empowerment
emphasizes participative management and job enrichment and has gained attention
of the leader and company heads (ECCLES, 1993; SPREITZER et al., 1999b; BARTUNEK;
SPREITZER, 2006). Decentralization of power in decision making enhances the
alignment of the personal goals with the organizational goals.
The leader or the supervisor needs
to execute the discretion of autonomy. While enhancing the strength of employee
and his leader empowerment leads to better understanding of the decision making
needs and coping capacity of the employee in complex scenario (CARLESS, 2004;
HUMBORSTAD et al., 2008b). Empowered employee has a sense of ownership and
realizing their own potential to perform well.
The leader, manager or the
supervisor needs to exhibit a leadership style which is based on delegation of
work and mutual trust. The manager must provide the employees with the
necessary information and communication leaving the execution details to the
employees for best result Potterfield (2012).The individual’s internal and
external feeling of empowerment and the belief of leader in act of empowerment
are mutually contributing to the overall empowering approach (SHAPIRA-LISHCHINSKY;
TSEMACH, 2014).
The different aspects of empowerment
can be categorized as the one based on process, on the basis of structure or
the physiological perspective (QUIÑONES; VAN DEN BROECK; DE WITTE, 2013). The
relationships between structural antecedents and resulting psychological states
have been classified as the process based approach. The management practices
emphasizing the delegation of responsibilities are termed as structural
approach and psychological state of subordinates after they are empowered is
based on the psychological approach of empowerment (LEE; WEI, 2011).
2.2.
Employee
Engagement
The problem of employee attrition
and consecutive strategies to retain them has led to emergence of employee
engagement concept. An engaged employee have high level of involvement,
commitment and satisfaction towards his job (HART; CABALLERO; COOPER, 2010).
According to the study of Bakker
(2002) there is strong a relationship between employee engagement and employee
productivity. Schmidt et al.'s
influential definition of engagement was "an employee's involvement with,
commitment to, and satisfaction with work. Employee engagement is a part of
employee retention." This integrates the classic constructs of job
satisfaction (SMITH et al., 1969), and organizational commitment (MEYER; ALLEN,
1997).
Schneider,
Hanges, and Smith’s (2003) most recent meta-analysis
can be useful for understanding the impact of engagement. Engagement is more than simple
job satisfaction. It can best be described as a harnessing of one’s self to his
or her roles at work. In engagement, people express themselves cognitively,
physically, and emotionally while performing their work roles (KAHN, 1990).
A study conducted by Coffman and
Gonzalez-Molina (2002)[4] points out that at the
beginning of any job the employee is very engaged. He is ready to take
initiatives and responsibility but after six months the level of engagement
decreases up to 38% and eventually may remain only 20% of that in the initial
stage.
2.3.
Empowerment
and Employee Work Engagement
2.4.
The
relationship between Empowerment and Performance
Lot of research highlights
that motivation and empowerment leads to better performance of the employee.
Empowerment result into job satisfaction and it is evident that satisfied
employee performs better and stays for a longer period in the organization.
With the technology driven organization the hierarchical format of organization
is changing and delegation/distribution of authority is required (SCINGDUENCHAI; PRASERT, 2005).
2.5.
The
relationship between Empowerment and Performance: mediating effect of Employee Engagement
Productivity and performance of the
employee are high in the presence of sufficient empowerment. Empowerment leads
to job satisfaction and enhanced personal efficacy. The participation in
decision making process also results in achievement of organizational goals.
Flexibility in the task of the employee helps to give high quality output
Dawson (2011). Employee engagement predicts employee productivity and
organizational performance.
2.6.
Mediating
effect of Employee Engagement
Most of the
organizations talk about quality work and high performance. The empowered
employee in presence of sufficient engagement during work is bound to perform
at a higher level. Saks (2006) and Truss
(2013) have highlighted in their study that employee engagement plays a
mediating role between the relationship of employee empowerment and
performance. Training, empowerment and rewards result into higher performance
of the employee. Engaging the empowered employee through right stimulus and
policies has a positive effect on overall performance (DEGAGO,
2014).
2.7.
Overall
performance
Scingduenchai and Prasert (2005) in their study have
highlighted that organizations have started creating employee empowering
strategies so as to align individual goals with the organizational goal.
Employee engagement further adds to this and makes the employees feel more
attached to his work. The organization also is able to utilize the potential of
the individual in the best way.
According
to Mone and London (2010) the empowered and engage employee is more committed,
involved and passionate for his work .Thus employee empowerment impacts the
productivity of the employee through a better engaged employee. Thus there
exists a mediating role of employee engagement in the relationship of
empowerment and his productivity (ALIAS; NOOR; HASSAN, 2014).
3. HYPOTHESES
Research hypotheses for
the present study are:
·
H1 Empowerment is
positively related with Employee Performance.
·
H2 Empowerment is
positively related with Employee Engagement.
·
H3 Employee Engagement is
positively related with Employee Performance.
·
H4 Employee Engagement
mediates the relationship between Empowerment and Employee performance.
4. RESEARCH METHODOLOGY
4.1.
Measuring
instruments
The
survey instrument for this study was composed of two parts. The first part was
related with demographic information including respondent’s gender, age,
qualifications and tenure, Second part was related with the employee
empowerment, third part was related with work engagement and forth part was
elated with job performance. The constructs were measured by using three
standardized questionnaires namely, Empowerment (Five items) adapted from Hayes
(1994) i.e I am empowered to solve customer problems, I am encouraged to handle
customer problems by myself and so on were used to measure empowerment, and the
shortest version of Utrecht Work Engagement Scale (nine items) were used to
measure work engagement (SCHAUFELI et al., 2006).
Vigor,
dedication, and absorption each consisted of three items i.e. at my work, I
feel bursting with energy, I am enthusiastic about my job, I feel happy when I
am working intensely and so on. Five items adapted from Babin and Boles (1998)
i.e. this employee is a top performer, this employee gets along better with
customers than do others and so on were used to measure job performance.
Responses
to items Empowerment and Job Performance were rated on five point scales
ranging from 5 (strongly agree) to 1 (strongly disagree) and Response options
for items in Work Engagement (vigor, dedication, absorption) ranged from 6
(always) to 0 (never). Higher scores indicated higher levels of each construct
(Job performance).
4.2.
Hypothesized
Model
Figure 1: Hypothesis Model
Baron
and Kenny (1986) proposed a four step approach in which several regression
analyses are conducted and significance of the coefficients is examined at each
step.
Hence the 4 equations would be:
5. DATA ANALYSIS
The
empirical study was conducted on IT sector in Delhi NCR region with a sample of
182 employees. The four stage regression technique for mediation was applied to
analyze the data.
Table
1: Regression output
|
|
R square |
T |
P value |
H1 |
Empowerment→ Performance |
0.084 |
4.075 |
0.001 |
H2 |
Engagement→ Performance |
0.05 |
3.148 |
0.002 |
H3 |
Empowerment→ Engagement |
0.042 |
2.907 |
0.001 |
H4 |
Empowerment + Engagement → Performance |
0.168 |
5.95 |
0.001 |
The result
of the Table 1 reflects that the highest value of T = 5.95 & R square
=0.168 are for the H4. All four hypotheses have p value < 0.05 and hence all
the four paths are significant.
The
first hypothesis establishes the effect of empowerment on employee performance.
The second hypothesis establishes the effect of engagementt on employee
performance, here employee engagement is mediating variable and empowerment is
the independent variable. The third hypothesis establishes that there is a
significant impact of independent variable on the mediating variable.
Finally
the fourth hypothesis with higher R square value reflects that the combination
of both the empowerment and engagement explains the changes in performance in
the better way. The change in R square (H4-H1) is 0.084, thus the variation
explained through combination of both the variables is just double. The result indicates strong mediation of
engagement in the relationship of employee empowerment and performance (BIESANZ;
FALK; SAVALEI, 2010).
6. DISCUSSION & CONCLUSION
The
result of the study supports the mediating role of employee engagement in the
relationship of employee empowerment and employee performance. Productivity and
performance of the employee are high in the presence of sufficient empowerment.
The empowered employee in presence of sufficient engagement during work is
bound to perform at a higher level. Decentralization
of power in decision making enhances the alignment of the personal goals with
the organizational goals.
The
leader or the supervisor needs to execute the discretion of autonomy. An
engaged employee have high level of involvement, commitment and satisfaction
towards his job. Engaged employee have higher satisfaction level, which
motivates and infuse enthusiasm in the employee. This helps the organizations
in lowering the attrition rate, low absenteeism and higher productivity.
According
to the Gallup study in 2017 51 % employees are looking for a change in job.
Thus it becomes important for the organization and researcher to focus on the
factors which brings down the attrition rate.
The current study establishes the importance of empowered and engaged
employee for the better performance (SAKS, 2006; TRUSS et al, 2013).
7. MANAGERIAL IMPLICATIONS
Organization
needs continuously to transform and evolve. Employee empowerment and employee
engagement are the two important areas where organizations needs to focus for
enhancing job performance. It is important for the managers to bring their
unique set of employees to the fore front and understand their need for
enhanced results. The empowered and engaged employee seamlessly aligns
themselves to the vision of the company thus contributing to the overall goal.
The
manager that creates a culture of collaborative and cross functional
contribution in all aspects of team, especially decision making enables higher
productivity. Thus decentralization of authority, promoting employee feedback,
recognition of their contribution communication of organizations vision is
strongly recommended for the managers to follow for higher job performance.
All
these things can be achieved only through empowering and engaging employees.
The managers must make utmost efforts to empower and engage the employees for
the better performance of individual and the organization in the larger
perspective.
8. LIMITATION & FUTURE WORK
The
study was conducted in the Delhi-NCR region it could be extended to all metro
cities in India. The sample size was 182; a lager sample would have been taken.
The Pan India trends could also be studied.
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