Effect of Perceived Organizational Support and Supervisor Support on Employee Engagement: A Study on SMEs in Gujarat

Shabana Anjum
Assistant Professor, Faculty of Management Studies, Indukaka Ipcowala Institute of Management (IIIM), Charotar University of Science & Technology, Changa, Anand, Gujarat, India; and is the corresponding author. E-mail: shabanaislam26@gmail.com

Kola Prasad
Professor, Postgraduate Department of Business Management, Sardar Patel University, V. V. Nagar, Anand, Gujarat, India. E-mail: kolaprasad@yahoo.com

The paper investigates the relationship of perceived organizational support and supervisor support with employee engagement and its subsequent effect on job satisfaction of employees working in SMEs in the state of Gujarat, India. The conceptual framework of research was formed based on Social Exchange Theory (SET) and Organizational Support Theory (OST). A total of 353 responses from employees working in SMEs were collected through a survey and analyzed using Structural Equation Modeling in AMOS 20. It was found that perceived organizational support and perceived supervisor support positively lead to employee engagement in SMEs. There was also a positive relationship between employee engagement and job satisfaction. This shows that support is much needed in organizations irrespective of size. The findings also indicate that employee engagement leads to an individual outcome like job satisfaction.

Introduction

Small and Medium Enterprises (SMEs) are the backbone of Indian economy based on the scale of employment generation, production, and contribution to GDP (Javalgi and Todd, 2011; Saini and Budhwar, 2008; and Ajayi et al., 2017). The Ministry of Micro, Small, and Medium Enterprises has defined and classified SMEs based on their investment in the business. A revision of MSME classification was announced under Aatma Nirbhar Bharat package, wherein micro manufacturing and services unit's investment and turnover was increased to 1 and 5 cr, respectively, whereas the small and medium unit investment and turnover was increased to 10 and 50 cr and 50 and 250 cr, respectively (The Gazette of India, 2020). Micro, Small and Medium Enterprises (MSMEs) are engaged in various activities, of which manufacturing alone constitutes 31% (Annual Report, 2020-21, Ministry of MSMEs, GOI). MSME sector generated employment for 11.10 crore people during the year 2015-16 as per the report of 73rd round of National Sample Survey (NSS) (Annual Report, 2020-21, Ministry of MSMEs, GOI). Nearly 27% of India's GDP in the fiscal year 2021 was contributed by MSMEs (Rathore, 2023). MSMEs have always played a significant role in the industrial development of Gujarat. They have proved to be a significant contributor to the state's economy, particularly in the area of value addition, job creation, and entrepreneurial development (Industries and Mines Department, Government of Gujarat, 2020). It is also labor-intensive, which means they are job providers to many skilled people. Despite their contribution, employees in small organizations are lagging in many aspects like education, income, skill, and competency, leading to inefficient and dissatisfied employees (Sudan, 2005; and Soni, 2013).

Like the employees of the public and private sector, SME employees also deserve proper HRD practices. Apart from regular HRM functions, employees' satisfaction, involvement, and engagement in the work and workplace, commitment, loyalty, intentions, and perceptions should always be given importance and evaluated at intervals. It is challenging for any entrepreneur to develop a highly engaged workforce when attrition, disengagement, turnover, and absenteeism are the biggest threats to organizations (Ajayi et al., 2017). Employee engagement can be defined "as a positive fulfilling, work-related state of mind that is defined as vigor, dedication, and absorption" (Schaufeli et al., 2002, p. 74). Vigor means working with a drive and being mentally strong, showing an eagerness to contribute and excel, being willing to put in a lot of effort, and persevering in the face of adversity (Schaufeli et al., 2002). A sense of significance, excitement, inspiration, pride, and challenge are all characteristics of dedication (Schaufeli et al. 2002). Absorption means being engrossed in one's job that one loses track of time and it becomes difficult for the employee to put off the work (Schaufeli et al., 2002). It makes much sense to maximize the level of employee engagement and develop a strong workforce. Against this backdrop, the current study seeks to identify the antecedents to employee engagement that do not require much resources as far as fostering engagement among employees is concerned (Rastogi et al., 2017). Since SMEs in emerging economies typically do not have proper processes for managing their human resources (Saini and Budhwar, 2008), employer-employee relationship is not formal and they share a unique relationship (Agarwal and Jha, 2015).

The employees in SMEs enjoy fewer facilities compared to their contribution to boosting the economy. There is no study on employees in SMEs whose job satisfaction is equally important as those in public and private sectors. The present study also examines the effect of employee engagement on their overall job satisfaction. Perceived Organizational Support (POS) and Perceived Supervisor Support (PSS) are studied as antecedents of Employee Engagement (EE) as the outcome to understand the interrelationship between these constructs in the context of SMEs in Gujarat.

Literature Review and Hypothesis Formulation
In recent academic work, POS has received a lot of attention (David et al., 2007). It is based on Organizational Support Theory (OST), which involves the organization's readiness to meet employees' socio-emotional needs (Eisenberger et al., 1986). According to OST, employees form general ideas about how much the organization appreciates and cares about their wellbeing (Eisenberger et al., 1986; and Shore and Shore, 1995).

POS is also seen as a guarantee that help will be offered by the organization when one needs to carry out the job effectively and to deal with stress (George et al., 1993). Social Exchange Theory (SET) also contributes to our understanding of POS. SET suggests that to continue the relationship between two parties, both the parties should exchange something of value (Dawley et al., 2010), and thus it creates an obligation on the part of recipients to care about the welfare of the organization and to help it reach its objective (Rhoades et al., 2001). According to Biswas and Bhatnagar (2013), organizations need to go beyond the specified contractual relationships with employees and provide them with economic as well as psychological backing in order to extract optimum efforts from employees. POS has a number of positive outcomes such as job satisfaction and organizational commitment (Rhoades et al., 2001). Those who perceive organizational support to be high are optimistic about their organization and their likely reaction towards employee's contributions and mistakes; thus, they are fearless about any damaging consequences to their self-image, status, or career. As a result, employees involve themselves fully in their work roles (Edmondson, 1999). When POS is low, employees are not sure about the expectations of the organization and fear that they may suffer due to their personal engagement, so they choose to play safe by withdrawing from their roles (Kahn, 1990). Ravikumar (2013), in his study of employee engagement in Indian MSME (manufacturing), found variance in employee engagement based on demographic variables and that experience leads to employee engagement. Mohanty and Anuprasad (2021) also posited organizational culture and trust to impact employee engagement. In a study conducted on 153 employees working with a therapeutic and rehabilitation service provider in Dhaka, it was found that employee engagement is largely affected by organizational support (Rahman et al., 2020). Marita et al. (2021a), in a study on agricultural employees, indicated that perceived supervisor support is essential to employee wellbeing. Perceived supervisor support enhances the engagement and psychological safety (Marita et al. 2021b). Work engagement of nurses was enhanced by supervisor support in a study conducted in Australia among 2894 nurses (Catthy et al., 2023). In a study conducted in manufacturing industries, it was found that caring attitude of an organization is an important factor governing employee engagement (Choudhury et al., 2021).

Many independent studies have been done on EE and Job Satisfaction. The literature review shows that there are only studies exploring the relationship between POS, PSS, EE, and JS. And these limited studies largely focus on banking, hospitality, and IT sectors. EE is still an unexplored topic in SME sector in Gujarat, and hence the present study was conducted.

Hypothesis Formulation
POS as an Antecedent of Employee Engagement
POS is a concept established based on the idea of SET (Cropanzano and Mitchell, 2005) and was developed by Eisenberger et al. (1986). Based on SET, when employees realize that the organization supports them in various activities of human resources, they tend to respond through continued effective performance (Karatepe, 2012). The assumption of social exchange relationship is that if one person does a favor for another, the other person feels he will get a similar favor in the future (Settoon et al., 1996). Saks (2006) was the first to relate perceived organizational support to employee engagement. According to him, when employees have a belief that the organization they belong to is concerned about them and cares about their wellbeing, they may reciprocate by trying to fulfill their obligations towards the organization by being more engaged. So perceived organizational support may lead to one more positive outcome, which is employee engagement. In other words, following the reciprocity norm of SET, the higher the organizational support for the employee, the more the engagement will be in order to achieve the organizational goal (Rhoades et al., 2001).

Based on Kahn's theory, Rich et al. (2010) also identified perceived organizational support as one of the antecedents of employee engagement. In his study, employees are highly engaged when they perceive higher organizational support. In a structural literature review by Wollard and Shuck (2011), different antecedents of employee engagement were identified. As many as 265 articles were reviewed, and then empirically and conceptually driven antecedents were identified at two levels, i.e., individual antecedents and organizational antecedents. POS is also identified as one of the antecedents, which falls under the category of the individual antecedent. The individual antecedent is defined as constructs, strategies, and conditions that were applied directly to or by individual employees. According to Bhatnagar (2012), when people perceive favorable levels of organizational collaboration, they are naturally motivated to put forth significantly more effort, which leads to employee engagement. According to Ahmed et al. (2015), employees reciprocate constructively through the change in their attitudinal and behavioral outcomes when they feel supported by their organizations. Their meta-analysis of the latest available literature on POS found that a strong positive impact of POS on employee engagement as employees show psychological and mental attachment with the organization (Engagement), with 53% variance.

H1: Perceived organizational support positively relates to employee engagement.

PSS as an Antecedent of Employee Engagement
Employees' immediate leader has a great influence on their state of engagement. The relationship with one's immediate manager can have a significant impact on one's perceptions of workplace safety (May et al., 2004). Employee creativity should be boosted through a supportive rather than dominating relationship (Edmondson, 1999). Perceptions of safety should be bolstered by supporting rather than controlling relationship, which leads an employee to have more independence and interest in work (Edmondson, 1999; and May et al., 2004). Supervisors who promote a healthy work environment show concern for their employees' needs and feelings, give positive comments, and encourage them to express their concerns, learn new skills, and solve job-related issues (Deci and Ryan, 1987). The supervisor is one who coaches, sets a clear goal, gives direct and honest feedback, empowers subordinates, and makes them feel valued. Frontline supervisors play a very important role in building engagement or employee disengagement (Frank et al., 2004). When employees are provided with such supportive environment, they are more likely to engage completely, try out new methods of doing things, address problems, and learn from their failures (Edmondson, 1999). Managing the emotions of subordinates is effective for supportive supervisors (David et al., 2007). Kahn (1990) stated that trusting and supportive interpersonal relationship enhances psychological safety and encourages people to try new things without the fear of negative consequences. He found that personal engagement is connected to higher levels of psychological safety. May et al. (2004) also found that supportive supervisor relations are positively related to psychological safety. Jose (2015) conducted a study to examine the impact of PSS on EE in the Indian context and found that PSS significantly predicts work engagement in the Indian context. The results indicated that employees with high PSS are more likely to be engaged than employees with low PSS. Therefore, POS and PSS are likely to be important antecedents to employee engagement (Saks, 2006).

H2: Perceived supervisor support positively relates to employee engagement.

Job Satisfaction as a Consequence of Employee Engagement
Psychologists studied job satisfaction extensively (Fritzsche and Parrish, 2005). Job satisfaction is an attitude defined as a "positive (or negative) evaluative judgment one makes about one's job or job situation" (Weiss, 2002, p. 175). Hulin and Judge (2003) suggested that job satisfaction is an emotional reaction to a job, resulting from a comparison between actual outcomes and desired outcomes. Organizations consider job satisfaction to be a measure of how happy employees are at their work (Wefald and Dowry, 2009). Job satisfaction can also be viewed in the context of a broader set of variables that affect an individual's work experience or quality of work life. Job satisfaction can be interpreted in terms of its connections to other important elements like overall wellbeing, workplace stress, workplace control, home-work interaction, and working environment (Tomazevie et al., 2014). Several researchers have treated important employee attitudes such as job satisfaction and organizational commitment as outcomes of Engagement (Albrecht et al., 2015).

Saks (2006) also suggested that highly engaged employees are more likely to demonstrate positive attitudes, intentions, and behaviors within the work environment. Shuck (2017) also associated employee engagement with job satisfaction in a way that employees who are highly engaged are also likely to be satisfied. An empirical study conducted by Vorina et al. (2017) on 594 employees working in both public and private sectors also found that job satisfaction is influenced by employee engagement. Biswas and Bhatnagar (2013), in their study on 246 Indian managers of six different organizations, found that when individuals experience a certain level of engagement, they find their work to be more fulfilling and motivating, because of which they perceive their work and workplace to provide them a pleasant environment leading to their increased satisfaction with the job.

H3: Employee engagement positively relates to job satisfaction.

Proposed Conceptual Framework
Figure 1 shows the conceptual framework, which is based on the extensive review of literature conducted. In the present study, POS and PSS are positively related to employee engagement. Further, employee engagement has also a significant and positive relation with job satisfaction.

and contended once they reach a level of engagement. An engaged employee tends to be satisfied with his job as well. In line with the objective of the research, perceived organizational support and perceived supervisor support have a direct and significant relation with employee engagement. This theory was validated in this study which strengthens the literature to a great extent. Psychological support and economic help are required from the organization for their employees in order to get a higher level of efficiency and dedication (Biswas and Bhatnagar, 2013). Engagement of employees of SMEs can be fostered by extending support both from organization and supervisor. Employees are mostly dependent upon the organization for their socio-emotional and economic needs. Employees' optimistic perception of the organization and supervisor for their support may lead to increased employee engagement in SMEs. SMEs should know even their small gesture of support means a lot to the employees, and they reciprocate by working with more dedication and energy. Owners of SMEs need to understand that their socio-emotional support to employees gives a lot in return in terms of profitability and productivity. Supervisors in SMEs should build a good relationship with their immediate subordinates.

Support from more experienced and senior colleagues serves as a morale-booster to employees, which ensures that they work with less or no fear. Support from the organization makes one feel more secure in his job. The findings also confirm that SME employee exhibited job satisfaction.

Conclusion
The findings of the study suggest that perceived organizational support and perceived supervisor support play a significant role in stimulating employee engagement, particularly in SMEs situated in Gujarat, India. Moreover, it also leads to job satisfaction of the employees of SMEs. The findings help practitioners in changing the perception of employees about the organization with support, care, and assistance, which encourages employees to work for the organization with the best of their abilities, causing a high level of employee engagement.

Future Scope: Future research could investigate a larger spectrum of factors linked to different types of engagement. Future studies could focus on elucidating the types of elements that are most significant for involvement in various roles, jobs, organizations, and groups.

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