Determinants of Employee Engagement: A Study of Select Information Technology Firms

Vikas Gautam
Associate Professor, Department of Marketing and Strategy, IBS Hyderabad (Under IFHE - A Deemed to be University u/s 3 of the UGC Act, 1956), Telangana, India; and is the corresponding author. E-mail: vikasgautam@ibsindia.org; vgautam78@gmail.com

Harsh Vardhan Kothari
Professor, Delhi Institute of Advanced Studies (DIAS), Delhi, India. E-mail: harshkothari76@gmail.com

The study investigates the role of organizational climate and self-efficacy as determinants of employee engagement amongst employees of select Information Technology firms. Primary data was collected from 105 employees working in different sectors in the National Capital Region, India. The Utrecht work engagement scale developed by Schaufeli et al. (2002), General self-efficacy (10 items scale) developed by Schwarzer and Jerusalem (1995) and Organizational climate questionnaire developed by Litwin and Stringer (1968) have been used to measure the constructs. The data was analyzed using Structural equation modeling. The analysis revealed a significant positive impact of organizational climate and selfefficacy on employee engagement. Both determinants explained 46% of the variance in employee engagement construct.

Introduction

Why is it that some employees are very energetic and they find their work meaningful and challenging, whereas others feel exactly the opposite? What is it that makes some employees not feel enthusiastic about their work? And what is it that makes employees not feel proud of what they do? Are these the questions which necessitate an understanding of the determinants of employee engagement? What role does self-efficacy and organizational climate play in helping us find answers to these questions? Indeed, organizations face many challenges at the workplace. However, creating a highly motivated and engaged workforce in order to ensure a high level of performance and productivity is vital for organizational survival and the success of business. The employee engagement as a construct has attracted the attention of management professionals and academicians alike, and yet we do not find answers to a few of the above questions.

It is in this background that the current study aims to study the determinants of employee engagement.

Kahn (1990) was one of the first to conceptualize the employee engagement construct. Engagement can be connected to a mental cognition that is represented by vigor, dedication, and absorption (Schaufeli et al., 2002). Vigor is labeled by cerebral pliability and full of energy during the work. It also insists on tenacity during tough work times. Dedication may be described in terms of individual's thorough involvement in his or her work. It can also be exhibited through eagerness, stimulation, self-importance, relevance and contest.

Absorption may be explained through the level of concentration shown by an individual in his/her work and thorough immersion in the work. Individuals are considered as absorbed when they do not separate themselves from work.

A study by Bakker and Leiter (2010) found engaged workers to be positive about their work and having the emotion that they are performing their jobs well. Employee engagement has been shown to predict a range of attitudinal, behavioral, performance, and financial outcomes (Macey et al., 2009).

Literature Review
According to Robinson et al. (2004), the optimistic approach of a worker towards workplace and cultural aspects may be treated as engagement. The authors argued that responsible and involved employees work selflessly and always put organization's interests on top. The engaged employees believe strongly in maintaining friendly relationships with their peers. According to Consiglio et al. (2016), higher level of engagement is associated with higher job performance and organizational citizenship behavior. Another meta-analysis confirmed that engagement is positively associated with commitment, followed by performance and health. Whereas it was found negatively related with turnover intention.

Job engagement upsurges individual as well as organizational performance (Bakker and Schaufeli, 2008). According to Harter et al. (2002), engagement increases customer satisfaction and loyalty, and subsequently increases the productivity of the employees and profitability of the organization. Literature in the area of work engagement identified its consequences like organizational commitment, job satisfaction, and low turnover intentions (Demerouti et al., 2001). There exists a strong positive association among work engagement and psychological wellbeing, job satisfaction, and intent to remain and higher levels of performance.

Determinants of Employee Engagement
In the context of Western world, organizational climate had been found related to work engagement (Hakanen et al., 2006; Dollard and Bakker, 2010). According to May et al. (2004), employee engagement is positively related with meaningfulness, safety and security, availability of co-workers and self-driven supervision. Social support, autonomy, learning opportunities and feedback were found as predictors of work engagement (Schaufeli et al., 2009). The authors conducted the empirical study among telecommunication managers. Saks (2006) identified various situational factors, such as distributive justice, job characteristics, organizational support, procedural justice, rewards and recognition, and supervisory support. Further, the author found organizational support as a critical predictor of organization engagement, whereas organizational support; and job characteristics were found critical predictors of job engagement.

Well-defined career opportunities to employees, benefits, non-discriminatory pay and organization's image positively impact employee engagement (Garg and Kumar, 2012). Chaudhary et al. (2012) found significant correlation between engagement and organizational climate. The authors measured engagement in terms of vigor, dedication, and absorption. By taking these three dimensions of engagement (vigor, dedication, and absorption), Pati and Kumar (2010) confirmed positive significant correlation with perceived organizational support.

Engaged employees are highly energetic, self-efficacious individuals who exercise encouragement over events that affect their lives (Bakker, 2009). Judge and Hurst (2007) argued that individuals with great core self-evaluations gauge demands more positively, have greater capability to handle these demands meritoriously and put more efforts in the act of their work roles and therefore have job engagement. Highly engaged managers have such a leadership style that their subordinates become very engaged in their respective work cultures.

Self-Efficacy and Employee Engagement
According to Kahn (1990), psychological differences may play a vital role in influencing persons' capabilities to engross in or unlock their character presentations. Employee engagement is influenced to a great extent by the personality characteristics of the individuals. Engaged employees handle situations actively with positive and self-reliant attitudes like self-esteem, optimism, and work engagement.

Self-efficacy and optimism have stronger impact on work engagement than other job resources (Bakker and Demerouti, 2008). The authors conducted a longitudinal study to confirm the above-mentioned relationship. Work engagement is an outcome of selfefficacy (Consiglio et al., 2016). Job resources are the main predictors of work engagement (Schaufeli and Bakker, 2004; and Bakker and Demerouti, 2008).

Schaufeli and Bakker (2004) described job resources as independence, growth prospects, interactive associations, guidance and administration styles, help from peers, guiding, tutoring, help from manager, and involvement in taking decisions. There has been scanty research in the area of ascertaining the combined effect of job resources on work engagement. Psychological safety completely mediates the relationship between work engagement and gratifying and caring relational associations with peers and seniors (May et al., 2004). According to Hakanen and Lindbohm (2008), there exists a positive association between work engagement and social resources.

The literature entails that there are a large number of studies on employee engagement. Self-efficacy is one of the important and vital variables used in predicting employee engagement. There are very few studies which establish the role of organizational climate in terms of supervision, communication, reward management, orientation and self-efficacy as determinants of employee engagement. The present study focuses on investigating the role of organizational climate and self-efficacy in predicting employee engagement amongst employees of Informational Technology industry. The proposed model of the study is shown in Figure 1.

Objectives
Based on the literature review, the objectives of the study are:

• To study the role of organizational climate as determinant of employee engagement;
• To examine the role of self-efficacy in enhancing employee engagement;
• To investigate the relationship among employee engagement, organizational climate and self-efficacy; and
• To examine the difference among employees in terms of their perceptions towards employee engagement and self-efficacy with respect to gender and level of education.

Hypotheses Formulation
H₁: There exists a positive impact of organizational climate on employee engagement.

H₂: There exists a positive impact of self-efficacy on employee engagement.

H₃: There exists a difference among employees' perceptions towards employee engagement in terms of gender.

H₄: There exists a difference among employees' perceptions towards employee engagement in terms of education.

H₅: There exists a difference among employees' perceptions towards self-efficacy in terms of gender.

H₆: There exists a difference among employees' in levels of self-efficacy in terms of education.

Data and Methodology
The target population consisted of Information Technology employees working in the National Capital Region (NCR) of India. Data was collected from a sample of 105 employees working across various IT organizations in NCR. Employee engagement construct was measured using Utrecht Work Engagement Scale (UWES) developed by Schaufeli et al. (2002). The scale consists of three dimensions (sub-constructs) of employee engagement, namely, absorption (6 items), vigor (6 items), and dedication (5 items). Therefore, employee construct had a total of 17 items. The authors recorded responses on a 7-point Likert scale (1 = strongly disagree, 7 = strongly agree). The study borrowed general self-efficacy 10-item scale developed by Schwarzer and Jerusalem (1995) to measure self-efficacy construct in the study. In this construct also, a 7-point Likert scale was used (1 = strongly disagree, 7 = strongly agree) to record responses of the target respondents. The 3rd construct of the study, namely, organizational climate was measured using 12-item organizational climate questionnaire developed by Litwin and Stringer (1968). This organizational climate questionnaire consisted of four dimensions (sub-constructs), namely, orientation (3 items), supervision (3 items), communication (3 items), reward management (3 items). Therefore, organizational climate construct had a total of 12 items. In this construct also, responses were recorded on a 7-point Likert scale (1 = strongly disagree, 7 = strongly agree).

The average age for the sample was found to be 27 years. Most of them were in their 30s (51%). while 35% were in their 20s, and above 30 years were only (17%). With the male-female ratio being 73:27, it was largely a sample of male employees. In terms of level of education, graduates were 47% and postgraduates 46%. In terms of work experience, it ranged from 1 year to 24 years' work experience, 1-3 years' experience (36%), 5-8 years (18%), and above 8 years' experience were 46%. Occupational status ranged from executives to senior managerial level (see Appendix).

Results
Descriptive Statistics
Table 1 shows the high levels of employee engagement in all the three dimensions (mean score indicating 3.96), prevalence of supportive organizational climate in the organization (mean score range 3.7 to 4.21) and presence of high level of self-efficacy belief among the employees (mean score 3.38).

The study followed the criteria suggested by Hinkin (1995) to decide a factor weight of 0.40 as the minimum cut-off criteria. The other criteria to eliminate items were crossloadings over 0.30 and low item-to-total correlation as suggested by Hair et al. (2010). As a result of exploratory factor analysis (cf. Tables 2, 3 and 4), the authors decided to delete 16 items (3 items from vigor; 2 item from dedication; 3 items from absorption) from second order employee engagement construct, whereas 3 items were deleted (1 item from orientation, 1 item from supervision and 1 item from communication) from organizational climate, and in the case of self-efficacy, 5 items were deleted, and the final construct contained 5 items. Finally, a total of 23 items covering all the constructs of study were used for further testing of measurement and structural models of the study.

Measurement Model
Gerbing and Anderson (1988) suggested that Confirmatory Factor Analysis (CFA) is most suitable for assessing overall measurement quality of a study model. The present study had 23 indicator variables representing 8 constructs, namely, vigor, dedication, absorption, orientation, supervision, communication, reward management, and self-efficacy. Furthermore, these seven out of eight first order constructs belong to two second order constructs like employee engagement (vigor, dedication, and absorption) and organizational climate (orientation, supervision, communication, and reward management).

The CFA results confirmed the factor structure as proposed (Table 5).

Table 5 shows that all factor loadings are highly significant (p < 0.000) with their respective constructs which helped further in concluding a good model fit.

order and one first order constructs, namely, employee engagement, organizational climate, and self-efficacy were examined by the results of a CFA (see Table 7).

In Table 7, diagonal of a correlation table, square root of Average Variance Extracted (AVE) is presented. The results of CFA included estimates of covariance between the factors, loadings of the indicators on their respective factors, and the amount of measurement error (unique variance) for each indicator. The convergent validity meant that indicators specified to measure a common underlying factor have relatively highstandardized loadings on that factor. To meet the criteria of convergent validity, Composite Reliability (CR) should be greater than or equal to 0.7, and AVE should be greater than

0.5 (Hair et al., 2010). For each set of indicators, CR ranges from 0.701 to 0.842, and AVE ranges from 0.504 to 0.537.

In this study, both the above-mentioned criteria are met, which suggests convergent validity. Further, Hair et al. (2010) suggested that for discriminant validity, square root of AVE should be greater than correlation among constructs. It is evident from the table that discriminant validity criteria are also met.

Model fit has been assessed with the help of fit indices suggested by Hair et al. (2010). All the fit indices are in the prescribed range (Table 8). Therefore, the structural model of the study is a good fit. Further, we have found that all the factor loadings were significant

with their respective constructs. Finally, it can be seen from Table 9 that organizational climate and self-efficacy have significant positive impact on employee engagement; both antecedents explained 46% of the variance in employee engagement construct.

The result (Table 10) shows no difference between males and females in terms of employee engagement and self-efficacy as the t-value is found to be insignificant. It also indicates high level of engagement irrespective of gender. In terms of the level of education, t-value is indicating that there is no difference in the level of engagement and self-efficacy irrespective of the level of education.

Discussion
The main objective of the study was to study organizational climate and self-efficacy as determinants of employee engagement in the Information Technology (IT) industry. Moreover, the study empirically tested whether there exists any difference among employees in their perceptions of employee engagement and self-efficacy on the basis of gender and education. The authors applied second order structural equation modeling to test the hypotheses of the study model. The summary of the hypotheses results is given in Table 11.

Hypothesis 1
We can see from Table 11 that the path (Beta) coefficient of causal relationship of organizational climate (cause) and employee engagement (effect) is 0.150 (p = 0.004) and it is positive in nature. The probability (p-value) is (0.004), which is less than 0.05 (level of significance at which study hypothesis was tested). Therefore, based on decision rule, the study rejected the null hypothesis at 5% level of significance, and concluded that organizational climate positively impacted employee engagement.

Hypothesis 2
Secondly, it is evident from the table that the path (Beta) coefficient of causal relationship between self-efficacy (cause) and employee engagement (effect) is 0.715 (p < 0.000) and it is positive in nature. The probability (p-value) is (0.000), which is less than 0.05 (level of significance at which study hypothesis was tested) or even 0.01. Therefore, based on decision rule, the study rejected the null hypothesis at 5% level of significance, and concluded that self-efficacy positively impacted employee engagement.

Hypothesis 3
The results show no differences between males and females in terms of employee engagement. It also indicates high level of engagement irrespective of gender.

Hypothesis 4
The results of t-test indicate that there is no difference in the level of employee engagement irrespective of the level of education.

Hypothesis 5
The results of t-test show insignificant difference, which means there is no difference between male and female employees in the levels of self-efficacy.

Hypothesis 6
The results of t-test are found to be insignificant, which shows that there is no difference between mean of different levels of education in levels of self-efficacy.

Conclusion
The results of this study show that both organizational climate and self-efficacy have significant positive impact on employee engagement. Both antecedents explained 46% of the variance in employee engagement construct. The path (Beta) coefficient of causal relationship between self-efficacy and employee engagement shows self-efficacy positively impacted employee engagement, and the path (Beta) coefficient of causal relationship of organizational climate and employee engagement shows organizational climate positively impacted employee engagement. The results also indicate high levels of employee engagement in all the three dimensions, existence of supportive climate and high level of self-efficacy as indicated in their mean score.

This suggests that employees who get support and proper directions from supervisors are likely to be more engaged. In the organization, if employees are clear about their defined goals and objectives of the organization and are rewarded on the basis of their achievement, it creates a positive impact on the employees, and as a result, employees find their work full of meaning and purpose. If such a climate prevails in the organization, employees become more engaged in their job. This study confirms that both organizational climate and self-efficacy act as significant positive predictors of employee engagement among IT sector employees. Bandura (1977) explained the concept of selfefficacy as the belief in one's ability to successfully perform a task.

So, individuals who perceive themselves positively are more likely to pursue roles that align to their values, called self-concordance, which promotes intrinsic motivation and may promote engagement at work. Singh (2000) found that with boss' support, frontline employees perceived their roles to be less stressful and their exhaustion from work is reduced, and their performance and perceived commitment levels increased. Kopelman et al. (1990) found that if customer contact employees perceive that their manager is concerned about them and provides appropriate control and authority over their work, they will feel more positively towards their work, and Brown and Peterson (1994) contended that employees will exert more effort in the workplace.

The findings of the study validated the findings of Schaufeli and Bakker (2004) which confirmed job resources as the main predictor of work engagement. May et al. (2004) also found that rewarding and supportive interpersonal relationships with co-workers and supervisors were indirectly related to work engagement through the mediating role of psychological safety. Moreover, organizational climate at the work place having characteristics of supportive management involves giving employees greater control over their work efforts and how they achieve their job goals (Brown and Leigh, 1996).

Several studies have also supported organizational climate to be positively and significantly related to work engagement (Hakanen et al., 2006; and Dollard and Bakker, 2010). Demographic background factors have also been found to influence employee engagement. However, the same research has found no clear difference between men and women in terms of their level of engagement. The findings also indicate no differences in the levels of employee engagement between male and female employees and between different levels of educational qualification. Though the results of this study show that organizational climate and self-efficacy have significant positive impact on the employee engagement, there is a need to further study it in different organizational contexts for a better understanding of employee engagement, as engaged employees are less likely to leave their employers, and engaged employees will most likely exhibit lower quit intentions, while involvements will be very high (Schaufeli and Bakker, 2004).

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