EFFECT OF EMPLOYEE ENGAGEMENT ON PERFORMANCE IN THE IT SECTOR Ashita Chadha* 1, Ritu Sharma 2. India.

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1 ISSN: IJMRR/June 2016/ Volume 6/Issue 6/Article No-8/ Ashita Chadha et. al., / International Journal of Management Research & Review EFFECT OF EMPLOYEE ENGAGEMENT ON PERFORMANCE IN THE IT SECTOR Ashita Chadha* 1, Ritu Sharma 2 1 Asst. Prof, University Institute of Engineering, Chandigarh University, Gharuan, Punjab, India. 2 Asst. Prof, University School of Business, Chandigarh University, Gharuan, Punjab, India. ABSTRACT Organisations are continually searching for different ways to enhance competitiveness for survival in the global economy. The focus is largely on the role that employees perform in bringing a competitive advantage. In recent times, a lot of impetus has been placed on increasing productivity of employees by engaging them. Research suggests that the financial bottom-line of organizations benefit immensely as a consequence of engaged employees. Employee engagement then becomes a measure of commitment of employees to consistently perform in the best interest of the organization. The empirical paper focuses on various dimensions that effect employee engagement of professionals in two IT companies at Rajiv Gandhi Chandigarh Technology Park. The paper uses Gallup s Q12 instrument as a survey tool. Correlation Analysis, Analysis of Variance has been used to find the relationship and understand whether there is a significant effect of engaged employees on performance. The study concluded that employee engagement has positive consequences on the performance of the employee. Keywords: Employee Engagement, performance, IT sector. INTRODUCTION In the competitive world of business, one resource makes a tangible difference to organizations success- the capability and skills of its employees. They are precious assets whose value appreciates with time. Organizations, today, make serious efforts to retain potential talent and invest to nurture them for competitive advantages. Engaged employees within an organization provide a competitive advantage to organizations (Joo & Mclean, 2006). Higher productivity, profitability and eventually sustainability in the market are products of a satisfied and committed human capital. Engagement is much more than satisfaction and commitment. High employee satisfaction may lead to low turnover, yet it is not an indicator of employee engagement. Employee satisfaction measures the employee s happiness with the current job and work conditions, while employee engagement determines the effort an employee readily extends above and beyond the expected role in job performance. To be fully engaged is to be involved and enthusiastic about one s work (Falcone, 2006). The organizations that focus on *Corresponding Author 835

2 employee engagement are more likely to maintain a strong, motivated workforce that is willing to expend extra effort, drive business goals, and deliver a return on HR s talent management investment (SHRM, 2012). Jack Welch a business consultant and former CEO of General Electric suggest employee engagement as one of the measure of a company s health (Vance, 2006). Employee engagement is the degree of commitment both emotional and intellectual to accomplish the goals, mission and vision of the organization (Bhatnagar, 2007). The International Survey Research (ISR) defines employee engagement as, a process by which an organization increases commitment and continuation of its employees to the achievement of superior results. ISR says commitment is in three forms cognitive commitment (think), affective commitment (feel) and behavioral commitment (act) (Masskom, 2015). Forbes quotes research conducted by Deloitte Global Human Capital Trends (2014) of 2,500 organizations in 90 countries illustrating companies around the world are struggling to engage the modern, 21st century workforce. Also quoted by them is Gallup research which shows that only 13% of employees around the world are actively engaged at work and more than twice that number are so disengaged that they spread negativity to others. LITERATURE REVIEW Engaged employees walk an extra mile to perform exceptionally, utilizing their talents and strengths at work. Engagement contributes to organization productivity, customer satisfaction and profits, reducing employee turnover and has some relationship with an organization s performance (Zhang 2009). Employee engagement has been associated with higher workforce productivity and customer satisfaction as well as lower absenteeism and turnover (Shapiro et al, 2004). The Gallup Organization, widely recognized for work on employee engagement defines it as those who, work with a passion and feel a profound connection to their company. Engaged employees help in moving the organization ahead of competition through innovation and creativity (GMJ, 2006). William H. Kahn (1990) an early proponent defined engagement as making the most of organization member s roles at the workplace; engaged people employ and express themselves physically, emotionally, and cognitively during role performances. Engagement is a high level of ownership, speaking highly of products and services being offered, pride in association with the organization, where each employee willingly does anything for the benefit and overall success of the organization. Engagement is then amalgamation of loyalty, commitment, productivity and ownership (Wellins and Concelman, 2005). The Corporate Leadership Council survey revealed that emotional engagement has four times the power to affect performance as compared to rational commitment (CLC, 2004). Employee engagement has been associated to superior performance and higher levels of organizational commitment by many researchers (Woodruffe, 2006; Lockwood, 2006).The Human sigma an approach to improve performance and reduce variability works when the employees are suitably engaged (Fleming, Coffman and Harter, 2005). Employee engagement assists in building a high performance organization (Macey and Schneider 2008). A working definition used by Kieron Shaw in a report by Melcrum Publishing defines Copyright 2016 Published by IJMRR. All rights reserved 836

3 employee engagement as, translating employee potential into employee performance and business success (Shaw 2005). Organizations need to create an environment that gets the best performance out of employees by giving them a feeling of emotional involvement towards work (Gorman & Ingham, 2006; Lockwood, 2006), thus affecting the level of employee engagement. Employees stay with those organizations which are progressive and talent friendly (Towers, 2003). Any organization that is dynamic and continuously provides ample opportunities for growth definitely influences the level of engagement of the employees. Disengaged employees concentrate on tasks rather than goals and outcomes that they are expected to accomplish. They want that they should be told what has to be done just so they do it and say they have finished the work that was asked of them. They will attend to work but will not participate with dedication and energy instead will be timeserving in the organization (Deshpande et al, 2014). They tend to feel that due credit is not given to their contributions, they are being overlooked and their potential not tapped. They attribute it to non-productive relationships with their managers or with Co-workers. Information technology is a service based industry and in order to obtain high performance in post-industrial, intangible work which demands speed, flexibility and innovation, employers need to engage their employees (Martel, 2003), especially by giving them equal participation in goal setting or decision making, freedom to perform at their job and trust them in achieving goals for the organization. It is possible to feel engaged by the job but not by the organization in which case an employee may be making a significant contribution to the organizational performance, but in essence is free to move to better job as is presently happening in the IT sector. Alternatively, it is also possible to feel engaged by the organization and not the job, in which case the employee only talks eloquently but does not perform equally. Satisfaction, commitment, pride and advocacy in relation to both the job and the organization constitute the essential elements of engagement. The Gallup s Organization emphasis twelve key elements, believed to be strong predictor of employee engagement (Thackray, 2001) in an organization, assessed through twelve questions that relate to 4 predictor factors growth, community, contributions and entitlements. As much research has objectively used the Gallup s Q12 instrument to measure employee engagement the present study uses the same to find the relation between employee engagement and performance, their tenure of association with the organization and future plans to continue working with the organization. The objectives for the study are: To analyze the relationship of employee engagement to performance. To find the relation between employee engagement and tenure of association of employee with the organization. To find the relation of employee engagement with future plans of employee staying with the organization. HYPOTHESIS H o1 : There is no significant relationship between employee engagement and performance of an organization. Copyright 2016 Published by IJMRR. All rights reserved 837

4 H o2. There is no relation between employee engagement and tenure of association of employee with the organization. H o3 : There is no the relation of employee engagement with future plans of employee staying with the organization. RESEARCH DESIGN A descriptive research design is used with a sample size of 50 middle level professionals working in two IT firms in Chandigarh City. The primary data is analyzed through descriptive statistics, coefficient of correlation and analysis of variance. We have collected data using the Gallup s Q12 instrument by marking views on a five-point Likert scale where 1 is highly disengaged, 3 is moderately engaged and 5 is highly engaged. The study helps to understand that there is a relation between employee engagement and performance, but it is important to recognize that the survey was completed with a small sample of 50 employees in two IT companies. FINDINGS AND ANALYSIS The findings from this research revealed that employees are only moderately engaged with an average mean score of 3.38 (Table 1). Q1 and Q2 depict the predictor factor entitlement and the statement I have the materials, information and equipment to do my work right has the highest mean (3.92) and lowest standard deviation (.804) indicating that most employees are provided the necessary basic facilities by the organization to complete the job. Q3, Q4, Q5 and Q6 depict contribution factor. The statement praise for good work has a lower mean (3.22) indicating employees expect recognition for the quality of work done from their superiors. Q7, Q8, Q9 and Q10 predict the factor community as a member of the organization indicating that opinions of middle level executives count and they have productive relationships with their managers or with their co-workers in the organization. However, there seems to be relatively less engagement of employee (3.10 mean) with relation to contribution to mission/purpose of company. This could be attributed to the fact that although a mission exists yet its Table 1: Descriptive Statistics depicting Employee Engagement on Gallup s Q12 Instrument Question No. Statements N Mean Std. Dev. Q1 I know what is expected of me at work Q2 Materials, information and equipment Q3 Do what I do best everyday Q4 Recognition or praise for good work in last seven days Q5 Supervisor/someone at work cares Q6 Someone encourages my development Q7 My opinions count at work Q8 Contribution to mission/purpose of company Q9 Co-workers committed to quality work Q10 Relationship with Co-workers Q11 Progress in last six months Q12 Opportunities to learn and grow communication across the organization is not extensive to make the employees understand their contribution in the strategy, mission and vision making process. Q11 and Q12 predict Copyright 2016 Published by IJMRR. All rights reserved 838

5 the factor growth indicating that employees have had opportunities to learn, grow and progress to a limit that they thus feel engaged to the job in the organization. Table 2: ANOVA - Performance of Organization Sum of Squares df Mean Square F Between Groups * Within Groups Total * Significant at the 0.05 level (2-tailed) Table 2 and 3 show that the Hypothesis (H o1 ) is rejected as there is a significant relationship between employee engagement and performance of organization. Thus engaged employees positively impact productivity contributing immensely to the bottom-line financial outcome of the organization. Although the relationship is significant yet the correlation between the variables (employee engagement and performance of the organization) is not very strong. This could be attributed to the peculiar characteristics of IT sector where highly qualified, smart and knowledgeable IT professionals have numerous job hopping opportunities. Their skills are highly marketable and with cutting-edge IT capability, changing jobs for better remuneration is an easy option they opt for more often. Table 3: Pearson Coefficient of Correlation of employee engagement to Performance of the organization Employee Engagement Performance of Organization Pearson Correlation Employee Engagement Sig. (2-tailed).022 * Pearson Correlation Performance of Sig. (2-tailed).022 * Organization * Correlation is significant at the 0.05 level (2-tailed) Table 4: Pearson Coefficient of Correlation of employee engagement to tenure of association with organization Employee Engagement Association with Organization Pearson Correlation Employee Engagement Sig. (2-tailed).642 Pearson Correlation Tenure of Association Sig. (2-tailed).642 with Organization Hypothesis (H o2 ) is accepted as no relation is found to exist between employee engagement and tenure of association of employee with the organization. In the IT industry ample job opportunities allow an employee to focus on accomplishing tasks without being emotionally committed to the organization. Thus, some employees may continue to work over a long period of time due to job satisfaction yet they may not feel engaged with the enterprise. Employees continue working as long as the task is challenging and he/she is learning new skills and knowledge. Sig. Copyright 2016 Published by IJMRR. All rights reserved 839

6 Table 5: Pearson Coefficient of Correlation of employee engagement with Future plan in the organization Employee Engagement Future Plan in the Org. Employee Engagement Future Plan in the Org. Pearson Correlation Sig. (2-tailed).432 Pearson Correlation Sig. (2-tailed).432 Hypothesis (H o3 ) is also accepted as there is no relation of employee engagement with future plans of employee staying with the organization. It is difficult for IT companies to retain its employees for longer period of time. IT professionals may feel engaged by the job but not by the organization and as soon as a better future prospect in career growth is seen employees leave the enterprise to join a new one where the remuneration is higher. CONCLUSION Engagement has positive consequences on the employee s performance. The study concluded that although there is a positive relation between employee engagement and employees association with the organization and also with their future plans of working in the organization yet the relationship is not significant. This could be attributed to the IT professionals having numerous opportunities for jobs in the ITES and IT industry. While employee satisfaction and employee engagement are essential for a contented, productive and committed workforce, achieving satisfaction without engagement has significantly less impact on business results. Satisfied employees may not necessarily be the best in terms of loyalty. Engaged employees are affectively and emotionally committed to demonstrate initiative, work hard, expend extra discretionary effort (Zhang, 2009) - and do so in alignment with strategic priorities to move the organization forward. To start reaping bottom-line benefits that a truly engaged workforce promises, enterprises need to adopt a more active and energetic approach to engage employees intellectually and emotionally. HR leaders should initiate management strategies for engagement by taking into account not only present perceptions of employees, but also their future expectations. Employees should eventually feel committed to the organizations values and goals so that they go the extra mile to complete the job. The end result will be engaged employees that drive competitive success and bottom-line results. REFERENCES [1] Bhatnagar J. Talent management strategy of employee engagement in Indian ITES employees: key to retention, employee relations 2007; 29(6): [2] Corporate Leadership Council. Driving Performance and Retention through Employee Engagement: a quantitative analysis of effective engagement strategies. Corporate Executive Board, Retrieved from Engagement.pdf (accessed on ) Copyright 2016 Published by IJMRR. All rights reserved 840

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8 [20] Vance RJ. Employee engagement and commitment, A guide to understanding, measuring and increasing engagement in your organization. Society for Human Resource Management 2006; [21] Zhang J. Employee Engagement Investigation in IT Industry. International Conference on Computational Intelligence and Software Engineering. CiSE. Wuhan, 2009; 1-4. doi: /CISE Copyright 2016 Published by IJMRR. All rights reserved 842