AJIBM  Vol.6 No.4 , April 2016
Employee Engagement and Organizational Performance of Retails Enterprises
Author(s) Paluku Kazimoto
ABSTRACT
In many countries, employee’s engagement has emerged as a potential factor for organizational performance. Many practitioners of human resource management have poorly understood measurement of employee motivation for activities and more precisely its commitment. This study analyzes factors on employee engagement and performance from selected retailing business enterprises in Wobulenzi-Luweero City, Uganda. A questionnaire was administered to 120 selected respondents, using purposive sampling technique. Measurement was done with the use of descriptive and inferential statistic approaches to consider responses from respondents and make decision accordingly. The study focused on measuring the employee engagement in relation with the organizational performance focusing on non-financial factors. The findings show that the degree of retail employee engagement and the level of job satisfaction were very high in retailing enterprises in Wabulenzi-Luwero city. However, it was observed that in retailing organizations, employees were found it difficult to make equilibrium of work experience and house life with their employment. This study shows that despite the association between employee engagement and job satisfaction, there is no relationship between employee engagement and job assignment, which is an important key factor for organization performance. The results reveal that job assignment is critical for engaging employees to ensure organizations’ longevity and profitability.

Received 25 March 2016; accepted 20 April 2016; published 26 April 2016

1. Introduction

Employee engagement has been perceived as a motivational factor towards organization’s objectives achievement. The good environment that is offered to the worker enables him to offer the best that the organization needs for its achievement of goals and objectives [1] .

Studies indicate that there is no single description regarding engagement of an employee. There is no general accepted approach to describe the terminology of employee engagement [2] . Employee engagement is characterized by the presence of workers at work place, fulfillment of its responsibility, leadership relationship with workers and leadership consideration of workers as focal point for organizational performance.

Lumina (2014) argued that employees were engaging in complex transactions that were structured in such a manner in order to misrepresent the financial performance of the organization. There are many aspects of life and not only services that characterize employee engagement.

Diversity of organizations intensifies problems of work place that hinder organization performance. Studies show that individual employee’s problems can be of personal ability to work, supervision issues of leadership and personal trauma to cope with the workload. Organizations tended to consider financial aspects of employee to achieve organizational goals. There is potential and opportunity for organization that consider both financial and non-financial factor for their performance [3] . Regardless the size of the organization and its type, objectives from nonfinancial factors could be benefit to the organizational performance. In Addition, the report indicated that measuring employee engagement could help the organization understand what it needs to build organization performance.

Managers and other financial workers put their emphasis on financial factors to achieve organization performance dealing with earnings and accounting returns, calculating financial benefits from project operations [4] . They put little emphasis on employee engagement and satisfaction, which are nonfinancial factors that are important to bring long-term organization performance. Hromei [5] indicated that the human related issues were neglected, while it is now a well known aspect that employees’ satisfaction will translate into a higher financial performance, through creativity and dedication to the organization’s goals. However, the study concluded that managers faced problems to enhance organization performance due to lack of knowledge and ability to consider non financial factors that were based on human capital which was the balance for work environment, organization performance for long run goals.

Employee engagement [6] [7] has benefit effect on quality services and its employment contentment. It is very challenging to choose organization performance measures. Aspired by the above theories, this researcher investigated and analyzed on the non-financial factors as measurement to find out the association between employee engagement and organizational performance of retail enterprises in Uganda.

2. Literature Review

2.1. Employee Engagement

Studies show [2] stated that the beginning of an employee engagement is at the fist of his appointment to the organization’s services. It is a responsibility of leaders to motivate workers commitment and engagement for job performance [8] . In contrast, other authors [9] stated that engagement is for both managers and workers and are responsible to achieve organizational goals and objectives.

“Engagement with the Organization measures how engaged employees are with the organization as a whole, and by extension, how they feel about senior management. This factor has to do with confidence in organizational leadership as well as trust, fairness, values, and respect-i.e. how people like to be treated by others, both at work and outside of work” [10] .

Two factors were distinguished for employee engagement: “Employee Satisfaction (which is the level of contentment or happiness a person assigns to: a) attributes of their job/position, b) their organization, and c) the general or overall way they feel about their employment) and Employee Commitment(that implies how the pride people feel for their organization as well as the degree to which they: a) intend to remain with the organization, b) desire to serve or to perform at high levels, c) positively recommend their organization to others, and d) strive to improve the organization’s results) [11] .

It was [12] reported that the good time to identify the best-engaged employees is at the time of their recruitment. Employee attitude and enthusiasm to work hard are positive experience that will longer for their good performance. For some [13] employees are affected by different factors, which need special attention from the leadership such as employee turnover than focusing only on organization benefits.

Openness behavior has been proved as one of the important elements that motivate employee engagement regardless of their skills and knowledge. Thus management needs to pay more attention on this factor while designing jobs and services for their workers [12] . While for some authors [14] reveal that preparation for responsible employees will help organizations to create positive background to advance employee abilities and aptitude to gain competitive advantage for organizational goals engagement.

Albrecht [15] recommended that organizations should encourage and keep employees well?being, which is one of the factors that contribute to their performance and commitment to achieve organizational goals. He argued that when employee provided with open and supportive clear autonomy to his background and career development will ensure engagement to his jobs clearly aligned with organizational goals. Others indicated, “The various drivers of work engagement and the incremental benefits accrued to organizations due to effective commitment practices are clearly interpreted” [6] .

It was proved that “workplace well-being (WWB) has been defined as “a holistic approach to creating high performance organizations through establishing the right conditions to generate high levels of employee engagement. This approach assumes that achieving high levels of organizational performance depends on employees who are strongly committed to achieving the goals of the organization, and who show this through their actions. This behavioural objective is influenced in turn by levels of employee satisfaction, and by supportive, respectful and healthy work environments. WWB is connected to physical health and wellness but primarily emphasizes the social and psychological dimensions of three inter-related elements ? workplace, workforce, and the work people do [11] .

Providing positive response to employees is another factor that is important to motivate employee engagement and commitment in organization. However, it was revealed in the same study “appropriate rewards and incentives to reinforce employees’ desired behavior are other promising job resources and that “employee growth and opportunity for advancement is another significant job resource [16] .

“Employers can set themselves up for continued success by focusing on the key Engagement Drivers that make a positive impact on their workforce and thus keep their employees engaged. The companies that have a highly engaged workforce have risen to the challenge. They proactively respond to the environment, competition, and changing workforce needs. They evolve, but stay true to the values that made them successful and are well positioned for continued success [17] .

Andrew & Sofian emphasized that “engagement should be a win-win state of affairs, where vastly engaged employees will resiliently identify with the success of their organization and win fulfillment from their contributions. And that knowledge of employee engagement is one of the pioneering work in advocating that employee engagement should be examined by distinguishing between job engagement and organization engagement” [18] .

2.2. Organization Performance

Studies indicated [12] that solution to employee engagement for enterprises performance is to provide employee with opening to share their ideas and feelings. Also that managers and leaders are to accommodate employees concerns to maintain organization performance [19] .

Employee attitude is a positive factor for their engagement to organization performance. The recognition of employee attitude is an important element for competition to contribute to organization profitability [13] . Others reported that employee engagement and organization performance, there is a need to share with them and demonstrate ideas for strategic plan of the organization [19] .

The concept of employee attitude described by authors [20] indicated that employee engagement involves task performance that is based on activity approaches and dispositional of the worker himself. “You can measure a lot of things that have nothing to do with performance and that don’t help a company implement a system that allows managers to create change [21] ”.

Serenson [21] emphasized, “It’s great when companies try to improve employee engagement and even better when they measure it. Measurement is the first step companies must take before they can implement meaningful actions to improve engagement. But if they don’t measure the right things in the right way, those actions won’t matter and they won’t have a measurable impact on business outcomes or the bottom line. Concentrating on employee engagement can help companies withstand, and possibly even thrive, in tough economic times”.

Others considered that well performing employees are considered with high motivation and values to ensure positive outcome in their organization [22] . In addition [23] [24] consideration of well being of employees is an acknowledgement to his contribution for organization performance. Markos and Sridevi [2] , also confirm that engagement is a double side of sharing information between managers and employees and find out the weaknesses of employee that needs attention. Consideration of top management to employees’ satisfaction is a lead towards organization performance.

Evidences show that there is relation between employee engagement and organization performance, whereby, the better the employee is engaged and committed, the better the performance of the organization. Employee engagement influence positively the non-attendance, continuation, advancement, facilitate client’s services and encouragement to staff towards organization performance [1] [25] .

Managers and other financial put their emphasis on financial factors to achieve organization performance dealing with earnings and accounting returns, calculating financial benefits from project operations. They put little emphasis on employee engagement and satisfaction, which are nonfinancial factors that are important to bring long-term organization performance [4] . Hromei [5] indicated that the human related issues were neglected, while it is now a well known aspect that employees’ satisfaction will translate into a higher financial performance, through their creativity and dedication the organization’s goals. However, the study concluded that managers face problems to enhance organization performance due to lack of knowledge and ability to consider non financial factors that are based on human capital which is the balance for work environment, organization performance for long run goals.

Researchers reveal that there is no particular best way of organization performance appropriate to all employee situations. In order to be efficient, the implementation of internal organization decisions should connect with the demands of external environment and people needs [26] . “The good news is that many organizations are making a start through a variety of innovative management approaches. Staffing and benefits solutions are being used to address employee attraction and retention. Better knowledge management systems are being created to stem the exodus of information. Training and development is gearing up to build new skills and knowledge. Marketing and branding are being used to build a positive image, and so on. All of this is needed. But none of this is going to be enough if employees do not see public organizations as good, satisfying places that they want to join, stay with, and contribute to in ways that help achieve organizational goals [11] .

On the other hand others argued that there have been “ a growing recognition of the role that employees actively play in shaping and influencing their environment and with a proactive personalities that are most likely to craft their own jobs, by mobilizing their own resources and setting their own challenges to work on their own engagement in turn to predict other ratings of organization’s performance” [27] . Giving workers a fair degree of responsibility enhance their senses of creativity to organizational problems; that could result from formal recognition programs put in place to reward top performers with considerable amount of autonomy, where many decisions could be made on the individual team level versus at headquarters [28] .

Many studies reveal that mediation between employee and manager is one of the key factors to improve organization performance. Par example, in the UK [29] “both mutual gains (positive mediation) and counteracting (inconsistent mediation) theses are relevant for understanding the impact of involvement-centered Human Resource Management on job satisfaction and organizational performance” [30] .

Employee engagement is another factor proved to be attached to organizational performance outcomes. With dedication and happiness, employees at their workplace ensure that their organization attain a remarkable and visible competitive advantage. Workers with higher engagement to their organizations increase their retention and reduce staff turnover and absenteeism. Further, organization result will be accountable on productivity, customer satisfaction, saving costs, and profitability level will increase [14] .

However, it was found that “measuring employee satisfaction and making changes to increase employee satisfaction will not necessarily lead to increased performance. In fact, the conditions that make many employees "satisfied" with their jobs are likely to frustrate high performing employees. Top performers want to be challenged and to challenge the status quo. They embrace change, seek out ways to improve, and want all employees to be held accountable for delivering results. By contrast, low performing employees often cling to the status quo, resist change, and avoid accountability whenever possible [10] [31] .

“The organizations that improve engagement during challenging times focus on a number of factors that differentiate them in the marketplace. These factors include focusing on long-term strategies, demanding measurable actions, involving all stakeholders, understanding key employee segments, and broadening the range of assessment tools and analytics. Employee expectations and company responsiveness to internal and external environmental changes have a lot to do with showing improvements, even when the market overall is showing a decline [17] .

3. Methodology

This study analyzes the factors of employee engagement and performance of selected retailing business enterprises in Wobulenzi-Luweero City, Uganda. This study’s purpose was to explore and find out the relationship between employee engagements and organizational performance based on non-financial factors.

3.1. Research Design

The study applied descriptive and correlational research design. “Research design expresses both the structure of the research problem, the frame work, organization or configuration of the relationships among variables of a study and the plan of investigation used to obtain empirical evidence on those relationships” [32] . Categories of responses provided by participants using nominal scale measured on the percentage considering the following scale: none at all commitment, little commitment, moderate commitment, committed and very committed for employee engagement; satisfactory and non satisfactory for the organization performance factors.

3.2. Targeted Population and Sample Size

This study focused on the employees in the 20 retails organizations selected in Wabulenzi sub-county in Luwero district in Uganda. Among activities performed by those organizations, there were retail of second hands spare parts for machines, mini-supermarket, retail of varieties of clothes and other items, food staff, guesthouses, and petrol stations. Participants were selected using purposive sampling technique. Those who participated in this study were 120. Using convenience-sampling methods 6 individuals were selected from each organization. With job assignment scheduled on different time, it was not easy to get employees to conduct the study. The result shows that 60% (72) of the respondents were male and 40% (48) of them were female. Majority (64%) of respondents were aged between 26 - 30 years old, 16% were between 31 - 35 years old, 10% were between 41 - 45 years, 8% were between 36 - 40 years old and only 2% of respondents were above 46 years old.

3.3. Data Collection and Instrument

The study used a structured questionnaire that was filled up by the participants from selected retail organizations. The questionnaire had two sections that were categorized as follows: first section was based on the questions related to employee engagement parameters and second section focused on questions related to organization performance. For employee engagement, answers were filled using none at all, little commitment, moderate commitment, committed, very committed for scale measurement for data coding. And for organizational performance the answers were satisfactory and non-satisfactory. To make it easy for the respondents, the researcher converted the nominal multiple choice rating of answers into choice based on numbers: 1 = not at all committed, 2 = little commitment, 3 = moderate, 4 = Committed and 5 = very committed, and 1 = Not satisfactory and 2 = Satisfactory.

3.4. Data Analysis

Responses from participants were encoded and analyzed by the help of SPSS for easier information interpretation. Percentage from frequencies was described to understand the views of participants on the employee engagement and organization performance. Person correlation was applied for testing hypothesis.

4. Results

4.1. Employee Engagement

Findings in Table 1 show that 40.2% of the respondents were very committed to control their job, 29.2% of them were committed and only 12.5 % of responses indicated moderate of commitment of employee. More than one fourth (35.8%) of responses show very high commitment on the availability of tools and resources, 29.2% of them committed and 15.5% moderate commitment. For recognition for performance, more than half (50.8%) of responses showed moderate commitment, 24.2% committed, and only 5% very committed. For provision of fair rewards for work, responses indicated that 31.7% were moderate commitment, 25% with little commitment, 10.8% with very little commitment, 10% of them committed, and only 5% of responses indicated very committed for the provision of fair rewards for work. The next investigation on employee engagement regarding recognition of ideas and suggestions shows that 39.2% responses indicated moderate commitment, 21.7% indicated committed and 16.7% responses indicated very commitment of employee engagement for the recognition of

Table 1. Employee engagement.

5 = Very committed, 4 = committed, 3 = moderate, 2 little commitment and 1 = none at al.

ideas and suggestions in their organization. On the importance to individuals needs, 41.7% responses showed moderate commitment, 17.6% showed committed, 16.7 % showed little commitment and only 6.7& with very commitment to importance of individuals in their organization. Regarding employee commitment for their activities, responses show that 29.2% were committed, 25.8% moderate commitment, 15.8% very committed and only 9.2% with little commitment. Refer to friend or colleague, responses show that 34.2% were respectively committed and with moderated commitment, and 12.5% very committed. To image of the company in the industry sector, 37.5% show moderate commitment, 23.3 very committed and 19.2% committed. To the image of company in the community 37.5% of responses indicated committed, 28.3% very committed and only 12.5% with moderate commitment.

4.2. Organizational Performance

Result in Table 2 shows that 62.5% of responses from questionnaire indicated that work assignment was not satisfactory for the organization performance and only 37.5% of them indicated satisfactory for the organization performance regarding work assignment. On the side of relationship with peers and colleagues, 60% of responses showed no satisfactory with organization performance and only 40% were satisfactory. Regarding work stress, more than half (53.3%) of the respondents indicated not satisfactory with the organization performance and only 46.7 were satisfactory. Whereby, more than half (50.8%) of the respondents stated that balance of work and the lives of employees were satisfactory with the organization performance and only 49.2 were not satisfactory. It was also observed that more than half (62.5%) of the respondents showed satisfactory for job performance in relation to the organization performance and only 37.5% were not satisfied.

4.3. Relationship between Employee Engagement and Organizational Performance

Results in Table 3 indicate the relationship between employee engagement and organization performance. It is observed that that made our there is very significant position relationship with employee commitment for activities (r = 0.486, p = 0), between image of the company in the industry sector (r = 0.477, p = 0), between provision of fair rewards for work (r = 0.403, p = 0), between job satisfaction and availability of tools and resources in the organizations (r = 0.326, p = 0.001), very significant negative relationship between recognition of ideas and suggestions (r = −0.647, p = 0) but negative, with importance to the individuals needs (r = −0.543, p = 0) but negative, between image of the company in the community (r = −0.391, p = 0) but negative, and significant positive relationship between job satisfaction and refer to friends or colleagues (r = 0.242, p = 0.14). Very statistical significant and positive relationship were found between work life balance and provision of fair rewards for work (r = 0.287, p = 0.004) and a negative significant relationship (r = −0.233, p = 0.019) with work stress and provision of fair rewards for work. Between relationship and image of the company in the community there is a

Table 2. Organization performance.

Table 3. Relationship between employee engagement and organizational performance.

**Correlation is very significant, *correlation is significant.

very significant relationship of r = 0.290 and p = 0.004, between relationship with peers or colleagues and refer to a friend or colleague there is a very significant relationship (r = −0323, p = 0.001) but negative. There is significant statistical relationship between work assignment and provision of fair rewards with r = 0.227 and value of 0.023, and lastly there is statistical relationship between work assignment and image of the company in the community (r = 0.238, p = 0.018).

5. Discussion

The results from Table 1 draw the attention on the employee engagement. It is evidenced from the study that most of the employees were very committed to control their job, committed on the availability of tools and resources, committed on their activities performance and to the image of company in the community. The study reveals also that employees were moderate commitment for recognition for presentation of reasonable returns for effort made, to the acknowledgment of opinions and propositions, individuals needs, to reference to friend or colleague, to the image of the company in the industry sector. This commitment was supposed to generate the outcome from the employee engagement to the activities and organizational goal. In relation to these findings some authors from their study concluded that “high levels of employee engagement might lead to improved employee commitment and involvement towards respective jobs and thus creating a motivated” [9] , workforce that will work together to achieve the common goals of the organization. Somehow not clear others [2] on their side indicated “to have engaged people in the organizations depends on engaged leadership. Likely to justify the commitment of the participants with that of their leaders”. Many [8] agreed on the same with the view that “engagement can invariably be a “win-win” scenario for both employees and employers within the wider organizational context forefronts the ideological divide, power relationships and contextual constraints experienced in “doing” engagement and being engaged”. Participants believed that commitment was the only to survive in the organization even if the outcome was not fair to the organization.

Results in Table 2 that reveal that the level of organization performance. More than half of participants reported that there was no satisfactory performance for work assignment, for relationship with peers and colleagues, for work stress, and only organization performance could be satisfactory when it comes to balance with the lives of employees. This reveals that the performance of the retail organizations in Wabulenzi is not satisfactory. Only when it comes to personal interest, employees are committed. The organization while aiming to achieve its goals the work becomes stressful, work assigned not fulfilled. Only way the participants could satisfy on the performance of their organization was to remain loyal to the company industry image and balance their lives, no risk for the sick of organizations. Purcell (2012) study supports only the last findings on the balance work and lives of employee, stating that employee engagement is worth pursuing as a means of improving working lives and company performance, which is contradicting the performance of the organization in terms of work assignment and work stress that are not satisfactory from the above results. The results agreed on the fact [13] that an organization should in this way “recognize employees more than any other variables, as powerful contributors to its competitive position”.

On other hand another study [2] contrasts the findings, rather indicates that organizations should “develop a strong performance management system which holds managers and employees accountable for the behavior they bring to the workplace, place focus on top-performing employees to reduce their turnover and maintain or increase business performance”.

Results from Table 3 reveal the relationship between employee engagement and organization performance. Although it seems to be clear that some factors are correlated, there is no evidence showing clearly that the relationship is leading to the outcome. Job satisfaction being the only factor correlated with other, this shows that employees need employment to survive not for organization performance. There is no relationship from work assigned which is the key factor for organization performance. Other studies show that “the relationship between employee engagement and organizational outcomes would be stronger if better measures are used. Thus, organizations need to understand how different employees are affected by different factors of engagement and focus on those, in order to achieve the strategic outcomes as well as to improve overall effectiveness [13] ”. Authors [12] agreed on the same view that “there is discretionary behavior theory that has been revealed to be an important element that is correlated with engagement. However, significant majority finds that their skills are not fully utilized in the workplace and opportunities to engage in discretionary behavior are denied. This again suggests that “management need to pay more attention to job design, creating more opportunity for people to contribute”.

6. Conclusions

The findings from this study reveal that employee commitment for activities and image of the company in the industry sector, provision of fair rewards for work, job satisfaction and availability of tools and resources in the organizations have strong and significant relationship. There is a very significant positive relationship between work life balance and provision of fair rewards for work, between relationship and image of the company in the community. The results show that there is very significant negative relationship of job description and recognition of ideas/suggestions, importance to the individuals’ needs and the image of the company in the community. Also results show that job description has significant relationship with peers or colleagues and refer to a friend or colleague. It is reflected from the results that there is significant positive relationship between job satisfactions and refer to friends or colleagues. There is significant relationship between work assignment and provision of fair rewards and image of the company in the community. Finally results indicate that there is negative significant relationship between work stress and refer to a friend or colleague.

This study shows that despite the correlation between employee engagement and job satisfaction; employee engagement and job assignment that are the most important key factors for organization performance are not correlated. The results reveal that job assignment is critical for engaging employees to ensure organizations’ longevity and profitability.

However, the analysis was limited on the analysis of the non-financial factors for organization performance, which were calculated based on such as ratios in different ways of measuring performance focusing on financial factors. From the study it is recommended that:

Ÿ Managers need to consider the staff and their job assignment to reduce stress and increase factors of motivation for employee engagement

Ÿ Enterprises management seems to ignore non-financial factors to achieve its goals.

Ÿ There is a need to establish control mechanisms that involve financial factors and non-financial factors in measuring performance for longevity of enterprises.

Cite this paper
Kazimoto, P. (2016) Employee Engagement and Organizational Performance of Retails Enterprises. American Journal of Industrial and Business Management, 6, 516-525. doi: 10.4236/ajibm.2016.64047.
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