Drivers of employees’ engagement and the role of exchange ideology as a moderator

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Drivers of employees’ engagement

and the role of exchange ideology as

a moderator

Master thesis, Msc. Human Resource Management,

University of Groningen, Faculty of Business and Economics

February 2013

Alina Haita

Oosterhavenstraat 2

9711 SC Groningen

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Abstract

This research examines whether employees’ perceptions of organizational and supervisor support, training, development and career opportunities, performance feedback and finally the level of rewards and recognition are related to their work engagement. It also establishes if exchange ideology moderates these relationships. Based on a survey conducted within an EU public institution it was revealed that all the antecedents, except recognition, were positively and significantly related to employees’ engagement to their work. It also showed that the relationship between perceived supervisor support and engagement was stronger, when employees have high, rather than low exchange ideology. Likewise, the relationships between employees’ perceptions of training, development and career opportunities were stronger when their exchange ideology was high. However, the research findings did not support any moderated relationship between perceived organizational support, the feedback received and the amount of rewards and recognition on one side and employees’ engagement on the other. The implications of the research findings, the limitations of this study, and the suggestions for future research are also presented.

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Nowadays, one of the best ways for organizations to achieve a competitive advantage over others is to physically, psychologically and emotionally engage their employees in their job (Khan, 1990). Having an engaged workforce thus has become one of the most important challenges for management, according to a survey of 656 chief executive officers (CEOs) from countries around the world (Wah, 1999). It is therefore not surprising that positive aspects of health and well-being are increasingly popular in Occupational Health Psychology and that one of these positive aspects is work engagement (Schaufeli & Bakker, 2003).

Engaged employees have a sense of personal attachment to their work and their values seem to match well those of the organization they work for. An engaged employee is aware of the business context and works with colleagues to improve performance within the job for the benefit of the organization (Robinson et al., 2004, p. 4). They are motivated and able to give their best to help it succeed – and from that flows a series of tangible benefits for organization and individual alike. According to Kahn (1990), engagement may lead to intrinsic motivation, creativity, authenticity, ethical behavior, increased effort and involvement and overall a more productive and happy employee. Fully engaged workers are those who are physically energized, emotionally connected, mentally focused, and feel aligned with the purpose of the organization (Loehr & Schwartz, 2003). Macey et al. (2009) conclude that engaged employees are more dedicated to create value, more consistent in their relations with customers and less likely to leave their company.

According to the literature there are many potential antecedents of employee engagement but there are only a few that have a highly significant impact on the level of engagement (Robinson et al.’s, 2004). Some of the most relevant ones are: perceived organizational and supervisor support (May et al., 2004; Kahn, 1990), performance feedback (Saks et al., 2006), decision-making authority (Towers-Perrin, 2003), leadership styles (CIPD, 2008), self-efficacy (Maslach et al., 2001), learning and development opportunities (Schaufeli & Salanova, 2007), rewards and recognition (Maslach et al., 2001).

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variations in the level of engagement among employees are mainly due to the differences in their perceptions of what the organization is giving to them. The concept that best captures this relationship is employee exchange ideology. This concerns employee application of the reciprocity norm to their relationship with the organization (Eisenberger et al., 2001). While some employees share with their organization without regard to what they receive (Witt, 1991a), others may be sensitive with the exchange ideology and share no more than what the organization does for them (Witt, 1991b). There is evidence that when individuals with a strong exchange ideology perceive they have been treated fairly by their organization, are more likely to feel obliged to reciprocate a beneﬁt (Cropanzano & Mitchell, 2005), which in this case would be a higher level of engagement. However, if treated unfairly, individuals with a strong exchange ideology could reciprocate by lowering task performance while increasing withdrawal and counterproductive behavior (Brent & Colquitt, 2007).

So far only Cheah and Tay (2011) have conducted a research on employees working in Malaysia and considered exchange ideology as a moderator of the relationship between engagement and several antecedents. This paper will be based on their work, but the focus will be on a public EU institution and will try to establish if exchange ideology moderates the relationship between employee engagement and other antecedents that were not used in Cheah and Tay’ (2011) research. The main drivers of engagement used in this study are: the perceived supervisor and organizational support, the existing opportunities for training and development, the feedback provided by the supervisor and the level of rewards and recognition employees receive from their organization. As employees perceive all these elements in a different way depending on their exchange ideology, also their level of engagement will vary. Therefore it is assumed that exchange ideology will positively moderate the relationship between these variables and engagement. Employees with high exchange ideology will be more engaged to their work as a response to what they receive in exchange from the organization.

Therefore, the following research question is defined:

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2. THEORETICAL BACKGROUND

In this chapter the main concepts and the relationships between them will be explained and several hypotheses will be defined.

2.1. Employee’s work engagement

a. Definition

Both in the academic literature and across public and private organizations, employee engagement has been defined in different ways; however there are several definitions which together best capture the concept of engagement. Saks (2006) describes organizational engagement as employees’ deep involvement in their organizations. Also in line with this definition, in a study made by Barclays (2008) engagement is defined as the extent to which an employee feels a sense of attachment to the organization he/she works for, believes in its goals and supports its values. It is an emotional and intellectual commitment to the organization (Baumruk 2004, Richman 2006 & Shaw 2005).

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engagement since I believe it best captures all the main characteristics of this concept and treats engagements as a multidimensional construct.

b. Antecedents of engagement

According to the literature there are many potential antecedents of employee engagement but there are only a few that have a highly significant impact on the level of engagement (Robinson et al.’s, 2004). This study will focus on the most relevant ones: rewards and recognition (Maslach et al., 2001), perceived organizational and supervisor support (May et al., 2004; Kahn, 1990), performance feedback (Schaufeli & Bakker, 2004) and learning opportunities (Schaufeli & Salanova, 2007).

The literature on engagement mostly describes the antecedents of employee engagement but the reasons why employees respond to these conditions with different levels of engagement are not fully explained (Saks, 2006). In order to have a better understanding of the reasons behind employee engagement, one should look at the Social Exchange Theory (SET). According to Saks (2006), SET argues that obligations are generated through a series of interactions between parties who are in a state of reciprocal interdependence. A basic principle of SET is that relationships evolve over time into trusting, loyal, and mutual commitments as long as the parties abide by certain ‘rules’ of exchange (Cropanzano & Mitchell 2005). Such rules tend to involve reciprocity or repayment rules, so that the actions of one party lead to a response or actions by the other party. For example, if employees perceive their supervisors care for their well-being, they would reciprocate by working harder to “repay” their superiors (Harrad, 2006 cited in Cheach & Tay, 2011).

2.2. Exchange ideology (EI)

Social exchange theory (SET) supports the norm of reciprocity, which states that individuals feel the need to repay those who have helped them (Gouldner, 1960). However, Eisenberger et al. (1986) suggested that individuals do not all respond in a similar manner to the norm of reciprocity and thus differ in the extent to which they reciprocate. These individual differences are labeled in the literature as “exchange ideology” (Brent & Colquitt, 2007).

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(Eisenberger et al., 2001). Exchange ideology captures both an employee’s expectation of and likely behavioral response to exchange relationships with a given organization or organizational member (Eisenberger et al., 1987).

In relation to work engagement, SET provides the theoretical explanation why employees would choose to be more or less engaged in their jobs. In this sense, exchange ideology describes the extent to which employees would vary their engagement depending on their perceptions of support they receive from different sources (Cheach & Tay, 2011). The process of perception is a key factor in individual behavior. Buchanan and Huczynski (2004:215) define perception as “the dynamic psychological process responsible for attending to, organizing and interpreting sensory data”. To a large extent, perception relates to the way in which individuals make sense of their environment and interpret and respond to the events and people around them. According to Robinson (2006) individuals categorize and make sense of events and situations according to their own unique and personal frame of reference, which reflects their personality, past experiences, knowledge, expectations and current needs, priorities and interests. Therefore, individuals with a strict exchange ideology adhere strongly to the norm of reciprocity, believing that they should help those who help them. By diligently maintaining the norm of reciprocity, when treated unfairly, individuals with a strong exchange ideology should reciprocate by lowering task performance while increasing withdrawal and counterproductive behavior. In contrast, given their relative lack of concern for reciprocation in social exchange relationships, individuals with a weak exchange ideology should react less harshly when treated unfairly (Brent & Colquitt, 2007).

Therefore, as long as employees perceive that they have been treaded fairly by the organization, the relationship between various antecedents and engagement might be stronger for the employees with a strong exchange ideology. In the same way, as long as employees perceive a fair treatment from their organization, the relationship between various antecedents and engagement might be weaker for individuals with a weak exchange ideology. Thus, for this study, exchange ideology has been treated as a moderator of the relationships between perceptions of the exchange and employees' reciprocal attitudes or behaviors.

2.3. Perceived organizational support (POS)

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carry out their job efficiently and effectively (George, Reed, Ballard, Colin & Fielding, 1993). According to Rhoades et al. (2001), in order to meet socio-emotional needs employees usually form general beliefs concerning how much the organization values their contributions and cares about their well-being - perceived organizational support (POS). Furthermore, on the basis of reciprocity norms, POS creates an obligation for employees that they should care about the organization’s welfare and help the organization reach its objectives.

According to the literature (Rhoades & Eisenberger, 2002), POS is related to a number of favorable outcomes like job satisfaction, organizational commitment, performance, but also to employee engagement. Employees who have higher POS are more engaged to their job and organization as part of the reciprocity norm of SET (Saks, 2006). Therefore, it is suggested that:

H1a: Employees’ perception of organizational support is positively related to their organization engagement.

At the basis of this relationship between what individuals give to and receive from an organization is the concept of exchange ideology. Because POS involves a positive valuation of employees and concern with their welfare, POS increases felt obligation towards the organization (Eisenberger et al., 2001). Since individuals do not all respond in a similar manner to the norm of reciprocity, it is suggested that the employees who perceive a fair support from their organization can respond with different levels of engagement. Employees with a strong exchange ideology will in the end be more engaged towards the organization compared to their colleagues with a rather weak exchange ideology. Therefore:

H1b: The relationship between an employee’s level of engagement and POS will be stronger for employees with high EI rather than low EI.

2.4. Perceived supervisor support (PSS)

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management and the impact this has on their level of engagement.

Positive perceptions of line management support are significantly related to employee engagement (CIPD, 2011). Also according to Maslach et al. (2001) and Bates (2004), the first-line supervisors, are particularly responsible for employees’ level of engagement. Employees perform well if they perceive that their supervisors and colleagues support them (May et al., 2004; Kahn, 1992); in exchange, they would reciprocate by being more involved in work that is related to their supervisors and organizations (Chen et al., 2002; Eisenberger et al., 1986). Therefore:

H2a: Employees’ perception of supervisor support is positively related to their level of engagement.

Since employees do not all respond in a similar manner to the norm of reciprocity (Eisenberger et al., 1986), it is suggested that the employees who perceive a fair support from their supervisor can respond with different levels of engagement. As exchange ideology describes the extent to which employees would vary their engagement depending on their perceptions of support they receive from different sources (Cheah & Tay, 2011), in this case the direct supervisor, it can be argued that employees with a high exchange ideology will be in the end more engaged compared to their colleagues with a rather weak exchange ideology. Therefore it is suggested that:

H2b: The relationship between an employee’s level of engagement and PSS will be stronger for employees with high EI rather than low EI.

2.5. Training, Development and Career opportunities (TDC)

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H3a: The opportunities for training, development and career advancement will be positively related to employees’ level of engagement.

Exchange ideology describes the extent to which employees would vary their engagement depending on their perceptions of support they receive from different sources, in this case the opportunities for TDC. Therefore, employees having a high exchange ideology will adhere stronger to the norm of reciprocity, and will respond with higher levels of engagement compared to their colleagues having a low exchange ideology. It is suggested that:

H3b: The relationship between an employee’s level of engagement and the opportunities for training, development and career advancement will be stronger for employees with high EI rather than low EI.

2.6. Feedback

According to Kahn (1990), motivation seems to affect the extent to which an individual is willing to self-invest their personal energy in their tasks and to be more engaged (Kahn, 1992). In this sense job resources may play both an intrinsic and extrinsic motivational role. According to Schaufeli and Bakker (2004), job resources refer to those physical, psychological, social, or organizational aspects of the job (e.g. performance feedback, support from colleagues, supervisory coaching), that are functional in achieving work goals (extrinsic motivation) and stimulate personal growth, learning and development (intrinsic motivation). Therefore, receiving proper feedback from one’s superior can lead to higher levels of motivation and engagement.

Also according to Robinson et al. (2004), a very important role in fostering employees’ sense of involvement and value is attributed to the line manager, who via constructive feedback can promote engagement (Deci & Ryan, 1987). According to Levy and Williams (2004) the frequency and quality of the feedback positively affects employees’ attitudes and behaviors as well as their level of engagement. From a SET perspective, one can argue that employees who are provided with enriched and regular feedback will feel obliged to respond with higher levels of engagement (Saks, 2006). Therefore it is suggested that:

H4a: Receiving regular feedback for the work done will be positively related to employees’ level of engagement.

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lead to higher levels of engagement than for others. This is the case because employees with a high exchange ideology adhere stronger to the norm of reciprocity, compared to the employees with a low exchange ideology. Therefore it suggested that:

H4b: The relationship between an employee’s level of engagement and the performance feedback received will be stronger for employees with high EI rather than low EI.

2.7. Rewards and recognition

According to Beer et al. (1984, p. 117) “organizations must reward employees because, in return, they are looking for certain kinds of behaviors: they need competent individuals who agree to work with a high level of performance and loyalty. Individual employees, in exchange for their commitment, expect certain extrinsic rewards in the form of promotions, salary or bonuses. Individuals also seek intrinsic rewards such as feelings of competence, achievement, responsibility, significance, personal growth, and meaningful contribution. Employees will judge the adequacy of their exchange with the organization by assessing both sets of rewards.” According to Sarvadi (2005) a reward system that creates a balanced offering to employees should address a variety of processes namely compensation, benefits, recognition and appreciation.

Compensation broadly refers to all the ways in which an organization can reward employees for the work that they do. These rewards could include wage and salary payments, promotion opportunities, fringe benefits, such as vacations, pensions, and medical insurance (Sethi & Pinzon, 1998). Compensation is the primary inducement offered to employees in exchange for the contributions of labor services in the employment contract (Lawler, 1990).

Recognition involves the acknowledgement of the efforts, creativity and willingness of employees to put in extra effort (Jeffries, 1997). Recognition helps organizations retain and motivate their best employees by recognizing their contributions. An appropriate formal recognition system seems also to be of great importance for employees and their level of engagement (Maslach et al., 2001; Melcrum, 2007, cited in Robertson-Smith G. & Markwick C., 2009). Such a program should be specific, personalized, contingent (i.e. recognition must be earned so that employees feel that they have achieved some action or result) and immediate (Wilson, 1994).

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in terms of SET, when employees will receive rewards and recognition from their employer, they will feel obliged to be more engaged towards their organization (Saks, 2006). Therefore it is suggested that:

H5a: The amount of rewards received by an employee will be positively related to his/her level of engagement.

H6a: The amount of recognition received by an employee will be positively related to his/her level of engagement.

According to Gouldner (1960), individuals feel the need to repay those who have helped them, however, they do not all respond in a similar manner to the norm of reciprocity and thus differ in the extent to which they reciprocate (Eisenberger et al., 1986). Considering that all employees perceive the amount of rewards and recognition received from the organization as fair, the employees with a high exchange ideology will be in the end more engaged towards the organization compared to their colleagues with a rather weak exchange ideology. Therefore:

H5b: The relationship between an employee’s level of engagement and the rewards received will be stronger for employees with high EI rather than low EI. H6b: The relationship between an employee’s level of engagement and the recognition received will be stronger for employees with high EI rather than low EI. In Figure 1 the following theoretical model has been developed.

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3. METHODOLOGY

3.1. Sample and research methodology

The data collection for this study has been carried out within a public EU institution, a very diverse organization that brings together employees from different national, professional and cultural backgrounds in a day-to-day work environment. It is a complex organization structured in 11 main Directorates, each having several divisions and sections.

The survey used for this research was developed using the academic literature in the field of engagement. The online version of the survey was created using Qualtrics, a software tool that facilitates the development and administration of online surveys. In order to collect the data for this study, a convenience sampling method was used since the survey was distributed among acquaintances, which were easier to approach. The questionnaire was distributed among 130 employees whom were selected from various levels within the organization (e.g. management, specialists, experts, analysts, interns) and occupational fields (e.g. accounting, HR, communications, administration, IT). The response rate was 71.5% (n=93). Participants were between 24 and 53 years old and had an average tenure within the organization of 5 years. Of the 93 respondents, 45% were males, and 55% were females, with the majority being at the professional level (72%) followed by administrative level (20%) and middle management (8%). Regarding the working pattern, 85% of the participants are working full-time and 15% of the participants are working on a part-time basis. As for the type of employment contract, 38% of the respondents are employed on a permanent basis, 37% are holding a temporary contract (1 year and more), 20% are interns and 5% of the participants hold a consultant or agency contract.

In addition, the respondents were assured that the survey was purely conducted for academic purposes and all responses to the survey would be confidential and anonymous.

3.2. Measures

The items measured in the survey were taken from existing scales that were already tested for validity and reliability. For each variable, all the negatively worded items in the scales were reverse scored in order to make them comparable to the rest of the positive items. See Appendix 1 for a complete list of items I have used.

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(UWES). This scale was developed based on the work of Schaufeli and Bakker (2003) and includes the three constituting aspects of work engagement: vigor, dedication, and absorption. Participants indicated their responses using a six-item scale for absorption (e.g. “It is difficult to detach myself from my job”) and vigor (e.g. “At my job, I feel strong and vigorous”) and a five-item scale for dedication (e.g. “I am proud on the work that I do”). The items were measured using a seven-point Likert scale anchored at, (1) never and (7) every day. The Cronbach’s Alpha for the subscale measuring vigor was .78, for measuring dedication was .93 and the Cronbach’s Alpha for the subscale measuring absorption was .79. Furthermore, an exploratory factor analysis was conducted. When looking at the Bartlett’s test for sphericity, the three factors arose with significant good fit index (χ2 [93]=987.82, p<.001). The sample size seemed to be adequate for a KMO=.86 (>0.5). Furthermore a Principal Component Analysis was conducted using an orthogonal rotation with 3 factors extracted (Varimax). This was the case since in the scree-plot, the breaking point was at 3 factors, and therefore the analysis was conducted by extracting only 3 out of 17 factors. Looking at the results (see Appendix 2) it is therefore possible to confirm the validity of the three measures used for this variable.

The exchange ideology (EI) scale was adopted from Eisenberger et al. (1986). The five-item scale measured the extent to which employees are willing to stretch their work efforts based on the treatment they receive from stakeholders in the organization (e.g. “An employee who is treated badly by the organization should lower his or her work effort”). The respondents recoded their views based on a five-point Likert scale anchored at, 1 = strongly disagree, and 5 = strongly agree. The Cronbach’s Alpha for the five items measuring exchange ideology was .80.

Perceived organizational support (POS) was measured by the eight-item (e.g. “My organization cares about my opinions”) short-form of the Survey of Perceived Organizational Support (SPOS) (Rhoades et al., 2001). Participants indicated their responses using a five-point Likert-type scale with anchors 1 = strongly disagree to 7 = strongly agree. The Cronbach’s Alpha for the eight items measuring perceived organizational support was .77.

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sample of a PSS item. The participants were asked about their agreement or disagreement on each item based on a five-point Likert scale whereby, 1 = strongly disagree, and 5 = strongly agree. The Cronbach’s Alpha for the four items measuring perceived supervisor support was .88.

Training and development opportunities (TDC) were measured using a nine-item scale (Robinson, 2007) including statements such as: “I have many opportunities for training”, “I am given adequate training to do my current job”. Participants were asked to rate the training and development opportunities made available by their organization on a five-point Likert scale whereby, 1 = strongly disagree, and 5 = strongly agree. The Cronbach’s Alpha for the nine items measuring training, development and career opportunities was .93.

Perceived regular feedback was measured using the five-item scale developed by Kuvaas (2010) and addresses day-to-day feedback outside formal feedback systems such as performance appraisal. Sample items include “I rarely get feedback, except for formal feedback systems such as performance appraisal (reversed item) ” and “I receive frequent and continuous feedback on how I do my job”. A five-point Likert scale was used, whereby, 1 = strongly disagree, and 5 = strongly agree. The Cronbach’s Alpha for the five items measuring perceived feedback was .84.

Rewards were measured using a four-item scale (e.g. “I am paid fairly for the work I do”) based on the work of De Beer (1987) and recognition was measured using a four-item scale (e.g. “I am praised regularly by my supervisor”) adopted from Saks (2006) and De Beer (1987). Participants were asked to respond using a ﬁve-point Likert-type scale with anchors (1) to a small extent to (5) a large extent to items such as, “A pay raise,” “A promotion,” “Praise from your supervisor,” and “Some form of public recognition”. The Cronbach’s Alpha for the four items measuring the level of rewards was .81 and for the items measuring recognition was .65.

For all the scales the alphas measuring reliability were above .70, except for the scale measuring “recognition” (.65), which however approached that level.

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3.3. Data analysis

The purpose of this research was to investigate the relationship between employees’ work engagement and its antecedents while looking at the moderating effects of exchange ideology.

Before testing my hypothesis, a Cronbach’s alpha test was conducted to test the reliability of the scales used. The coefficients revealed that all scales show internal consistency and measure the underlying construct for each of the items.

Furthermore, a three-step hierarchical regression analysis was used in order to test the hypothesis. In the first step, each predictor variable was individually entered in the regression equation. The purpose was to explain how much variance in the level of engagement is explained by each independent variable (the perceived support received from the supervisor and the organization, the opportunities for training and development, the feedback provided by the supervisor and finally the level of rewards and recognition employees receive from their organization) and to test hypotheses 1a, 2a, 3a, 4a, 5a and 6a. In the second step both the predictor and exchange ideology were introduced. In step 3, the two variables (predictor and exchange ideology) and a multiplicative term (predictor x exchange ideology) were entered to determine the interaction effect and to test hypotheses 1b, 2b, 3b, 4b, 5b and 6b.

4. RESULTS

The descriptive statistics and Pearson correlations among the variables relevant for this study are presented in Table 1.

Table 1 shows some significant and positive correlations between all three job engagement dimensions. Among them, vigor and dedication had the strongest correlation (r=.71; p<.01). There were also significant and positive correlations between the job engagement dimensions and several predictors, such as between vigor and POS (r=.42; p<.01), vigor and TDC (r=.41; p<.01), vigor and feedback (r=.35; p<.01). Also dedication was significantly correlated with POS (r=.43; p<.01), TDC (r=.41, p<.01) and feedback (r=.31; p<.01). When looking at absorption, the highest correlation was with TDC (r=.29; p<.01).

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Table 1. Mean (M), standard deviation (SD) and correlations matrix.

VAR Mean SD 1 2 3 4 5 6 7 8 9 1.VI 5.61 0.83 2.DE 5.4 1.31 .71** 3.AB 5.23 0.99 .63** .64** 4.EI 3.47 0.60 .05 .17 .25* 5.POS 3.44 0.58 .42** .43** .27* .07 6.PSS 3.75 0.85 .24* .29** .13 .14 .38** 7.TDC 3.52 0.88 .41** .41** .29** .05 .44** .58** 8.FED 3.15 0.87 .35** .31** .27* .51 .28** .45** .51** 9.RE 3.9 0.73 .25* .14 .15 .15 .42** .32** .56** .18 10.RC 2.52 0.50 .07 .11 .14 .08 .13 .09 .02 .25* .05

Note. N=93. VI=Vigor; DE=Dedication; AB=Absorption; EI=Exchange Ideology; POS=Perceived

Organizational Support; PSS=Perceived Supervisor Support; TDC= Training, Development and Career opportunities; FED=Feedback; RE=Rewards; RC=Recognition. *p<.05; **p<.01.

Furthermore, Table 2 shows the results of the hierarchical linear regression in which al predictors were regressed in separate analysis with each of the three dimensions of job engagement. Before running the regression, all the item scores of the independent variables were transformed to z-scores prior to creating the interaction terms. The purpose was to reduce the likelihood of multicollinearity between the predictor variables and the interaction term.

In step I of the regression, the results show that POS was significantly and positive related to all the three dimensions of engagement, but the highest coefficient was for dedication (b=.57; p<.01). For PSS, there was a significant relationship with both vigor (b=.21, p<.05) and dedication (b=.41; p<.01), but not with absorption. When looking at TDC, there was a significant and positive relationship will all the three factors of engagement, but the highest was with dedication (b=.56; p<.01). This was the case also for Feedback, which predicted best engagement with dedication (b=.44; p<.01). Rewards was significantly related only to vigor (b=.21; p<.05) while recognition was not a significant predictor of any of the three dimensions of engagement. Therefore, hypothesis 1a, 3a, 4a, were all fully supported and hypotheses 2a and 5a were partly supported. The results however do not support hypothesis 6a, which states that the amount of recognition received by an employee will be positively related to his/her level of engagement.

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Feedback, Rewards and Recognition.

In step III, the regression results show that the relationship between POS and any of the three dimensions of job engagement was not moderated by employees’ exchange ideology, so therefore hypothesis 1b was not supported. When looking at the coefficients of the interaction term (b=.22; p<.05) for PSS it can be noticed that the relationship with dedication was indeed moderated by employees’ exchange ideology. In addition there is a further significant explanation of the variance in dedication (ΔR²=.04; p<.05) thanks to the moderating effect of EI on the relationship between PSS and engagement. In order to test this, a post-hoc probing of the moderation effect of EI was performed (see Figure 2). In Figure 2 both lines go up representing the positive main effect of PSS on dedication (b=.34; p<.05). It can be noticed that the solid line is above the dotted line showing the non-significant main effect of EI (b=.11). Since the solid line is steeper than the dotted line, which demonstrates the interaction effect (b=.22; p<.05), it can be argued that there is a positive relationship between PSS and dedication, and this relationship is stronger for high levels of EI. This means that when EI is high, employees’ dedication to their jobs tends to be higher at higher levels of PSS. On the contrary, for low levels of EI, employees’ dedication to their jobs tends to be lower at lower levels of PSS. This pattern supports hypotheses 2b. Overall hypothesis 2b is partly supported.

When looking at TDC, the coefficient of the interaction term was significant (b=.21, p<.1) for dedication and thus the relationship with dedication was indeed moderated by EI. Furthermore, this interaction between TDC and EI increased the amount of variance accounted for in employees’ dedication to their job (ΔR²=.02; p<.1). Figure 3 indeed shows that both lines go up which reflects the positive main effect of TDC on dedication (b=.59; p<.01). Since the solid line is steeper than the dotted line, which demonstrates the interaction effect (b=.21; p<.1), it can be argued that there is a positive relationship between TDC and dedication, and this relationship is stronger for high levels of EI. So, when EI is high, employees’ dedication to their job tends to be higher at higher levels of perceived opportunities for TDC. On the contrary, for low levels of EI, employees’ dedication to their job tends to be lower at lower levels of perceived opportunities for TDC. Therefore, hypothesis 3b was partly supported.

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and any of the three dimensions of employees’ engagement on the other. The coefficients confirmed that the relationships between these predictors and job engagement were the same regardless of whether the EI was high or low. Therefore, hypothesis 4b, 5b and 6b were not supported.

Table 2. Regression results showing exchange ideology as a moderator between the relationships of six antecedents and job engagement

Step Variables

Employee Engagement

Vigor Dedication Absorption

(b) ΔR² (b) ΔR² (b) ΔR² I POS 0.35*** .18*** 0.57*** .19*** 0.27*** .07*** II POS 0.35*** .001 0.56*** .02 0.25** .05** EI 0.02 0.18 0.23** III POS 0.34*** .01 0.55*** .00 0.23** .02 EI 0.03 0.18 0.25** POS x EI 0.07 0.01 0.13 I PSS 0.21** .06** 0.41*** .09*** 0.14 .02 II PSS 0.2** .00 0.37*** .01 0.11 .05** EI 0.01 0.16 0.23** III PSS 0.19** .02 0.34** .04** 0.08 .03 EI 0.01 0.11 0.2** PSS x EI 0.11 0.22** 0.15 I TDC 0.34*** .16*** 0.56*** .18*** 0.27*** .07*** II TDC 0.34*** .01 0.57*** .04** 0.29*** .07*** EI 0.06 0.25** 0.26*** III TDC 0.35*** .02 0.59*** .02* 0.3*** .02 EI 0.05 0.23** 0.25** TDC x EI 0.12 0.21* 0.16 I Feedback 0.32*** .15*** 0.44*** .11*** 0.23** .05** II Feedback 0.31*** .001 0.43*** .02 0.21** .05** EI 0.02 0.19 0.23** III Feedback 0.96** .02 1.33** .02 0.47 .003 EI 0.37 0.69** 0.38 Feedback x EI 0.21 0.29 0.09 I Rewards 0.21** .06** 0.18 .02 0.15 .02 II Rewards 0.22** .01 0.22 .04** 0.19** .08*** EI 0.08 0.25** 0.28*** III Rewards 0.25*** .01 0.27** .01 0.23** .01 EI 0.08 0.26** 0.29*** Rewards x EI 0.09 0.16 0.11 I Recognition 0.05 .003 0.08 .004 0.12 .02 II Recognition 0.05 .004 0.06 .03 0.15 .07** EI 0.05 0.21 0.26** III Recognition 0.04 .03 0.07 .02 0.15 .002 EI 0.06 0.23 0.27** Recognition x EI 0.14 0.21 0.05

Note. b is the unstandardized regression coefficient; POS=Perceived Organization Support; EI=

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Figure 2. Post-Hoc Probing of Exchange Ideology moderation effect on the relationship between employees’ engagement and PSS

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5. DISCUSSION AND PRACTICAL IMPLICATIONS

The purpose of this study was to explore and extend Cheah and Tay’ (2011) work on employees’ engagement model and look how this model works in a public EU institution. It examined the effect that employees’ perceptions of organizational support, supervisor support, training, development and career opportunities, performance feedback and the level of rewards and recognition have on the three dimensions of their work engagement (i.e. vigor, dedication and absorption) and whether exchange ideology moderated any of these relationships.

The study found a positive and significant relationship between POS and all three dimensions of employees’ work engagement (full support for Hypothesis 1a). This outcome goes in line and builds upon past research (Rhoades et al., 2001; Rhoades & Eisenberger, 2002; Saks, 2006), which argues that POS is positively related to employees’ felt obligation to care about and aid the organization in achieving its objectives and one way of doing this is by being more engaged. However, the results do not support the proposition that exchange ideology moderated the relationship between POS and the dimensions of work engagement (no support for Hypothesis 1b). Therefore, the amount of variance that POS accounted for in the levels of employees’ engagement was consistent regardless of employees’ exchange ideology. This means that for the employees working in the EU institution, exchange ideology is less important when it comes to reciprocate a benefit received from the organization. One explanation could be that they take these benefits as a matter of right and are seen to be independent of their commitment and participation, so that reciprocation is not necessarily required to reinforce the exchange.

As a practical implication of these findings it can be suggested that if an organization wants its employees to be more vigorous, dedicated and absorbed in their jobs, one way of doing this would be to care about their well-being (e.g. flexible working arrangements), provide assurance that help will be available when needed (e.g. to deal with stressful situations, to carry out one’s job effectively) and develop programs which address employees’ needs and concerns (e.g. via surveys, focus groups, forums) (Saks, 2006).

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supervisor they will be more engaged (Maslach et al., 2001; Bates, 2004), mainly by showing high levels of energy and resilience, by being more enthusiastic about their job and by being willing to invest discretionary effort to fulfill their tasks. In addition, the results support the moderation effect of EI on the relationship between PSS and dedication (partial support for Hypothesis 2b). Therefore, employees’ positive perception of supervisor support will determine them to be more dedicated to their job when their EI is high rather then low. This finding suggests that organizations should focus more on this particular predictor of work engagement since positive perceptions of PSS can not only lead to engagement but also enhance it further for employees with a high EI. The drawback is that if employees with a high EI perceive the supervisor support as not sufficient or not fair they can reciprocate in a negative way by lowering task performance while increasing withdrawal and counterproductive behavior (Brent & Colquitt, 2007).

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Furthermore, the results of this research show a positive and significant relationship between the opportunities for training, development and career advancements offered by the organization and all three dimensions of employees’ engagement (full support for Hypothesis 3a). Therefore, if the employees perceive that the organizational culture encourages a belief in and practice of employee development, they will be more engaged to their jobs (Levinson, 2007a). Moreover, the results support the moderation effect of EI on the relationship between TDC and employees’ dedication to their job (partial support for Hypothesis 3b). Thus, employees’ perception of TDC will determine them to be more dedicated to their job because it is experienced as meaningful, inspiring, and challenging, when their exchange ideology is high rather then low.

Since most employees prefer challenging and interesting jobs, which require learning new approaches and building new skills, one way for organizations to create an engaged workforce is by building a specific learning culture (DDI, 2005). In such a culture employees are encouraged to develop new skills and are able to take time off work for doing so. Their training needs are regularly discussed with the line manager in order to make sure that each employee receives an adequate training to successfully complete his/her tasks. In addition, the supervisor together with each of his/her employee should try to identify the strengths and development needs of the latter, and provide opportunities to leverage or build skills and knowledge. Most employees want to use their best skills and will feel engaged when organizations recognize and capitalize on their unique strengths, rather than placing emphasis on fixing weaknesses (DDI, 2005).

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as performance appraisal. Therefore, for employees, receiving performance feedback is considered to be independent of their participation, so in this case reciprocation is not necessarily required to reinforce the exchange.

Based on the above findings some practical recommendations can be proposed. As a potential driver of employees’ engagement, organizations should encourage managers to give frequent and continuous feedback to their team members also outside the formal feedback systems. These discussions should have a frequency of at least once a week (Watson Wyatt, 2009) and should focus on how the job is done, more specifically on what was done good and what could have been done better. Feedback should be specific, timely and balanced (DDI, 2005). If supervisors provide only criticism after the work is done this could lead to disengagement among its team members. In addition, managers should advise their employees on potential development opportunities and trainings that could improve their skills and enhance their knowledge. Employees need and expect feedback also as a way of supporting their work and recognizing their progress (DDI, 2005), and not only as an opportunity to receive criticism.

Furthermore, the results of this research show a positive and significant relationship between the level of rewards and vigor (partial support for Hypothesis 5a). Thus, if organizations would like their employees to show high levels of energy and resilience, a willingness to invest discretionary effort, and persistence in the face of difficulties, then they should make sure that employees perceive the level of rewards as being fair for the work they do. However, the results do not support the mediation role of EI on the relationship between rewards and the three dimensions of engagement (no support for Hypothesis 5b). This might be the case because employees in this institution perceive the rewards they receive as a fair exchange for the work they do and time they invest, and even individuals with a high EI are not willing to respond with higher levels of engagement.

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and communicate rewards in a way that addresses employees’ sense of fairness (Towers Watson, 2010). When doing so they should also consider that both salary and benefits should be perceived as competitive and should be comparable to other reward packages they could get from different organizations.

Finally, the results of the study show no significant relationship between recognition and any of the three dimensions of engagement (no support for Hypothesis 6a). In addition, exchange ideology does not moderate the relationship between work engagement and the level of recognition employees receive (no support for Hypothesis 6b). The findings are not in line with the literature in the field (Maslach et al., 2001; Melcrum, 2007) which states that an appropriate formal recognition system seems to be of great importance for employees and their level of engagement. Such a program should be specific (i.e. employees must know what they did to receive the recognition), personalized, contingent (i.e. recognition must be earned so that employees feel that they have achieved some action or result) and immediate (Wilson, 1994). In addition it should combine both public recognition (e.g. employee of the month) with private recognition (offering employees a token of appreciation like a voucher for a training). Finally, recognition programs should be based on the core values of the organization, as in this way they reinforce these values and associated behaviors in the daily work of employees (Globoforce, 2012).

Therefore, one reason why in this institution recognition has no impact on its employees’ engagement levels could be the absence of such a formal recognition system. Secondly, it could also be that managers are not effectively recognizing and rewarding achievements, by not praising their employees when they deserve it.

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6. LIMITATIONS AND FUTURE RESEARCH

Like other studies in this area (Schaufeli and Bakker, 2004; Saks, 2006; Cheah & Tay, 2011), this research used cross-sectional and self-reported data, which brings its limitations. Cross sectional surveys are limited to a specific point in time therefore it is not possible to observe how these results vary over time, i.e. whether the determinants of engagement have different effects at different points in time. For the future, in order to address the limitations of cross-sectional surveys, researchers could use a longitudinal data collection (Cheah & Tay, 2011). This involves repeated observations of the same variables over long periods of time, which provides the opportunity to observe individual patterns of change. In addition it also provides definitive conclusions about the causal effects of each antecedent and employees’ work engagement.

Another limitation of this research is the size of my sample (N=93). A larger sample could not be used since the survey was distributed among acquaintances, which were easier to approach. For the future, researchers could use a larger sample size in order to increase the power and significance of the relationships between the variables (Cheah & Tay, 2011).

In addition, this study also raises concerns about common method biases. However, when looking at the results one can say that there are several reasons to believe that this was not always the case. First, the relationships between each antecedent of engagement and its three dimensions were quite different. If POS, TDC and feedback were significantly related to vigor, dedication and absorption, rewards predicted only vigor, while PSS predicted both vigor and dedication. Secondly, when looking at the moderation effect of exchange ideology, this was significant only for the relationship between two antecedents, PSS and TDC, and one dimension of engagement, which is dedication. In addition, the respondents were informed before taking the survey about the anonymity of their answers, which is a procedure usually used to reduce the method biases (Podsakoff et al., 2003). However, a common method bias is still considered as a shortcoming of this research.

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self-efficacy (Maslach et al., 2001). One could look at these antecedents and conduct a comparative analysis between several EU institutions or between a public and private organization and see whether there are any significant differences. In the analysis one could consider a range of different segments when looking at engagement, from job level (e.g. senior executive, director/manager, supervisor, specialist/professional, management salaried), to industry category (e.g. non-profit, high tech, manufacturing, insurance, pharmaceuticals, hospital and finance/banking) or even certain demographic characteristics (e.g. age, gender, marital status) (Towers Perrin, 2003). It could be also interesting to measure engagement at regular time intervals and see if there are any changes in the overall engagement levels of employees and if so, then to analyze the underlining reasons.

In all these future studies, one aspect that researchers should consider when measuring employees’ engagement is to support the surveys used by interviews and contextual analysis in order to gain a more holistic view on engagement and how it is being managed within different organizational settings (Kular et al., 2008).

7. CONCLUSIONS

By focusing on the Social Exchange Theory (SET), this study has provided insides on the role employees’ perceptions have on the relationship between employees’ work engagement levels and several of its antecedents. The outcomes of this research show that organizations should view work engagement as a multidimensional construct, which involves a series of actions and steps (Shaw, 2005) that require the input and involvement of all organizational members (Robinson et al., 2004).

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ent_and_ROI

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APPENDIX 1 - EMPLOYEE ENGAGEMENT SURVEY

The purpose of this survey is to look at how employees perceive different aspects of their work and their work environment and how this affects their level of engagement. You will be asked various questions about your working relationship with your organization. This survey is purely conducted for academic purpose.

Please note that all responses to this survey will be confidential and anonymous. No personally identifying information will be required, however, certain demographic information will be used for reporting purposes.

1. Employee engagement

The following 17 statements are about how you feel at work. Please read each statement carefully and decide if you ever feel this way about your job. If you have never had this feeling, cross the ‘1’ (one) in the space after the statement. If you have had this feeling, indicate how often you feel it by crossing the number (from 1 to 7) that best describes how frequently you feel that way

Never A few times a year or less Once a month or less A few times a month Once a week A few times a week Every day 1 2 3 4 5 6 7

1. _________ At my work, I feel bursting with energy

2. _________ I find the work that I do full of meaning and purpose 3. _________ Time flies when I'm working

4. _________ At my job, I feel strong and vigorous 5. _________ I am enthusiastic about my job

6. _________ When I am working, I forget everything else around me 7. _________ My job inspires me

8. _________ When I get up in the morning, I feel like going to work 9. _________ I feel happy when I am working intensely

10. ________ I am proud on the work that I do 11. ________ I am immersed in my work

12. ________ I can continue working for very long periods at a time 13. ________ To me, my job is challenging

14. ________ I get carried away when I’m working 15. ________ At my job, I am very resilient, mentally 16. ________ It is difficult to detach myself from my job

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2.Exchange ideology (moderator) Strongly

disagree

Disagree Neutral Agree Strongly agree

1 2 3 4 5

1. _________ An employee’s work effort should depend partly on how well the organization deals with his or her desires and concerns.

2. _________ An employee who is treated badly by the organization should lower his or her work effort.

3. _________ How hard an employee works should not be affected by how well the organization treats him or her

4. _________ An employee’s work effort should have nothing to do with the fairness of his or her pay

5. _________ The failure of an organization to appreciate an employee’s contribution should not affect how hard he or she works

3. Perceived organizational support Strongly

disagree

1 2 3 4 5

1. _________ My organization really cares about my well-being.

2. _________ My organization strongly considers my goals and values.

3. _________ My organization shows little concern for me (R).

4. _________ My organization cares about my opinions.

5. _________ My organization is willing to help me if I need a special favor.

6. _________ Help is available from my organization when I have a problem

7. _________ My organization would forgive a honest mistake on my part

8. _________ If given the opportunity, my organization would take advantage of me (R).

4. Perceived supervisor support Strongly

disagree

1 2 3 4 5

1. _________ My supervisor really cares about my well-being.

2. _________ My supervisor strongly considers my goals and values.

3. _________ My supervisor shows little concern for me (R).

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5. Training, development and career opportunities Strongly

disagree

1 2 3 4 5

1. _________ I am encouraged to develop new skills

2. _________ My line manager takes staff development seriously

3. _________ I am able to get time off work for training

4. _________ I have many opportunities for training

5. _________ I am given adequate training to do my current job

6. _________ My training needs are regularly discussed

7. _________ I feel I have equal access to training and development opportunities

8. _________ This organization actively supports my continuing professional development.

6. Feedback Strongly disagree

1 2 3 4 5

1. _________ I receive frequent and continuous feedback on how I do my job.

2. _________ I receive clear and direct information about my work performance through continuously provided feedback.

3. _________ I rarely get feedback, except for formal feedback systems such as performance appraisal.

4. _________ In my job, I’m continuously informed about what I have done well or what I could have done better.

5. _________ I know little about what my colleagues think about my work performance.

7. Rewards Strongly disagree

1 2 3 4 5

1. _________ I am paid fairly for the work I do.

2. _________ My salary is competitive with similar jobs I might find elsewhere.

3. _________ My benefits are comparable to those offered by other organizations.

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8. Recognition (for good job) Strongly

disagree

1 2 3 4 5

1. _________ I am praised regularly by my supervisor.

2. _________ I receive some form of public recognition (e.g. employee of the month). 3.__________I receive a reward or token of appreciation (e.g. lunch, training opportunity).

4. _________ I get credit for what I do.

Employee Profile

1. Please indicate your current level in the organization:

 Administrative (i.e. Accounting Assistant, HR Assistant, IT Assistant)

 Professional (i.e. Budget Analysts, Research Analyst, Principal/Senior Budget and Investment Expert, Principal/Senior Procurement Expert)

 Middle management (i.e. Deputy Head of Division, Adviser, Head of Section, Head of Division)

 Senior management (i.e. Deputy Director General, Director General)

2. Please specify the type of employment contract you have with your organization:

 Permanent contract (i.e. contract without an end date)

 Fixed-term contract (i.e. contract of at least one year with the organization)  Short-term contract (i.e. contract of less than one year with the organization)  Consultant

 Agency contract  Trainee/intern

3. Please indicate your working pattern:  Full time  Part-time

4. Please specify the number of years you are working for this organization: … 5. Please indicate your gender:

 Female  Male

6. Please indicate your age: …….

Drivers of employees’ engagement and the role of exchange ideology as a moderator