Organizational practices and employee
engagement: a case of Malaysia
electronics manufacturing firms
Ling Suan Choo, Norslah Mat and Mohammed Al-Omari
Ling Suan Choo is based in
the School of Management,
Universiti Sains Malaysia,
Minden, Malaysia.
Norsiah Mat is based in the
College of Business,
Universiti Utara Malaysia,
Sintok, Malaysia.
Mohammad Al-Omari is
based in the School of
Management, Universiti
Sains Malaysia, Sunagi
Petani, Malaysia.
DOI 10.1108/17515631311295659
1. Introduction
The competition in the marketplace is getting fiercer nowadays due to globalization.
Furthermore, the global financial crisis that occurred in the period 2007-2008 had forced
companies to increase their competitiveness for business survival. Consequently, employee
engagement has emerged as the most discussed topic among top management over the
globe in this decade, since it is an important element for business survival and success. And
Malaysia, with its highly educated workforce, is no exception.
Previous research has demonstrated the relationship of employee engagement with positive
work outcomes, such as low attrition, high performance, and positive business results
(Hallberg and Schaufeli, 2006; Saks, 2006; Schaufeli and Bakker, 2004). Findings from
BlessingWhite (2005), State of Employee Engagement research report showed a clear
correlation between engagement and employee retention, with 85 percent of engaged
employees indicating that they planned to stay with their current employer. Ramsey and
Finney (2006) also found that engaged employees may be more likely to commit to staying
with their current organization. However, Robinson et al. (2004, p. 1) commented that
‘‘engagement is big in the HR consultancy market, yet there is a dearth of academic
research in this area’’. Likewise, Saks (2006) commented that there is a lack of research on
employee engagement in academic literature. In a nutshell, there seems to be a knowledge
gap in employee engagement, which drives the need for more empirical research in this
area.
This study on employee engagement not only expands our knowledge in the theoretical
development, but also offers managers practical insights in employee motivation and
engagement. To know how to improve employee engagement is particularly important as
some reports have shown a decline in employee engagement, and a deepening
disengagement among employees (Bates, 2004).
To address the call for more research in employee engagement, this paper presents the
study of multinational electronics manufacturing companies, based in Malaysia, in six parts.
The first part of this article discusses what employee engagement is, followed by a
discussion on the outcomes of employee engagement and how to motivate employees.
Next, the study methodology is described, followed by the analysis and empirical findings.
Last, are the discussions of the findings, limitations, and suggestions for future research,
and conclusion.
2. Literature review
2.1 Employee engagement
The notion of employee engagement was first introduced by Kahn in 1990. Since then, many
corporate consultants and scholars have given their perspectives on the concept of
VOL. 14 NO. 1 2013, pp. 3-10, Q Emerald Group Publishing Limited, ISSN 1751-5637 j BUSINESS STRATEGY SERIES j PAGE 3
 employee engagement. Despite the growing interest and discussion, the concept of
employee engagement still lacks a universal definition and is riddled with inconsistencies
and overlapping definitions. Kahn’s (1990, p. 694) initially defined employee engagement as
‘‘the harnessing of organization members’ selves to their work roles; in engagement, people
employ and express themselves physically, cognitively, and emotionally during role
performances’’. Others have defined employee engagement as the emotional and
intellectual commitment to the organization (Baumruk, 2004; Richman, 2006; Shaw, 2005).
Alternatively, Frank and Taylor (2004) defined employee engagement as the amount of
discretionary effort exhibited by employees in their job. To some, the concept of employee
engagement seems to overlap with organizational commitment, organizational citizenship
behavior, and job involvement (May et al., 2004; Robinson et al., 2004). The study by
Hallberg and Schaufeli (2006), who present the concept of employee engagement
theoretically and empirically, defined engagement as representing experiences of vigor,
dedication to the role, and periods of absorption over extended periods of time – weeks,
months, or even years.

2.2 Outcomes of employee engagement

Research conducted by practitioners and academicians has found positive outcomes of
employee engagement (Saks, 2006), such as positive relationships with organizational
outcomes, which in turn lead to better financial performance and profitability (Armir and
Buckley, 2009; Gibbons, 2008; Robertson-Smith and Markwick, 2009; Saks, 2006; Salanova
et al., 2005; Schaufeli et al., 2009; Xanthopoulou et al., 2007). For instance, the study by
Salanova et al. (2005) on hotel front desk and restaurant employees from 114 service units
found that organizational resources and work engagement can predict service climate and
in turn predict employee performance and customer loyalty. While a longitudinal survey of
201 telecom managers, by Schaufeli et al. (2009), found that engagement negatively
predicts registered sickness duration and frequency.
The Gallup Organization (2004) also found a critical link between employee engagement,
customer loyalty, business growth and profitability. They compared the scores of these
variables among a sample of stores scoring in the top 25 percent on employee engagement
and customer loyalty with those in the bottom 25 percent. Stores in the bottom 25 percent
significantly under-performed across three productivity measures: sales, customer
complaints and turnover. In an extension of the Gallup findings, Ott (2007) cited Gallup
research and found that higher workplace engagement predicts higher earnings per share
(EPS) in publicly-traded businesses. When compared with industry competitors at the
company level, organizations, with more than four engaged employees for every one
actively disengaged, experienced 2.6 times more growth in EPS than did organizations with
a ratio of slightly less than one engaged worker for every one actively disengaged employee.
Besides that, Gallup’s meta-analyses provide strong evidence that highly engaged
workgroups within companies outperform groups with lower employee engagement levels.
Their study shows that top-quartile business units have 12 percent higher customer
advocacy, 18 percent higher productivity, and 12 percent higher profitability than
bottom-quartile business units. In contrast, bottom-quartile business units experience
more employee turnover (31-51 percent) and more accidents (62 percent) than those in the
top quartile of workplace engagement.

2.3 Motivating employee engagement

Typically, the social exchange theory (SET) is used to explain employee engagement
motivation. The core of SET argues that when individuals received economic and
socio-emotional resources from their organization, they feel obliged to respond in kind and
repay the organization. In other words, obligations are generated through a series of
interactions between parties who are in a state of reciprocal interdependence. This is
supported by Robinson et al. (2004), who assert that employee engagement is a two-way
relationship between the employer and employee. Employees are more likely to engage
themselves in work in return for the resources and benefits provided by their organization.

j j
PAGE 4 BUSINESS STRATEGY SERIES VOL. 14 NO. 1 2013
From previous engagement studies conducted by The Gallup Organization (2004), Hewitt
Associates (2004), BlessingWhite (2005), The Corporate Leadership Council (2004), and
The Conference Board (2003), 26 key antecedents of the employee engagement had been
identified. Among those antecedents are doing exciting and challenging work; having
career growth, and learning and development opportunities; working with great people;
receiving fair pay; having supportive management; and being recognized, valued, and
respected (Gibbons, 2008). From those 26 key antecedents, Gibbons (2008) identified eight
main antecedents that are commonly found among those studies, which are:
1. trust and integrity;
2. line-of-sight between individual performance and company performance;
3. personal relationship with one’s manager;
4. career growth opportunities;
5. pride of the company;
6. employee development;
7. nature of the job; and
8. coworkers/team members.
Apparently, these eight key antecedents are consistent with the scope of job resources as
proposed in Job Demands- Resources (JD-R) model (Bakker et al., 2004). According to the
JD-R model (Bakker et al., 2004), job resources are those physical, social, or organizational
aspects of the job that may: reduce job demands, and the associated physiological and
psychological costs; be functional in achieving work goals; or stimulate personal growth,
learning, and development. Job resources have motivational role both intrinsically and
extrinsically. Intrinsically, job resources foster employees’ growth, learning, and
development by fulfilling basic human needs such as needs for autonomy, relatedness,
and competence (Broeck et al., 2008; Deci et al., 1999; Ryan and Deci, 2000). Extrinsically,
job resources are instrumental for employees in achieving their work goals. For instance, job
resources such as encouragement from team members, and supportive comments and
actions from the supervisor. All these form of job resources may assist employees to reduce
their physiological and psychological costs at work, which aid them to complete their job
easily. Subsequently, these job resources motivate them to dedicate more energy and time
in work (Llorens et al., 2007; Schaufeli and Bakker, 2004).
Interestingly, a survey conducted by International Survey Research revealed that
antecedents of employee engagements are varied among countries (ISR, 2003). For
instance, they found that company management is an important determinant of employee
engagement among countries such as Australia, Singapore, and Hong Kong. However, for
countries such as UK and US, a more important factor is the degree to which organizations
are able to provide long-term employment and career opportunities. Moreover, Gallup’s
studies had found that the levels of employee engagement are also varied across countries.
For instance, Gallup studies in year 2004 reported that the levels of employee engagement
in Australia, China, Japan, New Zealand, and Singapore to be 18 percent, 12 percent, 9
percent, 17 percent and 9 percent respectively (The Gallup Organization, 2004).

3. Research design
3.1 Survey instrument
The questionnaire used in this study consisted of five sections. Section A of the
questionnaire gathers information on the demographic profile of respondents, such as
gender, age, race, education level, and their respective department. Section B of the
questionnaire measures to what extent the organizational practices (employee
communication, reward and recognition, and employee development) under this study
are being practiced in the company. Respondents are given a five-point Likert scale with
1 ¼ Strongly Disagree, 2 ¼ Disagree; 3 ¼ Uncertain; 4 ¼ Agree; and 5 ¼ Strongly Agree to

j j
VOL. 14 NO. 1 2013 BUSINESS STRATEGY SERIES PAGE 5
 indicate their agreement with the item statements. The last section of the questionnaire
measures employee’s perception of their engagement level at their work, based on a similar
five-point Likert scale, with 1 ¼ Strongly Disagree, 2 ¼ Disagree; 3 ¼ Uncertain; 4 ¼ Agree;
and 5 ¼ Strongly Agree.

3.2 Sample
The unit of analysis for this study is the individual employees. A total of 97 employees from a
multinational electronics manufacturing firm were randomly selected to participate in this
survey. The questionnaire was distributed to them and administered personally by the
researcher.

3.3 Method of analysis

Initially, frequency distribution was used to describe the profile of the sample. Next, for the
goodness of the measure, a reliability test was performed to measure the internal
consistency of the scale. This was then followed by computation of means and standard
deviation of all variables used in this study, which are organizational practices and employee
engagement. Last, multiple regression analysis was performed. To examine the goodness of
predictive validity, the R 2 value was computed in order to predict for future behavior.

4. Findings
The demographic details of the respondents are summarized in Table I. As shown, most of
the respondents answering the questionnaire are female respondents. More than half of the
respondents are within the ages of 25- and 34-years-old. In terms of race, about half of the
respondents are Malay, 35.0 percent are Indian and remaining 6.2 percent are Chinese. As
for their education level, 43.3 percent of the respondents are Degree holders, 37.1 percent
are Diploma holders, and the remaining are high school graduates. In terms of job function
within the company, more than one third of the respondents were from the Supply Chain
department, 27.8 percent from Human Resource Department, 7.2 percent from IT
department, 6.2 percent from Engineering Department, and the remaining 20.6 percent
were from other departments.

Table I Profile of respondents

Variable Frequency %

Gender
Male 25 25.8
Female 72 74.2
Age group
Below 25 7 7.2
25-34 years old 66 68.1
35-44 years old 24 24.7
Race
Malay 57 58.8
Chinese 6 6.2
Indian 34 35.0
Educational level
Secondary 19 19.6
Diploma 36 37.1
Degree 42 43.3
Department
Human resource 27 27.8
IT 7 7.2
Engineering 6 6.2
Supply change 37 38.2
Others 20 20.6

j j
PAGE 6 BUSINESS STRATEGY SERIES VOL. 14 NO. 1 2013
Reliability test was performed to measure the internal consistency of the scale used in this
study. According to Nunnally (1978), the minimum value requirement of Cronbach Alpha is
0.70. Table II shows the Cronbach Alpha values of the study variables, ranging from 0.83 to
0.98, all of which exceeds the recommended level of 0.70.
In the next section, a descriptive analysis was performed to analyze the extent of
organizational practices implemented within the company. As indicated in Table III, the
means for organizational practice ranged from 3.25 to 3.54, indicating that respondents
perceived a moderate level of organizational practices. Pertaining to the level of employee
engagement, respondents perceived themselves as averagely engaged ðmean ¼ 3:39;
SD ¼ 0:71Þ:
Next, a multiple regression analysis was conducted to examine the interaction among the
organizational practice variables, in order to indicate which variable has the most predictive
power on employee engagement. Table IV shows that all the organizational practice
variables are significant at p, 0.0001. The results also indicated that employee
development ðb ¼ 0:657Þ was the most powerful predictor of employee engagement,
followed by employee communication ðb ¼ 20:578Þ; and reward and recognition ðb ¼
0:483Þ: Besides that, the R 2 value was 0.432, showing that 43.2 percent change in employee
engagement is caused by organizational practices.

5. Discussion of the findings

Based on the results, it can be concluded that organizational practices do have a major
impact on employee engagement. This finding suggests that organizational practices have
43.2 percent impact on employee engagement, which is consistent with previous research
by Koyuncu et al. (2006). This study brings awareness to organizations on the importance of
organizational practices and the need to align their HR strategy into the company’s strategic
plan. This manufacturing firm can further foster higher levels of employee engagement in
order to reap the full benefits.

Table II Reliability analysis

Variables n Cronbach alpha

Employee communication 7 0.90

Reward and recognition 6 0.98
Employee development 6 0.95
Employee engagement 13 0.83

Table III Means and standard deviations of variables under study

Variable Mean SD

Employee engagement 3.39 0.71

Employee communication 3.33 0.62
Reward and recognition 3.54 1.00
Employee development 3.25 0.77

Table IV Regression result for independent variables and employee engagement

Variables Beta Sig.

Employee communication 20.578 0.000

Employee development 0.657 0.000
Reward and recognition 0.483 0.000

Note: F-value ¼ 23.605; R 2¼0.432; Adjusted R 2¼ 0.414

j j
VOL. 14 NO. 1 2013 BUSINESS STRATEGY SERIES PAGE 7
 The multiple regression analysis results also suggest that employee development has the
strongest predictive power on employee engagement. This finding is supported by previous
research findings conducted by Wellins et al. (2006), who claimed that most employees
prefer to keep their jobs fresh and interesting by learning new approaches and building new
skills. Thus, employee development seems to be able to meet this preference. Second, this
finding is consistent with JD-R model (Bakker et al., 2004) in which employee development is
one of the job resources that can fulfill basic human needs for autonomy, relatedness, and
competence that will motivate them to be more engaged in their workplace.
Interestingly, the finding suggests that employee communication does have a negative
impact on employee engagement, which is contradictory to what had been suggested by
the Job Characteristic Model (JCM) of Hackman and Lawler (1971). The JCM (Hackman and
Lawler, 1971) contended that feedback (employee communication) would lead to work
motivation and work effectiveness. This finding may be due to the fact that the content of
communication in the company has been viewed as a source of demotivating. For instance,
employee communication that solely emphasizes on meeting job demands or stringent
customer requirements may elevate levels of pressure and undue expectations, which
eventually initiates disengagement. In fact, the management team needs to address this
issue and may want to incorporate some motivating messages in employee communication,
such as providing performance feedback, recognition, and appreciation to employees in
order to improve employee engagement within the organization.
The third highest predictor for employee engagement is reward and recognition. Reward
and recognition refers to the extent to which the company gives appropriate reward and
recognition for the work that had been done in achieving organizational goals. This finding is
in line with Maslach and Leiter (2008), who proposed that rewards and recognition is one of
the areas in work life that have motivation potential to enhance employee engagement.

5.1 Limitations and future research

Although this study had shown that organizational practices influence employee
engagement, it does have some limitations. The sample in this study only covers one
manufacturing firm, this could have affected the relationship outcome obtained in this study
since different organizations may yield in a different scenario. Another limitation to be taken
into consideration is the nature of duties within the manufacturing setting. The antecedents
of employee engagement used in this study might not be able to be generalized in other
settings, including different industries and organizations, as well as the private and
government sectors.
It would be interesting for future researchers to investigate the antecedents of employee
engagement in other settings to extend the discovered knowledge in this field. Other
variables such as corporate strategy, organizational culture, and organizational
characteristics may be included as possible antecedents.
In addition, further researchers may extend the model to examine the consequences of
employee engagement empirically, which would help to bridge the gap of knowledge in the
context of employee engagement. According to Wefald and Downey (2009), limited studies
had looked into the consequences of employee engagement. This is because most of the
previous research on employee engagement had provided limited evidence for the value of
employee engagement to organizations, thus researchers should increase the focus on how
employee engagement can benefit managerial decisions and important outcomes.

6. Conclusion
This study had attempted to explore the extent of organizational practices in predicting
employee engagement in one of the electronics manufacturing firms in Malaysia and to
establish a relationship between organizational practices and employee engagement.
Interestingly, the finding shows that 43.2 percent of employee engagement is affected by
organizational practices in the firm and employee development is the most essential aspect
in improving employee engagement. Practically, the human resource department needs to

j j
PAGE 8 BUSINESS STRATEGY SERIES VOL. 14 NO. 1 2013
play its strategic role in fostering employee development, such as by offering employee
socialization programs, on-going training programs, incentive schemes that emphasizes on
new skills, employee growth reward and recognition, tuition re-imbursement, performance
appraisal, and promotion from within the organization in order to foster greater degrees of
employee engagement in the organization. The one-size-fits-all strategy is definitely not
going to work in the case of motivating the employee to become more engaged.

References
Armir, A.C. and Buckley, F. (2009), ‘‘Linking trust in the principle to school outcomes: the mediating role
of organization identification and work engagement’’, Journal of Education Management, Vol. 23 No. 7,
pp. 574-89.

Bakker, A.B., Demerouti, E. and Verbeke, W. (2004), ‘‘Using the job demands-resources model to
predict burnout and performance’’, Human Resource Management, Vol. 43 No. 1, pp. 83-104.

Bates, S. (2004), ‘‘Getting engaged’’, HR Magazine, Vol. 49, pp. 44-51.

Baumruk, R. (2004), ‘‘The missing link: the role of employee engagement in business success’’,
Workspan, Vol. 47, pp. 48-52.

BlessingWhite (2005), Employee Engagement, Princeton, NJ.

Broeck, A.v.d., Vansteenkiste, M., Witte, H.D. and Lens, W. (2008), ‘‘Explaining the relationship between
job characteristics, burnout, and engagement: the role of basic psychological need satisfaction’’, Work
& Stress, Vol. 22 No. 3, pp. 277-94.

(The) Conference Board (2003), Linking People Measures to Strategy, The Conference Board, New York,
NY.

Corporate Leadership Council (2004), Driving Performance and Retention through Employee
Engagement, Corporate Leadership Council, Arlington, VA.

Deci, E.L., Koestner, R. and Ryan, R.M. (1999), ‘‘A meta-analytic review of experiments examining the
effects of extrinsic rewards on intrinsic motivation’’, Psychological Bulletin, Vol. 125 No. 6, pp. 627-68.

Frank, F. and Taylor, C. (2004), ‘‘Talent management: trends that will shape the future’’, Human
Resources Planning, Vol. 27, pp. 33-41.

(The) Gallup Organization (2004), The Gallup Organization, available at: www.gallup.com

Gibbons, J. (2008), Employee Engagement: A Review of Current Research and Its Implications,
The Conference Board, New York, NY.

Hackman, J.R. and Lawler, E.E. (1971), ‘‘Employee reactions to job characteristics’’, Journal of Applied
Psychology, Vol. 55 No. 3, pp. 259-86.

Hallberg, U.E. and Schaufeli, W.B. (2006), ‘‘Same same ‘‘ but different? Can work engagement be
discriminated from job involvement and organizational commitment?’’, European Psychologist, Vol. 11
No. 2, pp. 119-27.

Hewitt Associates (2004), Press Release, May 18, available at: http://was4.hewitt.com/hewitt/resource/
newsroom/pressrel/2004/05-18-04.htm

ISR (2003), Employees Drive the Bottom Line, ISR, Chicago, IL.

Kahn, W.A. (1990), ‘‘Psychological conditions of personal engagement and disengagement at work’’,
Academy of Management Journal, Vol. 33 No. 4, pp. 692-724.

Koyuncu, M., Burke, R.J. and Fiksenbaum, L. (2006), ‘‘Work engagement among women managers and
professionals in Turkish bank’’, Equal Opportunities International, Vol. 25 No. 4, pp. 299-310.

Llorens, S., Bakker, A.B., Schaufeli, W.B. and Salanova, M. (2007), ‘‘Testing the robustness of the job
demands resource model’’, International Journal of Stress Management, Vol. 13 No. 3, pp. 378-91.

Maslach, C. and Leiter, M.P. (2008), ‘‘Early predictors of job burnout and engagement’’, Journal of
Applied Psychology, Vol. 93 No. 3, pp. 498-512.

j j
VOL. 14 NO. 1 2013 BUSINESS STRATEGY SERIES PAGE 9
 May, D.R., Gilson, R.L. and Harter, L.M. (2004), ‘‘The psychological conditions of meaningfulness, safely
and availability and engagement of the human spirit at work’’, Journal of Occupational and
Organizational Psychology, Vol. 77, pp. 11-37.

Nunnally, J.C. (1978), Psychometric Theory, McGraw-Hill, New York, NY.

Ott, B. (2007), ‘‘Investors, take note: engagement boosts earnings’’, Gallup Management Journal
Online, p. 1.
Ramsay, C.S. and Finney, M.I. (2006), Employee Engagement, Intuit, Mountain View, CA.
Richman, A. (2006), ‘‘Everyone wants an engaged workforce: how can you create it?’’, Workspan,
Vol. 49, pp. 36-9.
Robertson-Smith, G. and Markwick, C. (2009), Employee Engagement: A Review of Current Thinking,
Institute of Employment Study, Brighton.
Robinson, P., Perryman, S. and Hayday, S. (2004), The Drivers of Employee Engagement, Institute for
Employment Studies, Brighton.
Ryan, R.M. and Deci, E.L. (2000), ‘‘Self-determination theory and the facilitation of intrinsic motivation,
social development, and well-being’’, American Psychologist, Vol. 55 No. 1, pp. 68-78.
Saks, A.M. (2006), ‘‘Antecedents and consequences of employee engagement’’, Journal of Managerial
Psychology, Vol. 21 No. 7, pp. 600-19.
Salanova, M., Agut, S. and Peiro, J.M. (2005), ‘‘Linking organizational resources and work engagement
to employee performance and customer loyalty: the mediation of service climate’’, Journal of Applied
Psychology, Vol. 90 No. 6, pp. 1217-27.

Schaufeli, W.B. and Bakker, A.B. (2004), ‘‘Job demands, job resources and their relationship with
burnout and engagement: a multi-sample study’’, Journal of Organizational Behavior, Vol. 23 No. 3,
pp. 293-315.
Schaufeli, W.B., Bakker, A.B. and Rhenen, W.V. (2009), ‘‘How changes in job demands and resources
predict burnout, work engagement, and sickness absenteeism’’, Journal of Organizational Behavior,
Vol. 30, pp. 893-917.
Shaw, K. (2005), ‘‘An engagement strategy process for communicators’’, Strategic Communication
Management, Vol. 9 No. 3, pp. 26-9.

Wefald, A.J. and Downey, R.G. (2009), ‘‘Job engagement in organizations: fad, fashion or folderol’’,
Journal of Organizational Behavior, Vol. 30, pp. 141-5.
Wellins, R.S., Bernthal, P. and Phelps, M. (2006), Engagement: The Key To Realizing Competitive
Advantage, Development Dimensions International, Bridgeville, PA.

Xanthopoulou, D., Bakker, A.B., Demerouti, E. and Schaufeli, W.B. (2007), ‘‘The role of personal
resources in the job demands-resource model’’, International Journal of Stress Management, Vol. 14
No. 2, pp. 121-41.

Corresponding author
Ling Suan Choo can be contacted at: choolingsuan@yahoo.com

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

j j
PAGE 10 BUSINESS STRATEGY SERIES VOL. 14 NO. 1 2013