Understanding factors influencing employee engagement: a study of the financial sector in Malaysia

This thesis examines the factors that influence and shape employee engagement in the context of the financial sector in Malaysia. It does this by studying multilevel factors at three levels, the individual, organisational and societal levels. Specifically, the thesis focuses on three increasingly prominent concepts: empowering leaders’ behaviour, high-performance work practices (HPWP) and the possible role of religiosity. Drawing on institutional theory, an important argument in this thesis is the limitation of the mainstream single-level conceptualisations of employee engagement, which fail to capture the relational interplay of the contextual factors and the multilevel nature of engagement. Earlier research in HRM, particularly on employee engagement, has been conducted primarily from a micro-perspective that has focused on a specific function with little acknowledgement of contextual setting. This study uses a framework that bridges the macro- and micro-institutional levels of analysis in understanding employee engagement.

To achieve this objective, this study adopted a mixed-method approach. The first method, a qualitative study of 41 interviews with employees in the financial sector, was designed to explore the most salient factors in the employees’ levels of engagement. The second method, a quantitative survey of 278 employees, was designed to investigate the associations between the studied variables. Findings from both analyses suggest that empowering leadership behaviour has the largest effect on employee engagement. In particular, employees experience a significant level of engagement when their leader shows concern. At the organisational level, HPWP do seems to be practised in the organisations and to have an effect on engagement. However, problems that occur within the organisations cause the ineffectiveness of HPWP implementation. Interestingly, religiosity was found to play a crucial role in engaging employees at work among the Malay Muslims.

The key findings of this study suggest that both macro- and micro-institutions have pertinent roles in stimulating employee engagement. Organisations and managers need to understand the changing role of leaders, the introduction of HPWP and the practice of religious belief in the workplace as sources which enhance engagement. The expectation is that, through a better understanding of the relationships between these factors and the potential effectiveness of HPWP adoption, the selection of leaders and the development of employees may be conducted more effectively.