The effects of employee engagement on the business performance

Background of the study

There has been rising concerns about the contributions of the employee engagement on the performance of a business. Employees are considered as important assets in the success of a business, as they are the one responsible for the success of a business. Due to the increasing competition among firms in the market, many businesses are now investing a lot in the employees to ensure that their employees are in a position to deliver their best. The way of operating business has been faced by many changes arising from the increasing issues of globalization and technological advancements taking pace. The changes are leading to increased uncertainties, changes in the lifestyle of the customers, and changes in the demands of the customers (Godkin, 2015). In addition, employees in organizations are responsible for satisfaction of employees as organizations cannot be in a position control service delivery between the employees and the clients. Therefore, many businesses are now facing many challenges in ensuring profitability and sustainable growth in the competitive business environment. Employee engagement has been considered as crucial in handling the challenges facing business today where the organization, which is better managing its employees, is considered more competitive in the market.

The organizations with employees who are better engaged are said to be more productive as such organizations ensure that the employees’ productivity is improved. The highly engaged employees in the organization lead to great financial benefits to the organization where such organization experience increased profits (Chaurasia, & Shukla, 2014). In addition, with employee engagement, the level of customer satisfaction is expected to increase, as employees are motivated to work. The employees who are engaged are likely to be putting more efforts top the satisfaction of the customers thus contributing a lot in building the brand image of the


There are many attempts of scholars aiming at researching the effects of employee

engagement in the performance of organizations. Employees face many situations in the

organization that requires speaking to the management especially concerning the decision affecting their work. In the modern world, with the increased aspects of globalization due to the advancements taking place in the communications sector, employee engagement is considered essential (Deepa, Palaniswamy, & Kuppusamy, 2014). An employee being given the opportunity to give their opinion on the matters affecting their work contributes a lot to the organizational performance. This research is trying to research on the effects of employee engagement on the

performance of the business.

Justification of the study

The previous researches are being used to provide the basis for this study. Therefore, the

research is attempting to integrate and study the theories that do exist regarding the employee engagement and its effects on the business performance. This study tries to validate the relationship between the business performance and the employee engagement (Deepa,Palaniswamy, & Kuppusamy, 2014). The finding of previous research has revealed some implications of employee engagement to the performance of businesses. In this study, the effects of employee engagement on the performance of the business are being printed out.

Objectives of the study

The following are the objectives of the research:

1. To study the factors affecting the employee engagement in organizations

2. To identify the relationship between the employee engagement and the performance of businesses

3. To investigate the effects of employee engagement on the performance of businesses

Research questions

1. What are the factors that affect the employee engagement in an organization?

2. Is there any relationship between the employee engagement and the performance of


3. What are the effects of employee engagement on the performance of businesses?

Research hypothesis

The following are the hypothesis of the research:

1. There are some sets of factors that do affect employee engagement

2. A relationship exists between the performance of business and employee engagement

3. Employee engagement affects business performance positively where high employee

engagement improves the performance of business

Literature review

Employee engagement

Employee engagement is the relationship that does exist between employees and the

organization. An engaged employee is termed and the employee who is enthusiastic when performing his or her work. An employee works towards achieving the goals of the organization with actions, which are positive to further the interest and reputation of the organization. The organization that ensures high employee engagement is likely to perform better than those with low employee engagement are (Paek, Schuckert, Kim, & Lee, 2015). Therefore, employee engagement results in the commitment of employees towards performing their obligations in the organization.

Many business leaders now believe that employee engagement is essential to the success of the business. Employees who feel that are well listened and valued in the organization they work are likely to be highly enthusiastic about the jobs they perform. There has been increasing focus in many of the organizations on putting in place strategies that ensure that the employees feel that they are valued (Barrick, et al. 2015). The value for the employee voice in an organization is essential where employees are listened in the organization has their contributions when making decisions considered essential. Employees are the one who are mainly affected by nay decisions of the organization; thus, they need to be part of the decisions making process. Involving

employees in the process of making decisions is essential in making them motivated, as they can be able to give their suggestions to the decision of the organization. Employee engagement can be done best by ensuring that in the organization there is sound internal communication mechanism. The internal communication is essential in ensuring that the employees are well listened by the employers where the employees can be in a position to get the required assistance where necessary.

Employees are currently looking for the organizations, which best can listen to their ideas

regarding the running of the organization. The employees who are not engaged are most likely to result in the poor performance of the organization, as they are not motivated to work. This can result in losses as the employees are not much concerned about the costs of the company as they thing the company does not value their contribution to the company. Companies that do not ensure high employee engagement face many challenges especially during the implementation of change in an organization. This is because the employees are the one who are responsible for implementing change and if they are not involved in making such decisions make the company management face a big challenge in making the employees accept the change. They should be involved in the change decision making, as they can be able to contribute to the decisions resulting the change of operations. The management can be in a better position to make the

employees understand the need and the benefits of the change if they involve the employees in the decision making process. In addition, the management can be in a position to identify the areas the change is likely to face challenges during implementation.

Communication builds a good relationship between the employees and the management where the proper communication creates a conducive environment for the employees. The employees who are satisfied with their jobs are likely to be dedicated to performing their job. A proper communication from the managers to the employees makes employees have confidence with their managers hence ensuring good working relations in the work place. Effects of employee engagement on business performance

Employee engagement has many benefits to the organization making it crucial to the way the management of organizations manage the employees. Many organizations are ensuring that the employees are motivated in order to perform their duties well. The way different organizations treat their employees determines a lot in achieving competitive advantage in the market. Some of the benefits associated with the employee engagement in organizations include increased productivity, retention of employees, increased innovation, profitability, customer loyalty among other benefits.


Employee engagement is said to increase productivity, as they are motivated to perform their duties. The good relations that do exists between the managers and the employees due to the increased involvement of the employees in making decisions of the organization plays an important role in motivating employees. The motivated employees are likely to perform their tasks without any supervision, as they are motivated to do their job. Research has shown that employees who are involved in the issues of an organization are likely to me more efficient; thus, becoming more productive in the organization. In addition, the employees are likely to be more devoted to work as they feel that the organization recognize their contribution to the success of the organization. As a result, the employees perform their duties proper to ensure that they

improve the productivity of the organization as they feel the success of the organization is their own success. High engagement results in a high focus of employees, increases morale to the job, lowers absenteeism of the employees to work, and increase motivations among the employees leading to efficiency and productivity.

Employee safety

The safety of employees is one of the critical benefits associated with the increased

employee engagement in organizations. If the employees in an organization are not engaged are most likely to focus less on their work thus making many mistakes. Such mistakes create various impacts on the organizations in which safety is essential for employees in their working place. A study has revealed that many accidents in the work places are occurring due to the behavior of the employees in the work place that is unsafe that pose a great danger to the other employees.Serious issues of employee engagement that greatly affect the performance of the organization are usually caused by safety incidents of financial costs (Mellat-Parast, 2013). The safety incidents in organizations affect the quality of products, customers’ satisfaction and the organizational alignment.

Employee retention

Employee engagement is said to play an important role in retaining important talents in the organization. The organizations are able to retain special skills in the organization by ensuring high employee engagement where employee feel motivated to safety in the organization. The employees in such organization are less likely to leave jobs, as they feel satisfied with their jobs thus staying in the organization for long. The organizations that fail to maintain high employee engagement are likely to fail in their productivity, as they employees are likely to leave the organization. Many employees are now looking for organizations that employees have a voice during many decision-making processes of the organizations. The emotional commitment is higher for the employees who are highly involved in the matters of an organization thus improving their productivity in the organization (Allen, Ericksen, & Collins, 2013). The high rate of employee retention in an organization shows that the employees are motivated to remain in the organization thus the organization is able to retain productive employees in the organization. Many organizations are improving their focus and organizational knowledge in order to create a high performance in an organization through the commitment to achieve organizational goals.

Customer loyalty

Employee engagement is essential in creating customer loyalty, as the employees are

motivated to deliver services of high quality to the customers. As a result, the customers are most likely to enjoy the services encounter of the company thus getting satisfied with the products of the company. The provision of quality services make the customers loyal to the products of the company hence company-enjoying benefits associated with the loyalty of customers. Such benefits can include the ability of the company to raise the prices of its products without losing customers to their competitors in the market (Lam, Xu, & Chan, 2015). In addition, loyal customers are important marketers of products of the organization as they contribute a lot to the marketing of an organization. The marketing of customers is usually through the world o mouth as they are likely to refer the organization to their friends after receiving quality services in the

organization. This is essential in building the image of the company to the public thus making the company very competitive in the market. Therefore, if the employees are well engaged become more focused on delivering products to the expectations of the customers making the customers satisfied by the service experience. The loyalty of customers plays a very important role in the success of the business, as they act as the ambassadors of the products of the company.

The impacts of the customers in the process of marketing the company has been greatly

boosted by the technology advancements taking place in the world today. Technology has led to the increased use of social media where the customers can be able to share their experiences through social media (Alfes, et al. 2013). The same applies where an organization is offering poor services as its poor service provision can be shared among customers very fast. Therefore,engaging employees is essential in providing quality service sans products that can ensure customer satisfaction making them share their wonderful experiences through various platforms.The customers are able to interact using the different social media platforms to share their experiences concerning the culture, products and services of the company. The failure to engage employees might result in the creation of failure of the company products thus damaging its brand image as the customers can share their bad experiences and products of the company over

the social media. Therefore, higher employee engagement leads to the creation of high voluntary efforts of the employees thus improving the customer services provisions and contribute a lot to the customer experience. This in return results in increased customer loyalty as customers’ needs are met.


Employee engagement contributes a lot to the profitability of the organization as employees productivity increases as the get more engaged in the matter of the organization. The employees get motivated through increased engagement in the organization making them reduce mistakes that can result in increased losses. The cost of production can highly be controlled through engaging employees and educating them on the impacts of increased costs of production to the organization (Allen, Ericksen, & Collins, 2013). Due to the motivation the employees are being given in the organization make them keen to ensure reduced costs through avoiding any wastage

through errors as they benefits from the increased profitability of the organization.

In addition, the employees are highly focused on their work and are usually highly

committed to achieve the goals of the organization. The management can ensure that the employee are committed and devoted to their duties by ensuring proper communications are in place (Parry, & Sherman, 2015). Besides, ensuring that the employees are recognized for their contribution to the performance of the organization and their hard work is essential to improving the profitability of an organization.

Competitive innovation

The employee engagement is essential in creating an innovative culture in organizations.

This is because through increased engagement of the employee their creativity and innovation are improved, as they have the freedom of doing their work on their own thus encouraging them to be creative. Organizations those are able to have employees that can be innovative stand a high chance of becoming competitive in the market. High innovation can be achieved through giving the employee freedom to share ideas and do their work on their own (Song, et al. 2013). This makes the employees more innovative as they can think on their own the best ways of achieving the goals of the company. In addition, if the employees are engaged, they work effectively making improvements to their work through innovations. This allows the creation of systematic innovation culture in an organization that can contribute to the profitability and sustainable growth in the organization.


Research design

This research will use descriptive research design to give the required description of the

ways in which the employee engagement affects the performance of businesses. This study design is preferred, as it will enable the researcher to obtain the required information for the study. The relevance of the information obtained is essential in obtaining accurate results of the study. In addition, with descriptive research design provides the information about the actual

phenomenon under research.

Target population

The study is targeting business organization where the employees are expected to respond to questionnaires. The questionnaires will be containing questions necessary for collecting the data that will be used in analyzing the effects of employee engagement on the performance of businesses.

Sampling frame

A sampling frame is the list of items where the sample to be used in the study is obtained representing the population under research. The sample will be obtained from the target population, as the study cannot be done on the whole population. The sampling is then aimed at understanding the phenomenon under research using a sample top represent the population targeted. The sample for the study will then be taken randomly from the population giving all the items in the population, which is targeted in the research equal chances of inclusion in the sample size. The sample size of the study will comprise of 30 respondents where the respondents will be given questionnaires to give their opinion on the effects of the employee engagement on

the performance of businesses. The respondents are expected to have full knowledge of the employee engagement effects on the business performance where they will be expected to respond to the questionnaires.

Research instruments

The research will be using questionnaires in the process of collecting data that will be useful in obtaining the findings of the study. The variables that can enable collecting of relevant data will be used in designing the questionnaires. The use of the relevant variables will be essential in assisting the researcher achieve the objectives of the study. The questions used in the questionnaire will be simple to ensure that the respondents can easily respond to the questionnaires.

Data collection procedure

Drop and pick will be the method to be used in the process of administering the

questionnaires is the drop and pick method. This method will ensure that the respondents have sufficient time to respond to the questionnaires, as they will be left with the questionnaires then researcher later pick them. The questionnaires will be administered to 30 respondents by the researcher leaving the respondents with the questionnaires to pick them later. The questionnaires will be useful in this study, as they will provide first hand data that will be useful in coming up with accurate results. Thus, the obtained data from the questionnaires will be useful in obtaining useful information regarding the effects of the employee engagement to the business performance. Besides, secondary sources of data will be used in this study to ensure the data

obtained using questionnaires can be compared with the literature available. The major

secondary sources of data will include magazines, books and journals that will be containing information related to the effects of employee engagement on the employee performance.

Validity testing

Pretesting of the instruments used in the research will be done in order to ensure that the

research instruments can be in a position to collect the required data. The research will then conduct a pilot study in the process of testing the validity of the questionnaires. The research questions will be reframed after the pilot study to ensure proper collection of data for the study.

Data processing

The analysis of the data will be done in order to achieve the objectives of the study where the researcher will be aiming at obtaining the answers to the study questions. The findings of the study will then be presented using frequency distribution tables and charts. The researcher will use excel to analyze the data obtained from the questionnaires where graphs, and frequency tables will be produced.

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