Research Article: 2022 Vol: 21 Issue: 3
Navin Kumar Shrivastava, Birla Institute of Management Technology, Greater Noida, India
Rajnish Ratna, Royal University of Bhutan
Akhilesh Tiwari, Christ (Deemed to be University), Delhi NCR
Citation Information: Shrivastava, N.K., Ratna, R., & Tiwari, A. (2022). Drivers of employee engagement: insights from ITES sector based in national capital region (NCR) of India. Academy of Strategic Management Journal, 21(S3), 1-10.
The information technology (IT) and information technology enabled services (ITES) industry has been one of the key driving forces fuelling India’s economic growth. The prodigious development in the contemporary IT/ITES sector has been undergoing a paradigm shift. Drawing inspiration from it, this research paper has been developed with special reference to ITES Sector. It is based on a survey which includes measuring the engagement of the employees under prevailing organizational climate. It determines the impact of HR efficiencies on the employees and providing suggestions for the betterment of the climate. In today’ business world, ITES sector is facing immense competition apart from the multi-dimensional growth that it is enjoying. Every organization must showcase something extra in order to survive and succeed. This paper covered seven ITES units of NCR region (India). The samples were drawn from the employees representing junior and middle level managers of these units. The data was drawn in 2018-19. The findings revealed that the HR strategies played a key role in effective engagement of employees. The empirical study revealed the current engagement level covering 74% employees under the satisfactory level (i.e. 6% were very high, 28% were high, 40% of the employees were medium) and the remaining 26% of employees were spread into 21% as low and only 5% as very low. The major employee engagement drivers emerged as transparency in performance appraisal, a well-articulated communication channel, progressive reward and recognition system etc. The research highlighted the need of effective HR policies, for improving the climate of the organization by bridging the present gap that has emerged because of organizations becoming more and more impersonal and mechanistic. If addressed with due care it will help in creating a synergistic work environment for achieving higher productivity.
HR Strategies, Engagement, IT & ITES, Organizational Climate, Employee Satisfaction.
Information Technology (IT) is one of the world’s fastest growing sectors. The two major branches of IT sector can be classified as IT products and IT enabled services (ITES). The Information Technology enabled Services (ITES) sector has not only changed the way the world looks at India but has also made significant contributions to the Indian economy. IT enabled Services (ITES), also called web enabled services or remote services or Tele-working, covers the entire gamut of operations which exploit information technology for improving efficiency of an organization. These services provide a wide range of career options that include opportunities in call Centre, medical transcription, medical billing and coding, back office operations; revenue claims processing, legal databases, content development, payrolls, logistics management, GIS (Geographical Information System), HR services, web services etc. IT/ITES sector has emerged as a major contributor to Indian economy. Contribution to forex reserves, generating employment opportunities, growing prosperity of burgeoning middleclass, and rise in consumerism – IT/ITES sector is driving the growth engine in more than one-way.
Indian IT and ITES industry is one of the fastest growing industries in India. This Industry employs 3.97 million people in India (IBEF, 2018). This industry is catalyst in changing India’s image globally. Indian IT industry contributes around 7.7% of country’s GDP. Total industry size grew up to US$ 167 billion in FY 2017-18 and is expected to reach to US$ 350 billion by 2025. India is the leading sourcing destination across the world, accounting for approximately 55 per cent market share of the US$ 185-190 billion global services sourcing business in 2017-18
IT and ITES sector can be divided in four broad categories. IT services which attained a market size of US$ 86 billion in FY 2018 and out of which around 81% of revenue came from export. Business Process Management with a market size of US$ 32 billion in FY18 and over 87% revenue was from exports. Software products and engineering services reached to a market size of US$ 33 billion and exports had over 84% share. Hardware market size was US$ 15.4 billion in FY18 and domestic market accounts for a significant market share.
The growth in this sector further unfolds some challenges for the Human resource department to explore ways of meaningful engagement and retention of employees in this sector. Therefore, the subjects like Organizational climate, Employee satisfaction, Team satisfaction and Leadership etc. have become the focus areas and requires strategic understanding for creating new age organizations for innovation driven future. The current study was designed to capture ITES employees’ perception on each one of the above stated factors for having better employee engagement leading to better organizational performance. This study brings forth major employee engagement drivers to improve the climate of the organization by bridging the present gap that has emerged because of organizations becoming more and more impersonal and mechanistic.
Employee engagement has been linked to higher job performance ratings, increased in-role performance, organizational citizenship behaviors, personal initiative, higher likelihood of promotion, decreased absenteeism and tardiness, and lower turnover and turnover intention, (for a review, see Macey & Schneider, 2008). Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work (Custominsight, 2018).
Organizational Climate is often defined as the recurring patterns of behavior, attitudes and feelings that characterize life in the organization (Delaney & Huselid, 1996). Although culture and climate are related, climate often proves easier to assess and change. At an individual level of analysis the concept is called individual psychological climate. These individual perceptions are often aggregated or collected for analysis and understanding at the team or group level, or the divisional, functional, or overall organizational level. Climate here includes every aspect of working condition from Health and hygiene feedbacks of performance appraisal, communication efficiency, work timings, reward and recognitions etc and all other factors that can help motivate an employee to work better.
Employee satisfaction is a measure of how happy workers are with their job and working environment. Keeping morale high among workers can be of tremendous benefit to any company, as happy workers will be more likely to produce more, take fewer days off, and stay loyal to the company. There are many factors in improving or maintaining high employee satisfaction which are adopted and practiced by wise employers. To measure employee satisfaction, many companies will have mandatory surveys or face-to-face meetings with employees to gain information (Mishra & Gupta, 2009). Both of these tactics have pros and cons, and should be chosen carefully. Surveys are often anonymous, allowing workers more freedom to be honest without fear of repercussion.
A measurement of how good a team feels, or how good a team member feels being part of a team. It is something on which depends the entire performance of the team as well as of the members individually (Mayer & Davis, 1999). Team satisfaction not only enhances performance but also helps in achieving the overall Team as well as organizational goal (Dubinsky et al., 1993).
The directive path-goal clarifying leader behavior refers to situations where the leader lets followers know what is expected of them and tells them how to perform their tasks. The achievement-oriented leader behavior refers to situations where the leader sets challenging goals for followers, expects them to perform at their highest level, and shows confidence in their ability to meet this expectation. The participative leader behavior involves leaders consulting with followers and asking for their suggestions before making a decision. The supportive leader behavior is directed towards the satisfaction of subordinates needs and preferences. The leader shows concern for the followers’ psychological wellbeing.
There is a widely held belief that an organization’s survival and success are at least partially dependent on the effort, behaviors, and interactions of employees as they carry out the mission and strategy of the firm (Wright & McMahan, 1992). Tesluk et al. (1995) reported that employees in organizations who are engaged in greater amounts of employee involvement training reported more commitment to the organization and less cynicism about the possibility of organizational change. However, greater use of employee involvement training seemed to occur in organizations with less participative climates (Bent & Freathy, 1997). Strategic human resource scholars have argued that companies can effectively influence the interactions, behaviors, and motivation of employees through different human resource (HR) practices (Becker & Gerhart, 1996; Huselid, 1995). Also a well-designed Employer branding strategy integrated with well-rounded HR offerings will lead to enhanced levels of job satisfaction for achieving better employee engagement (Shrivastava & Shukla, 2021). Thus, for better engagement of employees, relational aspects of organizational social climate, such as trust, cooperation, and shared language, is key mechanisms that enable employees to exchange and recombine knowledge (Nahapiet & Ghoshal, 1998; Smith, 2001). InKopelman et al. (1990) paper examines approaches to the formation of organizational climate. Three perspectives appearing in the literature the structural, the perceptual, and the interactive are identified and examined. Cultural approach developed from above mentioned perspectives posits that organizational climate arises from the inter subjectivity of members as they interact within a context established by an organization's culture. A definition of organizational climate, informed by this approach, is presented. Finally, distinctions between organizational climate and organizational culture are examined. Creating a social climate that facilitates knowledge sharing may be particularly crucial for high-technology companies prospective as their employees often see knowledge as a source of power and job security, a perception that makes them unwilling to share tacit knowledge with other employees (Davenport & Prusak 1998). A paper by Luthans & Sommer (1999) indicated that downsizing had a negative impact on a range of employee perceptions of the organization.Bennett et al. (1999) report a study in which they hypothesized that total quality training would be effective in changing employees' customer orientation only if the organization's transfer climate defined as supervisor and co-worker support were positive. While this hypothesis indicates that climate would moderate the relationship between the HR practice, total quality training, and customer orientation, the analyses (Rogg et al. (2001) reported were more consistent with a mediator hypothesis. In particular, researchers have argued that firm social climate may encourage employees to focus on the larger community of the organization rather than on their own best interests, thus facilitating knowledge exchange and combination (Nahapiet & Ghoshal, 1998). Simon et al. (2009) says although organizational culture endures like personality, it is easier to change. Climate is variable like mood and is just as important as human feelings. We can compare organizational culture and climate to personality and mood. The former is enduring; the latter is temporary. We acquire our basic personalities early in life, but our moods can shift several times in one day. Organizational culture is not quite as fixed as personality, however, so the analogy is not perfect. It is hard to change an organization's culture but not as difficult as changing your personality ((Rogg et al., 2001). Also, organizational climate can last so long it becomes indistinguishable from culture, like being in a bad mood for months on end. Generally, however, climate is easier to change. During an economic downturn, people are worried about their jobs, then suddenly a big order comes in and everyone breathes a sigh of relief, so the climate improves (Higgs & Renton, 2003).
This research uses the exploratory research design. Questionnaires are used to collect the responses of employees from ITES sector working in India. The sample size consisted of 300 respondents, the data was collected through convenience sampling (non- probability) from selected ITES companies of India. For the survey a well design questionnaire based on Likert 5-point scale (5- Strongly agree, 4– agree, 3 neutral, 2 – disagree and 1 strongly disagree) was used for analyzing employee satisfaction. Analysis was done with statistical Tools SPSS 21. The analysis of the literature was carried out according to the approach proposed byCentobelli et al. (2021) and Rasool et al. (2021). The purpose of the study was with the following objectives:
1. To understand thoroughly the HR practices of the ITES based organization.
2. To understand the organization climate and its impact on the employees and providing suggestions for the betterment of the climate ITES sector.
3. To measure the team satisfaction at selected ITES units through Team satisfaction survey and also finding the leadership style of the supervisors through Path Goal theory.
4. To analyze and find out the ways and means of increasing employee satisfaction through HR practices for better employee engagement.
5. To analyze the selected ITES units separately and thus providing suggestions for increasing efficiency in all the units individually.
The research is an exploratory study involving survey and interviews.
3 questionnaires are designed using likert scale (1–Strongly Disagree, 5-Strongly Agree) to assess 7 units for their organizational climate, leadership style on 4 criteria based on path goal theory and team satisfaction on a 5 point likert scale with very high to very low levels of satisfaction of these selected ITES units.
300 in total 7 units are chosen from ITES sector in India.
The data collected from the questionnaire was expressed in concise and logical form with the help of line graphs, tables and using SPSS.
As the Table 1 and the Figure 1 show in ITES unit I i.e. Unit 1 as well as in Unit IV and VI satisfaction of the employees are majorly medium (57%, 50% & 50% respectively), whereas in Unit II and Unit V maximum of the members are highly satisfied (60% & 76% respectively). But in Unit III satisfaction level of the members in their teams is majorly low (41%).OVERALL: The satisfaction level of 40% of the employees are medium, 28% are high and 21% whereas only 5%are very low and 6% under very high category.
|Table 1 Illustrates Degrees of Team Satisfaction of All Units|
Path Goal Theory Evaluation
As it is evident from the Table 2 above that: In unit I 29% of the employees said that their leader follows Directive style of leadership, 14% said that they follow supportive style, 14% said that they follow participative style and 43% said that they follow achievement oriented style. In unit II 10% of the employees said that their leader follows Directive style of leadership, 33% said that they follow supportive style, 44% said that they follow participative style and 13% said that they follow achievement oriented style. In unit III the CSA said that 47% of the employees said that their leader follows Directive style of leadership, 19% said that they follow supportive style, 6% said that they follow participative style and 28% said that they follow achievement oriented style. Whereas the CSS said that 50% of the employees said that their leader follows Directive style of leadership, 18% said that they follow supportive style, 14% said that they follow participative style and 20% said that they follow achievement oriented style etc is the trend for all the units.
|Table 2 Illustrates Various Leadership Styles Rated by Units|
|Directive||29%||10%||CSA-47% CSS- 50%||24%||12%||40%||CSA- 19% CSS-0%|
|Supportive||14%||33%||CSA-19% CSS-18%||12%||38%||20%||CSA- 33% CSS- 50%|
|Participative||14%||44%||CSA-6% CSS-14%||25%||50%||10%||CSA- 41% CSS- 50%|
|Achievement- oriented||43%||13%||CSA-28% CSS-20%||39%||0%||30%||CSA- 7% CSS-0%|
Overall: Through path goal theory of leadership it was found that on an average 26% of the people follow Directive Style, 25% follows Supportive Style, 28% follows Participative Style and 21% follows Achievement Oriented Style.
Organizational Climate Evaluation
Performance appraisal feedback: (IN %)
Overall: As the Table 3 denotes 18.4% are highly satisfied, 33.8% are just satisfied, 32.1% are neither satisfied nor dissatisfied, 11.5% are dissatisfied and 4.2% are highly dissatisfied.
|Table 3 Illustrates Percentage Responses for Performance Appraisal Feedback|
Level of communication: (IN %)
Overall: Based on Table 4 analysis 42.7% of the total employees said that Yes the communication process is effective whereas 57.3% denied this fact.
|Table 4 Illustrates Responses of Employees For Communication Level from all Units|
Health hygiene & working condition
Overall: Based on Table 5 analysis 43% of the total employees said that they are satisfied whereas 57 were dissatisfied with respect to health hygiene and working conditions of the units under study.
|Table 5 Illustrates Percentage Responses about Health Hygiene & Working Condition|
Overall: Based on Table 6 analysis 53% of the total employees said that they are satisfied whereas 42 were dissatisfied with respect to the prevailing HR services of the units under study.
|Table 6 Illustrates Percentage Responses About HR Services by Units’ Employees|
The Following Recommendations Were Made based on the Above Analysis-
1. Some one from the Head office or zonal office should go for visits in every unit at regular intervals. These visits must be very interactive and should seem useful to the employees. That same person must be present during appraisal also. If by any chance that person cannot attend then a minimum of one HR person must be present during the appraisal just to assure the employees that the company is being fair on their part. This will increase their confidence on the system leading to their satisfaction.
2. Feedbacks should be given to the employees soon after the appraisal takes place. One common session by the HR with all the employees of one cluster can be helpful. Just an interactive session where in the HR will inform of the progress in the appraisal and will take suggestions on it from the employees. Being heard and feeling important is a great motivator for every employee.
3. Rewards and recognitions after appraisal are necessary. It is not always possible for the company to increase pay of every individual but some kind of material reward can be satisfactory too. Say a certificate acknowledging their effort or some Company gift vouchers or say simple movie tickets for the family of the employee, which won’t be a costly affair but can prove to be great motivator.
4. Here comes the role of an HR individual where just a patient hearing can help solve many issues. Thus a close door meeting of the HR officer with every employee individually quarterly or even once a year can boost the energy of the employees making them feel needed in the organization. If spending 5 minutes per employee i.e. say 7 days to complete the full organization can help boost employee satisfaction.
5. Ideas, business suggestions, etc must be encouraged by choosing and announcing the best and giving them some token of recognition.
6. Whatever the case may be a proper Tiffin area must be provided to all the employees irrespective of the size of the unit. Either a system of common lunch at the unit manager’s room must be allowed making the unit manager understand the shortage of space as well as the requirement of a Tiffin area.
7. Punching card attendance may seem a bit costly now but at the long run it will not only be of great use but will also help avoid all kind of manipulations. Also the punch cards record the time of entry and hence proper supervision can be maintained always.
Some Interesting and Innovative Recommendations for All the Units
1. Introduction of sports meet for all the units.
2. Conducting competitions about job knowledge in the units individually.
3. Introduction of company journals consisting of poems, write ups etc by the employees only.
4. Reward and recognition must be improved. Sometimes not only monetary reward is required but also something like little tokens of recognition also would work. Something for employees having maximum overtime with quality initiatives should be acknowledged with employee of the year certificate, with a small gift of say 5$ (300 INR approx.) gift voucher or just a crockery set.
5. Small token of appreciation conveying messages like- “We Care For you” would help in attaining employee satisfaction. This can also be done through gifting Birth Day cards or anniversary cards to the employees directly from the head office. If possible even celebrating birth days or just gifting 2 movie tickets or say just chocolates worth 2$ (120 INR) can be helpful as this will make the employees feel taken care of and thus may create a sense of satisfaction and belonging.
6. Academic value addition schemes as a part of career advancement for the undergraduate employees may be introduced. Motivating them to pursue Graduation from any low cost government college (distance learning courses) can be of great help for them. In return the company can ask them either to sign a bond of 3 years during the graduation course and 1 year after that or pay their fee amount to the company anytime along with minimum fine and leave.
In current competitive environment organizations’ have to walk an extra mile to do something innovative in order to survive and succeed. These innovative initiatives include strategies to hire as well as retain the employees who are willing to add value to their organization and care for their organization. But if you wish to have such employees some extra miles have to be traversed by the organisations to reach out to their existing and future employees. The quality of people and their engagement will be critical factors in corporate vitality and survival.
In present scenario those companies are successful which are able to take strategic decisions towards employee engagement initiatives with same compensation as the competitors by keeping in mind the 3 R’s i.e. Respect, Recognition & Rewards.
The employer should determine the precise methods to implement these 3 Rs, but in general, respect should be the main focus of any organisations move towards employee engagement. Without it, recognition and rewards seem to be hollow and have little effect—or they have negative effects.
This is where organizations responsibility comes into the picture. It is found that the outcome of it directly affects the Retention, Absenteeism and Productivity. A more pleasant work environment (for both employees and employer), Effective service delivery or profitability, Customer engagement, and Safety orientation.
Thus, the objective on effective employee engagement can be achieved only if we carefully understand the Individual contributions as well as organizational reciprocations. These individual contributions include quality efforts, ability to execute work, loyalty, adequate skills, time management and relevant competencies needed for designated role based responsibilities. In return the organizations’ should be prepared to reciprocate accordingly with attractive remuneration, job security, additional benefits, career growth opportunities, status in employment and adequate opportunities for promotions.
Thus, it is strongly felt that some responsibility, care and involvement by the management can bring about immense change in the satisfaction level, thus increasing employees’ engagement as well as working capacity. Hence the role of an HR employee must be given immense importance and thus carried on with great responsibility to bring about a healthy climate throughout the organization.
Limitation of the Study
The research was conducted in a short span of time therefore the research is not wide to include all the aspects of the study. The study cannot be generalized due to the fact that the study does not cover proportionate age, experience level and other diversities of region and gender. This study is limited to sample size of 300 respondents from ITES sector of NCR-National Capital Region (India) only.
In order to make the findings of this study more generalizable, a larger sample size may be considered the next time such a research is carried out on the related field. Larger sample size leads to better randomized distribution of respondents. This study can be extended to other sectors also. A greater variety of respondents across multiple age brackets and varied occupational backgrounds and levels would only bring dynamism to the study. This dynamism would lead to a more concrete study about the topic.
Implications and Scope for Future Research
We have also observed some implications and direction for future research. Almost there are enough studies on relating to need of effective HR policies, for improving the climate of the organization by bridging the present gap that has emerged because of organizations becoming more and more impersonal and mechanistic.
This study has further substantiated need for a personal approach with transparency for better employee engagement. If addressed with due care it will help in creating a synergistic work environment for achieving higher productivity. The future research areas specially connected with employee engagement and organizational effectiveness in ITES sector can be intervention of AI (Artificial Intelligence) and ML (Machine Learning) in this sector.
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Received: 07-Dec-2021, Manuscript No. ASMJ-21-10302; Editor assigned: 09-Dec-2021, PreQC No. ASMJ-21-10302(PQ); Reviewed: 30-Dec-2021, QC No. ASMJ-21-10302; Revised: 08-Jan-2022, Manuscript No. ASMJ-21-10302(R); Published: 18-Jan-2022