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EnhancingtheemployeeenagementTheMediatingRoleofExchangeIdeology.pdf
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Enhancing the Employee Engagement: The Mediating Role
of Exchange Ideology (Meningkatkan Keterlibatan Pekerja: Peranan Perantaraan Ideologi Pertukaran)
Lianto
(Faculty of Economics and Business, Universitas Tanjungpura)
(Sekolah Tinggi Ilmu Ekonomi Widya Dharma)
Anis Eliyana
(Faculty of Economics and Business, Universitas Airlangga)
Rizky Fauzan
(Faculty of Economics and Business, Universitas Tanjungpura)
ABSTRACT
This study analyses a model that links three predictors namely workplace spirituality, self-
efficacy, and person-organization fit to employee engagement through the mediating role of
exchange ideology. Drawing on social exchange theory, researchers expected that exchange
ideology would mediate the relationship between the given antecedents and employee
engagement. This study used quantitative method to collect data and WarpPLS5.0 to analyze
the data. The results of a survey conducted among 100 employees of credit unions in West
Kalimantan, Indonesia, indicated that employees with stronger spirituality, self-efficacy, and
values compatibility engaged better at work. Researchers also found that exchange ideology
did not mediate the relationship between workplace spirituality and employee engagement
although the exchange ideology mediated the relationship between two predictors namely
self-efficacy and person-organization fit to employee engagement.
Keywords: Workplace spirituality; self-efficacy; person-organization fit; exchange ideology;
employee engagement
ABSTRAK
Kajian ini mengkaji model yang menghubungkan tiga faktor penentu, iaitu kerohanian
tempat kerja, keberkesanan kendiri, dan kesesuaian individu-organisasi untuk keterlibatan
pekerja menerusi peranan perantaraan ideologi pertukaran. Menurut teori pertukaran sosial,
peyelidik menjangkakan ideologi pertukaran menjadi pengantara dalam hubungan antara
antesedan yang diberi dan keterlibatan pekerja. Kajian ini menggunakan kaedah kuantitatif
untuk mengutip data dan perisian WarpPLS5.0 digunakan untuk menganalisis data. Hasil
kaji selidik yang dilakukan ke atas 100 orang pekerja syarikat kredit di Kalimantan Barat,
Indonesia, menunjukkan bahawa pekerja yang mempunyai kerohanian yang lebih kuat,
keberkesanan kendiri, dan keserasian nilai akan bekerja dengan lebih baik di tempat kerja.
Para penyelidik juga menemukan bahawa ideologi pertukaran tidak memainkan peranan
pengantara bagi hubungan antara kerohanian tempat kerja dengan keterlibatan pekerja
meskipun ideologi pertukaran menjadi pengantara hubungan antara dua faktor penentu,
iaitu keberkesanan kendiri dan kesesuaian nilai individu dengan nilai organisasi untuk
keterlibatan pekerja.
Kata kunci: Kerohanian tempat kerja; keberkesanan kendiri; kesesuaian nilai individu
dengan nilai organisasi; ideologi pertukaran; keterlibatan pekerja
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INTRODUCTION
One of the fundamental elements of the survival of an organization is a sustained competitive
advantage generated by the valuable, rare, inimitable, and non-substitutable resources
(Barney 1991; Ichrakie 2013). The Harvard Business Review (2015) reported that 71% of
respondents ranked employee engagement as very important to achieve organizational
success. Engaged employees look for a better way to finish their work, spend less time for
routine activities, and use resources efficiently. The employee engagement influences
effectiveness and innovation (Welch 2011), performance (Macey & Schneider 2008), and the
sustained competitive advantage (Albrecht et al. 2015; Nair & Salleh 2015). Ratanjee and
Emond (2013) stated that the engagement factor plays a vital role, for it motivates business
activity, competitive advantage, and sustainable organization. Since the introduction of Kahn
(1990), this concept has been drawing the attention of researchers, either in business,
management, industrial psychology/organization, or human resources (Albrecht et al. 2015;
Crawford, LePine & Rich 2010; Gruman & Saks 2011; Welch 2011; Wollard & Shuck 2011).
Kahn (1990) defined employee engagement as an involvement of an employee in his role
where he works and expresses himself physically, cognitively, and emotionally. The
involvement motivates loyalty within the employee so that he or she can reduce the intention
to quit (Macey & Schneider 2008). The engaged employee, who is concerned with the
success of an organization, will make a contribution that is more than what a job requires
(Mercer, Carpenter & Wyman 2007).
In adverse circumstances, workforce is becoming disengaged at fast rates. The global
level of employee engagement is in crisis “with serious and potentially lasting repercussions
for the global economy” (Mann & Harter 2016). Based on the data of 230,000 full-time and
part-time employees in 142 countries, 24 percent were actively disengaged, 63 percent were
not engaged, and only 13 percent of employees were highly engaged in their jobs (Gallup
2016). The findings indicate that at the global level, the workplace could be described more
as a source of frustration than as a place of self-realization. The grim picture of employee
engagement reminds us of the importance of a research. To improve employee engagement, a
critical and holistic research needs to be done. It is a substantial matter that today’s
organization tries to review the key driver of employee engagement (James, McKechnie &
Swanberg 2011). Responding to the lack of employee engagement, the focus of this research
is to develop an empiric model in the process of improving employee engagement.
This study contributes to the on-going discussion about the antecedents of employee
engagement through examination of exchange ideology as a mediator. This study may be
among the first research to examine exchange ideology as a mediator for the effect of
workplace spirituality, self-efficacy, and person-organization fit on the employee
engagement.
LITERATURE REVIEW
The concept of workplace spirituality urges employees to discover and apply spiritual values
(Mehta & Joshi 2010). An organization that assists employees to find the inner meaning of
their work will reach a peak of creativity, learning process, and passion in their mind
(Fawcett et al. 2008). A spiritually-minded organization helps its employees to develop and
realize the fulfilment of their great potential (Robbins & Judge 2013). Saks (2011)
emphasized the importance of including the variable of workplace spirituality as a predictor
of employee engagement and its comparison with other predictors. The concept of workplace
spirituality will enrich the model of employee engagement. In line with Saks (2011), Roof
(2015) stated that a deeper understanding of the relationship between workplace spirituality
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and employee engagement indicates that workplace spirituality plays key role as a potential
component to respond to the global decrease of engagement at the workplace. Kolodinsky,
Giacalone, and Jurkiewicz (2008) found that workplace spirituality was positively related to
job involvement, a variable that has some similarity to engagement. Previously, Mirvis
(1997) found that to engage employees with their work, organizations needed to pay attention
to the employees’ spiritual life and their collective potential. Based on the above background,
this research would relate workplace spirituality to employee engagement with the following
hypothesis:
H1 Workplace spirituality is positively related to employee engagement
Self-efficacy refers to individual beliefs in doing their work (Bandura 2012). The higher
the self-efficacy of a person, the higher the belief in his ability to achieve success. In difficult
situations, people with low self-efficacy will easily give up. Conversely, people with high
self-efficacy will try hard to overcome the obstacles he faces (Stajkovic & Luthans 1998).
The involvement of self-efficacy in this model of research is based on the following research
gap. Saks (2006) proposed that the upcoming researchers needed to take into consideration
the predictor of employee engagement that are different from variables of individual
differentiation, such as self-esteem, locus of control, and self-efficacy. Luthans and Peterson
(2002) stated that self-efficacy had a significant effect on employee engagement. It is a better
predictor of task performance than various traditional workplace attitudes (e.g. satisfaction
and organizational commitment), personality traits, level of education, training, goal setting,
and feedback interventions. Xanthopoulou et al. (2008) found that self-efficacy is a predictor
of performance through employee engagement. Self-efficacy influences learning capacity,
motivation, and individual performance since an individual will try to learn and only do
things that he or she is convinced that he or she is able to perform (Lunenburg 2011).
Albrecht and Marty (2017) also found that self-efficacy has significant positive associations
with work engagement. Building on this literature and following Saks (2006), researchers
suggest that self-efficacy is positively related to employee engagement. Therefore, the
hypothesis is:
H2 Self-efficacy is positively related to employee engagement
Person-organization fit refers to the compatibility between the value of the employee and
the value of the organization (Yaniv & Farkas 2005). The conceptualization of person-
organization fit is based on the Schneider's Attraction-Selection-Attrition framework.
According to this framework, individuals are not randomly choosing a situation, but are
deliberately looking for an interesting situation. After selecting the situation, they will be part
of the situation and live within it. In the context of person-organization fit, an organization is
a situation in which people feel attracted, chooses to be part of it, and resides in it when there
is a match, and comes out of it when there is no match (Schneider 1987). At the end of their
analysis, Macey and Schneider (2008) stated that engagement could be a consequence of the
conditions of a work environment and dispositional characteristics at a workplace, and the
interaction of these two elements. Accommodating the contingent perspective (situational
context), they proposed the concept of person-environment (organization) fit which means a
compatibility between value internalized by the employees and the value of the organization.
Research of Lovelace and Rosen (1996) proved that the person-organization fit was the
predictor of work satisfaction, stress reduction, and intention to quit. According to Lv and Xu
(2018), the interaction of a high-performance work system and psychological contract on
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employee engagement was mediated by the person-organization fit. Hence, researchers
expected that person-organization fit would be positively related to employee engagement.
H3 Person-organization fit is positively related to employee engagement
Based on Saks’s suggestion (2006) about the role of exchange ideology between
engagement and its antecedent, this research proposes an exchange ideology as a mediating
variable. The concept of this ideology, which was promoted for the first time by Eisenberger
et al. (1986), consists of a convincing idea of reciprocity between employees and an
organization. Normally, what the employees do depends on the attitude of an organization.
In the context of working, Eisenberger et al. (1986) described exchange ideology as a
continuum. On one side of the continuum, an individual’s work performance is equal to the
reinforcement by the organization. If the employees are well treated, they will work hard,
otherwise, they will not work hard. On the other side of the continuum, an individual will
work hard without concerning about what they receive from the organization. Even so, they
will work hard although they are not well treated. This means that exchange ideology reflects
on an individual’s expectation of the individual and organization exchange.
Although no specific study has yet surveyed exchange ideology as a mediator between
employee engagement and the predictors, some studies have been made to observe the topic
of social exchange in the organization (Shore et al. 2006). Bal, Kooij and De Jong (2013)
have examined the mediating role of the psychological contract that related the
developmental HRM to employee outcomes. The psychological contract, which consists of
transactional and relational contracts, has a similar meaning to the two-continuum exchange
ideology. Yeh (2012) found that relational psychological contracts (similar to a lower
continuum of exchange ideology) had a positive influence on engagement. On the other side,
the transactional psychological contracts (similar to a higher continuum of exchange
ideology) had a negative influence on employee engagement. Analogically, researchers
expected the exchange ideology would have an indirect effect that would mediate the
relationship between employee engagement and the antecedents.
An employee who recognizes his spiritual identity will consider his work as a vocation.
He will fulfill his role and duties without being too concerned with how the organization
treats him. Besides, meaningful work is a key feature of a productive work environment
(Hackman & Oldham 1980). Experience in the meaning of work can create the excitement
that connects employees better with positive perceptions (Giacalone & Jurkiewicz 2003).
Employees also need to feel that they are part of a community in the workplace. According to
Duchon and Plowman (2005), the workplace should be seen as a place to share life. When
employees feel themselves as part of the community, they will identify themselves with the
goals of the organization and strive to achieve them. If all three dimensions of workplace
spirituality are experienced by employees, it is expected to create a low exchange ideology.
Employees will work hard no matter what they get in exchange. Concerning the above
description, researchers expected that workplace spirituality would enhance employee
engagement through exchange ideology. Researchers proposed the following hypotheses:
H4 Exchange ideology mediates the relationship between workplace spirituality and
employee engagement: workplace spirituality negatively relates to exchange ideology
(4a) and exchange ideology negatively relates to employee engagement (4b).
Employees with high self-efficacy will be more optimistic and intensive to involve
themselves in the organization. They can even ignore negative feedback. On the other side,
employees who have low self-efficacy tend to reduce the effort when it gets negative
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feedback (Bandura & Cervone 1986). Here, it is clear that self-efficacy can shape the
expected exchange ideology. In other words, employees will still perform even if they do not
get recognition from the organization. Hence, researchers hoped that self-efficacy would
enhance employee engagement through exchange ideology.
H5 Exchange ideology mediates the relationship between self-efficacy and employee
engagement: self-efficacy negatively relates to exchange ideology (5a) and exchange
ideology negatively relates to employee engagement (5b).
Researchers and practitioners agree that value compatibility between employees and
organizations is the key in managing flexible and committed workforce needed in a
competitive business environment (Bowen, Ledford & Natan 1991; Kristof 1996; Sekiguchi
2004). Various empirical research findings showed that a high level of fit between the value
of employees and the organization would be followed by a variety of positive behaviors.
These variables correlated with attitudes expected in work, such as job satisfaction and
commitment (Chatman 1989; Judge 1994; Vancouver & Schmitt 1991), labor turnover
intention (Chatman 1989; O'Reilly, Chatman & Caldwell 1991; Ambrose, Arnaud &
Schminke 2008), and prosocial behaviors, such as organizational citizenship behavior
(O'Reilly & Chatman 1986) and contextual performance (Goodman & Svyantek 1999;
Sekiguchi 2004). We expect that employees who feel satisfied by value compatibility would
reciprocate lower exchange ideology resulted positive behavior. For these reasons,
researchers hypothesized the following hypothesis:
H6 Exchange ideology mediates the relationship between person-organization fit and
employee engagement: person-organization fit negatively relates to exchange ideology
(6a) and exchange ideology negatively relates to employee engagement (6b).
METHODOLOGY
SAMPLE AND DATA COLLECTION
Researchers conducted this research by distributing questionnaires to 100 employees of eight
credit unions using a multistage sampling. In West Kalimantan, there were 31 credit unions
incorporated in the Center for Legal Credit Cooperatives. Each credit union had dozens of
branches spread across the city, coastal and inland areas of West Kalimantan. All employees
in the 31 credit unions are the study’s sampling frame. From the population, the target
population was selected based on three criteria; 1) the credit unions have been in operation
for more than 20 years; 2) total assets of IDR 200 billion and above, and 3) have 50
employees or more. Based on these criteria, only 8 credit unions were selected. From this,
researchers selected the respondents proportionately to the total amount of employees which
is 100 respondents. This is in line with Ghozali’s recommendation (2008) which stated that
for Partial Least Squares analysis, the research sample ranged from 30-100 respondents. The
fundamental reason for choosing credit unions as the context of the survey was that credit
unions played a key role in developing the socio-economic life of the people in West
Kalimantan. The appreciation of human dignity from this economic organization was
expressed by a systematic program to increase the social prosperity of the people by fighting
against poverty. Credit unions also educate and train their members to have financial literacy
and understand how to manage their money professionally.
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MEASUREMENT
Workplace spirituality was measured based on a scale developed by Ashmos and Duchon
(2000). This scale was empirically developed and validated. Researchers measured the self-
efficacy using a five-item scale adopted from Schwarzer and Jerusalem (1995). The person-
organization fit was measured using a four-item scale developed by Netemeyer et al. (1997).
To measure exchange ideology, researchers adopted a scale developed by Eisenberger et al.
(1986). The employee engagement was measured using a scale adopted from Rich, Lepine
and Crawford (2010). All items were measured using five-point Likert scale with 1 for
strongly disagree to 5 for strongly agree.
ANALYSIS
We examined the hypotheses by conducting partial least squares (PLS) path modelling in
WarpPLS5.0 using the two-step process advocated by Henseler, Ringle and Sinkovics (2009).
The two-step process encompasses the outer model assessment and the inner model
assessment. In the first step, the assessment focused on the measurement models. An
evaluation of PLS estimates showed the measurement validity and reliability according to the
criteria that were associated with the reflective and formative outer model. A measurement
model was examined for the five constructs in this study. In the second step, researchers
assessed the inner model or structural model. Reliable and valid outer model assessments in
the first step were the initiation of the inner path model estimation. In line with
recommendation of Henseler et al. (2009), researchers assessed a series of indices,
encompassing R2 (the coefficient of determination), the individual path coefficients, the
values of effect size (f2) that could be considered as the partial effect of the path model, and
assessment of the predictive relevance (Q2).
RESULTS
MEASUREMENT MODEL ASSESSMENT
An assessment of the outer model focused on the effort to examine the validity and
reliabilities of indicators of the latent construct of this research. The criteria used to examine
the reflective construct were indicators of reliability, internal consistency, convergent
validity, and discriminant validity. From the PLS output (Table 1), the loading factor of all
indicators fulfil the reliability condition, except for item 9 with a loading of 0.668 and item
14 with a loading of 0.573. Based on the rule of thumb, those two items had to be eliminated.
TABLE 1. Indicator loadings for reflective construct
Construct Item Loading Scale type
Self-efficacy 4 0.826 Reflective
5 0.835 Reflective
6 0.797 Reflective
7 0.774 Reflective
8 0.74 Reflective
9 0.668 Reflective
Person-
organization fit 10 0.762 Reflective
11 0.796 Reflective
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12 0.848 Reflective
13 0.838 Reflective
Exchange
ideology 14 0.573 Reflective
15 0.803 Reflective
16 0.847 Reflective
17 0.811 Reflective
The re-examination produces output as presented in the following Table 2. It shows that
the value of the composite reliability of the three reflective constructs is very good (self-
efficacy 0.902, person-organization fit 0.885, and exchange ideology 0.880), that is, >0.70
and it fulfills the criteria of internal consistency reliability.
TABLE 2. Indicator loadings and composite reliability for reflective
construct
Construct Item Loading Scale type Composite
Reliability
Self-efficacy 4 0.843 Reflective 0.902
5 0.827 Reflective
6 0.826 Reflective
7 0.774 Reflective
8 0.753 Reflective
Person-
organization fit 10 0.762 Reflective 0.885
11 0.796 Reflective
12 0.848 Reflective
13 0.838 Reflective
Exchange
ideology 15 0.802 Reflective 0.880
16 0.880 Reflective
17 0.844 Reflective
Assessing the convergent validity and discriminant validity, Table 3 shows the value of
AVE which is given in the diagonals. The value of the AVE is also very good (engagement
self-efficacy 0.648, person-organization fit 0.659, and exchange ideology 0.710), that is more
than 0.50 and therefore fulfilled the requirement of convergent validity. Table 3 summarizes
the result of analysis to show discriminant validity. It indicates that the value of the square
root of the AVE of each latent variable is larger than the square of the correlations. Fornell-
Larcker criteria for discriminant validity postulates that a latent variable should share larger
variance with its indicator instead of other latent variables. The square root of the AVE for
self-efficacy is 0.805, the person-organization fit is 0.812 and exchange ideology is 0.843;
this is higher than the value above and below them. This condition shows that the
discriminant validity of the three predictors fulfill the requirements.
TABLE 3. Correlation among construct scores (root of AVE in diagonals)
Construct WS SE POF EI EE
AVE = 0.573 AVE = 0.648 AVE = 0.659 AVE = 0.710 AVE = 0.741
Workplace spirituality (WS) 0.757 0.452 0.444 -0.297 0.554
Self-efficacy (SE) 0.452 0.805 0.601 -0.376 0.534
Person-organization fit (POF) 0.444 0.601 0.812 -0.414 0.566
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Exchange ideology (EI) -0.297 -0.376 -0.414 0.843 -0.315
Employee Engagement (EE) 0.554 0.534 0.566 -0.315 0.861
Compared to the reflective construct, the evaluation of formative construct is performed
by assessing the reliability and collinearity of the indicators. The parameter of indicator
reliability is the significant weight achieved by the resampling process. Meanwhile, the
parameter for collinearity is the value of the variance inflation factor (VIF). The referential
value for collinearity is VIF <5 or ideally according to some literature, VIF <2.5 – 3.3. To
evaluate the formative construct in this research, the following Table 4 shows the result of the
formative construct analysis of this survey, that is, workplace spirituality and employee
engagement based on loading indicator compared to other relevant criteria. From the table, it
can be seen that all indicators of the formative construct of workplace spirituality and
employee engagement have a significant weight value where ρ-value <0.001. So, all
formative indicators of this research have fulfilled the reliability’s requirements. The VIF
value of the two constructs also shows that the score <2.5. This indicates that there are no
problems of multicollinearity.
TABLE 4. Indicator weights for formative construct
Construct Workplace
spirituality
Employee
engagement SE ρ-value VIF WLS
Workplace
spirituality 1
0.390 0.000 0.090 <0.001 1.148 1
Workplace
spirituality 2
0.474 0.000 0.088 <0.001 1.362 1
Workplace
spirituality 3
0.452 0.000 0.088 <0.001 1.301 1
Employee
engagement 1
0.000 0.399 0.090 <0.001 2.318 1
Employee
engagement 2
0.000 0.403 0.090 <0.001 2.402 1
Employee
engagement 3
0.000 0.357 0.091 <0.001 1.520 1
Notes: P values < 0.05 and VIFs < 2.5 are desirable for formative indicators; VIF = indicator variance inflation
factor;WLS = indivator weight-loading sign (-1 = Simpson's paradox in l.v.)
STRUCTURAL MODEL ASSESSMENT
The output diagram as shown in Figure 1 shows us that the variance of exchange ideology is
influenced by variance value of workplace spirituality, engagement self-efficacy, and person-
organization fit which is 24.8%. This is indicated by the value of R2 that is 0.248. The result
of the estimation explains that the contribution of the three exogenous constructs
simultaneously is categorized as small. Besides, the variances of the latent endogenous
construct of employee engagement are influenced and can be explained by the variances of
workplace spirituality, self-efficacy, person-organization fit, and exchange ideology which
reach 50.6%. This is indicated by the value of R2 of 0.506. The value of such influence is
classified into a strong and substantial category. The result describes that the contribution of
the four predictors of employee engagement simultaneously is categorized as large or
substantial (≥0.45).
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Figure 1 indicates that workplace spirituality, on one hand, was significantly related to
employee engagement (β= 0.279, ρ= 0.002, f2= 0.157), which supported Hypothesis 1.
However, on the other hand, workplace spirituality is not significantly related to exchange
ideology (ρ= 0.201, NS), failing to support Hypothesis 4a. This signifies that exchange
ideology could not be a mediator for the relationship between workplace spirituality and
employee engagement. This analysis discovered both a positive relationship between self-
efficacy and employee engagement (β= 0.225, ρ= 0.009, f2= 0.128), and a negative
association between self-efficacy and exchange ideology (β= -0.175, ρ= 0.034, f2= 0.072),
which supported Hypotheses 2 and 5a. This research also found a positive significant
relationship between person-organization fit and employee engagement (β= 0.246, ρ= 0.005,
f2= 0.144), and a negative association between person-organization fit and exchange ideology
(β= -0.317, ρ<0.001, f2= 0.147), which gave support for Hypotheses 3 and 6a. Moreover, the
exchange ideology is negatively related to employee engagement (β= -0.163, ρ= 0.046, f2=
0.077), which confirmed Hypothesis 4b, 5b, and 6b. According to Zhao, Lynch, and Chen
(2010), the requirement to establish mediation was a significant indirect effect. The following
Table 5 summarizes the P-value and indirect effect of this research.
TABLE 5. ρ-values of indirect effect for paths with 2 segments
Construct Employee
engagement ρ-value
Workplace spirituality 0.013 0.105
Self-efficacy 0.029 0.048
Person-organization fit 0.052 0.036
Table 5 reveals that exchange ideology did not mediate the relationship between
workplace spirituality and employee engagement (non-significant in ρ-value=0.105).
However, these results confirmed the expected indirect effect through exchange ideology as a
mediator for relationships between self-efficacy and employee engagement (significant in ρ-
Workplace
Spirituality
(F)3i
Self-efficacy
(R)5i
Person-
Orgnization Fit
(R)4i
Exchange
Ideology
(R)3i
Employee
Engagement
(F)3i
β= -0.082
ρ= 0.201
f2= 0.029
β= -0.175
ρ= 0.034
f2= 0.072
β= -0.317
ρ<0.001
f2= 0.147
β= 0.279
ρ= 0.002
f2= 0.157
β= 0.225
ρ= 0.009
f2= 0.128
β= 0.246
ρ= 0.005
f2= 0.144
β= -0.163
ρ= 0.046
f2= 0.077
R2 = 0.248
R2 = 0.506
FIGURE 1. Hypothesized model and results
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value=0.048) and between person-organization fit and employee engagement (significant in
ρ-value = 0.036).
In assessing the effect of a particular independent variable on a dependent variable,
Figure 1 demonstrates the score of the effect size (f2) for each predictor. It indicates the
contribution of each predictor for the criterion variables’ coefficient (R2) in the model. R2 of
exchange ideology (0.248) derives from the contribution of workplace spirituality (0.029),
self-efficacy (0.072), and person-organization fit (0.147). The result of R2 (0.506) of
employee engagement is an accumulation of the contribution of workplace spirituality
(0.157), engagement self-efficacy (0.128), person-organization fit (0.144), and exchange
ideology (0.077). The predictive relevance of this research model can be traced from the Q-
square (Q2) on each dependent variable. The model has predictive relevance if Q2 > 0. The
output estimated by PLS shows that the exchange ideology (Q2= 0.247) and employee
engagement (Q2= 0.505) have predictive relevance.
DISCUSSION AND CONCLUSION
The results of this research showed that the three predictors were significantly related to
employee engagement. Two out of three predictors of the model, such as self-efficacy and
person-organization fit, influenced the employee engagement through exchange ideology as a
mediator. The weak connection between the spiritual dimension and employees’ perception
of what they should give to and what they should get from the organization might cause the
insignificant influence on the two constructs. The values of spirituality were still perceived as
a very personal one. Meanwhile, exchange ideology was linked strictly to the rights and
duties, a formal regulation of contribution and compensation, and the hierarchy of needs of
the employees. The gap of spiritual dimension and employees’ rights and duties caused the
above condition, although the employees hold the values of spirituality respectively, and at
the same time they hold the exchange ideology up to a certain level. These findings were not
in line with most of the workplace spirituality researches that discovered the various positive
impacts of spirituality on the organizational behavior (Burack 1999; Fawcett et al. 2008;
Freshman 1999; Korac-Kakabadse 2002; Leigh 1997; Metha & Joshi 2010; Pawar 2008;
Robbins & Judge 2013; Wagner-Marsh & Conely 1999).
Self-efficacy related significantly to exchange ideology. The employees needed to have
self-efficacy in their abilities to engage in their work and organization. Based on the previous
researches on self-efficacy, this result was in line with most of the researches on the outcome
of self-efficacy of all disciplines. According to the findings of a number of researchers
(Bandura 1989; Bandura & Cervone 1983; Lunenburg 2011; Luthans & Peterson 2002;
Mensah & Lebbaeus 2013; Propst & Koestler 1998; Xanthopoulou et al. 2008), self-efficacy
was a strong predictor of the various positive organizational behaviors.
Person-organization fit also related significantly to exchange ideology. If an employee’s
compatibility of values with the organizational culture was high, the exchange-ideology of an
employee’s behavior would be low. The implication of this finding is that in the process of
recruitment and selection, the organization should consider the behavior and values of the
candidates which are in accordance with the organizational culture. This finding was in line
with the previous researches done by researchers and practitioners who were in consensus
that the values compatibility between employees and organization was an important key to
develop the flexible and committed workforce needed by the competitive business
environment (Bowen et al. 1991; Kristof 1996; Sekiguchi 2004).
Workplace spirituality related significantly to employee engagement. If the implication
of the spirituality’s values at the workplace was higher and stronger, the employee
engagement would increase. The employees needed to be aware of their inner dimension and
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meaning of their work. They also need to be a member of a bigger community of work. The
implication of spiritual elements will increase employee engagement in work and
organization. This finding was in line with Word (2012) that found significant relationship
between workplace spirituality and job involvement and meta-analysis of Dent, Higgins, and
Wharff (2005) which found that spirituality had an intimate relationship to productivity. The
spirituality element supported the idea that each individual has an inherent need for work that
will bring meaning for him (Chalofsky & Krishna 2009).
Self-efficacy related significantly to employee engagement. If the workers are confident
that their ability to integrate into their work is strong, the level of engagement would also be
also high. Considering the process of enhancing the engagement of an employee in his or her
work and organization, the employees are convinced that it is necessary to prepare a space for
those who are really engaged in their work. This essential need is strengthened from
psychology perspective that emphasized the importance of self-confidence as an intrinsic
motivation to reach an achievement (Seligman & Csikszentmihalyi 2000). This finding was
in line with various research studies which found that self-efficacy related to engagement
(Luthans & Peterson 2002; Rich et al. 2010) and performance (Xanthopoulou et al. 2010).
Self-efficacy creates positive environment based on high self-confidence and this would lead
employees to be engaged more in their work in order to improve their performance. On the
other hand, if good performance is achieved, self-confidence of the employees will be
strengthened (Salanova, Llorens & Schaufeli 2011).
Person-organization fit related significantly to the employee engagement. If the
employee’s perceived compatibility of their values and the organization’s value was high and
strong, their will and effort to be engaged in work would also be strong. In the process of
enhancing employee engagement, organizations need to pay attention to the organizational
climate that enables employees to achieve congruence so there will be a balance between the
values of the workers and the corporate culture. This finding strengthened the previous
researches about the impact of person-organization fit (Ambrose et al. 2008; Chatman 1989;
Goodman & Svyantek 1999; Judge 1994; O’Reilly & Chatman 1986; O’Reilly et al. 1991;
Rich et al. 2010; Sekiguchi 2004; Vancouver & Schmitt 1991; Verquer, Beehr & Wagner
2003).
Exchange ideology is found to be related significantly to employee engagement. This
finding contributes to the novelty of the model of employee engagement development. This
research discovered that exchange ideology could be the mediator that linked self-efficacy
and person-organization fit to employee engagement. This contribution is important because
most of the previous researchers suggest exchange ideology as a moderating variable (Ahn,
Lee & Yun 2016; Eisenberger et al. 1986; He et al. 2014; Ladd & Henry 2000; Orpen 1994;
Pazy & Ganzah 2010; Redman & Snape 2005; Scott & Colquitt 2007; Takeuchi, Yun &
Wong 2011; Witt 1991, 1992; Witt & Broach 1993; Witt, Kacmar & Andrews 2001). Only a
few researchers that posit this construct in the mediating role (Ravlin et al. 2012). Through
the mediation of exchange ideology, this research explains the relationship between employee
engagement and its predictors.
MANAGERIAL IMPLICATIONS
In the process of improving sustained competitive advantage through the development of
employee engagement, organizations need to create the climate that accommodates
workplace spirituality. An employee who experiences the spiritual dimension of his work will
find the meaning of work for his life and feel that he is a member of a community. Such a
person will easily engage in work. Besides preparing a special space for the spiritual
development that motivates the employees to be more engaged, the organization needs to
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develop self-efficacy of each employee. High self-efficacy in the ability to be engaged in
work will strengthen all the efforts for better employee engagement. Employees will
persevere to face difficulties in work, interpersonal communications, and temporary limits of
the organization. Although each employee has his own way to achieve the value of
compatibility, the organization need to build a harmonious coherence between the value
within an employee and the organizational culture. The employees need continuous training
and socialization in order to strengthen the coherent values between the employees and the
organization. In this way, both the employees and the organization can walk together,
motivated by their shared values.
LIMITATIONS AND AVENUES FOR FUTURE RESEARCH
The result of the research, in general, confirmed the significant interrelationship of the
constructs, however, the explanatory power of this model is still at the moderate level. This
shows that the possibility of other predictors for explaining employee engagement.
The insignificant relationship between workplace spirituality and exchange ideology
might take place because of the dimension of workplace spirituality developed in the context
of Western culture of and way of thinking need to be contextualized in Eastern culture. It is
necessary to develop the basic idea of workplace spirituality considering the Sitz im Leben of
Indonesian (Asian) culture. Indonesian society has a local wisdom consisting of a series of
values in traditional spirituality which needs to be explored. Further research will be needed
to understand the workplace spirituality of Indonesians in the Eastern culture and way of
thinking. Such research can be done by using mixed methods or a triangulation method.
Future research needs to develop a more complex model of research so that the
explanatory power of the applied model can be improved. The complexity of a phenomenon
and reality is triggered by many potential variables as predictors. Future research can
consider the development of the research model that involves other constructs, such as
organizational commitment, perceived justice, perceived organizational support, and work-
life balance.
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Lianto (corresponding author)
Faculty of Economics and Business
Universitas Tanjungpura
Jl. Prof. Hadari Nawawi Pontianak
78124 Kalimantan Barat, INDONESIA.
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Sekolah Tinggi Ilmu Ekonomi Widya Dharma
Jl. H.O.S. Cokroaminoto 445, Pontianak, 78117 INDONESIA.
E-Mail: [email protected]
Anis Eliyana
Faculty of Economics and Business
Universitas Airlangga
Jl. Airlangga 4-6, Surabaya, 60286 INDONESIA.
E-Mail: [email protected]
Rizky Fauzan
Faculty of Economics and Business
Universitas Tanjungpura
Jl. Prof. Hadari Nawawi Pontianak
78124, Kalimantan Barat, INDONESIA.
E-Mail: [email protected]
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