1.

INTRODUCTION

India has grown up to top ten economies in the world. The emergence of economic
reforms has created a new window of opportunities for employment in various
sectors. Employees give the brand a face and voice; they are the one who create the
customer stories which makes the brand creditable. A positive, enthusiastic and
committed human capital is the foremost requirement of any trade that can put forth
the best epitome and representation of his brand. Employees often get engaged
differently at work place depending upon their experiences of emotional
meaningfulness, safety and availability in specific situations. The implications are
that, engaged employees bring innovation and creativity, as they directly or indirectly
project a positive image of their organization. Their commitment portrays an
impression of a responsible organization including reputation for integrity, good
internal communication and a culture of innovation” as accounted by Corporate
Leadership Council, 2004. Organizations always look for people who are generally
enthusiastic to come to work every day and are highly passionate about their work.
Organizations with genuinely engaged employees have higher retention, productivity,
customer satisfaction, innovation, and quality. They also require less training time,
believe in teamwork, are committed to their job and lead to customer satisfaction and
long term relationship management with the brand.

The growing level of uncertainty in the business environment requires organisations

to continuously adapt to changes and accommodate different needs of the workforce.
Organisations often compete and attempt to survive by lowering prices, cutting costs,
redesigning business processes and downsizing the number of employees. Assuming
that there is a limit to cutting costs and downsizing, new approaches to human
resource management are inevitable for organisational survival and progress. Rather
than focusing on reducing costs, the shift of the focus in human resource management
(HRM) is to build employee engagement.

The challenge today is not just retaining talented people, but fully engaging them,
capturing their minds and hearts at each stage of their work lives. Employee
engagement has emerged as a critical driver of business success in today’s
competitive marketplace. Further, employee engagement can be a deciding factor in
organizational success. Not only does engagement have the potential to significantly

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affect employee retention, productivity and loyalty, it is also a key link to customer
satisfaction, company reputation and overall stakeholder value. Employee
engagement is a complex concept, with many issues influencing engagement levels.
Consequently, there are many pathways to foster engagement, with no one kit that fits
all organizations. While each company may define employee engagement differently,
ultimately, the key to effective engagement will be rooted in the flexibility of
approach most appropriate for each individual firm.

In recent years, there has been a great deal of interest in employee engagement.
Employee Engagement is the extent to which employees think, feel, and act, in ways
that represent high levels of commitment to their organization. Engaged Employees
are motivated to contribute 100% of their knowledge, skills, and abilities to help their
organization succeed. The concept of employee engagement is widely discussed and
is the subject of numerous books, websites, research papers, conferences and so on.
Confusion is sometimes caused by people using the term interchangeably for other
constructs, such as employee commitment, job satisfaction, employee happiness or
internal communication. Along with enhanced technology and streamlined work
processes, gained employees’ discretionary effort, so called engagement, may be one
of the most effective ways to increase productivity and improve business results. In
fact, many literatures have claimed that employee engagement predicts employee
outcomes, organizational success, and financial performance. As innovation, speed to
market, and the need for ever-increasing efficiency define the competitive, edge,
organizations around the globe are counting on motivated workforces to help them
succeed.

Banking being one of the key service sectors in India has witnessed an explosive
growth and expansion. Rising incomes enhanced the need for banking services which
resulted in great boom in terms of advanced technology, prompt communication
system and conception of various banks to cope up with multinational environment.
Mostly in banking sector, employee engagement plays a very crucial role. Because
employees’ who were working inside the banking sector are handling risky task in
their daily job. The research endeavours to study the influence of various factors on
levels of engagement of employees at work.

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2.A BRIEF REVIEW OF THE CONCEPT PROPOSED IN THE STUDY
Employee Engagement
Employee engagement is a property of the relationship between an organisation and
its employees. An “engaged employee” is defined as the one who is fully absorbed by
and enthusiastic about their work and so takes positive action to further the
organisation’s reputation and interests.”
Employee engagement, also called worker engagement, is a business management
concept. An "engaged employee" is one who is fully involved in, and enthusiastic
about his work, and thus will act in a way that furthers the institution's interests.
According to Scarlett Surveys, "Employee Engagement is a measurable degree of an
employee’s positive or negative emotional attachment to their job, colleagues and
institution which profoundly influence their willingness to learn and perform at
work".

Factors influencing employee engagement

Career Development
Career development practises help organisations retain talented employees and also
provide personal development opportunities. Employees tend to invest in companies
that invest in them by planning for their career development. Career development is a
global factor in employee engagement. Also adequate level of employee development
via training, skills and learning can result in making employees more engaged with
respect to the job and the organisation.

Effective Management of talent

Employee engagement-friendly culture appreciates the diversity related to talents and
skills that come in with the employees and prompts the employees to aspire for and
achieve the vision of future. A talent management strategy comprising of career
planning, organisational support and incentives can result in high engagement and
reduced attrition levels in the organisation.

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Leadership
Employees show more engagement towards the organisation when they see
themselves getting praised by their immediate managers, they have the leader’s
attention (for example, one-on-one conversations).In case of entrepreneurial firms the
leadership needs to be visionary, future oriented and should involve the employees in
their vision in order to increase employee engagement. It was also found that a key
driver to employee engagement is the employees thinking that their leadership is
committed. The quality of leader member exchanges between supervisors and
employees affect the engagement levels of the employees.

Clarity of Company Values, Policies and Practises

HR practises and policies play an important role in defining the relationship between
the employees and employers. It was found that there is no direct connection between
HR practices and policies and employee engagement. In fact, it was revealed that the
relationship among HR practices and engagement is rather indirect. Two key factors
are impacted by HR practises, the line manager behaviour and the person–job fit. The
actual relationship exists between these two and employee engagement. Employees
should be made to feel that their companies’ values are clear and unambiguous in
order to generate higher engagement.

Respectful Treatment of Employees

A culture wherein respect is valued results in better engaged employees. A managers’
attitude of respect towards the employee and fair treatment of the employees
comprehends if a manager would listen to the ideas or suggestions of the employee, or
whether makes the employees feel valued or whether they can communicate
effectively with the employees. Involvements that come in contact with normal
practice play the role of motivators and make the employees feel valued and thereby
enhance engagement.

Company’s Standards of Ethical Behaviours

An organisation’s ethical standards contribute to engagement of an employee. The
way employees are prepared to support the services and products of the company
depends on their perception of quality of the services and goods. Higher employee
engagement is also linked with higher levels of customer engagement. The image of

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the company as perceived by the employees also depicts the engagement levels of the
employees. Organisational citizenship behaviour also positively impacts employee
engagement.

Empowerment
Employees feel that they should be able to express their views for decisions that might
affect their functions. The leadership of highly engaged workplaces makes a
challenging and trusting environment, wherein employees are urged to disagree with
prevailing orthodox practises, to innovate and help the organization grow. The ability
of employees to give their views to the senior management also impacts engagement.

Fair Treatment
The employee’s engagement tends to be higher when the boss or superior provides
them with equal opportunity for advancement and growth for all employees.
Egalitarian pay structures also impact employee’s engagement level in the
organisation. Greater amounts of informational justice lead to more behavioural and
cognitive engagement towards work with symptoms of greater commitment and
motivation, taking pride in work and feeling of excitement for it.

Performance Appraisal
Another important criterion for evaluating the engagement level of an employee is the
fair rating of the performance of the employee. An organisation following an
appropriate appraisal technique, known to be unbiased and transparent, tends to show
higher level of employee engagement. Communication between manager and
employee regarding performance expectations and role clarity with respect to the
employee’s role also increase engagement levels.

Pay and Benefits

An organisation should have proper salary systems in place so as to motivate the
employees to work in the firm. So as to enhance the engagement level the employee
has to be provided with specific compensation &benefits.

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Satisfaction
Satisfaction is the stepping stone to engagement; therefore it is important for an
organisation to match the goals of the job to the individual goals of the employee so
that he can feel satisfied about his job. Employees with higher levels of self-efficacy
are more likely to be engaged when it comes to work as it leads to a higher
temperament to spend extra efforts and energy completing tasks and therefore greater
absorption and involvement.

Family Friendliness
It refers to an individual’s families’ influence on his or her work. Engagement comes
into the picture when the employee develops an emotional attachment with the
organisation as a result of the benefits provided for his family by the organisation.

Communication
Long-term engagement starts with good communication between employer and
employees as well as among co-workers.

Organisation Politics
The politics in the organisation impacts the employee’s engagement in a negative
manner. Employees who work in a political environment displayed strong negative
emotions which in turn could be responsible for hindering their growth along with
learning & development. This could directly impact work engagement, which might
result in negative job outcomes, lower organizational commitment and greater
turnover intentions.

Emotional Factors
Emotional aspects like rationality also come into the picture in the discussion about
drivers of employee engagement as they are linked to personal satisfaction and sense
of inspiration. Example Family stress, work related stress.

The drivers of Employee Engagement are identified through the literature review and
already existing Engagement Models. They are further critically reviewed to identify
the gaps and to suggest the scope of future research particularly in the Banking
Sector. However there are many factors that directly or indirectly influence the level

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of engagement at work but this study will prominently be focussing on various
variables including leadership, communication, work practices and spirituality and the
level of impact they have on engagement levels of employees at work.

3. BRIEF REVIEW OF THE WORK ALREADY DONE IN THE FIELD

Saxena (2015), found the connection between employee engagement and

organization culture and its impact on organizational performance in terms of
productivity and profitability. It revealed the direct connection between employee
engagement and organization culture and organization performance and proved that
employee engagement is crucial for job satisfaction and employee loyalty and
retention in the organization.

Mokaya (2014), found that Employee engagement was greatly influenced by

performance management, personal development and growth, workplace recreation
and remuneration package. However, among the determinants remuneration is the
highest contributor of employee engagement with workplace recreation having the
least influence. Low engagement and job satisfaction can contribute to multiple
organizational problems and have been associated with increased levels of turnover
and absenteeism, adding potential costs to the organization in terms of low
performance and decreased productivity. It is important for bank management to be
aware of the needs and make up of their workforce, as well as the impact of
environmental factors, when developing their programmes and policies that have
implications on engagement.

Swathil S. (2013), found in his study that in today economic downturn situation,
organization started to look into its people asset so that they can utilize the human
asset to sustain the competitiveness in the industry. Employees who are engaged in
their work and committed to their organizations give companies crucial competitive
advantages -including higher productivity and lower employee turnover.

Mamta, Sharma R. Baldev (2011), conducted research on “Study of Employee

Engagement and its Predictors in an Indian Public Sector Undertaking”. Three factors
namely pay; job content and objectivity are found to be the predictors of employee
engagement.

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Wallace (2006), a study on drivers of engagement predicted four drivers, namely
employee welfare, empowerment, employee growth and interpersonal relationships.
The three elements of employee engagement viz contributions, connections, growth
and advancement, were identified through the study.

Otken Ayse, Begum & Erben GulSelin (2010), found in their study that Social
support in the organizational context has a positive influence on several attitudes and
behaviours of employees. Especially, when employees receive a support from a key
factor in the workplace, they reciprocate through positive outcomes.

Bakker and Schaufeli (2008), found that employees who have positive interactions
with their managers have increased levels of engagement.

Vazirani (2007), found that an organization should have a proper pay system; provide
equal opportunities for growth and advancement to all the employees. Only a satisfied
employee can become an engaged employee, organizations with high levels of
engagement provide employees with opportunities to develop their abilities, learn new
skills, acquire new knowledge and realize their potential.

Jyotsna (2007), found that in her study that a good level of engagement may lead to
high retention, but only for a limited time.

Schaufeli (2006), concluded that blue collar workers were less engaged than
managers, educators, and police officers. Engagement did not seem to differ
systematically between genders.

Lockwood (2006), concluded from his study that engaged employees leads to
engaged customers, and this, in turn converts into long term profitability.

Joe & Mclean (2006), concluded in their study that engaged employees within an
organization provide a competitive advantage to organizations.

Woodruff (2006), in his study found that non-financial motivators also influence
employee’s engagement. Some of these non-financial motivators contributing to
engagement are: advancement, autonomy, and commitment to employees, exposure to

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senior management, praise, support, challenge, trust, respected organization, and
respect for work/life balance.

Walumbwa, Orwa, Wang, and Lawler (2005), found that using a transformational
leadership style leads to increased organizational commitment and job satisfaction.

Lado & Wilson (1994), found in their study that employee engagement has a
substantial impact on employee productivity and talent retention.

Britt, Adler and Bartone (2001), in his research found that engagement in
meaningful work can yield benefit from work. In a recent study it is explored that
where the level of engagement had increased, absenteeism had decreased among
employees.

4. NOTEWORTHY CONTRIBUTION IN THE FIELD OF PROPOSED WORK

A number of models of employee engagement have been proposed by various

researchers and consulting groups studying the phenomenon. There are many
individual and organizational factors that determine whether employees become
engaged, and to what extent they become engaged.

Mercer’s Model of Employee Engagement (2007)

Over the last several years, Mercer had conducted studies around the world in order
identify the drivers that contribute most to higher levels of employee engagement.
And in the study four global drivers of employee engagement were identified namely:
work itself, leadership, recognition and rewards, and communication. This can
provide the framework for a global engagement strategy, lending cohesiveness and
consistency to engagement initiatives.

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RBC's New Model of Employee engagement by Moorcroft (2006)

This reported that the changes to employee communications showed improvement in

employee alignment and engagement scores. Interestingly, the communication budget
was actually reduced; illustrating that a more focused and thought through strategy
can result in better value for money. (Cited by Bhatia, 2011).

Robinson’s Model of the Drivers of Employee Engagement (2004)

The approach to employee engagement, as discussed by Robinson, stresses the

importance of feeling valued and involved as a key driver of engagement. Within this
umbrella of feeling valued and involved there are a number of elements that have a
varying influence on the extent to which the employee will feel valued and involved.
The model illustrated the strong link between feeling valued and involved and
engagement.

Drivers of Engagement – Hewitt Study (2000)

Hewitt‘s model begins with the employees being engaged regardless as to what level
engagement may or may not be, or the job fit of the employee (As cited by Harris,
2006). The behaviour of the employees is influenced by their level of engagement.
These behaviours have a direct impact on the organization and customer experience.
The customer then affects the business results based on these experiences with the
organization and its employees. Finally, those business results will positively or
negatively impact shareholder value and stock performance (cited by Harris, 2006).

Drivers of engagement according to Hewitt are (1) People (2) Compensation (3)
Processes and procedures (4) Quality of life (5) Opportunities and (6) Work / values.

Gallup’s Hierarchy of Engagement (1999)

Gallup created a model to emphasize the relationship of management and the

organization. First, an organization needs to identify its strengths, and then determine
the best fit for each employee. Gallup believes that once one combines appropriate
employee job fit with great managers, then the organization will have engaged
employees. The model continues reinforcing the theory that engaged employees will
then produce engaged customers which will impact business results including growth,
profit increase and stock performance.

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5. OBJECTIVES AND PROPOSED METHODOLOGY OF RESEARCH

1. To explore the factors affecting employee engagement in private sector banks.

2. To examine the role of organizational policies in driving employee
engagement.
3. To study the impact of high performance work practices on level of employee
engagement.
4. To study the role of leadership in engaging employees at work.
5. To find out the relationship between employee engagement and employee
performance.
6. To examine the effect of Recognition & Rewards on employee engagement.

HYPOTHESIS:

The formulation of hypothesis will be done on the basis of collected data from the
area of study at the stage of Data Analysis. Therefore, Hypothesis is proposed to be
drawn after reviewing the literature and collected data during the period of research.

RESEARCH DESIGN:

Descriptive as well as analytical research design method is planned for this research.
Since the research is related to the study of factors influencing employee engagement,
therefore descriptive method would find appropriate research design to describe
proposed characteristics under investigation.

RESEARCH APPROACH:
This study will use survey method of collecting data. This process is best suited for
descriptive research like this one.

AREA OF STUDY:
Research will be confined to Madhya Pradesh. It is proposed to collect data from the
private banks of four prominent cities of Madhya Pradesh. The banks under
consideration are HDFC, AXIS and ICICI.

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SAMPLING PLAN:

Sampling is the process of selecting units (e.g., people, organizations) from a

population of interest so that by studying the sample we may fairly generalize our
results back to the population from which they were chosen. Following elements of
sampling are proposed to be taken during the study:

Sampling Unit:

Sampling unit will be Individual bank employee.

Sample Size:

It is proposed to elicit responses from 300 individual employees.

Sources of Data:
Both primary and secondary data will be used for the purpose of study.

METHODS OF DATA COLLECTION:

Primary Method- A Structured Questionnaire will be employed to collect the

primary data. Questionnaire will contain dichotomous, multiple choice and close
ended questions to facilitate the bank employees give response and helpful in making
an analysis and interpretation of the data.

Secondary Method- The secondary data will be taken from sources like Books,
Newspapers, Magazines, Journals and relevant Websites.

SAMPLING METHOD:
Multiple stage sampling will be used to collect data from respondents.

As survey of Madhya Pradesh may be difficult because the field of study is widely
scattered and there are many private banks as well. Hence, Multiple Stage Sampling
would be appropriate to carry out results.

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A sample of 100 employees each will be taken from three leading private sector bank.
Further, the sample will be collected from four prominent cities of Madhya Pradesh.

TOOLS FOR DATA ANALYSIS AND HYPOTHESIS TESTING:

To analyse the data, this study will resort to basic statistical methods like Measures of
Central Tendency and Standard Deviation. While the relationship between variables
under study and the impact of one variable over other will be derived with the help of
Correlation and Regression Analysis respectively.
However various statistical tests like Chi-square, ANOVA, and Regression etc. will
be used with the help of SPSS (Statistical Package for Social Science) software.

TOOLS FOR DATA REPRESENTATION:

Tabulation & Cross Tabulation using percentage and frequency will be used to
classify the data on the basis of various characteristics. Bar Charts, Pie Charts and
Graphs will also be used for the purpose of representing classified data. It will give an
easy access to the readers about the information collected from the respondents.

6. LIMITATIONS
1. There may be variations in actual and disclosed preferences of respondents.

2. The study is confined to some cities of M.P., so may not give exact results.

3. The study is confined to only 3 private banks, so results may vary for other banks.

4. Only some of the factors influencing the employee engagement are taken into
consideration.

7.EXPECTED OUTCOME OF THE PROPOSED WORK

1. The research findings will facilitate the employers in understanding the level of
engagement of various employees at work.

2. This study will highlight the impact of demographic factors on employee

engagement.

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3. This research work will be useful for employers for better understanding of factors
influencing the level of engagement of employees at work.

4. The study will help employees to recognize their commitment and to understand if their
commitment has an effect on the level of Performance.

5. The study will also work as a secondary source of data for further studies in this
area.

CHAPTER PLAN

Chapter 1 Introduction

Chapter 2 Review of Literature

Chapter 3 Objectives, Hypotheses and Research Methodology

Chapter 4 Data Analyses, Hypotheses testing and Interpretation

Chapter 5 Findings and Discussion

Chapter 6 Conclusion and Recommendations

Bibliography and Annexure

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BIBLIOGRAPHY

Books:

 Kothari C. R., Research Methodology: methods and Techniques, 4nd edition

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 Dessler, G., Human Resource Management , New Jersey: Prentice
Hall.2000.
 Abbasi, S. & Hollman K., The Real Bottom-line. Public Personnel
Management.

Research Papers:
 BhatnagarJyotsna(2007), “Talent management strategy of employee
engagement in Indian ITESemployees: key to retention.” International
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 Bhatia Neeta,“Employee Engagement practices and its effect on employee
performance with special reference to ICICI and HDFC Bank in lucknow”,
International journal of Scientific & Engineering Research Volume 2, Issue
8, August 2011.
 Gallup (2006), “Engaged Employees Inspire Organization Innovation”,
October 12, 2006.TheGallup Management Journal, accessed at
http://gmj.gallup.com/content/24880/GallupGStudyGEngagedGEmployees
GInspireGCompany.aspx.
 Hewitt Aon (2012), ‘Trends in Global Employee Engagement’, pages 5-10,
2012.
 Lockwood N.R. (2007),“Leveraging employee engagement for a
competitive advantage”, SHRM Research Quarterly. Alexandria, VA:
SHRM Foundation.
 Mani V. (2011), “Analysis of Employee Engagement and its predictors”,
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 Mercer (2007), “Exploring the Global Drivers of Employee Engagement”,
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 Otken, A.B.&Erben G.S. (2010),“Investigating the Relationship between
Organizational Identification and Work Engagement and the Role of

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 Supervisor Support.” Journal of Economics & Administrative Sciences,
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 Robinson D., Perryman S. and Hayday S. (2004),“The Drivers of
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 Swathil S. (2013),“Effecting Employees Engagement Factors”, International
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 Sharma, Baldev R. (2010),“Determinants of Employee Engagement in a
Private Sector Organization: An Exploratory Study”, Advances in
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 Schaufeli W.B., Bakker A.B., SalanovaM. (2006),“The measurement of
work engagement with a brief questionnaire: a cross-national study,
Educational and Psychological Measurement”, 66, 701-16.
 Saxena V. & Srivastava R.K (2015), “Impact of employee engagement on
Employee performance–case of manufacturing sectors”, International
Journal for Management Research & Business Strategy, April 2015.
 Vazirani N.(2007), “Employee Engagement Working Paper”, SIES College
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 Woodruffe C. (2006),“Employee engagement”, British Journal of
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Signature of Supervisor Signature of Candidate

Signature & Seal of HOD

Study Centre
Department of Business Administration, A.P.S. University, Rewa (M.P.)

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