EMPLOYEES’ WORK ENGAGEMENT AMONG EMPLOYEES AT

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The copyright © of this thesis belongs to its rightful author and/or other copyright owner. Copies can be accessed and downloaded for non-commercial or learning purposes without any charge and permission. The thesis cannot be reproduced or quoted as a whole without the permission from its rightful owner. No alteration or changes in format is allowed without permission from its rightful owner.

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WORK ENGAGEMENT AMONG EMPLOYEES AT KULIM (MALAYSIA) BERHAD

NURFADZIDAH BINTI AZHAR

MASTER OF HUMAN RESOURCE MANAGEMENT UNIVERSITI UTARA MALAYSIA

August 2019

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EMPLOYEES’ WORK ENGAGEMENT AMONG EMPLOYEES AT

KULIM (MALAYSIA) BERHAD

By

NURFADZIDAH BINTI AZHAR

Project Paper Submitted to School of Business Management

Universiti Utara Malaysia

in Partial Fulfilment of the Requirement for the Master of Human Resource Management

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Permission to Use

In presenting this project paper in partial fulfillment of the requirement for a Post Graduate degree from the Universiti Utara Malaysia (UUM), I agree that the Library of this university may make it freely available for inspection. I further agree that permission for copying this project paper in any manner, in whole or in part, for scholarly purposes may be granted by my supervisor, or in their absence, by the Dean of School of Business Management where I did my project paper. It is understood that any copying or publication or use of this project paper parts of it for financial gain shall not be allowed without written permission. It is also understood that due recognition shall be given to me and to the UUM in any scholarly use which may be made of any material in my project paper.

Request for permission to copy or make other use of materials in this project paper, in whole or in part should be addressed to:

Dean of School of Business Management Universiti Utara Malaysia

060100 Sintok

Kedah Darul Aman, Malaysia

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Abstract

Having highly engaged employees are critical for every organization. This is because highly engaged employees are more customer focus, more creative, take less sick leave, care about the future of the organization, put in greater effort in achieving organization objectives, feel proud with the organization that they work for, are inpired to do their best and motivated to deliver their organization’s objectives. Even though organization realized the importance of having highly engaged employees, it is one of their top challenges.Thus, this study is conducted with the intention to capture factors that might influence work engagement among employees. The study examines the direct relationship between ethical climate, ethical leadership, psychological empowerment, employee values and work engagement. A total of 181 questionnaire were distributed online through google form format to respondents at Kulim (Malaysia) Berhad after permission was granted by the company. Out of 181 questionnaire distributed, only 177 questionnaire were returned, representing a response rate of 97.79%. However, 156 were usable for further analysis, after deleting the outliers cases. Hypotheses for direct effect were tested using multiple regression analyses. Results showed that ethical climate, ethical leadership, psychological empowerment and employee values were positively related to work engagement. The findings indicate that work engagement among employees can be enhanced by creating an ethical work environment, practicing ethical leadership style, giving the opportunity to employees to actively invlove with their work, and focusing on positive values like fairness.

Keywords: Work engagement, ethical climate, ethical leadership, psychological empowerment, employee values

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Abstrak

Memiliki pekerja yang mempunyai tahap keterlibatan yang tinggi adalah penting bagi setiap organisasi. Ini kerana pekerja yang mempunyai tahap keterlibatan yang tinggi lebih fokus pelanggan, lebih kreatif, kurang mengambil cuti sakit, mengambil berat akan masa depan organisasi, meletakkan usaha yang tinggi untuk mencapai objektif organisasi, merasa bangga dengan organisasi tempat mereka bekerja, mempunyai inspirasi untuk melakukan yang terbaik dan bersemangat untuk melaksanakan objektif organisasi. Walaupun organisasi menyedari akan kepentingan memiliki pekerja yang mempunyai tahap keterlibatan yang tinggi, ia adalah salah satu cabaran yang utama. Oleh yang demikian, kajian ini dilaksanakan dengan harapan untuk mengenal pasti faktor yang mungkin mempengaruhi keterlibatan kerja dalam kalangan pekerja. Kajian ini mengkaji hubungan langsung antara iklim etika, kepimpinan etika, pengupayaan psikologi, nilai individu dan keterlibatan kerja.

Sebanyak 181 borang soal selidik telah diedarkan secara atas talian menggunakan format borang google kepada responden di Kulim (Malaysia) Berhad. Daripada 181 borang soal selidik yang diedarkan, 177 soal selidik telah diterima semula, dengan kadar maklumbalas sebanyak 97.79%. Walaubagaimanapun, 156 boleh digunakan untuk analisis selanjutnya. Hipotesis ke atas kesan langsung diuji menggunakan analisis regresi berganda. Dapatan kajian menunjukkan bahawa iklim etika, kepimpinan etika, pengupayaan psikologi, nilai individu mempunyai hubungan yang positif dengan keterlibatan kerja. Dapata ini memberi gambaran bahawa keterlibatan kerja dalam kalangan pekerja boleh ditingkatkan dengan membentuk persekitaran kerja yang etika, mempraktikkan gaya kepimpinan etika, memberi peluang kepada pekerja untuk terlibat secara aktif dalam kerja mereka dan memberi fokus terhadap nilai-nilai positif seperti keadilan.

Kata kunci: Keterlibatan kerja, iklim etika, kepimpinan etika, pengupayaan psikologi, nilai pekerja

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Acknowledgement

In the name of Allah, the Most Merciful and the Most Compassionate, all praise is due to Him for giving me the strength, patience, and motivation in completing this research project.

I would like to thank the entire academics and administrative staff of Universiti Utara Malaysia, especially the School of Business Management, College of Business for the invaluable support throughout my candidature. I owe an immense debt to Associate Professor Dr Siti Zubaidah Othman, for all the energy, care and enthusiasm she had devoted to this effort. Without her professional guidance and support, I would not be where I am today.

To my beloved parents, and my family members, thank you for all your prayers, patience, support, and word of encouragement for me to keep moving and complete my research project. Also, to all my friends for their continuous support and constructive comments.

Finally yet importantly, I would like to express my gratitude to the management of Kulim (Malaysia) Berhad, especially the Human Capital Management Department for allowing the research to be conducted and for participating in the study. Without their sincere participation, this study will not be as successful as today.

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Table of Content

Permission to Use ... i

Abstract ... ii

Abstrak ... iii

Acknowledgement... iv

Table of Content ... v

List of Tables... viii

List of Figures ... ix

CHAPTER 1 INTRODUCTION ... 1

1.1 Background of Study ... 1

1.2 Problem Statement ... 2

1.3 Research Questions ... 5

1.4 Research Objective ... 6

1.5 Significance of Study ... 6

1.6 Scope of Study ... 7

1.7 Definition of Key Terms ... 7

1.8 Organization of Chapters ... 8

CHAPTER 2 LITERATURE REVIEW ... 10

2.1 Introduction ... 10

2.2 Understanding the Concept of Work Engagement ... 10

2.3 Past Studies on Work Engagement ... 12

2.4 Understanding the Concept of Ethical Climate ... 13

2.5 Past Studies on Ethical Climate ... 14

2.6 Understanding the Concept of Ethical Leadership ... 16

2.7 Past studies on Ethical Leadership ... 16

2.8 Understanding the Concept of Psychological Empowerment ... 17

2.9 Past studies on Psychological Empowerment ... 18

2.10 Understanding the Concept of Employee Values ... 19

2.11 Past studies on Employee Values ... 20

2.12 Research Framework ... 22

2.13 Development of Hypotheses... 23

2.13.1 Relationship between Ethical Climate and Work Engagement ... 23

2.13.2 Relationship between Ethical Leadership and Work Engagement ... 24

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2.13.3 Relationship between Psychological Empowerment and Work

Engagement ... 25

2.13.4 Relationship between Employee Values and Work Engagement ... 29

2.14 Conclusion ... 30

CHAPTER 3 METHOD ... 31

3.2 Research Design ... 31

3.3 Population and Sampling Design ... 32

3.3.1 Population ... 32

3.3.2 Sampling Size ... 33

3.3.3 Sampling Technique... 33

3.4 Operational Definitions and Measurements ... 34

3.4.1 Work Engagement ... 34

3.4.2 Ethical Climate ... 35

3.4.3 Ethical Leadership ... 36

3.4.4 Psychological Empowerment ... 38

3.4.5 Employee Values ... 39

3.5 Questionnaire Design ... 40

3.6 Pilot Study ... 41

3.7 Data Collection Procedures ... 42

3.8 Technique of Data Analysis ... 43

3.8.1 Descriptive Analysis ... 43

3.8.3 Correlation Analysis... 44

3.8.4 Regression Analysis ... 44

CHAPTER 4 FINDINGS ... 46

4.2 Response Rate ... 46

4.3 Data Screening ... 47

4.4 Demographic Characteristics of the Participants ... 48

4.5 Descriptive Analysis ... 50

4.6 Correlation Analysis ... 56

4.7 Multiple Regression Analysis... 58

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CHAPTER 5 DISCUSSIONS, RECOMMENDATIONS AND CONCLUSIONS .. 60

5.2 Summary of the Research ... 60

5.3 Relationship between Ethical Climate and Work Engagement ... 61

5.4 Relationship between Ethical Leadership and Work Engagement... 61

5.5 Relationship between Psychological Empowerment and Work Engagement ... 62

5.6 Relationship between Employee Values and Work Engagement ... 62

5.7 Research Implications ... 63

5.7.1 Theoretical Implications... 63

5.7.2 Practical Implications ... 63

5.8 Limitations and Directions for Future Study ... 64

REFERENCES ... 67

APPENDICES ... 79

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List of Tables

Table 1.1 Engagement rate in Asian’s country ... 3

Table 1.2 Annual labor productivity (hours worked) by economic activity, 2015- 2018 - Annual percentage change... 3

Table 1.3 Revenue earned at Kulim (Malaysia) Berhad (2016 – 2018) ... 4

Table 3.1 Distribution of executive and assistant managers at Kulim (Malaysia) Berhad ... 32

Table 3.2 Work engagement items ... 34

Table 3.3 Ethical climate items ... 35

Table 3.4 Original and adapted version of ethical leadership’s items ... 36

Table 3.5 Ethical leadership items ... 37

Table 3.6 Psychological empowerment items ... 39

Table 3.7 Employee values items ... 40

Table 3.8 Reliability analysis on pilot study ... 42

Table 4.1 Respondents’ response rate ... 46

Table 4.2 Result of normality analysis ... 48

Table 4.3 Demographics characteristics of participants (n=156) ... 49

Table 4.4 Descriptive analysis ... 51

Table 4.5 Descriptive analysis of work engagement items ... 51

Table 4.6 Descriptive analysis of ethical climate items ... 52

Table 4.7 Descriptive analysis of ethical leadership items ... 53

Table 4.8 Descriptive analysis of psychological empowerment items ... 54

Table 4.9 Descriptive analysis of employee values items ... 55

Table 4.10 Descriptive statistics, scale reliabilities, and correlations of variables . 57 Table 4.11 Multiple regression analysis ... 58

Table 4.12 Summary of hypotheses testing ... 59

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List of Figures

Figure 2.1. Research Framework ... 22

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CHAPTER 1 INTRODUCTION

1.1 Background of Study

Many organizations are giving more attention to their workforce as a way to survive and gain competitive advantage. They are looking for employees who can take initiative and respond creatively to the challenges of the job. Thus, the issue of engagement become more critical. One of the reasons why organizations start to give great attention on employees’ work engagement is because it has positive and beneficial consequences at the individual and organizational levels. These include organizational commitment, physical health and business-unit performance. Engaged employees are generally more satisfied with their work, committed and effective at work. Employees with higher levels of engagement with their managers tend to feel that they are getting direction on the work they do, and feedback on their performance. These employees will have a mutual feeling of respect with their managers, which also lends to the sense of being a valued part of the company.

But finding the right way to engage people with their work represents a major challenge for various organizations. Employees don’t automatically become engaged when they been praised or been given other types of acknowledgement. But, if they feel that their organizations failed to acknowledge their existence and contribution, employees can quickly become disengaged. Thus, identifying factors that might contributing to work engagement among employees are becoming crucial for every organization.

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APPENDICES

Appendix A – Questionnaire

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81

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82

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83

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84

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Appendix B – List Name Respondent

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86

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87

Appendix C – Data Analysis for Pilot Study Reliability Analysis

1. Employee Engagement

Reliability Statistics Cronbach's

Alpha N of Items

.837 9

2. Ethical Climate

Alpha N of Items

.729 5

3. Ethical Leadership

Alpha N of Items

.928 15

4. Psychological Empowerment Reliability Statistics Cronbach's

Alpha N of Items

.900 12

5. Employee Values

Alpha N of Items

.936 8

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Appendix D – Data Analysis for Real Study 1. Frequencies Analysis

Statistics

Gender Education Experiences Income

N Valid 156 156 156 156

Missing 0 0 0 0

Mean 1.38 5.60 3.63 4.08

Median 1.00 6.00 4.00 4.00

Mode 1 6 5 5

Std. Deviation .488 .942 1.187 1.044

Variance .238 .887 1.409 1.091

Range 1 5 3 4

Minimum 1 2 2 1

Maximum 2 7 5 5

Percentiles 25 1.00 5.00 3.00 3.00

50 1.00 6.00 4.00 4.00

75 2.00 6.00 5.00 5.00

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid Male 96 61.5 61.5 61.5

Female 60 38.5 38.5 100.0

Total 156 100.0 100.0

Education

Valid SPM 4 2.6 2.6 2.6

STPM 4 2.6 2.6 5.1

Certificate 3 1.9 1.9 7.1

Diploma 40 25.6 25.6 32.7

Bachelor Degree 94 60.3 60.3 92.9

Master Degree 11 7.1 7.1 100.0

Total 156 100.0 100.0

Experiences

Valid 1 - 5 years 38 24.4 24.4 24.4

6 - 10 years 35 22.4 22.4 46.8

11 - 15 years 30 19.2 19.2 66.0

More than 16 years 53 34.0 34.0 100.0

Total 156 100.0 100.0

Income

Valid RM1000-RM2000 2 1.3 1.3 1.3

RM2001-RM3000 11 7.1 7.1 8.3

RM3001-RM4000 34 21.8 21.8 30.1

RM4001-RM5000 35 22.4 22.4 52.6

RM5001 and above 74 47.4 47.4 100.0

Total 156 100.0 100.0

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89 2. Descriptive Analysis

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Age 156 18 60 37.83 9.306

Position 156 1 34 5.22 4.862

Organization 156 1 37 11.35 9.019

Valid N (listwise) 156 3. Normality Analysis

Descriptives

Statistic Std. Error

New_EE Mean 3.8864 .03562

95% Confidence Interval for

Mean Lower Bound 3.8161

Upper Bound 3.9567

5% Trimmed Mean 3.8861

Median 3.8889

Variance .225

Std. Deviation .47392

Minimum 2.33

Maximum 5.00

Range 2.67

Interquartile Range .56

Skewness -.100 .183

Kurtosis .354 .363

New_EC Mean 4.2113 .03918

Upper Bound 4.2886

Median 4.0000

Variance .272

Minimum 2.40

Maximum 5.00

Range 2.60

Skewness -.090 .183

Kurtosis -.065 .363

New_EL Mean 3.9134 .04324

Upper Bound 3.9987

Median 4.0000

Variance .331

Minimum 1.53

Maximum 5.00

Range 3.47

Skewness -.269 .183

Kurtosis 1.078 .363

New_PE Mean 4.0009 .03561

Upper Bound 4.0712

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90

Median 4.0000

Variance .224

Minimum 2.75

Maximum 5.00

Range 2.25

Skewness .159 .183

Kurtosis -.198 .363

New_EV Mean 4.0332 .03753

Upper Bound 4.1073

Median 4.0000

Variance .249

Minimum 3.00

Maximum 5.00

Range 2.00

Skewness .204 .183

Kurtosis -.054 .363

Extreme Values

Case Number Value

New_EE Highest 1 33 5.00

2 79 5.00

3 94 5.00

4 145 5.00

5 159 5.00

Lowest 1 53 2.33

2 177 2.56

3 147 3.00

4 119 3.00

5 92 3.00^a

New_EC Highest 1 14 5.00

2 15 5.00

3 20 5.00

4 21 5.00

5 23 5.00^b

Lowest 1 59 2.40

2 165 3.00

3 87 3.00

4 76 3.00

5 54 3.20^c

New_EL Highest 1 20 5.00

2 23 5.00

3 33 5.00

4 41 5.00

5 53 5.00^b

Lowest 1 143 1.53

2 17 2.60

3 75 2.80

4 59 2.80

5 37 2.80

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91

New_PE Highest 1 23 5.00

2 53 5.00

3 67 5.00

4 110 5.00

5 131 5.00^b

Lowest 1 59 2.75

2 65 2.83

3 32 2.92

4 147 3.00

5 9 3.17

New_EV Highest 1 14 5.00

2 20 5.00

3 21 5.00

4 23 5.00

5 26 5.00^b

Lowest 1 165 3.00

2 147 3.00

3 76 3.00

4 67 3.00

5 54 3.00^a

a. Only a partial list of cases with the value 3.00 are shown in the table of lower extremes.

b. Only a partial list of cases with the value 5.00 are shown in the table of upper extremes.

c. Only a partial list of cases with the value 3.20 are shown in the table of lower extremes.

Tests of Normality

Kolmogorov-Smirnov^a Shapiro-Wilk

Statistic df Sig. Statistic df Sig.

New_EE .081 177 .007 .986 177 .072

New_EC .222 177 .000 .907 177 .000

New_EL .158 177 .000 .945 177 .000

New_PE .083 177 .005 .983 177 .027

New_EV .142 177 .000 .945 177 .000

a. Lilliefors Significance Correction

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92 3.1 Employee Engagement

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93

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94 3.2 Ethical Climate

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95

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96 3.3 Ethical Leadership

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97

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98 3.4 Psychological Empowerment

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99

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100 3.5 Employee Values

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101

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102 4. Descriptive Analysis

New_EE 156 3.00 5.00 3.8519 .41771

New_EC 156 3.20 5.00 4.2205 .46569

New_EL 156 1.53 5.00 3.8966 .49971

New_PE 156 2.83 5.00 3.9829 .45592

New_EV 156 3.00 5.00 4.0280 .46912

Valid N (listwise) 156 4.1 Employee Engagement

EE1 156 1 5 3.94 .679

EE2 156 1 5 3.68 .672

EE3 156 3 5 3.87 .609

EE4 156 2 5 3.97 .652

EE5 156 2 5 3.91 .646

EE6 156 3 5 4.28 .638

EE7 156 1 5 3.61 .839

EE8 156 1 5 3.49 .799

EE9 156 1 5 3.92 .668

Valid N (listwise) 156 4.2 Ethical Climate

EC1 156 2 5 4.26 .567

EC2 156 3 5 4.24 .569

EC3 156 2 5 4.21 .619

EC4 156 3 5 4.37 .546

EC5 156 1 5 4.04 .761

Valid N (listwise) 156 4.3 Ethical Leadership

EL1 156 2 5 4.15 .581

EL2 156 3 5 4.07 .558

EL3 156 1 5 3.96 .651

EL4 156 2 5 3.99 .632

EL5 156 1 5 3.91 .626

EL6 156 2 5 3.82 .695

EL7 156 1 5 3.93 .644

EL8 156 1 5 3.91 .646

EL9 156 1 5 3.77 .708

EL10 156 1 5 4.03 .647

EL11 156 2 5 3.86 .595

EL12 156 1 5 3.81 .818

EL13 156 2 5 3.78 .678

EL14 156 1 5 3.59 .752

EL15 156 1 5 3.87 .633

Valid N (listwise) 156

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103 4.4 Psychological Empowerment

PE1 156 2 5 4.26 .591

PE2 156 2 5 4.16 .638

PE3 156 2 5 4.21 .630

PE4 156 3 5 4.29 .579

PE5 156 3 5 4.24 .561

PE6 156 2 5 3.84 .749

PE7 156 2 5 3.79 .662

PE8 156 2 5 3.93 .654

PE9 156 2 5 3.90 .554

PE10 156 2 5 3.94 .665

PE11 156 1 5 3.60 .777

PE12 156 2 5 3.63 .771

Valid N (listwise) 156 4.5 Employee Values

EV1 156 3 5 4.13 .633

EV2 156 3 5 3.88 .626

EV3 156 3 5 3.99 .612

EV4 156 3 5 4.28 .588

EV5 156 3 5 4.06 .571

EV6 156 3 5 3.95 .599

EV7 156 3 5 4.01 .574

EV8 156 3 5 3.93 .591

Valid N (listwise) 156 5. Reliability Analysis

5.1 Employee Engagement

Case Processing Summary

N %

Cases Valid 156 100.0

Excluded^a 0 .0

Total 156 100.0

a. Listwise deletion based on all variables in the procedure.

Alpha N of Items

.781 9

Scale Statistics

Mean Variance Std. Deviation N of Items

34.67 14.133 3.759 9

5.2 Ethical Climate

N %

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104

Excluded^a 0 .0

Total 156 100.0

Alpha N of Items

.811 5

21.10 5.422 2.328 5

5.3 Ethical Leadership

N %

Excluded^a 0 .0

Total 156 100.0

Alpha N of Items

.947 15

58.45 56.184 7.496 15

5.4 Psychological Empowerment Case Processing Summary

N %

Excluded^a 0 .0

Total 156 100.0

Alpha N of Items

.902 12

47.79 29.932 5.471 12

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105 5.5 Employee Values

N %

Excluded^a 0 .0

Total 156 100.0

Alpha N of Items

.910 8

32.22 14.085 3.753 8

6. Correlation Analysis

Mean Std. Deviation N

New_EE 3.8519 .41771 156

New_EC 4.2205 .46569 156

New_EL 3.8966 .49971 156

New_PE 3.9829 .45592 156

New_EV 4.0280 .46912 156

Correlations

New_EE New_EC New_EL New_PE New_EV New_EE Pearson Correlation 1 .444^** .506^** .542^** .520^**