BE-ci 2016 : 3rd International Conference on Business and Economics, 21 - 23 September, 2016

How Work Environment affects the Employee Engagement in a

Telecommunication Company

Idaya Husna Mohda*, Maimunah Mohd Shaha, and Nor Shafiqah Zailana

* Corresponding author: Idaya Husna Mohd, idayahusna@puncakalam.uitm.edu.my

a
Faculty of Business and Management, UiTM Puncak Alam

Abstract
http://dx.doi.org/10.15405/epsbs.2016.11.02.37
The purpose of this study is to explore the employee engagement which is predicted to be affected by rewards,
work environment and work-life balance. This study also further investigates which factor (rewards, work
environment and work-life balance) highly affects employee engagement. A quantitative survey questionnaire was
developed which explores the behaviour, experiences, perspectives and feelings of respondents towards their
engagement. Descriptive analysis, reliability analysis, Pearson’s correlation analysis and multiple regression
analysis were applied in this study to measure the relationships between independent and dependent variables.
Based on data from the sample of 250 employees in a telecommunication organization in Klang Valley, work
environment is the most influential factor that contributes towards employee engagement. This is followed by
rewards and work-life balance consecutively.

Keywords: Employee engagement, work environment, work-life balance, reward, absenteeism, disengage workforce.

1. Introduction

Employees nowadays are engaged with the organization and their job due to some reason such as
compensation or rewards, working environment and work-life balance. According to Hewitt Associates
there are 21 key drivers or components to enhance employee engagement including career
opportunities, benefits, and corporate responsibility, co-workers, employee health and well-being,
intrinsic motivation, manager, managing performance, middle management, organizational reputation,
pay, people or HR practices, physical work environment, recognition, resources, retirement savings,
senior leadership, work-life balance, work processes and work tasks (Mishra, Boynton & Mishra, 2014).
Organizations, on the other hand, also try to figure out the ways to increase the level of employee
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engagement. This is to curb the disengagement of employees on their job and organization. According
to Bakker (2011) total production is affected by the engagement of employees. If an employee is
disengaged, a lower output will be produced. Therefore, managers and the whole organization must
make the effort to ensure that employees in the organization are engaged with the environment of the
work, the activities that organized by the organization and their scope of job. It is also important for the
top management to ensure that each employee is in the right position and job. The vision and mission
are also to be delivered to employees, and each effort contributed by employees need to be
compensated, thus creating opportunities for employees to be promoted (Yu , 2013). Macey &
Schneider (2008) and Saks (2006) stated that research on employee engagement are still lacking which
means that more research on employee engagement needs to be done. Therefore, this study aims to
explore employee engagement which are predicted to be affected by rewards, work environment and
work-life balance.

2. Literature Review

2.1 Employee Engagement

Employee engagement is one of the main problems that each organization tries to maintain among
their employees and trying to ensure that employees put their hundred percent of effort in their tasks.
Employee engagement is of great interest in each organization in order to successfully compete with
their competitors. Previous studies have stated that prediction can be made on the outcomes of
employees’ performance, financial flow and stability, and also the achievement of organizational
success (Bates, 2004; Harter et al.,2002; and Richman,2006). However, a study by Bates (2004) and
Richman (2006) stated that once employee enter an organization, they need to get involved in each
activity that organization provides for them such as induction, training and development program, and
so on.

The level of employee engagement depends on certain factors or determinants. Saks (2006)
suggested job characteristics, perceived organisational support, perceived supervisor support, rewards
and recognition, procedural justice and distributive justice. However, according to Joshi and Sodhi
(2011), the determinants that influence the employee engagement are job content related to autonomy
and challenging opportunities, the compensation and benefits that employee gain for contributing their
skills, knowledge and abilities to the organization, the work-life balance that can enable employees to
balance thier personal needs and career needs, the relationship between employer and employee, the
advancement for career growth, and lastly, teamwork or groupwork.

In a more recent study by Bakker and Bal (2010) employees tend to perform better in their jobs
especially those who are engaged. Anitha (2014) describes employee engagement as the level of
commitment and involvement of an employee that impacts on the organization and its values.
Employees that have a high involvement in the organization can lead to outstanding performance in
their jobs. Furthermore, the positive attitude of employees towards their organization and its value

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eISSN: 2357-1330 / Corresponding Author: Idaya Husna Mohd
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system would be called the positive connection between the emotional aspect and the work that the
employee does; meaning that, employees are able to manage their emotions while performing their jobs
which shows that the employee actually has a good attitude towards their relationship with the
organization. Besides that, employees perform their work beyond the standard of excellence when they
are fully engaged with their jobs.

2.2 Rewards
“The reward system defines the relationship between the organization and the individual member
by specifying the terms of exchange ( Kerr & Slocum, 2005). Reward and compensation is an essential
element to employee engagement that encourages an employee to attain more and hence, focus more on
work and individual growth. It does not only motivate employees to perform well, but encourages
employees into giving more attention to career and personal development.

Other researchers contend that the rewards system has become one of the important factors that will
heavily affect how employees will engage in their work (Taufek, Zulkifle, & Sharif, 2016; Srivastava
& Bansal, 2016; Anitha, 2014). It is further explained that, each effort contributed by the employee
must be compensated by employers whether it is in terms of tangible or intangible rewards. Employers
also should provide the opportunity for enhancement and promotion for employees. Through the
opportunity given to employees, they can improve themselves to be more efficient and effective and
also more engaged with the organization and job.

2.3 Work life Balance

Employees and organization need to balance their work and non-work life. Work-life balance
(WLB) practices are organizational efforts created to minimize work-life conflict for employees. This
also enables employees to be more efficient and effective at work (Lazar, Osoian and Ratiu,2010).

Over the years, work-life balance has been defined in various ways. According to Scholarios (2004)
work-life balance is important role in shaping the employee’s attitude for their organization and also
their life. Clark (2000), Ungerson & Yeandle (2005) defined work-life balance as the thought of
employees on job, personal and family time that are sustained and integrated by minimizing the conflict
that might happen. Deery (2008) defined the meaning of work-life balance as a concept of simple task
as it can be viewed from each definition from word “work”, “life” and “balance”. However, Guest
(2002) argued that it is possible to discover work-life balance trend and growth as it influences the
employees’ well-being and job outcomes. From another perceptive, Dundas (2008) argued that
work-life balance is about managing and manipulating efficiently between the job and all personal
aspects. Many researchers have created their own definition and of work-life balance and
conceptualised it.

In recent years, companies are increasingly becoming aware of the need to embrace the concept of
work–life balance as an important tool to facilitate sustainable human resources, which is found to be

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very important to attract and retain talents (Ruth Eikhof, Warhurst & Haunschild, 2007;Ojo, Salau
&Falola, 2014) This is supported by Ahuja (2014) where work-life balance impacts on absenteeism,
productivity and work satisfaction thus influencing employee engagement.

2.4 Work Environment

According to Anitha (2014), there is a significant relationship between work environment and
employee engagement. Conditions of the workplace play an important role to employees in whether
they want to keep working in the organization. A safe work environment can attract new candidates
into the pool to apply for the positions that still need to be fulfilled. The work environment plays an
important role as people want to work in a safe workplace. Earlier studies have shown that the work
environment is a factor that can be used to determine the level of engagement for each employee
working in the organization. Studies by Miles (2001) and Harter et al. (2001) found that various aspects
of work environment can result in various levels of employee engagement. This is supported by
Holbeche & Springett (2003), May et al. (2004) and Rich et al. (2010). Organizations that play their
roles and show their concern about employees’ needs and feelings, provide positive feedback and allow
employees to make known their concerns, develop new skills and solve work-related problems are
characterised as management that fosters a supportive working environment (Deci & Ryan, 1987).

In fact, Kahn (1990) found that supportive and trusting interpersonal relationships as well as
supportive management promoted psychological safety. Organizational members felt safe in work
environments that were characterized by openness and supportiveness. Supportive environments allow
members to experiment and to try out new things and even fail without fear of the consequences (Kahn,
1990). The working environment impacts on employee engagement. Recent studies also show that
meaningful workplace environment is considered a key determinant of employee engagement (Popli &
Rizvi, 2016; Anitha, 2014).

Based on the review of literature, the hypotheses developed in the study include:

H1 There is a relationship between reward and employee engagement.

H1 There is a relationship between work-life-balance and employee engagement.
H1 There is a relationship between work environment and employee engagement.

3. Methodology

For this study, researchers chose a quantitative approach in order to identify the relationship
between reward, work-life-balance, work environment and employee engagement. A descriptive
(frequency analysis) study was undertaken to describe the characteristics of respondents (age, gender,
education, year of employment, and so on). The unit of analysis for this study were the individual
employees in a Malaysian telecommunication company. For the purpose of this study, the researcher
chose a non-probability sampling design of convenience sampling. The total sample size was 100. The

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eISSN: 2357-1330 / Corresponding Author: Idaya Husna Mohd
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researcher used an interval scale also known as Likert scale for all variables in this study ranging from
1 = ‘Strongly Disagree’ until to 4 = ‘Strongly Agree’.

4. Findings and Discussions

Based on the survey conducted, the respondents consisted of 56% female and 44% male. 30.7% of
the respondents were 43 years old and above followed by 26.7% of the respondents aged between 23 to
27 years old, and the lowest percentage (4%) were respondents aged between 38 to 42 years old.
Most of the respondents were married (61.3%) as compared to single (38.7%). The majority of
respondents highest education level was bachelor degree (61.3%), followed by diploma with 20%,
certificate (4%) and a fair number of respondents with post graduate degree ( Masters 6% and PhD
1.3%). Most respondents earned between RM3000 to RM5999 monthly (34.7%) and had worked for 6
to 10 years (25.3%).

Table 1. Descriptive Statistics, Cronbach Alpha, and Pearson Correlation

Employee Work-life Work
Variables Reward
Engagement Balance Environment
Employee Engagement (0.946) 1
Reward 0.676** (0.930) 1
Work-life Balance 0.414** 0.459** (0.749) 1
Work Environment 0.711** 0.680** 0.363** (0.926) 1
Mean 3.27 3.04 3.34 3.35
Note: ** Correlation is significant at the 0.01 level (2-tailed); Entries in parenthesis indicate Conbrach Alpha
value.

Using Cronbach’s Alpha, the reliability and validity analysis were conducted in order to examine
the reliability of the each variable. The results demonstrated in table 1 shows that all values were above
0.7. According to Nunnaly (1978), any values above 0.7 and nearer to 1 are considered good. Therefore,
the items tested in the study are reliable and valid (Nunnaly, 1978). Table 1 also shows a significant
moderate positive relationship between employee engagement and rewards as r=.676, p= <0.05. The
strength of the relationship between both variables is moderate. This is shows that the higher received
rewards, the higher the engagement of the employee. This is in line with the findings by Taufek,
Zulkifle, and Sharif (2016), Srivastava and Bansal (2016) and Anitha (2014) where rewards system is
one of the important factors that strongly affect how the employee will engage in their work. Therefore,
Hypothesis 1 is supported although the strength of the variable is moderate.

The second hypothesis is to see the relationship between work-life balance and employee
engagement. Work-life balance and employee engagement have significant lowest positive relationship;
(r=.414, p <0.05) which mean the work-life balance has a low impact on engagement of the employee.

There is a significant moderate relationship between work environment and employee engagement
(r=.711, p < 0.05) which means the more conducive the work environment, the more the employee will

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become engaged in their organization and jobs. The strength of employee engagement and work
environment is moderate since the correlation between both is .711. This finding is supported by
Anitha (2014), Miles (2001), Harter et al. (2001) , Holbeche & Springett (2003), May et al. (2004) and
Rich et al. (2010). The work environment does impact on employee engagement. This is also in line
with Popli and Rizvi ( 2016) where meaningful workplace environment is considered a key determinant
of employee engagement.

Table 2. Multiple Regressions

Model Unstandardized Standardized t Sig.

Coefficients Coefficients
B Std. Error Beta
(Constant) 6.870 9.097 .755 .453
Reward .513 .178 .318 2.889 .005
Work-life balance .331 .280 .102 1.179 .242
Work Environment .861 .197 .458 4.362 .000
F value 32.996
Sig .000
Adjusted R2 .565
R2 .582

Table 2 describes the result for multiple regression analysis performed for the framework proposed
in this study. Based on table 2 above, all the variables involved (rewards, work environment and
work-life balance) explained 58.2 % of the variance in the employee engagement. Based on the table
above, work environment is found to be have a great impact on employee engagement as β .458.
Another two variables; rewards and work-life balance are found to have moderate impact on employee
engagement with β .318 and β .102 respectively. Rewards, work environment and work-life balance are
found to have a positive relationship on employee engagement. This indicates the higher the rewards,
work environment and work-life balance, the higher the level of employee engagement. This model is
acceptable because significant value is 0.000 and F = 32.996 which is greater than 1.

5. Conclusion

This study proposed to identify the factors that influenced employee engagement among employees
in a telecommunications company in Kuala Lumpur. The findings demonstrated that factors that
influence employee engagement are rewards, work environment and work-life balance. Each
independent variable impacts differently on employee engagement. Work environment is found to have
a great impact on employee engagement where it shows that respondents feel that environment is more
important to engagement of employees. Work environment does not only need to be conducive but also
needs to be free for employee to contribute their effort towards the organization. This will result in
employees feeling committed and passionate towards their job and organization. All three independents

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variables posted a positive relationship on employee engagement as proven by this study. Looking at
their regressions analysis, the greatest influence is work environment, followed by rewards and
work-life balance. This indicates that the more the rewards, work environment and work-life balance,
the higher the level of employee engagement. Based on the findings, the objectives of the study have
been achieved and all the research questions have been answered. In conclusion, all hypotheses are
accepted.

Based on this study, employees should develop more skills, knowledge and abilities in order to
particpate in the activities that the organization organizes for them. They also need to find solutions
to use all the skills, knowledge and abilities that they have in order to make a positive contribution to
the success of the organization. Employers, on the other hand, need to understand their employees'
needs and wants. Not only that, employers should also highlight the uniqueness of the working
environment to sustain their employee engagement and motivate the employees to work harder and
attract new employees to their organization. In terms of rewards, the employers should properly
evaluate the performance of employees to ensure that employees get the right terms of compensation
and benefits to rewards their efforts. As for future research, a study on other factors that contribute to
employee engagement should be conducted which involves identifying the relationship between other
factors and employee engagement. Last but not least, future research also needs to investigate in-depth
the relationship of existing factors that affect employee engagement

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