CHAPTER - 2

LITERATURE REVIEW

INTRODUCTION
The present study deals with the ramifications of existing organizational culture on
the formulation of human resource practices and to what extent such practices impact
the level of employee engagement in an organization. Before we proceed further, it is
always beneficial to define the concepts involved in a detailed manner, for the precise
formulation of objectives and research questions. Furthermore, a review of existing
literature related to definitions of relevant concepts and the dynamics of relationship
among organizational culture, human resource practices, and employee engagement,
will further add to the clarity of thought in determining the direction of research and
also prevents reinvention of the learning wheel.

2.1 ORGANIZATIONAL CULTURE

The construct of organizational culture has evolved from various social sciences,
basically anthropology, sociology and psychology. The concept of organizational
culture was discussed by Edward Pettigrew in 1979 for the first time in the journal
“Administrative Science Quarterly”. According to him, the culture of any
organization evolves on the basis of certain established cognitive systems. Analyses
of these systems help us to understand the underlying thought process of the
employees and the decisions taken by them. Organizations have their practices to
develop the desired values and belief systems, which become the basis for conducting
their day-to-day business.

Ouchi (1980) defined culture as always being in a state of dynamic equilibrium.

Though its various aspects may be abstract it can be observed in the common
behaviour patterns of its members.

Hofstede (1986) observed that a set of both national and local factors add to the
existing culture and influence the behaviours of employees in any organization. He
said that there are mainly four factors, power distance, masculinity vs feminism,
individualism and uncertain avoidance index. Later on, his team discovered the fifth
factor too, Confucius dynamics, which helped them in their research in respect of

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Asian organizations. He also suggested how this knowledge could be used for a better
understanding of the functioning of an organization.

Jay (1986) came out with the concept of the interrelationship between existing
organizational culture and functional advantage in organizations. He has stated that
firms having a culture with the required attributes can obtain sustained superior
financial performance due to this advantage.

Cooke and Rosseau (1988) in their study, suggested that culture has an impact on
existing communication patterns and decision-making processes in an organization.
Further Fisher (2000) supported these insights in his studies. Culture also influences
interpersonal relationships and learning activities inside an organization. In short,
culture has an indelible print over various organizational process.

As per Edger Schien (1990) culture is a dynamic construct, which can be internalized,
transferred and suitably altered. He also stated that culture includes values, beliefs and
assumptions, which provide directions to the organizations in their future course of
action. According to Canessa and Riolo (2003), culture reflects the shared beliefs and
experiences among members of an organization. They also stated that the stable
network of contacts among members fosters a high achievement of tasks.

Marcoulids (1993) stated that organizational construct comprises three interrelated

dimensions- a socio-cultural system, a value system and the collective beliefs of the
people belonging to a particular organization. He claimed that by studying with the
help of this framework, one can understand the phenomenon of organizations not
working as per desirable standards.

Later on, a series of studies were conducted in the 1990s, to study the influence of
culture on organizational performance and how it can be modified to improve the
effectiveness of an organization (Campbell, 2004).

Detert, Schoreder and Mauriel (2000) presented eight dimensions of organizational

culture, which ranged from motivation to total quality management. He tried to give
the present an encompassing definition of organizational culture.

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Kowalczyk and Pawlin (2002) are of the view that understanding culture could be
used for competitive advantage in an organization. Cameron and Quinn (2011),
observed that there is a direct relationship between organizational culture and the
success of any organization. Lapina, Kairisa and Aramina (2015) have also concluded
that organizational culture is not easy to define, but it certainly affects the
effectiveness of an organization. In short, the study of organizational culture became a
mandatory step in the formulation of strategic planning in the present times.

Shahzad, Xiu and Shahbaz (2017) in their study on Pakistan’s software industry, have
opined that organizational culture in any organization is loosely comprised of three
different dimensions- supportive culture, innovative culture and sustainability focused
culture. As per their study, these dimensions affect the status of employee
empowerment. With a more empowered employee, the organization will have more
effective policies.

LongLam, Phuong, Nga and Khoa (2021) also talk about the relationship between
organizational culture and enhanced innovation capability. As per them, “an open
innovation of culture of an organization in which mutual trust, collaboration and
learning are promoted by supportive and participative leaders is more likely to
increase the efficiency of knowledge management practices; this eventually leads to
enhanced innovation capability of the firm.”

Kross and Vanhove (2022) concluded that “contrary to existing views that the
importance of cultural perspective is pervasive all over the organization, it is seen that
there are systematic differences in perception of cultural patterns across,
organizational levels and are related to organizational frequency.”

The concept of culture cannot be stated in a straightjacket form that would be

applicable to all types of organizations due to many types of variances, including
work and a number of other factors. The idea of culture is dynamic and constantly
changes to meet the evolving needs. However, it can certainly be maintained that all
these definitions consider organizational culture as a construct that consists of shared
beliefs, values and meanings which is considered valuable by the organization and its
employees. It has an impact on its effectiveness, adoption of required changes and
enhanced innovation.

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As a result of these variations in the constituents of different cultures, organizations
can be identified as different from one another. Culture provides a sense of
belongingness and inspires individuals to aspire for goals that go beyond their
ambitions. Apart from being a source of inspiration for employees, culture also works
as a control mechanism by providing guidelines for desired performance. It has also
been noticed that in organizations, where the set of cherished values of the
existingculture is not shared by the majority of its members, the culture is considered
to be weak and the turnover of the employees is high. This further leads to a situation
where employees would be disengaged, productivity would be dismal and customers
relationship would be a cause for concern.

Therefore, it is essential for the survival of any organization that the existing culture is
shared and upheld and upheld in such a manner that an environment of cooperation is
created and optimum productivity is achieved with the help of effective decision-
making.

There have been different views among academicians regarding the number of
components of organizational culture- from trust, values, stability, aggressiveness,
outcome orientation, and people orientation to innovation. For the present study
purpose, mission, vision and value statement have been selected as the focus area, its
impact on the formulation of human resource practices and employee engagement.

2.2 VISION, MISSION AND VALUE STATEMENT

Though the importance of vision, mission and value statement have been recognized
as strategic documents, not many empirical research have been conducted. According
to Calder (2014), it is one of the major benchmarks, which helps in measuring the
success of any organization. Organizations and leaders prepare their strategic plans
while keeping these statements in mind. All new changes whether in policies related
to human resources, marketing, finance or operations, are planned in sync with the
mission, vision and values statement.

A mission is a brief statement about the reason for the existence of an organization
and also the outcomes it wants to achieve.

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Bart and Baetz (1998) have described the mission statement as a cornerstone of any
organization. They have opined that a strong mission paves way for a long successful
path for any organization.

As per Peter Drucker (2005) “Business purpose and business mission are so rarely
given adequate thoughts, it perhaps is the most important cause of business frustration
and failure.”

A mission statement defines business strategy. Horwath and Drucker (2005) show the
current purpose of the organization, which is one of the major elements of strategic
planning. It also unites the different working groups with different functions to work
in a single direction. It further helps in the consolidation of resources and efforts
towards the achievement of objectives. Employees are simultaneously focused on
what they are working on with a clear purpose. It has also been found that companies
with mission statements have been more successful.

A mission statement provides a definition of business strategy but it can only be

productive when all the members of the organization believe in it, otherwise, it will
lose its importance.

While the mission is a statement about the present status of an organization, the vision
indicates how the future is being visualized by an organization. Vision is a statement
regarding the future goals of an organization, which it aspires to achieve, making it an
integral part of strategic planning in any organization. Any organization's journey
without a vision may become aimless and unable to accomplish its goals.
Furthermore, a vision statement serves as both a motivating tool and a source of
direction and purpose for an organization.

Since vision reflects the future goals and aspirations, it helps in motivating the
employees. It provides both strategic guidance and inspires people to work for it. John
Kotter in his book, “Leading Change” says that the vision should be imaginable,
desirable, feasible, focused, flexible and communicable.

However, any vision statement must be aligned with the cherished value system of the
organization and should be communicated properly among the members otherwise it

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will have no relevance. According to Grusenmeyer (2009), the more precise the vision
statement, the more clarity will be there for strategic planning.

Horwath and Drucker (2005) have written that values are the ideals, which inspire the
thought and actions of an organization. Being the core belief, they are present in all
organizational activities. These values become the basis of the formation of
organizational culture. Since they set the standard for behaviour, they influence how
employees interact with all of their stakeholders.

But to have its maximum impact, an organization should make its relationship
compulsory with the major organizational processes. It should be the criteria for the
selection of an employee and should also get reflected in the process of dismissal. The
strength of values depends upon the collective commitment of employees towards
them and how well they are communicated and adopted within an organization.

Mission, vision and value statements are prepared through the rigorous exercise of
strategic planning, still, many academicians are yet to give them their suitable
importance in the daily business of an organization.

Heath, Johansen, & Bowen (2018) have stated that core ethical values become the
basis of the formulation of a mission and vision statement. These statements are the
base for organizations becoming successful as they provide direction to various
business activities. The mission statements provide specific objectives for attaining
competitive advantage and also help in prioritizing such activities. Vision statements
specify long time goals and help visualise the space, an organization would like to be
placed in future. In short, the vision provides the aspired targets and the mission
statement specifies how to achieve them.

Aktar (2021), studied 16 pharmaceutical industries in Bangladesh and came to the

conclusion that in case any organization requires to motivate and inspire their
employees, it needs to focus more on the alignment of mission, vision and value
statements and human resource practices.

Kunjumuhammadand (2022), have discussed the contribution of mission, vision and

value statements while planning for the achievement of excellence in higher
educational institutes.

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A review of the literature proves that mission vision and value statement have a direct
influence on the strategic planning in an organization and to make it more relevant it
is of utmost importance that it is in total alignment with culture and practices.

2.3 HUMAN RESOURCE PRACTICES

The 1970s in the USA have drawn attention as a period that helped organizations run
more efficiently. In the beginning, the whole focus of human resource management
practices was to formulate policies for conformance to the by-laws of the organization
by the existing employees. Later on, it developed itself as a concept incorporating all
the processes such as recruitment, training and development, compensation and
performance management. The current emphasis is on striking a balance between the
requirements of the capability development of individuals and organizations. The
concept of human resource management came into vogue in the 1960s and goals,
culture and development.

Effective human resource practices facilitate the increase in efficiency of any

organization by capacity building of its employees and meeting any unforeseen
challenges. It develops commitment among the employees and keeps them motivated
for hard work. Apart from that it also focuses on maintaining the general well-being
of the employees, so that the desired environment is created for the fulfilment of long-
term strategic goals.

Human Resource practices consist of planning, recruitment, training and

development, appraisals, rewards and recognition, promotion and transfers, welfare
activities, career planning, safety and health-related policies. Last but not the least, it
should also include a good exit policy.

Rousseau and Greller (1994) describe human resource practices such as recruitment,
training, compensation and performance management as a psychological contract
between an organization and employees. According to them, these contracts need to
be aligned in such a manner that both parties understand the purpose and aspirations
behind such contracts.

Baron and Kreps (1999) studied the role of consistency in human resource practices
for better organizational performance. They discussed the different types of

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consistencies and their importance in an organization. These consistencies must find a
place while the formulation of human resource practices.

Collins and Clarke (2003) studied 73 high-technology firms and showed the
relationship between human resource practices and the development of an
organization. They also observed that it should be mediated through the
organization’s top management along with their social networks.

Collins and Smith (2006) have stated that existing human resource practices have an
impact on the social environment of an organization. An amicable social environment
inspires employees to go for knowledge exchange among themselves and it gets
reflected in their performance. Increased commitment certainly prepares an
environment of trust, cooperation and strong shared experiences, which further leads
to improved revenue growth.

Beugelsdjk (2008) talks about human resource practices and their relationship with
the state of innovation in an organization. Practices which focus on task autonomy
and performance-linked compensation inspire greater chances of innovation
possibilities. Through their study it was found that stand-by contracts are not that
effective as far as innovation is concerned. Huang and Chung-Jon (2009), added the
mediating role of knowledge management between human resource practices and
innovation.

Kehoe and Wright (2013) articulated the relationship between employees’ perception
of human resource practices and the incident of absenteeism, intent to stay and other
group behaviour. According to them, commitment among employees is shaped by
their assumptions about existing human resource practices.

Pellegrini and Marco-Frey (2018), have observed that in the case of sustainability, it
has to be cherished by the top management if it wants employees to internalize it and
develop a high commitment toward sustainable behaviour.

Alola and Alafeshat (2021) observed the significance of human resource practices on
employees and concluded that proper selection and subsequent training have a
substantial impact on an organization. It also helps in attracting and retention of
highly efficient employees through the mediating role of employee engagement.

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Jurrar (2022) while studying the impact of strategic human resource practices on
employee engagement has confirmed the influential role of human resource practices
on the commitment of employees and said that there is only a partial role of
transformational leadership in engagement.

As is evident from the above discussion, the concept of human resource practices has
undergone many transformations. From the focus on growth and productivity, it has
shifted towards the well-being of employees, positive job experiences, innovation,
sustainability, capacity building of employees, and innovation to increase their
commitment.

In this age of a highly competitive world, organizations require that not only the best
persons should be hired, but they should remain the best for their whole careers.
Through effective human resource practices with a focus on the well-being of their
employees, organizations can certainly create a culture where employees feel safe and
secure and are ready to meet any challenge. Therefore, organizations should make
policies for providing suitable opportunities for their employees for upgrading their
skills, along with focusing on the achievement of organizational goals. An effective
human resource policy aligns itself with long-term strategic goals and takes care of
employees' growth at the same time. This also results in the retention of their
workforce and ensures their satisfaction and commitment.

On giving a closer look, we can say that there is not a single element which is
associated with the manpower of an organization that should be ignored by the
practitioners of human resource development. The top management today wants its
organizational goals to be realigned with the HR practices so that it is beneficial for
both employees and the organization.

Human resource practices consist of recruitment, training, performance management

and compensation. Training and development as well as performance management
have been selected as research proposes for the current study.

The study brings to the fore whether human resource practices in the organizations are
in alignment with organizational culture and are influencing the engagement level
among employees.

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2.4 LEARNING AND DEVELOPMENT
Learning and development are one of the most important activities in an organization.
Rapid changes are being witnessed in the global business environment due to ever-
changing technological interventions and business norms. It is essential that the
organization should always strive to keep its employees updated and relevant for
competitive advantage. Learning needs keep arising at regular intervals and have
become one of the main organizational functions. In this changed scenario, instead of
human resource departments, line managers are taking lead in identifying learning
needs and making development plans.

Thorpe and Clifford (2000) have described learning as, “the process of increasing
knowledge and skills and developing our attitudes or beliefs so that we have the
opportunity for5 increased choice.”

Alan Mumford (1995) in his book “Effective Learning” states that, “learning has
happened when people can demonstrate that they know something that they did not
know before and they could do something, they could not do before.”

As per Clifford and Thorpe (2007) development could be defined as a process of

growth which facilitate changes. They have observed that learning and development
have replaced the term ‘training’, as the main idea nowadays is to develop the
learning capabilities of employees instead of a trainer delivering the content. Learning
and development functions are considered more advisory and facilitatory in nature
and training could also be one of them.

Hurley and Hult (1998), have stated that a higher level of innovativeness is found in
organizations, where learning and development activities are given due importance.

Lin and Lee (2017), observed that organizations with greater emphasis on learning
have improved work engagement among employees and strengthened their
effectiveness.

Lopez, Peón and Ordás (2004) provided empirical evidence that collaborative culture
has an impact on learning and it facilitates improved performance.

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Malik and Garg (2020) have concluded after they studied IT professionals in India,
that there is a positive relationship between learning organizations and employee
engagement. Organizations with structured patterns of knowledge sharing promote
engagement and effectiveness. Alnuaimi et al (2020), have suggested that developing
collective knowledge leads to greater innovation and effectiveness.

Further, Hopkins (2022) has discussed the learning strategies which could help in the
formation of sustainable organizations.

In the contemporary world, learning and development activities have become a very
strategic agenda to improve the engagement level with increased opportunities for
learning and self-development among employees. By providing opportunities for
personal growth of the employees, organizations are also ensuring their own growth.

2.5 PERFORMANCE MANAGEMENT

In general, performance management is considered as an appraisal system for
employees which is approved by the management, mostly based on a mapping scale.
It has also been found, in almost every organization, that there would be a small
minority which would give outstanding performance and at the bottom there would be
another minority, lacking even basic skills to perform. The majority would always be
in between the two extremes. Managing the performance of this majority population
is the main idea behind this provision of performance management.

Warren (1972) was the first researcher to discuss the importance of the concept of
performance management in the area of human resource management. Though it
continued to be discussed as an academic construct, it was brought into focus by
Plachy and Plachy (1988).

Fletcher and Williams (1996) defined performance management as a concept of a

collective vision of the aim and objectives of the organization in such a manner that it
facilitates the comprehension among the employees of their roles and contribution and
it ultimately results in the achievement of goals for both employee and organization.

Bates and Holton (1995) have discussed performance as a multidimensional concept.

They are of the view that the measurement of performance cannot be similar in all
cases, it varies due to different reasons. It does not only provide information about the

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way things are to be done but also what is being done and to what extent job
requirements have been fulfilled.

Hartle (1995) observes that the appraisal system should be made an integral part of
the organizational process and should be in synchronization with the organizational
goals, career development of employees and total quality management.

According to Spinks, Wells and Meche (1999), performance appraisal helps in

improving organizational effectiveness, particularly in cases, where the appraisal
system and organizational goals are in synchronization. They have discussed that the
appraisal system not only measures performance but also facilitates the desired
performance in certain circumstances.

Armstrong (2000) worked extensively on performance management and termed it as a

strategic policy that is related to all the processes of the organization concerning its
human resource policies, existing prominent culture and established communication
channels. Individual organizations must decide how to carry out this strategic policy
in accordance with their own interests.

According to Griffin and Ebert (2002), the evaluation of performance is formal and
makes estimations about the job performance of an employee. In their view, the whole
idea of introducing the appraisal system is to assess whether the employee is working
effectively or not.

It has been suggested by Mayer and Gavin (2005) in their study that performance
appraisals play an important role since they bring clarity about specific requirements
of a particular job to be performed and help in minimizing the related stress. This also
helps in improving the working environment by removing ambiguities resulting in
increased productivity. Performance appraisals also help in identifying the
performance gap and suggesting the training and learning needs in the organization.

Clevan, Winter and Wortmann (2010) have indicated about managing performance to
achieve sustainability goals in an organization and have opined in their study that this
aspect requires a thorough study for more precision in approach.

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According to Gruman and Saks (2011), organizations are trying to use performance
management systems for improving their level of performance. They further state that
this process can also lead to a higher level of engagement among employees.

Elena and Maria (2019) have observed that in this highly competitive world,
organizations need to balance income and finance while ensuring customer
satisfaction at the same time. Therefore, performance needs to be closely monitored at
all levels.

Sriharan and Tseb (2019) have stated that performance management is not merely a
‘three-legged stool’ consisting of a performance evaluation framework, precise
decision rights and compensation rules. There is bound to be misalignment at some
point in time, which could be rectified through appropriate human resource
interventions.

Hristov, Appolloni, Chirico and Cheng (2021) have discussed sustainable

development and environmental aspects being one of the most coveted agendas in
almost all organizations. They suggest that these sustainable and environmental goals
should be aligned with a performance management system to make these goals
achievable.

Mishra (2021) in his study has talked about the latest trend in performance
management i.e., 720-degree performance appraisal system. The appraisal system
which started with 90 degrees is now talking about 720 degrees. Though most
organizations are using a 360-degree appraisal system, it was found to be lacking in
the corresponding feedback. In this system, employees are evaluated in a 360-degree
format and proper feedback is given based on this evaluation.

Hence, it can be said that performance management is not only related to annual
appraisals of the employees but is also used for the setting of goals and revision of the
same in case of requirements. It also provides feedback to the top management about
existing norms and policies and creates opportunities for personal development of
employees. In fact, in any organization, performance management should be
considered an ongoing process, instead of an annual ritual as it will help the
management to introduce necessary modifications well in time. Moreover, this system

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has evolved over the years with changing priorities of organizations from risk
management and employee engagement to sustainability.

Though a majority of studies talk about the positive effects of performance appraisals,
few of them also point to the possible negative impacts of such appraisals. Spinks,
Wells and Meche (1999) have observed that sometimes these appraisals hamper the
work itself. Employees look at them with suspicion and negative sentiments. While
writing appraisals, there are always chances that the personal biases of supervisors
might give different colours to their opinion and defeat the whole purpose of
appraisals. There have also been instances where the achievement of goals became the
top priority and ethical practices were undermined.

2.6 EMPLOYEE ENGAGEMENT

Focus on employee engagement is not a very old phenomenon. In the 2000s, M/s
Gallup started its surveys on large scale to measure the level of engagement among
employees and their ramifications on different organizations. It discussed the latent
factors which keep employees motivated and results in their improved performance.
Nowadays the concept of employee engagement is gaining importance for both
managers and academicians. It would not be an exaggeration if we refer to it as one of
the key concepts in the area of human resource management.

Before we discuss the definition of the concept of engagement, it is important to show

how this concept evolved over the years. It was Goffman (1959) who first used the
word ‘embracement’ which described how people channel their energy for
improvement in their performance. However, despite some studies conducted on
similar lines, it remained largely insignificant.

It was not considered an academic construct in recent times until Kahn (1990) gave an
operational definition to the term and popularized it in the field of academics and
management. He defined employee engagement as “the harnessing of organizational
members’ selves to their work roles; in engagement, people employ and express
themselves physically, cognitively and emotionally during role performance”. These
people are aware of their objectives and their roles in their work environment and they
have the required resources for the disposal of their work along with a sense of
fulfilment in what they do.

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Following Kahn, with an increasing interest in the role of positive psychology in the
area of performance management, Rothman (2003) and Csikszentminalyi (2002)
came out with their respective studies in this area and concluded that by increasing
happiness in the workplace, engagement with one’s work could be enhanced. This
sentiment was echoed by Rothman and Rothman in another study (2010).

Further Schaufeli and Bakker (2002), worked extensively in this area and gave their
U-Trecht instrument to measure the level of engagement in a scientific manner. Many
more instruments came into existence after this but they remained a pioneer in this
area.

With more and more younger generation workers joining the workforce, a rising trend
could be seen to consider the workplace as a source of social fulfilment (Cartwright
and Homes, 2006). In order to solve these issues, it put pressure on employees to
improve their human resource procedures. It became very obvious to them that in case
they want to retain their best talents, they will have to provide positive work
experience (Alarcon et al, 2010).

Many studies conducted subsequently showed that there is a positive relationship

between the level of engagement and growth in revenue and productivity. Cedric
(2011) did a detailed study of companies with highly engaged employees and
compared the outcome with less engaged employees. He concluded that companies
with high engagement levels were found to be better in terms of better-operating
income, earnings per share and net income growth.

Though in certain studies it has been found that they are also considered as same as
job involvement and job satisfaction, on closure look both are different from
employee engagement. Job involvement is mostly related to the urgefor satisfaction
factor of job and it has more to do with the consciousness of one’s image. Job
satisfaction relates to the kind of feelings people have about their job. Employee
engagement is not a process of any kind of evaluation but it is involved in one's work.
To a large extent, we can say that employee engagement facilitates the sense of job
satisfaction.

Employee engagement is the core factor for success. It leads to record production,
lessens absenteeism, improves service quality, creates satisfied customer networks,

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and increases overall commitment; ultimately leading to improved business results.
Surely, there exists a positive correlation between engagement among employees and
improvement in business. It can be termed as the main force in attaining success by
any organization, despite the adverse conditions of the existing economy. (Sarkar,
2011; Smith,2009)

Through the overall discussion about the concept of employee engagement, it can be
concluded that without the involvement of employees in the everyday functioning of
an organization with total commitment, no organization can dream of making it big.

Laxmi (2012) has mentioned that the proper management of labour can happen only
in cases where the concept of employee engagement becomes the focus of the
management and is put into use for better results through effective policies.

Anitha (2014) has suggested in her study that working environment, team and co-
worker relationships are the main predictors of employee engagement in an
organization. She also said that engagement has a significant impact on the
productivity of employees.

Bedarkar and Pandita (2014) have stated that engagement should be integrated into
the existing organizational culture. Fulfilment of employees’ aspirations has an
impact on the performance of employees and overall performance.

Eldor and Vigoda-Gadot (2017) have differentiated employee engagement from

psychological empowerment or contract. According to them, engagement has some
sort of incremental value towards performance. In short, engagement has more impact
on performance than other similar psychological constructs.

Borah and Barua (2018) have observed while reviewing the existing literature on
employee engagement that there is still confusion regarding the concept of
engagement and more studies are required to be focused on the relationship among
individual characteristics, technology and authentic leadership on engagement for
further clarity.

Ismail, Iqbal and Nasr (2019) have also confirmed the existence of a significant
relationship between employee engagement and overall performance in their study of
job performance and employee engagement.

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Studies were also conducted to explore the relationship between internal
communication and employee engagement. It was found that both are highly
interrelated and effective internal communication leads to improved engagement
(Spotjeric et al, 2021).

Hurtienne (2021) discussed the relationship between employee engagement and

innovation and talked about the significant relationship between a higher level of
engagement and improved innovation in an organization.

Oktanofa (2022) after his study, concluded that employee engagement is directly
related toa low level of recognition, rewards and work-life balance. In case these
predictors are taken care of by the organization, the engagement level would improve,
resulting in enhanced performance and reduced turnover.

The above discussion emphasizes the importance of three concepts of organizational

culture, human resource practices and employee engagement in not only attaining the
desired objectives but also in providing continuity to the practices which are available
for appropriation by the newcomers and become a term of reference for existing
manpower.

2.7 STUDIES RELATED TO DYNAMICS AMONG ORGANIZATIONAL

CULTURE, HUMAN RESOURCE PRACTICES AND EMPLOYEE
ENGAGEMENT
So far numerous studies have been undertaken in the area of dynamics among
organizational culture, human resource practices and the prevalence of employee
engagement in an organization. Many scholars so far have studied these concepts and
have tried to explain their relevance in the field of management and their role in
increasing the efficiency of any organization. As renowned management guru Peter
Drucker has famously stated, “Culture eats strategy for breakfast”. A short review
based ona survey of such literature is being discussed here.

Buckingham and Coffman (1999) suggested that employee engagement has a positive
relationship with many factors such as productivity, profit, customer satisfaction and
retention. Saks (2006) acknowledged the importance of employee engagement in
increasing productivity in any organization.

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Rosemary Batt (2002) after studying a national representative sample of call centres
and applying multivariate analysis, came out to the conclusion that organizations that
focus on a higher level of skills among employees, ensure participation of employees
in policy making and provide different kinds of human resource incentives, had
higher sales growth rate and lower attrition rates.

For a basic understanding of the dynamics of employee engagement in an

organization the social exchange theory (SET) can be very useful. SET describes that
mutual obligations are created through in course of ongoing interaction between two
sides, in a state of mutual interdependence. One of the assumptions of SET is that
these relationships grow in course of time and the two sides develop a sense of
commitment based on trust and loyalty. The system continues as long as both the
party abide by this rule of exchange. (Cropanzano & Mitchell, 2005).

Aggarwal, Datta and Bhargava (2007) have stated in their review that human resource
practices facilitate the formation of psychological constructs among employees which
leads to enhanced employee engagement. They further suggest that to assess the
association between human resource practices and employee engagement further
studies are required.

Lockwood (2007) stated in her study that employee engagement gets influenced by
certain cultural practices of the organization like integrity, communication patterns, a
culture of innovation etc. The organization has to move beyond monetary benefits
towards mission and values, learning and development, work-life balance etc.

Markos Solomon and Sandhya S.M. (2010) have discussed in their research that the
existing level of employee engagement can be an indicator of organizational
performance in the desired direction. This points out that there exists a correlation
between employer and employee, in case we study concept of job satisfaction,
employee commitment and organizational behaviour. Their research indicates the
close link between employee engagement and the achievement of organizational
outcomes. Engaged employees result in higher employee retention and a further
reduction in turnover. It motivates employees to stay in the organization and lessens
the idea of an intention to leave. It also results in increased productivity, profitability
and enhanced customer satisfaction.

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Two very important studies were done on the banking sector in Pakistan, by Asad,
Hussain, Nayyab, Ashraf and Adnan (2011). The results in both studies confirmed
that there exists an important relationship between human resource practices and
employee engagement.

Jiang, Lepak, Hu Jia and Baer (2012) in a meta-analysis studied the effect of three
dimensions of skill, motivation and opportunity enhancement in an existing HR
system on the proximal organizational outcome in terms of growth in human capital
and distal organizational outcome in terms of achievement of organizational goals.
The outcome suggested that processes related to the development of skills were more
effective in connection to human capital and had less influence on motivation with
were more positively related to human capital and less positively related to employee
motivation than practices related to improving motivation or creating opportunities.

Rao, Appalayya and Vani (2014) surveyed 206 employees working in different
organizations in Andhra Pradesh, to find out the reasons related to the successes of the
employees in their careers. They concluded that employee engagement is the
prominent reason for advancement in the career of these employees after the best
practices in the area of human resource management.

Sattar, Ahmad and Hassan (2015) studied the impact of human resource practices and
mediating role of employee engagement in job satisfaction and better performance of
employees. In their opinion, the role of employee engagement only partially affects
the relationship between human resource practices and the satisfaction and
performance of the employees.

Albrecht, Bakker, Gruman and Saks (2015) have given findings that HR practitioners
have to proceed beyond the regular engagement surveys and it is required that it may
be considered while formulating human resource management policies such as
recruitment, performance management, patterns of interpersonal behaviour inside the
organization and opportunities for training and development. They were also of the
view that HR practices can be used for improving employee engagement, which in
turn can help the organization in achieving a competitive advantage.

Herminingsih (2015) studied employee engagement in various companies in

Indonesia and concluded that human resource practices have a direct influence on

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employee engagement facilitated through culture. At the same time, another study
conducted by Singh (2010) shows that human resource practices are the reasons
behind shaping the organizational culture. Siddhanta (2010) stated that culture plays a
prominent role in influencing engagement by acting as a facilitator. As per Denison,
(2010) employee engagement is directly related to organizational culture.

Nowadays, different types of human resource practices are being followed in

organizations to motivate employees to give their best, which is not forced but
develops a sense of discretion among them (Berg, 1999). But at the same time, as per
Schaufeli & Bakker, 2004, these processes limit the available resources related to jobs
with both organizational and individual performance through employee engagement.
Therefore, we can say that the achievement of organizational goals stands on two feet,
that is employee engagement and relevant human resource practices.

Krishnaveni and Monica (2016) have discussed in their study, that there are five
prominent drivers of engagement, that can address the requirements of employees'
specifications related to jobs, well-meaning line managers, good working
relationships among workers, opportunities for learning and development and system
of incentives. When such factors are encouraged, there would be an enhancement in
employee engagement and organizational effectiveness will also increase.

Shuck, Joshua, Collins and Diaz (2016) in their study on conditions conducive to
greater employee engagement have observed that it is the organization which has the
authority to introduce the right kind of environment for employee engagement to
evolve, and in turn, it gets benefitted from the outcome of a high level of engagement.

Aktar and Pangil (2018) have studied the relationship between human resource
practices and employee engagement while taking organizational culture as a
moderating variable for their study. They have concluded that while there is an
important relationship between human resource practices and employee engagement,
organizational culture has only a partial role to play as a moderator.

While discussing the various types of human resource practices, Alfiyah and Riyanto
(2019) have stated that appropriate compensation, work environment and training,
result in increased engagement and higher performance.

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Saad et al (2021) have stated that human resource practices have a positive significant
impact on employee engagement. However, they are of the view that strategic
implementation does not act as a moderator between human resource practices and
employee engagement.

To conclude, we can say that most of the studies done so far in the area of the
outcome of dynamics among organizational culture, human resource practices and
employee engagement show an important connection among them, and to achieve the
desired performance on a consistent level, it needs to make human resource practices
deeply integrated with organizational culture.

2.8 REVIEW OF SURVEYS REPORTS CONDUCTED ON EMPLOYEE

ENGAGEMENT
While going through the outcomes of some of the surveys conducted regarding
employee engagement by some of the experts in this area. It was found that these
surveys not only provide us with a statistical base in this case but also come out with
interesting outcomes, which indicates a need for further research in this direction.

Tower Perrin’s survey (2005) showed a sizable gap in the rate of employee
engagement, among employees across different geographic regions. The highly
engaged workforce was from Mexico (40%) and Brazil (31%), the US (21%) and
Canada (17%) were in the middle and Europe (11%) and Asia (7%) were the lowest.
Research may be necessary to determine the potential causes. So far one of the
possibilities being expressed is cross-cultural factors, but the need for research in this
area is highly warranted.

Watson Wyatt (2008-09) also surveyed the Asia-Pacific region and came out with the
findings that there was an overall dip in employee engagement by 4%. In India, it
dipped by 3%, as compared to the previous year.

According to a survey done by Blessings White (2011) out of 10,914 employees

surveyed across the world, merely 31% were found to be engaged, in all regions
except South East Asia. More employees conveyed that they would not like to
continue with their current employer in 2010 when compared to the number in 2008.
In this survey, it was found that 37% of Indian employees were engaged, it is one of
the highest in the world. But this rate falls to 30% in the case of younger employees.

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It was also found that HR employees were less engaged (27%), whereas the level of
engagement of employees for sales is 43% and marketing was 43%. Indian employees
who wanted to leave their existing organization in the coming year also increased
from 5% (2008) to 10% (2010). This finding indicates that more research should be
done in this area, particularly in the Indian context, to find the causes and provide
suggestions to improve employee engagement for better results. The fact that 21% of
employees have ambivalent views on long-term commitment, gives another incentive
for research in this area. This decline highlights the need of the hour: enhancing
employee engagement, particularly in India.

When we look at the surveys conducted by various research organizations, we find

that a sizable number of employees feel disengaged with their present employers and
look at any initiative in this direction with scepticism. Instead of improving the
conditions, they indulge in spreading negativity all around. (Dernovsek, 2008; Perrin,
2003; Ellis & Sorensen 2007; Blessings White 2008).

As per the subsequent survey of Tower Perrin (2012), the number of detached and
disengaged employees became an average of 43% out of the total 32,000 employees
surveyed. In their Global Workplace Report, Gallup has observed that 85% of
employees are either not engaged or actively disengaged.

Tiny Pulse conducted an employee engagement survey of around 25,000 employees,

across the world between January 2019 to December 2019 and stated that 43% of the
workers would be willing to leave their present company for a 10% salary raise.

In May 2020, Gallup did three employee engagement surveys in the US. In May, it
reached a new high of 38%. However, within a month, it dropped to the level of 2000.
The percentage of engaged employees came down from 38% to 31% and the number
of active employees came down from 15% to 14%. These findings are based upon a
survey conducted over a random sample of 2687 employees working either full-time
or part-time.

Since 2000 Gallup started following the employee engagement trend in the US and
the trend can be depicted as under.

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 Figure 2.1: US employee engagement trend
(Source: Gallup. https://www.gallup.com/workplace/313313/historic-drop-employee-engagement-
follows-record-rise.aspx. Accessed July 4, 2021.)

When we have a look at the above graph, we see that there is an upward movement in
the level of employee engagement in the US till May 2020. And suddenly it goes
down due to the unprecedented situation of the pandemic and social unrest following
the killing of George Floyd.

The average percentage of engagement was found to be low in India as per Gallup’s
State of the Global Workplace Report (2017), It showed that only 13% of Indians
were engaged and it included both organized and unorganized sectors. But as per the
survey conducted by Gallup in 2020 in India Indian employees felt that they are not
thriving in their life but were found to be engaged at 25%, which is better than the
global average of 20%. If we compare this with the trend of employee engagement in
the US, a lot needs to be done.

While going through the outcomes of the surveys conducted by various research
organizations, we find that a sizable number of employees feel disengaged with their
present employers and look at any initiative in this direction with scepticism. Instead
of improving the conditions, they indulge in spreading negativity all around.
(Dernovsek, 2008; Perrin, 2003; Ellis & Sorensen 2007; Blessings White 2008). It has
been estimated by Gallup organization that low employee engagement costs the
global economy $ 81 trillion.

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On the basis of review of literature related to the concepts like, organizational culture,
human resource practices, learning and development, performance management
system, employee engagement and various survey reports regarding the present state
of engagement, certain research gaps have been identified. These gaps could help in
determining the future direction of research in this area. These gaps have been
discussed in the preceding paras.

2.9 RESEARCH GAP

Concepts such as organizational culture, human resource practices and employee
engagement are widely researched with significant outcomes by various scholars, all
over the world. It is a daunting task to document all the research with their conclusion
and recommendations. However, an effort has been made to go through some of the
most quoted and relevant studies to have a first-hand experience of the progress made
so far in the proposed area of research.

After reviewing a wide range of literature, it is clear that there is a lack of academic
research regarding how employees' perceptions of the current human resource
practices affect their engagement with their performance. As a result, research in this
area would be very helpful for both academics and policymakers. Survey results also
suggest that there are problems with the work's decreasing involvement in the Indian
context.

Though lots of studies have been done so far to explore the relationship between
human resource practices and organizational outcomes, however, little attention has
been paid to the area of its impact on individual employees.

Another gap which could be pointed out was that in the majority of research, it is
assumed that existing human resource policies would equally apply to all workers. It
is important to note that employee engagement is not always influenced by HR
policies alone, but also by how employees view those procedures. This aspect has
largely been unexplored. In which way employees’ impression of the existing human
resource practices shapes their engagement with their work, may prove to be a crucial
point of query.

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Further, we need to explore the various dimensions of human resource practices, such
as acting as antecedent or as a moderating variable in the overall phenomena of
employee engagement to have clarity on the relationship between the two.

Macey and Schneider (2008) have pointed out that existing researches show the
significance of employee engagement, however research in the area of the relationship
between employee engagement and organizational culture has not been fully
explored. The present intends to study the research gap in the area of organizational
culture and employee engagement, using human resource practice as a moderating
factor.

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