The current study is going to explore the employee engagement and leader member exchange and their impact on service performance of employees. The study comprising various banking, insurance and postal service organizations of the State of Jammu and Kashmir, the northern most part of India, would be first kind of endeavour in an emerging field of services marketing. Additionally, disseminating the same information among service managers would help to create and foster employee friendly culture in an organization by promoting better leader member exchanges.

Employee engagement refers to a positive work related state of mind, characterized by vigour, dedication and absorption (Schaufeli and Bakker, 2004). Vigour i.e., high levels of energy and mental resilience while working, dedicationi.e., sense of significance, enthusiasm, pride and finally absorption i.e., engrossment in one’s work.

Employee engagement has been considered as one among the significant work attitudes that influence employee work outcomes. Organizational practices like leadership support, confidence, empowerment (Kahn’s, 1990), role benefit, job autonomy, goal setting (Selden, et al., 2001) etc had been associated with enhancement of employee engagement. Role benefits i.e., employee’s perception of career opportunities and growth, job autonomy or freedom and independence are also reported significant drivers of work engagement.

Goal setting and strategic plan formulation to achieve goals could engage employees to take ownership of the work. Decision making or co-ordination boosts employee self confidence and create a sense of responsibility that leads to engagement of employees at work (Konrad, 2006). Working life like flexible working hours, rest time, co-workers support develops favourable work culture conducive for engagement of employees. Emotional well-being of employees does impact employee engagement (Cropanzano and Mitchell, 2005). Management involvement, trust and empowerment act as boosters for engagement of employees (Rosas-Gaddi, 2011). Employee engagement could be controlled and regulated by effective management, by shaping attitude and emotional state of employees. Employee engagement had been in positive relationship with various other constructs like reward systems, employee involvement, training and career development, performance appraisals and HR practices (Rashid et al., 2011).

Employee engagement leads to various favourable individual and organizational outcomes. Engaged employees were better performers, more productive at their work tasks, more customer-focused, show higher levels of discretionary effort, affective commitment andprove more profitable (Shuck and Reio, 2011). Engaged employees affect working of co-workers, put their best efforts at work, show persistence while facing difficulties, analyse the business environment, competitive forces, strives for the success of an organization, act as ambassadors of an organization, communicates and maintains a differential image in the minds of its target audience and performs extraordinary as well as discretionary tasks (Baumruk, 2006). Engagement of employees, influence job satisfaction (Saks, 2006), job involvement (psychological identification with one’s job), flow (sensations people feel, while acting holistically), reduction in employee turnover (Rank, et al.,2007), customer satisfaction (Griffith, 2001), productivity etc, (Harter, et al., 2002), absenteeism rate and increases profitability.

LMX:

LMX is a multidimensional construct having dimensions like affect, contribution, loyalty and professional respect. Affect represents mutual liking of leader and member based on similar interests, outside work context, thus form more informal than work based relationship. Liden and Maslyn (1998) stressed that this construct impacts attitudinal than behavioural outcomes, such as job satisfaction, organizational commitment and perceived organizational support. Loyalty represents the support for each other by leader and member while defending each other’s point of view in public. Leaders who are loyal to their members feel confident in their abilities and will give them more autonomy, responsibility and personal judgement, while handling different projects. Contribution deals with individuals who are seen more capable and are given difficult tasks to complete. They also receive more resources like equipment, budgetary support etc. Since, LMX is work related; it impacts employee behaviours like job performance and organizational citizenship behaviour (Ansari, et al., 2007). Professional respect represents the repute that an employee or supervisor has about performing his job with excellence. There is a possibility of forming perceptions about such an individual before meeting or seeing him by simply hearing from others about his qualities in an organization. Such candidates may be the right choice for supervisors to form high quality relationships with.LMX has been associated with member performance in recent past studies. LMX influence in-role as well as extra-role task behaviours of employees at work. Wayne et al. (1997) found that employee rated LMX quality was significantly related to leader evaluations of subordinate’s performance.

Service Performance.:

Service Performance, refers to the organizational desired behaviour of employees like superior service delivery, customer satisfaction, customer retention, etc (Campbell et al., 1993). Service performance include performing in-role tasks (mentioned in job contract), out-role tasks (outside job contract) like helping co-workers, showing courtesy to customers, etc (Zemke and Schaaf, 1989).

Service performance has always been the outcome of effective work attitudes, leadership behaviour, organizational policies (Epitropaki and Martin, 2005), culture, relationships, etc. Service performance represents the blend of employee motivation, commitment (Buck and Watson, 2002), effort, etc, and is the reflection of soft skills, technical knowhow, executed by service employees. Management practices like employee relationships, management support (Karasek and Theorell, 1990), rewards, recognition, feedback, communication, (Dattaet al., 2005);trust, etc have positive effect on employee service performance.

Employee Engagement and Service Performance.

Employees who feel energized are more creative in their job performance. Employee perform formalized job tasks to create a minimum standard of service performance and in addition perform tasks outside their job contract ,those are voluntary in nature and influence working of co-workers, customers and establish different standard of service performance (Harter et al., 2002). Such voluntary behaviours include helping co-workers with their tasks, attending customers when fellow co-worker is absent, solving customer problems outside one’s domain etc. All these behaviours are expectedof those who exhibit higher level of work engagement as a result of positive state of mind. These behaviours enhance interpersonal relationships, customer perception of service quality, organization image, positive word of mouth, productivity and performance (Buckingham and Coffman, 1999). Taking together these facts, this study also proposes as:

H1: Employee engagement positively influences service performance of employees.

LMX and Service Performance.

Employees feel motivated when asked to participate in decision making, provided support from management, co-workers. Delegating authority and autonomy enhance employee performance Datta et al. (2005). LMX ensure that subordinates are given autonomy regarding their job tasks, participation in key decision making, feedback, by their immediate supervisors Graen and Uhl-Bein (1995). Thus, having common or interdependent features of LMX and service performance, we, hypothesize that LMX have a positive impact on employee service performance.

H2: LMX exert significant positive impact on service performance of employees.

MATERIALS AND METHODS:

The materials and methods include the following:

Structured questionnaires were hand distributed among employees and customers while conducting the survey. The sample consists of middle management employees, frontline employees, lower level employees and customers. A sample size of 380 comprises of 60 supervisors or leaders, 120 sub-ordinates or members and 120 customers from Life Insurance Corporation (LIC), Department of Posts (Post Offices) and State Bank of India (SBI). Relationship of each supervisor is linked with two immediate sub-ordinates and performance of each sub-ordinate is assessed by a single customer. The survey was conducted in the state of Jammu and Kashmir, the northern most part of India.

Data were analysed through various techniques in order to test the hypothesized model. The path model depicting the impact of employee engagement and LMX on service performance of employees was examined through structural equation modelling. SEM enable to test the extent to which variables in the hypothesized model is consistent with the data. The maximum likelihood estimation technique is used to estimate the model as the given technique generates reliable results. Measurement model was first confirmed using factor analysis, and then SEM was performed based on the measurement model to estimate the fit of the hypothesized model to the data.

RESULTS:

The Confirmatory factor analysis suggested a good fit for the measurement model with x² value is statistically significant (x² = 838.1, df = 348, p < 0.05, RMR = 0.042, GFI = 0:781, AGFI = 0.754, CFI = 0.901). The goodness-of-fit index (GFI) and the adjusted goodness-of-fit index (AGFI) were 0.781 and 0.753, respectively. The CFI showed a high value of 0.90. Cronbach alpha for all constructs was in significant range. The structural modeling suggest that the hypothesized model fit the data well with x² statistically significant (x² = 913.1, df = 391, p < 0.05, RMR = 0.043, GFI = 0:831, AGFI = 0.787, CFI = 0.913). The goodness-of-fit index (GFI) and the adjusted goodness-of-fit index (AGFI) were D0.812 and 0.795, respectively. The CFI showed a high value of 0.923. Each and every hypothetical relationship of present study is well supported by structural modelling results. The path coefficients for the hypothesized model are shown as below:

DISCUSSION:

The current study has found that Employee engagement exerts a positive and significant influence on service performance with values of R²=.35 and significance of p< 0.5. The coefficients indicate that employee engagement can trigger desired job outcome in the service industry. In addition, LMX also, has been found having significant influence on employee service performance directly, with values of R²= .34 and significance of p< .05. Thus, we could conclude, that in addition to better employee engagement, LMX quality relationships between supervisors and subordinates, also act as significant indicators for excellent service performance of employees.

Fig 1: Influence of EE and LMX on Service Performance.

Note: EE: Employee Engagement, LMX- Leader Member Exchange and SP- Service Performance.

Employee engagement act as a critical success factor, especially, in service sector where, real time performances are performed by highly dedicated and energized employees. Also, LMX theory, believe in the principle of reciprocity i.e. exchange of favours. Supervisors provide resources, information,and support to subordinates who in return accomplish challenging tasks, meeting deadlines, performing in-role, out-role tasks etc. LMX has been associated with significant outcomes like employee satisfaction, strong interpersonal relationships, favourable work culture etc. Management across organizational hierarchy should sensitize their leaders to understand the philosophy of LMX and encourage them to inculcate desired behaviours to ensure effective and efficient leadership. Employees need to be given opportunities like participation in key decision making, information sharing, autonomy, so that better LMX quality could be established between leaders and subordinates.

The present study, represent regional participation of organizations. Participation from national or international participation organizations can bring different insights in to the study. Organizations that participated were from insurance, banking and postal sectors only. Organizations from other sectors like health, education, tourism, entertainment etc, can enhance the generalizability of results and implications. The present study explored employee engagement, LMX and service performance relationship, only. The relationship of these construct along with demographic factors like ethnicity, gender, age, would have allowed exploring different inferences and patterns.

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Research J. Humanities and Social Sciences. 8(4): October -December, 2017, 387-391

Received on 03.06.2017

Modified on 19.09.2017

Accepted on 20.09.2017

DOI: 10.5958/2321-5828.2017.00056.0