Article

The Relationship between Compensation and Selected Dimensions of Employee Engagement in a Mid-Sized Engineering Services Firm

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Abstract

Employers have focused increasing attention on monitoring employee engagement over the past decade. This research study explored the employee engagement dimensions of 1) alignment with the organization, 2) management effectiveness, and 3) salary and compensation based on the perceptions of employees at a medium-sized engineering services firm. Data were collected each year, for three years from employees using a 47-item electronic survey that addressed employee engagement. The results of the study established a quantifiable relationship and evidence of a path between these three dimensions of employee engagement. A non-parametric structural equation modeling (SEM) technique was employed to analyze the impact of compensation on alignment with the organization and opportunity for development and recognition. It was found that these dimensions shared a strong relationship and provided prelimi- nary evidence that compensation shares a causal relationship with alignment with the organization and opportunity for development and recognition. This finding is contrary to many prominent studies by Buckingham and Coffman (1999), Wagner and Harter (2006), and Harter, Schmidt, Asplund, Kill- ham and Agrawal (2010), which underplay the role of compensation in employee engagement. Future studies should test experimentally or quantitatively whether compensation has an impact on employee engagement and focus on determining what factors have the most and/or least influence on key employee engagement behaviors.

Keywords: human resources, leadership, management, research methods, statistical methods

How to Cite:

Gill, P. S., Dugger, J. & Norton, F., (2014) “The Relationship between Compensation and Selected Dimensions of Employee Engagement in a Mid-Sized Engineering Services Firm”, The Journal of Technology, Management, and Applied Engineering 30(1).