ANALYSES ON THE KEY DRIVERS OF ENGAGEMENT, ENABLEMENT, AND EMPOWERMENT FOR DEVELOPING EMPLOYEE EXCELLENCE IN SELECT MANUFACTURING COMPANIES IN INDONESIA

• Main Author: Permana, Iman
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/64648
• Institution: Institut Teknologi Bandung

Organizational excellence is crucial for survival in today’s business dynamics. Literature reviews revealed that how engaged, how enabled, or how empowered employees were in day-to-day work activities affected organizational excellence. This research hypothesizes that employees’ actions, on the other hand, are affected by how engaged, how enabled and how empowered they are in day-to-day work activities. These actions, along with the results of the actions, are basically what employee excellence is all about. It is therefore paramount to ensure that the motivated employees, who are highly engaged, are properly enabled with the right resources and work environment and are empowered with right level of authority of decision making. This study analyzed the key drivers of employee engagement, enablement, and empowerment in select manufacturing companies in Indonesia. Manufacturing companies were chosen for this study due to their massive work force and their largest share of foreign direct investment inflows into Indonesia, and thus, the study would add values to the Indonesian business sector by focusing on manufacturing organizations. Eight manufacturing companies were selected for this study. Four companies were foreign direct investment multinational companies, while the other four were local or national companies. This research firstly developed a framework for developing sustainable employee excellence through the constructs of engagement, enablement, and empowerment. The study commenced with literature review to identify potential drivers of each of these constructs, which were then used in conceptual theory building to come up with the proposed framework. To further explore and confirm these drivers, the study then proceeded with evidence-based interviews with 257 foremen, 257 direct subordinates of the foremen, 83 direct superiors of the foremen, and 34 managers of the eight sampled companies. As a result of the literature review and the evidence-based interviews, eleven potential drivers of engagement, seven potential drivers of enablement, and four potential drivers of empowerment were identified. The study then assessed the relative-importance of these potential drivers by conducting pairwise comparisons and analytic hierarchy processes. Further confirmation was then done with a quadrant analysis of importance-vs- ii observance. The same 257 foremen from the eight companies interviewed previously were taken as the respondents for this part of the study. The results of the assessment mentioned above revealed that being confident of own future in the organization, supportive working environment, and superior’s willingness to delegate are respectively the most important drivers for engaging, enabling and empowering employees. Using the model built based on the framework from the qualitative study, the research then quantitatively analyzed the model using Structural Equation Modelling (SEM) with latent variables. The measurement model for the predictor variables used formative measures, and therefore, Partial Least Square (PLS)-SEM was used in this study. Employees at the foremen level were the unit of analysis in this quantitative study. Using survey questionnaire, the 257 foremen from the eight companies were the respondents for this quantitative study. As a result of the quantitative analysis, the study revealed that there was a key driver for each of the predictor construct when quantitatively related with Employee Excellence. Psychological Capital was found to be the key driver of Employee Engagement; Infrastructure for Data Sharing was the key driver of Employee Enablement; Transformational Leadership was the key driver of Employee Empowerment. The study also revealed that Employee Engagement, Enablement, and Empowerment were not correlated with each other when jointly affecting Employee Excellence. These three constructs jointly affected Employee Excellence positively and significantly. In the perspective of theory-building, this research contributed to the existing stream by recommending a model of employee excellence based on 3E (Engagement, Enablement, and Empowerment), and empirically examined the model by assessing employee engagement, employee enablement, and employee empowerment as latent independent predictors of employee excellence. While literature reviews revealed that previous researches studied how engagement, enablement, or empowerment affected organizational excellence individually, this research provided a new dimension to the existing stream by assessing how the 3E affected employee excellence jointly. In the perspective of practical/managerial implications, the research findings provided an empirical basis for management to prioritize strategic actions on the most important factors for affecting engagement, enablement, and empowerment, in an effort to develop employee excellence, which was reflected in terms of safety, productivity, quality, customer service, and leadership performances. The study recommended managerial actions to develop these reflective manifests of employee excellence through the most important drivers of employee engagement, enablement, and empowerment.