Employee engagement is often evaluated at the individual unit level to determine the construct’s impact on a firm’s financial performance. This unit of evaluation is not consistent with how large companies assess levels of employee engagement. The purpose of this study is to investigate business-unit employee engagement and its potential impact on organizational profitability. The results of this study are intended to contribute to the research literature and help senior leaders focus on human capital strategies that produce returns on their investments. The current study examined whether statistical correlations between business-unit employee engagement and organizational profitability exist and whether there are significant differences in organizational profit between higher and lower scoring business-units on employee engagement. Business-unit employee engagement scores were also used to determine whether employee engagement can predict same-year lag and following-year organizational profit. The author hypothesized that business-unit employee engagement is statistically correlated to organizational profit and there is a significant difference in organizational profitability based on higher and lower employee engagement scores. The author also hypothesized that business-unit employee engagement scores can statistically predict same-year lag and following-year organizational profit. Using a 3-year sample of European business units from a large manufacturing firm, the results, in general, provided support for each hypothesis. Significant correlations and regressions were found in addition to significant differences between the predictor and the dependent variable. The researcher concluded that senior leaders need to invest in practices that positively influence higher levels of employee engagement due to its relationship to organizational profitability.
|Subjects||Management; Occupational psychology; Organization theory|
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