A study on Impact of Employee Engagement on Organizational Performance: An empirical Investigation through SEM Approach

Abstract

Employee engagement is a critical determinant of organizational performance, significantly influencing productivity, innovation, and employee retention. This empirical study examines the impact of employee engagement on organizational performance within the IT industry using a Structural Equation Modeling (SEM) approach. Data was collected from IT professionals across various organizations, focusing on key engagement dimensions such as emotional commitment, workplace involvement, and alignment with organizational goals. The study evaluates how these factors influence performance metrics like financial outcomes, customer satisfaction, innovation, and employee retention. The SEM analysis validates the hypothesized relationships, revealing that higher engagement levels strongly correlate with enhanced organizational performance. Practical implications include actionable strategies for IT leaders and HR professionals to foster a more engaged workforce by implementing targeted initiatives, creating feedback-driven environments, and promoting leadership that aligns with employee values and aspirations. While offering valuable insights, the study acknowledges limitations, including reliance on self-reported data and a cross-sectional design, and suggests longitudinal studies for future research. This research contributes to the growing understanding of employee engagement in the IT sector, emphasizing its importance as a strategic tool for improving performance and achieving competitive advantage.