EMPLOYEE

ENGAGEMENT
IN
MANUFACTURING
SECTOR

Indian Institute of Management Amritsar

A Human Resource
Management Project Report

INTRODUCTION
In the dynamic global market, the manufacturing industry needs to focus more in developing
the Human Resource department. Many manufacturing industries are currently facing major
issues in HR ranging from shrinkage of skilled workforce and requirement of labor
competencies to various training and development methodologies of the workforce.
It is in this context that the concept of Employee Engagement (EE) is rapidly gaining
popularity, use and importance at the workplace. Research and consultancy firms, led by the
high-profile Gallup organization, are focusing their efforts increasingly on surveys of
employee engagement that aim to improve levels of engagement. Many research articles are
published in this area showing how the employee engagement programs are delivering
corporate results. Many of the firms believe that Employee Engagement can be a source of
competitive advantage.
In this report, we will try to elucidate what are the factors employee engagement consists of
and try to measure the employee engagement in manufacturing sector in India. We will also
discuss how to increase the employee engagement in the manufacturing sector.

OBJECTIVES OF THE STUDY

The objective of this study is to study the factors contributing to employee engagement and
how these factors impact the individuals working in an organization, especially that in the
manufacturing sector. We will study what the employees in manufacturing sector feel about
their jobs and will try to measure the employee engagement practices in the Indian
manufacturing sector by using individual factors that influence employee engagement. Based
on our study, we will also offer recommendations for improvement in the employee
engagement practices in the Indian Manufacturing sector.

RESEARCH METHODOLOGY
Primary data has been collected by the researchers with the help of a structured questionnaire
administered to 50 employees across different manufacturing companies along with some
secondary data that is collected from various sources. A research questionnaire was designed
to cover some of the possible dimensions of Employee Engagement which was then used to
gather responses from employees across India, working in the manufacturing industries. The
research contains both qualitative as well as quantitative aspects.
Limitations
The sample size is small and the questionnaire is limited to 24 questions and cannot possibly
cover all the dimensions of Employee Engagement. Although the respondents range from
lower hierarchy to the managerial level employees, most of the respondents are engineers and
not shop floor technicians or ground level employees, making it a bit skewed. Despite these
limitations we think that this study can be helpful in understanding some of the ground
realities as well as challenges faced by the organizations.

WHAT IS EMPLOYEE ENGAGEMENT?

Employee Engagement has been defined in more than one ways over time. A majority of HR
professionals and management consultancies tend to define employee engagement in the
terms of:

Organization commitment, including both an affective attachment to the organization

(emotional attachment to the organization or positive attitude) and desire to stay with
the organization in the future
Employees willingness to go an extra mile, which includes extra role behavior and
discretionary effort that promotes the effective functioning of the organization

Employee engagement is based on trust, integrity, two way commitment and communication
between an organisation and its members. It is an approach that increases the chances of
business success, contributing to organisational and individual performance, productivity and
well-being. It can be measured. It varies from poor to great. It can be nurtured and
dramatically increased; it can be lost and thrown away.
Categories Of Employee Engagement
Although there are various grounds on which one can define employee engagement, it can be
broadly categorized into the following three categories on the basis of the level of
commitment, involvement & satisfaction of employees. The categories are:
Engaged Employees
They are the builders. They want to know the desired expectations for their role so
they can meet and exceed them. They're naturally curious about their company and
their place in it. They work with passion and they drive innovation and move their
organization forward by performing at high levels.
Not Engaged Employees
They tend to concentrate on the tasks rather than the goals and outcomes they are
expected to accomplish. They want to be told what to do just so they can do it and say
they have finished. They focus on accomplishing tasks versus achieving an outcome.
Actively Disengaged Employees
They are the "cave dwellers. Theyre consistently against virtually everything."
they're not just unhappy at work. Theyre busy acting out their unhappiness. They sow
seeds of negativity at every Opportunity.
Employee Engagement in Manufacturing Sector In India
India has a growing manufacturing sector with a large employee population is associated with
it. This sector employs not only white collar workers but a majority of blue collar workers.
According to Gallups employee engagement survey - conducted in 2011 and 2012 - in
manufacturing sector, about 60% of employees were found to be not actively engaged in the
organizations along with 30% of those actively disengaged, and only 9% of employees were

engaged at work. There are various reasons for such a behavior of the work force and this
indirectly affects the overall performance of the organization. Here, we will discuss all such
reasons and the after-effects of employee disengagement at work place.

FACTORS AFFECTING EMPLOYEE ENGAGEMENT

Existing literature points out that Employee Engagement is broadly a result of Job
Satisfaction (JS), Job Involvement (JI), Perceived Organization Support and Organizational
Commitment. Based on this, we designed the questionnaire.
In order to compute the level of engagement among the employees in the Indian
manufacturing sector, the set of questions in the questionnaire that we used to carry out the
survey, have been grouped based on these factors. They are mentioned in further pages.

QUESTION WISE ANALYSIS OF THE SURVEY

Questions 1 5 contain the information about the candidate and the company he/she is
working with.
Question 6.No. of years in this industry?

Question 7.No. of years with this company?

Question 8.How many people work under you?

The responses vary from 0 230.

Question 9.Of those who work under you, how many are skilled?
The responses vary from 0 100.
Question 10. Of those who work under you, how many are semi-skilled?
The responses vary from 0 150.
Question 11. Of those who work under you, how many are unskilled?
The responses vary from 0 40.
Question 12.How satisfied are you with your Job Profile?

Question 13.Do you think employees are identified as individuals?

Question 14.How motivated are you to see the company succeed?

Question 15.What about the variety of tasks that your position requires?

Question 16.Would you advise a friend to apply for a job at this company?

Question 17.Does your manager, or someone at work, seems to care about you as a person?

Question 18.Do you have the resources you need to do your work right?

Question 19.Is there someone at work who encourages your development?

Question 20.At work, do your opinions seem to count?

Question 21.Does the mission/purpose of your company make you feel your job is
important?

Question 22.Do you have a best friend at work?

Question 23.In the last year, have you had opportunities at work to learn and grow?

Question 24.In the last six months, has someone at work talked to you about your progress?

OVERALL ANALYSIS OF THE SURVEY

Factorization of Items
The Kaiser-Meyer-Olkin measure of sampling adequacy and Bartletts test for sphericity is
used to test the sample adequacy for applying factor analysis. Kaiser recommends values
greater than 0.5 as acceptable. Since the value is 0.732, it is a good value and hence we are
confident that factor analysis could be appropriate for these data. The Bartletts test for
sphericity is significant hence R- matrix is not an identity matrix. It reveals that there are
some relationships between variables and therefore factor analysis is appropriate for these
data.
KMO and Bartlett's Test
**Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity
Approx. Chi-Square
Df
Sig.

.732
247.794
78
.000

The table shows that the KMO value is 0.743 which is greater than 0.5 which is the
acceptable score. The Bartletts Test of Sphericity is 1.000 which is significant at .000 thereby
confirming that the data is satisfactory enough to perform factor analysis.

Rotated Component Matrix

The rotated component matrix displays the statement with its factor loadings. When the
rotated matrix is compared with unrotated matrix, we infer that there are three factors and
variables load highly onto one factor.
Rotated Component Matrixa
STATEMENTS

Component
1

How motivated are you to see the company succeed?

.826

How satisfied are you with your job profile?

.819

Would you advise a friend to apply for a job at this company?

.738

Does your manager or someone at work seems to care about you as a person?

.451

Do you have the resources you need to do the work right?

.354

In the last year, have you had opportunities at work to learn and grow?

.799

In the last six months, has someone at work talked to you about your progress?

.763

Do you have a best friend at work?

.700

Is there someone at work who encourages your development?

.477

What about the variety of tasks that your position requires?

.798

Does the mission purpose of your company makes you feel your job is important?

.655

At work, do your opinions seem to count?

.635

Do you think employees are identified as individuals?

.552

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 4 iterations.
This rotated component has the value limit from 0.826 to 0.354. The statement in the first
component namely working condition has the highest value of 0.826, the statement aspects is
motivation level in the organization and the least value 0.354 more information regarding
their job. The statement in the second component namely Growth Opportunities has the
highest value of 0.799, the statement is with regard to the reorganization and compensation
and the least value is of 0.477, the statements aspect is promotion policy.
The final rotated component has the value limit from 0.798 to 0.552. The statements in this

component namely work environment has the highest value of 0.798; the statement aspect is
surrounding environment and the least value 0.552 is the statement of interaction of
colleagues. The table shows the factor loadings extracted under each factors. First factor is
named as Working Conditions. Second factor is named as Growth Opportunities and the
third factor is named as Work Environment.
FACTORS

DESCRIPTION OF FACTOR STATEMENT

FACTOR
LOADING
S

How motivated are you to see the company

0.826
succeed?
How satisfied are you with your job profile?
WORKING
CONDITIONS

0.819

Would you advise a friend to apply for a job at

0.738
this company?
Does your manager or someone at work seems to
0.451
care about you as a person?
Do you have the resources you need to do the
0.354
work right?
In the last year, have you had opportunities at
0.799
work to learn and grow?

In the last six months, has someone at work talked

GROWTH
0.763
OPPORTUNITIE to you about your progress?
S
Do you have a best friend at work?
0.7
Is there someone at work who encourages your
0.477
development?
What about the variety of tasks that your position
0.798
requires?
WORK
ENVIRONMEN
T

Does the mission purpose of your company makes

0.655
you feel your job is important?
At work, do your opinions seem to count?

0.635

Do you think employees are identified as

0.552
individuals?

All these statements are grouped in to three factors, the factors are working condition, growth
opportunities, and work environment.The working condition is the first factor it has the
questions related to the working condition taking place in the organization. There exists
statements related to working condition they are, comfortable workspace and it has the higher

value when compared to other statements the value being 0.826.The second factor promotion
has statements created to the growth opportunities strategies. The first statement which has
0.799 has the larger value is with regard to the relationship between management and
employee.The last factor is working environment and it has 4 statements related to the work
environment. The statement has the value of 0.798 and it is with regard to the regard to the
social aspect of the work.
FACTORS

MEAN

S.D.

RANK

WORKING CONDITIONS

2.028

0.966931137 1

GROWTH
OPPORTUNITIES

1.64

0.78816752
9

WORK ENVIRONMENT

2.02

0.94555293
4

Ranking for Factor Involved

Respondents were asked to give rating between 1 (Strongly Disagree) and 5 (Strongly Agree)
to perceived quality of work life related variable identified for studying employees adoption
behavior.

The highest mean score of the variable is 2.028 and the lowest mean score is 1.64 for the
variable. Standard deviation of the variable is 0.966. As the factor promotion takes the first
place, it is interpreted that promotion plays the major role in the job satisfaction of the
employees. The next factor is work environment which is in the second place and working
condition holds the last place, it is found out that working condition and work environment
gives lesser job engagement when compared to the growth opportunities.
Findings
From the analysis, Employee Engagement is divided into three factors they are working
condition, growth opportunities and work environment which are named on the basis of the
statements and their type. Analysis reveals that the factor working conditions gives maximum
engagement in workplaceto the employees. Factor Analysis infers that the working

environment has the highest percentage. By segmenting, it is found that employees care more
about the working conditions, rather than growth opportunities and work environment.This
analysis shows contrast between management and ground-level employees.

SUGGESTIONS AND RECOMMENDATIONS

Supervisors and Managers should meet at regular intervals with the employees to
discuss about the improvement in the company, at work place and in their living of
standard, family problems etc.
Gap between managers and the employees should be reduced by raising the level of
engagement. For example: by conducting extra co-curricular activities like social and
cultural programs
Few employees feel that their ideas or work cant be recognized or appreciated. So
encourage them by making them feel that their ideas as well as they are important for
the company.
Create good and healthy environment at work place and increase the environment

CONCLUSION
Employee Engagement is the buzz word term for employee
communication. It is a positive attitude held by the employees towards
the organization and its values. It is rapidly gaining popularity, use and
importance in the workplace and impacts Organizations in many ways.
Employee engagement emphasizes the importance of employee
communication on the success of a business. An organization should thus
recognize employees, more than any other variable, as powerful
contributors to a company's competitive position. Therefore employee
engagement should be a continuous process of learning, improvement,
measurement and action. We would hence conclude that raising and
maintaining employee engagement lies in the hands of an organization
and requires a perfect blend of time, effort, commitment and investment
to craft a successful endeavour.

REFERENCES
[1].Ravichandran A., SoundaraRajan L. J., BalaSendhil Kumar G., A Study on Job
Satisfaction of Employees of Manufacturing Industry in Puducherry, India.
[2].ShilpaVarma, PriyaVij, Gopal R., A Study of the Employee Engagement Practices in
the Indian Manufacturing Sector.
[3].Dotson D., Engage, Empower and Align The Core of Next Generation
Manufacturing
[4].Yogendar et al., Employee Engagement in Manufacturing Sector