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RESEARCH ARTICLE
J Bus Mark Manag (2014) 7(2): 329–353
URN urn:nbn:de:0114-jbm-v7i2.903
Optimizing employee engagement with internal
communication: A social exchange perspective
Emma Karanges · Amanda Beatson · Kim Johnston · Ian Lings
Abstract: Employee engagement is linked to higher productivity, lower attrition, and
improved organizational reputations resulting in increased focus and resourcing by
managers to foster an engaged workforce. While drivers of employee engagement have
been identified as perceived support, job characteristics, and value congruence, internal
communication is theoretically suggested to be a key influence in both the process and
maintenance of employee engagement efforts. However, understanding the
mechanisms by which internal communication influences employee engagement has
emerged as a key question in the literature. The purpose of this research is to investigate
whether social factors, namely perceived support and identification, play a mediating
role in the relationship between internal communication and engagement. To test the
theoretical model, data are collected from 200 non-executive employees using an online
self-administered survey. The study applies linear and mediated regression to the model
and finds that organizations and supervisors should focus internal communication efforts
toward building greater perceptions of support and stronger identification among
employees in order to foster optimal levels of engagement.
Keywords: Employee engagement · Internal communication · Identification · Perceived
support · Social exchange theory · Social identity theory · Workplace relationships
Published online: 30.06.2014
---------------------------------------© jbm 2014
---------------------------------------E. Karanges (C)
Queensland University of Technology, School of Advertising, Marketing, and Public Relations, Brisbane,
Australia (applicable to all authors)
e-mail: [email protected]
A. Beatson
e-mail: [email protected]
K. Johnston
e-mail: [email protected]
I. Lings
e-mail: [email protected]
Optimizing employee engagement with internal communication: A social exchange perspective
Introduction
Employee engagement is the extent to which employees display discretionary effort in
their roles at work (Frank, Finnegan, and Taylor 2004). Engagement as a concept has
gained substantial interest across academic and practitioner literatures (Shuck and
Wollard 2011), due to its links to increased financial returns and improved organizational
reputations (Saks 2006). Benefits of an engaged workforce contribute to these
organizational outcomes through increased productivity, higher job satisfaction, and
decreased turnover (Saks 2006). While these benefits have resulted in an increased
priority, focus, and resourcing by managers worldwide to foster an engaged workforce
(Shuck and Wollard 2011), recent industry studies suggest these efforts may not be
working (see e.g., Gullup 2010; Towers Perrin 2008). Iyer and Israel (2012) identified
internal communication as a key driver of employee engagement. However, this
association has not been empirically confirmed. More specifically, understanding the
mechanisms by which internal communication influences employee engagement
remains unaddressed in the literature.
Internal communication is an internal organizational process that provides and
shares information to create a sense of community and trust among employees
(Rothenberg 2003; Ryynanen, Pekkarinen, and Salminen 2012). Developing a sense of
community and trust through internal communication involves establishing and
maintaining relationships between an organization, supervisors, and employees (Hume
and Leonard 2013). While employees experience many relationships within their
workplace, two essential relationships dominate an employee’s professional life: a
relationship with their organization (i.e., executive and senior management) and with
their direct supervisor; commonly referred to as social exchange relationships
(Masterson, Lewis, Goldman, and Taylor 2000; Sluss, Klimchak, and Holmes 2008).
Favorable social exchange relationships are essential for achieving organizational and
individual goals and objectives as each individual and/or group is interdependent on the
other (Hume and Leonard 2013). Social exchange theory is a prominent theoretical
paradigm for understanding workplace relationships (Cropanzano and Mitchell 2005)
and employee attitudes (DeConinck 2010) and offers a lens to explore social exchange
relationships within the organizational environment (Gersick, Dutton, and Bartunek
2000). Sluss et al. (2008) argue that further understanding of the mechanisms that
underpin social exchange relationships is required to provide greater insight into the
relationship between internal communication and employee engagement. The present
study addresses this need.
The main purpose of this research is to propose and test a new theoretical model,
based on the principals of social exchange and social identity, to explain the association
between internal communication and employee engagement at both the organizational
and supervisory level. While there is good reason to believe that social exchange (i.e.,
perceived support) will mediate the relationship between internal communication and
employee engagement, research has not explored social identity (i.e., identification) and
its potential mediating role in the association between internal communication and
engagement (Sluss et al. 2008). The remainder of this paper is structured as follows.
First, we review the theoretical background and concepts that are central to this study
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Optimizing employee engagement with internal communication: A social exchange perspective
and develop a conceptual model. Next, the research methodology is detailed followed
by the data analysis and the discussion of the findings. Finally, the limitations of the
study as well as suggestions for future research are discussed.
Theoretical background
Social exchange relationships
One of the most important aspects of an employee’s professional life is the
relationships they experience within the boundaries of their organization (Gersick et al.
2000; Masterson et al. 2000). Relationships play a critical role in shaping work
environments (Bartunek and Dutton 2000). Work environments can have either a
positive or negative effect on the amount of value, support, and identification an
employee derives from their professional life (Gersick et al. 2000). Social exchange
theory is a dominant theoretical paradigm used to explain workplace relationships (Blau
1964; Cropanzano and Mitchell 2005). Social exchange theory is a foundational theory
for other theories including leader-member exchange theory (Abu Bakar, Dilbeck, and
McCroskey 2010; Gerstner and Day 1977), organizational support theory (Baran,
Shanock, and Miller 2012; Rhoades and Eisenberger 2002), transformational leadership
(Judge, Piccolo, and Ilies 2004), trust (Dirks and Ferrin 2002), and service-dominant
logic (Vargo and Lusch 2004). Social exchange theory consists of similar perspectives
to service-dominant logic; a cognitive framework used to underpin the exchange of value
co-creation between organizations and their customers (Karpen, Bove, and Lukas 2011;
Vargo 2011). Vargo and Lusch (2008) extend service-dominant logic to include all
parties (e.g., employees) that exchange resources of value to develop favorable
cognitions, emotions, and behaviors to achieve mutual benefit for individuals,
customers, organizations, and societies.
The most explored and applied facet of social exchange theory is workplace
relationships (Cropanzano and Mitchell 2005). Various mutually dependent associations
exist within workplaces; these are referred to as social exchange relationships
(Cropanzano, Byrne, Bobocel, and Rupp 2001). Social exchanges involve a sequence
of interactions between two parties that produce personal obligations, appreciation, and
trust (Blau 1964; Emerson 1976). While numerous characteristics of social exchange
exist, the most significant is reciprocity, whereby positive and fair exchanges between
two parties (individuals or groups) result in favorable behaviors and attitudes
(Cropanzano and Mitchell 2005). Employees experience social exchange relationships
with their colleagues, customers, suppliers, direct supervisor, and their organization
(Masterson et al. 2000). Each of these relationships have cognitive, emotional, and
behavioral implications whereby employees reciprocate the socioemotional benefits
they receive (Blau 1964; Cropanzano and Mitchell 2005). The two social exchange
relationships which dominate an employee’s professional life are the relationships with
their organization and with their direct supervisor (Masterson et al. 2000; Sluss et al.
2008). An employee’s desire to reciprocate favors toward their organization and their
direct supervisor are the result of these relationships (Cropanzano and Mitchell 2005).
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Optimizing employee engagement with internal communication: A social exchange perspective
Calls have been made for more complex, empirical research on workplace
relationships (see e.g., Cropanzano and Mitchell 2005; Van Knippenberg, Van Dick, and
Tavares 2007; Masterson et al. 2000; Sluss et al. 2008). In particular, the need for
research focusing on exchanges between an employee and their organization and
between an employee and their direct supervisor has been highlighted as an important
area (Masterson et al. 2000; Sluss et al. 2008). Therefore, this study examines the
impact of internal communication on employee engagement at the organizationemployee and supervisor-employee level.
Resources of exchange
Social exchange theory provides an explanation of how individuals offer and obtain
resources within social exchange relationships (Sluss et al. 2008). A social resource is
defined as “any item, concrete or symbolic, which can become the object of exchange
among people” (Foa and Foa 1980, p. 78). Foa and Foa (1980) explore the nature of
interpersonal resource interactions (i.e., transactions within an organizational context)
and cluster resources into six social categories: love, status, information, money, goods,
and services. Foa and Foa’s (1980) six social classifications are grouped into two
additional categories: concreteness and particularism.
The resource of interest within this study is information, which includes “advice,
opinions, instructions, or enlightenment” (Foa 1971, p. 346) and is conceptualized as
internal communication. Information is considered moderately particularistic and highly
symbolic, implying it goes beyond object worth and its source has an impact on its value
(Cropanzano and Mitchell 2005). Furthermore, Rhoades and Eisenberger (2002) posit
that social exchange theorists (see e.g., Blau 1964; Cotterell, Eisenberger, and Speicher
1992) believe employees will value resources (i.e., rewards and desirable job
conditions) more highly if their organization provides resources on a voluntary basis,
rather than as a requirement from an external party such as a union or the government.
According to Smidts, Pruyn and Van Reil (2001) internal communication facilitates
interactions between organizations and employees which create social relationships
based on meaning and worth. In turn, this is believed to increase productivity and drive
positive employee attitudes (Cropanzano and Mitchell 2005). The conceptualization of
information as a resource of exchange is consistent with social exchange theory,
whereby individuals use their cognitive filters to translate resources (i.e., information)
into positive or negative actions. Therefore, this study equates the resource of
information as the exchange of communication between an organization, a supervisor,
and their employees. Furthermore, this study positions employee engagement as a
favorable, pro-social attitude and behavior which employees are likely to reciprocate.
The concept of internal communication and employee engagement are discussed in the
following sections.
Internal communication
To retain a satisfied and motivated workforce, senior leaders and managers must
continually find ways to meet individual employee needs and stimulate their creativity,
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Optimizing employee engagement with internal communication: A social exchange perspective
while persuading them to act in ways aligning with organizational objectives (Kitchen
and Daly 2002). One approach used by organizations to foster satisfied and motivated
employees is internal communication (Ryynanen et al. 2012; van Vuuren, de Jong, and
Seydel 2007). Internal communication plays an integral role in the management function
due to its ability to provide value to an organization’s internal and external customers
(Ryynanen et al. 2012; Zahay and Peltier 2008). Furthermore, it is necessary for senior
leaders and managers within service driven organizations to communicate frequently
with employees concerning service delivery and quality to establish trust and develop
performance goals (Smith 2011). An increasing amount of research has been published
on internal communication within the human relations, organizational psychology,
management, and internal marketing literature (Lings and Greenley 2005; Ryynanen et
al. 2012; Smith 2011). Internal communication is considered an important, challenging
process which strengthens the connection between an organization and its
stakeholders, particularly employees (Gray and Robertson 2005; Mazzei 2010).
The existing literature offers several definitions to describe internal communication
(see e.g., Bovee and Thill 2000; Carriere and Bourque 2009; Kalla 2005; Mazzei 2010;
Welch and Jackson 2007). The four main themes derived from the various definitions
are 1) transactional in nature, 2) exchange of information, 3) management process, and
4) communication flow. While the definitions by Bovee and Thill (2000), Carriere and
Bourque (2009), Kalla (2005), Mazzei (2010) and Welch and Jackson (2007) provide
insight into what constitutes internal communication, there is no one definition that fully
encapsulates the concept in its entirety. Therefore, this study incorporates the definitions
by Bovee and Thill (2000), Carriere and Bourque (2009), Kalla (2005), Mazzei (2010)
and Welch and Jackson (2007) and defines internal communication as: The process
responsible for the internal exchange of information between stakeholders at all levels
within the boundaries of an organization.
Internal communication is operationalized in this study at two levels, organizationemployee and supervisor-employee, and will be referred to as internal organizational
communication and internal supervisor communication. Internal organizational
communication occurs between an organization’s executive team (i.e., chief executive
officer, senior management) and employees, while internal supervisor communication
occurs between supervisors and their employees. The importance of considering
internal organizational communication and internal supervisor communication stems
from Bennis and Nanus’ (1985) belief that both levels of communication are essential
within all organizations. Furthermore, Bennis and Nanus (1985) suggest organizations
and supervisors must communicate with their employees about company goals, visions,
and values, as well as specific role-related tasks, in ways which elicit and encourage
employees to respond with feedback. Therefore, it is important to understand how
internal communication enhances organizational effectiveness and whether internal
communication is linked to employee engagement. Some authors (see e.g., Johlke and
Duhan 2000; Smidts et al. 2001) conceptualize internal communication as a
multidimensional construct, while others (see e.g., Carriere and Bourque 2009; Zahay
and Peltier 2008) position internal communication as a unidimensional construct
consisting of various items that reflect the entire conceptual domain of internal
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Optimizing employee engagement with internal communication: A social exchange perspective
communication. As there are differences in views and no widely accepted scale used to
measure internal communication, this study utilizes a less contentious approach and
describes the concept as a unidimensional construct. The conceptual domain of internal
communication is drawn from the services marketing and management literature (Johlke
and Duhan 2000; Maltz 2000).
Employee engagement
Employee engagement is associated with favorable employee outcomes such as
organizational effectiveness and positive financial returns (Saks 2006). Employee
engagement has been the focus of both industry and academic studies (Shuck and
Wollard 2011). Despite the increase in attention, there is a shortage of empirical
research on employee engagement (Saks 2006). Furthermore, much of what has been
written about employee engagement comes from consulting firms where it has its basis
in practice rather than theory (Saks 2006). Despite growing interest in engagementrelated research, consultancy studies reveal a decline in the number of engaged
employees (Saks 2006). A global workforce study conducted by Towers Perrin (2008)
found only 21 per cent of employees to be engaged with their work, and 38 per cent of
employees were moderately to fully disengaged with their work. More recently Gullup
Consulting (2010) found 11 per cent of employees worldwide are engaged in their job,
62 per cent are not engaged, and 27 per cent are actively disengaged. Employee
engagement has therefore become a high priority for organizations worldwide.
This research aligns with Schaufeli, Salanova, González-Romá, and Bakker’s (2002
p. 74) definition of engagement as “a positive, fulfilling, work-related state of mind
characterized by vigor, dedication, and absorption”. Vigor, also known as an employee’s
behavior, is defined as “high levels of energy and mental resilience while working, the
willingness to invest effort in one’s work, and persistence even in the face of difficulties”
(Schaufeli, Bakker, and Salanova 2006, p. 702). Dedication, also described as an
employee’s emotion, is defined by Schaufeli et al. (2006 p. 702) as “being strongly
involved in one’s work and experiencing a sense of significance, enthusiasm, inspiration,
pride, and challenge”. Finally, absorption, or cognition, is defined as “being fully
concentrated and happily engrossed in one’s work, whereby time passes quickly and
one has difficulties with detaching oneself from work (Schaufeli et al. 2006 p. 702).
Internal communication and employee engagement
Internal communication is suggested as one of the key determinants of employee
engagement (Iyer and Israel 2012). Despite the importance accredited to internal
communication and employee engagement within the practitioner literature, there is little
empirical academic research testing and supporting an association between the
constructs.
Three different levels of engagement are recognized by Truss, Soane, and Edwards
(2006) and include emotional (being very involved in work related tasks), cognitive
(focusing very hard on work related tasks), and physical (being willing to put in extra
effort) (Truss et al. 2006). Although the source of the engagement components is not
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Optimizing employee engagement with internal communication: A social exchange perspective
acknowledged by Truss et al. (2006) these components directly align with Kahn’s (1990)
belief that when engaged, people employ and express themselves physically,
cognitively, and emotionally during role performance. Truss et al. (2006) found three
main drivers of employee engagement 1) opportunities for employees to feed their views
and ideas upwards, 2) employees feeling well-informed about what is happening within
their organization, and 3) employees sensing their manager is committed to the
organization. An important conclusion, Truss et al. (2006) argues, is that keeping
employees well informed about organizational issues is a major driver of employee
engagement.
While there are no specific studies investigating the influence of internal
communication on employee engagement, organization communication satisfaction is
suggested to have a positive impact on employee engagement (Iyer and Israel 2012).
One aspect of organization communication is inter-organizational communication
(Downs and Hazen 1977) which parallels the current conceptualization of internal
communication. Building on this, the present study aims to discover the mechanisms
that play a mediating role in the relationship between internal communication and
employee engagement.
Organizations and supervisors who communicate with their employees on a daily
basis facilitate social exchange, commonly described as the sequence of interactions
that produce personal obligations, appreciation, and trust (Blau 1964; Emerson 1976;
Ruck and Welch 2012). The theorized relationship between internal communication and
employee engagement is believed to operate through social exchange, whereby
employees feel obligated to return the favorable benefits they receive (Saks 2006).
Favorable exchanges based on obligation are characterized by the act of reciprocity
(Cropanzano and Mitchell 2005). Duck (1994) supports this view and adds that internal
communication is in fact a fundamental element of all exchange relationships.
Furthermore Rich, Lepine, and Crawford (2010) posit that if communication within an
organization is truthful, respectful, polite, and dignified, it is likely to play an important
role in developing optimal employee engagement. On these grounds, the following
hypotheses have been developed.
Hypothesis 1: Internal organizational communication has a direct positive effect on
employee engagement.
Hypothesis 2: Internal supervisor communication has a direct positive effect on
employee engagement.
Mediators of the internal communication and employee engagement exchange
relationship
This study focuses on both the direct and indirect relationships between internal
communication and employee engagement at the organization and supervisor level
(Jaccard and Jacoby 2010). Alternative explanations for the association between
internal communication and employee engagement may be understood through the role
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Optimizing employee engagement with internal communication: A social exchange perspective
of mediating variables. Several factors have been proven to mediate the relationship
between internal communication and favorable organizational outcomes, including
motivation (Bambacas and Patrickson 2008), communication satisfaction (Carriere and
Bourque 2009), commitment, and brand identification (Punjaisri, Evanschitzky, and
Wilson 2007). However, there are numerous unexplored variables that may have a
mediating effect on the association between internal communication and favorable
outcomes within the work environment (Welch and Jackson 2007). Social exchange, as
suggested above, offers an explanation for exchange-based transactions between
organizations, supervisors, and employees. Insights regarding social exchange
relationships are frequently represented by perceived support; a concept commonly
described as the extent to which an employee feels as though their organization and
supervisor genuinely values their efforts and cares about their well-being (Eder and
Eisenberger 2008). However, research on workplace relationships has not considered
another important aspect of an employee’s professional life, specifically their sense of
identity and belonging (Sluss et al. 2008). Calls have been made for further research
investigating the role of identification within the context of social exchange relationships
(Sluss et al. 2008). Identification is commonly referred to as an employee’s perception
of oneness and group membership and has the potential to influence social exchange
relationships (Ashforth and Mael 1989). Therefore, both perceived support and
identification, referred to as social factors within this study, will be investigated as
potential mediators. As this research examines the social exchange relationships
between organizations and employees as well as supervisors and employees, perceived
support and identification will be considered at both levels. The first social factor to be
addressed is perceived support.
Perceived organizational support is defined as an employee’s belief that their
organization values their efforts and cares about their well-being (Eder and Eisenberger
2008). Employees consider their relationship with the organization to be representative
of a relationship between themselves and another more influential individual (Sluss et
al. 2008). Social exchange theory implies that an organization’s willingness to reward
increased work effort, and to meet socio-emotional needs, is determined by an
employees’ ability to develop strong beliefs concerning the extent to which the
organization values their contributions and shows a genuine interest in their welfare
(Hutchison et al. 1986). Perceived organizational support, as suggested by (Rhoades
and Eisenberger 2002), manifests when an employee believes the organization will
provide the necessary, and even additional, resources when they are required to
successfully perform their role efficiently and effectively. On these grounds, the following
hypothesis has been developed.
Hypothesis 3: Perceived organizational support has a mediating effect on the
relationship between internal organizational communication and employee
engagement.
Perceived supervisor support has also been shown to have a significant influence
on favorable organization-level and individual-level outcomes (DeConinck and Johnson
2009; Eisenberger, Stinglhamber, Vandenberghe, Sucharski, and Rhoades 2002).
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Optimizing employee engagement with internal communication: A social exchange perspective
Although perceived organizational support and perceived supervisor support are highly
interrelated (Rhoades and Eisenberger 2002), research indicates they are distinct
constructs (DeConinck and Johnson 2009). Perceived supervisor support is
underpinned by social exchange theory and commonly defined as “the extent to which
the supervisor values the employee’s contributions” (DeConinck and Johnson 2009, p.
334). According to Shanock and Eisenberger (2006) employees consider the support
they receive from their supervisor as an indication of the organization’s positive or
negative orientation toward them. On these grounds, the following hypothesis has been
developed.
Hypothesis 4: Perceived supervisor support has a mediating effect on the
relationship between internal supervisor communication and employee engagement.
The second social factor to be investigated is identification. The benefits of
organizational identification and supervisor identification are best understood through
social identity theory and principals of group membership. This study contributes to
existing literature by adding social identity to the theoretical model and examining
identification as a potential mediator of the relationship between internal communication
and employee engagement.
Organizational identification occurs when employees feel as though they belong
to an organization, whereby they identify themselves in terms of their social and group
membership (Tajfel 1978). Employees who identify themselves with the organization
view the success or failure of the organization as their own (Ashforth and Mael 1989).
When employees take pride in their group membership, they are likely to generate
favorable individual-level and organization-level outcomes including, organizational
citizenship behavior, employee satisfaction, decreased turnover, performance, and
commitment (Riketta 2005). In addition, organizational identification has a cognitive and
affective component which influences an employee’s sense of pride and belonging to
an organization (Smidts et al. 2001; Tajfel and Turner 1985). According to Tajfel and
Turner (1985) the affective component of organizational identification plays the more
important role in achieving positive social identity. On these grounds, the following
hypothesis has been developed.
Hypothesis 5: Organizational identification has a mediating effect on the
relationship between internal organizational communication and employee
engagement.
Supervisor identification facilitates interpersonal relationships among supervisors
and their team members, namely employees (Becker, Billings, Eveleth, and Gilbert
1996). As Ashforth and Mael (1989) posit, employees who confidently identify with their
organization exhibit a supportive attitude and are more likely to align with the
organization’s overall goals and objectives. To date, research on identification has rather
neglected an employee’s ability to identify with their direct supervisor, and the
implications this may have for the supervisor-employee relationship, and of course
employee engagement. Becker et al. (1996) consider supervisor-related identification
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Optimizing employee engagement with internal communication: A social exchange perspective
and organization-related identification within their research on employee commitment.
Their research found that employees from different organizations will distinguish
between their identification with their organization and with their direct supervisor.
Therefore, supervisor identification will be considered as a key determinant of the
relationship between internal supervisor communication and employee engagement.
On these grounds, the following hypothesis has been developed.
Hypothesis 6: Supervisor identification has a mediating effect on the relationship
between internal supervisor communication and employee engagement.
In sum, social exchange and social identity have the potential to influence an
employee’s professional life and the ability to effect an employee’s perceptions of the
quality and value of their workplace relationships (Sluss et al. 2008). Therefore, both
perceived support and identification will be considered within this research as the
mechanisms (i.e., mediating variables) that influence the relationship between internal
communication and employee engagement. Relationships among the constructs were
empirically tested as follows (see Figure 1).
Fig. 1: The proposed research model
H1 – H2 Hypothesized direct relationships, H3 – H6 Hypothesized indirect (mediation) relationships
Methodology
This study employed a quantitative approach (Cavana, Delahaye, and Skaran 2001).
An online survey comprising of five sections was used (see Appendix for list of final
scale items) (Becker 1992; Johlke and Dunhan 2000; Maltz 2000; Miller, Allen, Casey,
and, Johnson 2000; Schaufeli et al. 2002; Shanock and Eisenberger 2006). All items
were measured using a 7-point Likert-scale, ranging from ‘1 = strongly disagree’ to ‘7 =
strongly agree’. Two stages of pre-testing were implemented to resolve any fundamental
problems in the survey and to test for content validity (Malhotra, Hall, Shaw, and
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Optimizing employee engagement with internal communication: A social exchange perspective
Oppenheim 2006). Stage one, 12 participants gained through a convenience sampling
technique completed the survey and provided feedback regarding overall design and
the clarity of wording and instructions. Subsequently, some design modifications were
made to the survey before the second stage of pre-testing occurred. Stage two, a larger
pilot study of 54 responses gathered using a snowball sample was conducted to achieve
an acceptable level of reliability and validity (Zikmund 2011).
After pre-testing the survey and making slight amendments, the main survey was
administered, via email, to a sample of 2,000 Australian males and females aged 18 –
65+ currently employed on either a full-time or part-time basis with an organization
employing over 50 staff. It was required that hierarchical management levels existed
within the participants’ organization. This was important to the research enquiry which
was aimed to understand the influence of internal communication, from both the
organization and supervisor, on employee engagement. Participants holding an
executive management (i.e., owner, partner, chief executive officer) or senior
management (i.e., executive, general manager) position within their organization were
excluded from the target population as they are generally the source of communication,
rather than the receivers.
All respondents received an email containing the link to the online survey. A
response rate of 18.25% was achieved (365 completed surveys, 200 usable due to the
financial restrictions associated with the study). Respondents were almost equally split
between male (49.5%) and female (50.5%) employees aged between 15 and 65 plus,
with the largest age segment being those aged 55 to 64 (28%). The majority of
respondents had worked for their current organization for one to five years (29%),
attained a diploma/certificate as their highest level of education (34%), and worked
within interpersonal type roles i.e. education and training sector (16.5%),
government/public and health sector (14.5%), and the retail sector (13.5%). To minimize
the risk of self-selection and non-responses bias, a third party was used to administer
the online survey.
Scale validation and dimensionality of constructs
The reliability and validity of the scales were addressed to minimize measurement
error and to ensure the results were a true representation of the observed event (Hair,
Black, Babin, Anderson, and Tatham 2010). Scale items were adapted from the services
marketing (Johlke and Dunhan 2000; Maltz 2000), psychology (Schaufeli et al. 2002)
and organizational behavior (Becker 1992; Miller et al. 2000; Shanock and Eisenberger
2006) literature and thus, the scales used were not specific to the context of this
research. Furthermore, the items used to measure internal communication
(organizational and supervisor) were significantly adapted to better suit this research.
Therefore, it was essential to test the suitability of these items given that they were used
in a different context (Nunnally and Bernstein 1994). Reliability was assessed by
examining the Cronbach’s (1951) alpha coefficients and item-to-total correlations.
Individual items with alpha scores below .70 and item-to-total correlation scores less
than .30 were deleted (Hair et al. 2010; Nunnally and Bernstein 1994).
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Optimizing employee engagement with internal communication: A social exchange perspective
Following the reliability tests, an exploratory factor analysis (EFA) was undertaken
to determine the factor structure of each construct (Hair et al. 2010). Exploratory factor
analysis using principal axis factoring and oblique rotation methods was performed
(Allen and Bennett 2012). Following the recommendations of Field (2005), Hair et al.
(2010), and Tabachnick and Fidell (2007), items were deleted if they had unique factor
loadings less than .50 and/or if they cross loaded onto more than one factor. Factors
with eigenvalues less than one were also deleted and the scree plot was inspected for
a prominent elbow to provide further insight into the number of factors to be extracted
from the data. All constructs were shown to be unidimensional. Internal organizational
communication is measured by seven items and internal supervisor communication by
13 items which adequately represent the complete conceptual domain of internal
communication.
Analysis and results
This study tests two competing models which provide an explanation for the
relationship between internal communication (organizational and supervisor) and
employee engagement. The six hypotheses identified within the literature review were
tested by performing a series of regression analyses. First, the standard direct effect
models testing H1 and H2 were examined using linear regression. In the first regression
involving internal organizational communication and employee engagement, a
significant and positive association between the two variables was found (β=.48,
p<.001). Furthermore, internal organizational communication accounted for 23% of the
variance in employee engagement, thus supporting H1. In the second regression
involving internal supervisor communication and employee engagement, a significant
and positive association between the two variables was found (β=.57, p<.001). Internal
supervisor communication accounted for 32% of the variance in employee engagement,
thus supporting H2.
Second, the four indirect effect models testing H3-H6 were examined using multiple
regression; a technique used to assess mediation (Hair et al. 2010). Baron and Kenny’s
(1986) four conditions of mediation were used to test for mediation: 1) the independent
variable (IV) has a significant and unique effect on the mediator (M); 2) when the M is
removed, the IV has a significant and unique effect on the dependent variable (DV); 3)
the M has a significant and unique effect on the DV when controlling for the IV and; 4)
the significant relationship between the IV and the DV will be reduced (partial mediation)
or will no longer be significant (full mediation) when controlling for the M. Consequently,
four regression analyses were conducted to test for mediation (see Table 1 and Table
2).
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Optimizing employee engagement with internal communication: A social exchange perspective
Tab. 1: Results of mediated regression (organization-employee model)
Regression: H3
Regression: H5
Beta
t
Beta
t
1 (Constant) IOC
.48**
7.71
.48**
7.71
2 (Constant) IOC
-.10
-1.00
-.15*
-2.03
POS
.70**
7.24
.84**
11.39
OI
Note. * = p <.05; ** = p <.001
Tab. 2: Results of mediated regression (supervisor-employee model)
Regression: H4
Regression: H6
Beta
t
Beta
t
1 (Constant) ISC
.57**
7.71
.57**
7.71
2 (Constant) ISC
.14
1.06
.33*
-2.03
.48**
3.72
.29*
11.39
PSS
SI
Note. * = p <.05; ** = p <.001
The results of the multiple regression analyses for each model indicated a significant
and positive relationship between the independent variables (internal organizational
communication and internal supervisor communication) and the mediators (perceived
organizational support, organizational identification, perceived supervisor support, and
supervisor identification), thus confirming the first condition of mediation for each model.
The second condition required to support a median hypothesis was met for each model
as described in the previous section. The third regression assessed the effect of the
mediators (perceived organizational support, organizational identification, perceived
supervisor support, and supervisor identification) on the dependent variable (employee
engagement) when controlling for the independent variables (internal organizational
communication and internal supervisor communication). The results of each regression
revealed a significant and positive relationship between the mediator and dependent
variable for each model, thus confirming the third condition. The final regression
indicated that the relationship between internal organizational communication and
employee engagement, and internal supervisor communication and employee
engagement, decreased when perceived organizational support and perceived
supervisor support was included (see Table 1 and Table 2). Both relationships also
became non-significant at the p <.05 significance level, thus confirming the fourth
341
Optimizing employee engagement with internal communication: A social exchange perspective
condition and supporting H3 and H4. Furthermore, the relationship between internal
organizational communication an employee engagement, and internal supervisor
communication and employee engagement, decreased when organizational
identification and supervisor identification were included. However, the relationships
remained significant at the p <.05 significance level, thus confirming the fourth condition
and partially supporting H5 and H6. To further confirm whether full mediation had
occurred, the Sobel’s (1982) test was conducted and indicated that the indirect effect
was significant at p <.001 for each relationship within all models (MacDonald and
Jessica 2006).
The final stage of analysis evaluated the adequacy or fit of each model using the R2
of the criterion variable (employee engagement) to determine which model within each
level (organization-employee and supervisor-employee) explains the highest proportion
of variance in employee engagement. Organizational identification explained the highest
proportion of variance in employee engagement scores, R2 = .54, F(1, 197) = 129.79,
p < .001 within the organization-employee model and perceived supervisor support, R2
= .37, F(1, 197) = 13.86, p < .001 within the supervisor-employee model. Following the
recommendations of Chin (1998) both models represent moderate model fit and give
the highest predictive ability for employee engagement.
Discussion
Theoretical implications
The overall purpose of this study was to test two competing models which provide
an explanation for the relationship between internal communication (organizational and
supervisor) and employee engagement. The study proposed that social factors, namely
perceived support and identification, would have a mediating effect on the relationship
between internal communication (organizational and supervisor) and employee
engagement. This proposition was supported as the indirect effect models suggested
that internal communication (organizational and supervisor) as a resource is having little
to no impact on employee engagement in the presence of perceived supervisor support
and organizational identification. The key theoretical findings are now discussed.
This research highlights the role of internal communication in influencing employee
engagement. The relationship between internal communication (organizational and
supervisor) and employee engagement received significant and positive support in the
direct effect models testing H1 and H2. This finding supports the notion that internal
communication has a significant role to play in optimizing employee engagement.
Specifically, these results support the expectation that social resources, when viewed
favorably by employees, will influence an employee’s experience in the workplace
(Sluss et al. 2008). This research provides empirical evidence for the association
between internal communication (organizational and supervisor) and employee
engagement. However, the indirect or mediating effects of the relationship between
internal communication and employee engagement were theorized to provide a better
342
Optimizing employee engagement with internal communication: A social exchange perspective
explanation for the association between internal communication (organizational and
supervisor) and employee engagement.
Hypothesis 3, 4, 5, and 6 posit that identification and perceived support have a
mediating effect on the relationship between internal communication (organizational and
supervisor) and employee engagement. The findings for the organization-employee
model are consistent with established studies (see e.g., Ashforth and Mael 1989; He
and Brown 2013; Lings and Greenley 2005; Riketta 2005; Smidts et al. 2001), and
indicate that organizational identification partially mediates the relationship between
internal organizational communication and employee engagement, thus supporting H4.
In other words, internal organizational communication influences employees’ ability to
identify with their organization which then has an expositive impact on employee
engagement. Organizational identification also represented the highest proportion of
variance in employee engagement over perceived organizational support. These
findings suggest that identification is an important component of an employee’s
professional life and influences their ability to engage with their work. The findings also
favor social identity theory which has been used to gain an informed perspective on the
perceived oneness between the individual and the organization (Ashforth and Mael
1989; Dutton, Dukerich, and Harquail 1994).
The findings for the supervisor-employee model are consistent with established
studies (see e.g., DeConinck 2010; Hutchison et al. 1986; Panaccio and Vandenberghe
2009; Rhoades and Eisenberger 2002; Saks 2006; Shanock and Eisenberger 2006;
Sluss et al. 2008), and indicate that perceived supervisor support fully mediates the
relationship between internal supervisor communication and employee engagement,
thus supporting H5. In other words, internal supervisor communication influences
perceptions of perceived support which then has an expositive impact on employee
engagement. Perceived supervisor support also represented the highest proportion of
variance in employee engagement over supervisor identification. However, the
proportion of variance in employee engagement represented by perceived supervisor
support and supervisor identification differed by only 2%. This implies that both social
factors play a role in influencing employee engagement. Overall, these findings support
social exchange theory, which emphasizes the role of reciprocity in social exchange
relationships between supervisors and their employees (Cropanzano and Mitchell 2005;
Rhoades and Eisenberger 2002). This result is similar to the theoretical assertion that
when supervisors provide resources (internal communication) in a way that is perceived
to be beneficial, employees will consider the relationship favorably and will reciprocate
with engagement (Cropanzano and Mitchell 2005).
While no direct comparisons between the organization-employee model and
supervisor-employee model have been statically drawn, soft conclusions regarding their
interdependence can be made. It appears that resources (social and economic) are
usually allocated and exchanged by an organization’s team of supervisors as they are
in contact with employees more frequently than the chief executive officer and senior
management team (Sluss et al. 2008). While the organization-employee and supervisoremployee models operate through different mechanisms one may assume that the
343
Optimizing employee engagement with internal communication: A social exchange perspective
supervisor-employee relationship is responsible for the development of the
organization-employee relationship. In sum, principals of social exchange and social
identity influence an employee’s professional life and their willingness to reciprocate
engagement.
Practical implications
This research also offers practical implications for supervisors and organizational
leaders. The results provide organizational leaders and supervisors with some of the
internal drivers and tools which influence employee engagement. Organizational
leaders should take advantage of identification, namely perceptions of value and pride,
in influencing employee engagement through internal communication. That is, in order
for employees to become engaged, they must develop knowledge of their group
membership to which they attach value and emotional significance (Tajfel 1978).
Organizations can achieve this through internal communication which builds employees’
knowledge of group membership and strengthens identification with their organization.
For instance, communication should be focused on increasing employees’ sense of
pride and belonging (Tajfel 1985). Furthermore, internal communication should facilitate
an employee’s ability to link their values and goals to those of the organization (Miller et
al. 2000). Supervisors should take advantage of perceived support, namely perceptions
of the quality of the exchange relationship, in influencing employee engagement through
internal communication. That is, in order for employees to become engaged, they must
develop a strong belief that their supervisor values their efforts and cares about their
well-being (Shanock and Eisenberger 2006). Supervisors can achieve this through
internal communication which builds employees’ perceptions of support. Furthermore,
supervisors should involve employees in discussions about their individual role and
team objectives frequently (Johlke, Dunhan, Howell, and Wilkes 2000).
In summary, from a practice perspective, organizational leaders and supervisors
should focus internal communication toward strengthening identification with the
organization and perceived support from the supervisor, rather than using internal
communication to drive employee engagement directly.
Limitations and future research
Although this research contributes to academic and practitioner knowledge, each
research design contains inherent limitations. However, these limitations can be
addressed by future research. Four main limitations were identified within this study.
First, cross-sectional and self-report data were used which implies issues of causality
and common method bias (Robson 2011; Zikmund 2011). Therefore, while the findings
are consistent with social exchange and social identity theory and literature
(Cropanzano and Mitchell 2005; Masterson et al. 2000) the results do not confirm
causality. Future research with longitudinal and experimental designs are required to
provide more specific conclusions about the causal effects of internal communication
(organizational and supervisor) on employee engagement, and the extent to which this
association is mediated by principals of social exchange and social identity. Second,
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Optimizing employee engagement with internal communication: A social exchange perspective
some of the variables were highly inter-correlated, commonly referred to as
multicollinearity. Tolerance and its inverse, the Variance Inflation Factor (VIF) (Allen and
Bennett 2012) were used to test for multicollinearity. While the results of both tests
confirmed that multicollinearity did not pose a major threat to the study, some of the
tolerance values did not meet the more rigorous requirements of Menard (2002). Hence,
future research incorporating other predictors (i.e., trust and fairness) of perceived
quality and value of the exchange of resources between organizations, supervisors, and
employees may overcome this potential issue. Third, the non-probability sampling
technique used within this study limited the generalizability of the results. Fourth, the
most important social exchange relationships experienced by employees were
investigated within this research: an employee’s relationship with their organization and
with their supervisor. While each model was tested individually, the findings did not make
direct comparisons between the models because of construct equivalence. Future
research could investigate both models and then make comparisons between the
organization-employee and supervisor-employee relationship by utilizing analysis
methods to test for construct equivalence, such as CETSCALE (Malhotra et al. 2006).
This would ensure that construct measures are consistent across both models, thus
increasing the ability to make hard conclusions about the significance of the findings.
Another avenue of future research stems from the findings of previous studies
suggesting that proficient management and delivery of customer-related communication
is a driver of successful customer relationships (de Chernatony and Segal-Horn 2003;
Ryynanen et al. 2012). While the present study focuses on an organization’s internal
customers, namely employees, it would be beneficial to apply the current theoretical
model to an organization’s external customers. Such an investigation could help
researchers gain insight into the social factors which drive customer engagement.
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Appendix: Scale Items
Internal Organizational Communication
Items
Communalities
Factor Loading
At work, communication flows two-way (e.g. from the
executive team to me, and from me to the executive team)
.85
.92
At work, I exchange ideas and information with the executive
team freely and easily
.81
.90
At work, open lines of communication between me and the
executive team are encouraged
.75
.87
Discussions with the executive team go beyond mere
direction about how to do my job
.72
.85
I often discuss work-related matters with the executive team
.65
.81
The executive team regularly discusses organizational
issues with me
.61
.78
The executive team communicates with me frequently
.56
.75
Cronbach’s Alpha
Internal Supervisor Communication
Items
.94
Communalities
Factor Loading
At work, I exchange ideas and information with my direct supervisor
freely and easily
.84
.92
Communication from my direct supervisor is accurate
.81
.90
At work, communication flows two-way (e.g. from my direct
supervisor to me, and from me to my direct supervisor)
.78
.89
Communication from my direct supervisor is adequate
.80
.89
Discussions with my direct supervisor go beyond mere direction
about how to do my job
.76
.87
Communication from my direct supervisor is timely
.76
.87
At work, an open line of communication between me and my direct
supervisor is encouraged
.76
.87
My direct supervisor and I discuss the best actions for me to take in
my role
.76
.87
I often discuss role-related matters with my direct supervisor
.73
.85
My direct supervisor tells me how my job tasks fit into the overall aim
of the organization
.72
.85
My direct supervisor communicates with me frequently
.71
.84
Communication from my direct supervisor is complete
.68
.83
My direct supervisor and I regularly discuss my day-to-day activities
and goals
.65
.80
Cronbach’s Alpha
.98
351
Optimizing employee engagement with internal communication: A social exchange perspective
Perceived Organizational Support
Items
Communalities
Factor Loading
My organization really cares about my well-being
.85
.92
My organization strongly considers my goals and values
.85
.92
My organization cares about my opinions
.84
.91
My organization shows a great deal of concern for me
.80
.89
My organization is willing to help me when I need a special
favor
.70
.84
Help is available from my organization when I have a
problem
.63
.79
My organization would forgive an honest mistake on my
part
.62
.79
My organization would not take advantage of me
.59
.77
Cronbach’s Alpha
.96
Perceived Supervisor Support
Items
Communalities
Factor Loading
My direct supervisor really cares about my well-being
.86
.93
My direct supervisor cares about my opinions
.85
.92
Help is available from my direct supervisor when I have a
problem
.82
.91
My direct supervisor shows a great deal of concern for me
.82
.91
My direct supervisor strongly considers my goals and
values
.78
.89
My direct supervisor is willing to help me when I need a
special favor
.77
.88
My direct supervisor would forgive an honest mistake on
my part
.74
.86
My direct supervisor would not take advantage of me
.62
.78
Cronbach’s Alpha
.97
Organizational Identification
Items
Communalities
Factor Loading
I am proud to be an employee of my organization
.84
.92
I am glad I chose to work for my organization rather than another
company
.82
.91
I talk up my organization to my friends as a great company to work
for
.74
.86
I find it easy to identify with my organization
.73
.85
I feel that my organization cares about me
.52
.84
I would describe my organization as a large “family” in which most
members feel a sense of belonging
.70
.83
352
Optimizing employee engagement with internal communication: A social exchange perspective
I find my values and the values of my organization are very similar
.69
.83
I have warm feelings toward my organization as a place to work
.68
.82
My organization’s image in the community represents me well
.66
.81
The track record of my organization is an example of what
dedicated people can achieve
.61
.80
I would be willing to spend the rest of my career with my current
organization
.60
.77
I really care about the fate of my organization
.52
.72
Cronbach’s Alpha
.96
Supervisor Identification
Items
Communalities
Factor Loading
Since starting this job, my personal values and those of my direct
supervisor have become more similar
.75
.87
When someone praises my direct supervisor, it feels like a personal
compliment
.72
.85
My direct supervisor’s successes are my successes
.72
.85
The reason I prefer my direct supervisor to others is because of
what he or she stands for
.71
.84
My attachment to my direct supervisor is primarily based on the
similarity of my values
.71
.84
When I talk about my direct supervisor, I usually say ‘we’ rather
than ‘they’
.71
.84
I feel a sense of ‘ownership’ for my direct supervisor
Cronbach’s Alpha
.64
.80
.94
Employee Engagement
Items
Communalities
Factor Loading
I am enthusiastic about my job
.82
.91
At my work, I feel I have lots energy
.72
.86
At my job, I feel strong and vigorous
.71
.84
My job inspires me
.68
.83
I am immersed in my work during work hours
.66
.80
When I get up in the morning, I feel like going to work
.61
.78
I feel happy when I am working intensely
.60
.76
I am proud of the work that I do at my organization
.57
.76
Cronbach’s Alpha
.94
353

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