Impact of CSR on Employee Engagement: Study Case of Bank Audi in Lebanon ()
1. Introduction
Today employee engagement has become the top issue on the mind of business leaders as it increases the company ability to attract, retain and, ultimately, influence work and business outcomes by reducing staff turnover, improve productivity and efficiency, retain customers and make more profits which made the employee engagement one of the top concerns for HR professionals looking to identify the engagement “drivers” which seems to be very difficult and hard to know exactly where to start.
In recent times, we have seen that there has been a rise in people adopting a more flexible approach and seeking employment with companies willing to understand their needs. Indeed, the Survey “Apprehensive millennials: seeking stability and opportunities in an uncertain world” (Deloitte, 2017) declared that over 53% of workers feel that the opportunity to make a difference, will enable them to get a sense of satisfaction from their work and this is considered as a crucial factor to their overall happiness. With the increasing number of studies available on the internet demonstrating the important role of CSR today and its impact on business, it is surprising that there is still limited research done considering the employee’s perspective. Therefore, this study tries to fill this gap by studying the relationship between corporate social responsibility and employee engagement from employee’s perspectives and investigate which factors have the greatest influence on employees’ engagement.
The concept of Corporate Social Responsibility (CSR) is not new. It has been practiced by companies for many years, but prior to 1990, the focus was limited to donations and sponsorships. It started with the new business concept proposed by Edward Freeman in his book “Strategic Management, A Stakeholders Approach” where he highlighted the need to put the stakeholders in the center of the strategic thinking in a relational view of business. The stakeholder management aims to protect the interest of all individuals concerned or affected by the company’s business and it is an approach which can enhance the corporate social responsibility and sustainability in an organization. Stakeholder management is the art and science of successfully managing relationships with individuals, groups, and organizations that affect or are affected by business operations.
Stakeholders are the people and organizations that affect the achievement of a company’s purpose or goals. Achieving stakeholder management requires identifying those stakeholders who have some interest in the company’s activities, keeping track of their needs and expectations, communicating their views to decision makers within the company, connecting individual interests with organizational responsibilities, and balancing stakeholders’ competing interests so that shareholders’ needs are met without harming other stakeholders. In the same perspective of reinforcing the relationship with the stakeholders, contemporary organizations rely on their employees to build a long-term business success; therefore, the management must recognize the benefit of involving all stakeholders and mainly employees in the development of the company’s long-, medium- and short-term business strategies as engaging employees proved to be crucial for the business success and to manage the employee-employer relations.
Since no studies have been developed to further examine the relationship between corporate social responsibility and CSR to identify how employees perceive CSR, what type of activities they are most passionate about, how CSR impacts their relationship with the company, and what CSR offers them to become more motivated, engaged, and increase their performance. Therefore, our research main question that will be answered in this study is how CSR increases employee engagement and what is the mechanism creating the connection between CSR and employee engagement. This study will evaluate the impact of both CSR dimensions: internal and external along with the two dimensions of Employee Engagement: Job Engagement and Organizational Engagement which will help to understand the links between CSR and employee engagement.
2. Review of the Employee Engagement Models
Motivated and engaged employees are the key to success for organizations. The companies with a high percentage of employee engagement experience more creative performances, less mind and physical absenteeism, and more work involvement by the members of their staff which benefits the clients also and makes employee engagement directly linked to the ongoing success of the Business. Hence, it is essential for each organization to engage the employees to perform at their optimum level.
The importance of employees for the success of the business is not a recent discovery. In 1949 Professor George Elton Mayo was the first to highlight that the company is not only the place where employees go to perform their duties and responsibilities. Mayo (2003) affirmed that people use most of their cognitive and affective abilities at work and they develop formal and informal relationships, and the nature and the quality of these relations determine their professional experience at work. Therefore, the workplace can no longer be considered only a place where employees perform duties, today the workplace is where people connect, exchange ideas, build relationships, acquire shared information and build new concepts and new friends.
The importance of the work environment and the job characteristics on employee engagement was first acknowledged by Hackman and Oldham back in 1980 but Kahn work and studies made him today the father of Employee engagement theories.
2.1. Hackman & Oldham Employee Engagement Model (1980)
Hackman and Oldham (1980) presented the Job Characteristics Model which is till today used worldwide and can be applied to any job. Job characteristics theory determined five job characteristics required to make the employees satisfied about their roles and feel engaged.
• Skills variety: employees should have challenging tasks that require variety of skills.
• Task identity: tasks should be clear enough to employees.
• Task significance: employees should know how they are contributing to the overall company success by performing these tasks.
• Task autonomy: employees should have the freedom to select the best way of performing these tasks.
• Job feedback: employees need to receive feedback on their job performance in order to improve their job performance.
According to Hackman & Oldham, employees will be more engaged when they do meaningful tasks in a positive environment where two-way communication is used so they can participate in the decision-making process which will increase their sense of accountability for the job outcomes.
2.2. Kahn Employee Engagement Model (1990)
The first definition of employee engagement was given by William Kahn (1990). He defined personnel engagement as “the harnessing of organization members’ selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances”. In this definition, the physical aspect refers to the employee’s “physical efforts to achieve their assigned roles”. The cognitive aspect refers to the notion of an employee about its organization and working conditions. The emotional aspect refers to the employees “feelings and attitude towards the organization and its stakeholders”. The cognitive aspect refers to the notion of an employee about its organization and working conditions. The emotional aspect refers to the employees’ feelings and attitude towards an organization and its stakeholders.
Back in the 1990’s, Kahn conducted research on employee engagement by observing the work behavior in two different firms: the first one was a summer camp and the second was an architectural company. Based on his observations, Kahn defined employee engagement as: “the ability to use his full self at work”.
Kahn’s theory proposes that engagement is a concept with three dimensions (physical, cognitive and emotional) that are experienced at the same time. According to William Kahn, People have dimensions of their selves that they wish to use and express when performing their roles. People can use different degrees of themselves when at work based on how they perceive themselves, their role and the relation between themselves and their role. To use such dimensions of themselves is to invest their personal energies in the form of physical, cognitive, and emotional efforts.
In Fact, we feel that there is an active relation between self and role in which employees exist in some dynamic relation in which a person both use his personal energies into role behaviors: Self-Employment by mobilizing all the energies (physical, emotional and cognitive) that the employee needs in order to perform efficiently the task and expose his/her self in the role (Self-Expression) by implementing his/her ideas, his/her own work method or ideas. For that to happen, Kahn identified three psychological conditions: 1) psychological meaningfulness: to what extent the role means to the employee so he can be able to engage his full self in it; 2) psychological safety: to what extent the employee feel safe to participate and to bring his full self into his job? Does he believe that there would be some negative results for him for doing so; and 3) psychological Availability: to what extent the employee is able physically and mentally to be present and to invest his full self into his job?
1) Psychological Meaningfulness. According to Khan (1990) Meaningfulness is the “the feeling that the one is receiving a return on investment of oneself in currency of physical, cognitive, or emotional energy.” Therefore, it is always linked to job factors that can encourage or discourage employees to personally engage while they are at work. The research indicated that three factors generally influenced psychological meaningfulness: task characteristics, role characteristics, and work interactions.
• Task characteristics
Based on previous research done by Hackman & Oldham (1980) on job characteristics, khan suggests that when the employee is provided with a certain autonomy at work, an opportunity to use a variety of his skills to perform a task he will more likely experience psychological meaningfulness.
• Role characteristics
The research of Kahn indicated work factors that shaped the idea of psychological meaningfulness in the way that roles require certain personality traits that employees were indirectly asked to adopt so employees experience a sense of meaningfulness when there is fit between their real identity and the job behavioral requirements. Also, Roles provide employees with certain power or influence on others which create the feeling of being valued and appreciated which reinforce the sense of psychological meaningfulness.
• Work interactions
People also experienced psychological meaningfulness when their roles included positive and meaningful interpersonal interactions with co-workers which boosted their feeling of pride and self-respect.
2) Psychological Safety. Psychological safety for Khan is the feeling that the employee is able to show and use oneself without fear of negative consequences to self-image, status or career and it is related to social factors that provide a healthy, inoffensive, and social situation in which to engage. The work environment has a great impact on the psychological safety in a company as employees’ behaviors are influenced by their social environment and their perceptions of the support from their colleagues and superiors. The role of positive leadership based on relational transparency significantly influences psychological safety and generates a high level of interpersonal trust which would encourage employees to fully engage at work. Employees can feel comfortable to share their different opinions as long as doing that cannot lead to negative consequences that can damage their relations and their social status in the company.
3) Psychological Availability. For Kahn, psychological availability can be associated with the degree of concentration or level of distractions that enabled people to engage in their role. Therefore, Researchers suggested that People have different levels of personal engagements based on their perception on the return on investment of their full self in the role. The mechanism influencing employee’s engagement levels is highlighted and described by the Psychologists Freud (1922) and the sociologists Goffman (1959) as an active calibration of self in role that employees use based on the return on investment of their self-engagement in the role.
2.3. Meyer and Allen Employee Engagement Model (1997)
Meyer and Allen (1997) define employee engagement as “passion for work”, a psychological state that has at least three separable components. The three-component model of commitment developed by Meyer and Allen arguably dominates organizational commitment research. This model proposes that organizational commitment is experienced by the employee as three simultaneous mindsets encompassing affective, normative, and continuance organizational commitment:
Affective Commitment reflects commitment based on emotional ties the employee develops with the organization primarily via positive work experiences.
Normative Commitment reflects commitment based on perceived obligation towards the organization, for example rooted in the norms of reciprocity.
Continuance Commitment reflects commitment based on the perceived costs, both economic and social, of leaving the organization. This model of commitment has been used by researchers to predict important employee outcomes, including turnover and citizenship behaviors, job performance, absenteeism, and tardiness.
Meyer and Allen provide a comprehensive overview of the theoretical lineage of this model: 1) a desire, Affective Commitment reflects commitment based on emotional ties the employee develops with the organization primarily via positive work experiences; 2) an obligation, Normative Commitment reflects commitment based on perceived obligation towards the organization; and 3) a need, Continuance Commitment reflects commitment based on the perceived costs, both economic and social of leaving the organization.
Affective Commitment. Emotional engagement refers to an identification and emotional attachment to the company. Meyer and Allen have highlighted the critical role of positive work experiences in the development of engagement. One of the mechanisms by which these work experiences lead to emotional engagement is relative to the feeling of being supported and appreciated.
Continuance Commitment. The continuation commitment is based on the costs incurred by the termination of the contractual relationship with the company (loss of salary or extra-legal benefits, limited transferability of specific skills, few job alternatives, etc.) Therefore, for Meyer and Allen any action or event that increases these start-up costs is a potential antecedent of the continuation commitment. This process of “recognition” implies that two individuals, who are objectively in the same situation, may have quite different levels of continuation commitment. Studies have identified two types of antecedents of the continuation commitment to the business.
Normative Commitment. Normative commitment represents an attitude of loyalty towards a given target, derived from a feeling of moral obligation toward the company. This process is based on the psychological contract that binds the employee to that target.
2.4. The JD-R Model of Engagement by Bakker and Demerouti (2006)
The JD-R model (2006) is considered as the most recognized model of engagement till today. The JD-R Model includes two categories: 1) job demands and requirements, related to the workload and work pressure and Stress levels; 2) job resources, a job that provides employees with career and personal development plans, training, coaching and regular feedback on their performance. According to Bakker and Demerouti, job demands require continued effort which is influenced by the physical and psychological needs. Therefore, when the job demands are high, but the employee is provided with high support from his management, the employee is more likely to enjoy his role, be more satisfied and engaged. Accordingly, Arnold B. Bakker emphasized that “Enthusiastic employees excel in their work because they maintain the balance between the energy they give and the energy they receive”.
2.5. Emma Soane New Model of Employee Engagement
In 2012, Emma Soane proposed a new model of employee engagement that consider engagement includes three aspects of employee engagement: 1) Intellectual engagement; 2) affective engagement; and 3) social engagement
Intellectual Engagement. The cognitive aspect which involves the link between the engaged state and the great levels of cognitive activity that focus on the execution of work duties. Emma used the term intellectual engagement and defined it as “the extent to which one is intellectually absorbed in work and thinks about ways to improve work”. The intellectual aspect of engagement is highly supported by previous studies (Kahn, 1990; Macey & Schneider, 2008; Schaufeli et al., 2002).
Affective Engagement. The affective aspect of the employee engagement as Emma defines it is “the extent to which one experiences a state of positive affect relating to one’s work role’.” The affective aspect is also not new and was mentioned in previous research and work (Bakker & Schaufeli, 2006; Khan, 1990; Schaufeli & Bakker, 2004; Schaufeli et al., 2002).
Social Engagement. The social aspect of engagement is based on Kahn studies who recognized that being engaged reflects a strong connection with others. Furthermore, Meyer and Gagné (2008) acknowledged the importance of relatedness to their theory on engagement. This model suggested by Emma is greatly influenced not only by Kahn but also by the Self-determination theory developed by Ryan and Deci (2000).
The new model of engagement identifies three requirements: 1) a work-role focus; 2) activation; and 3) positive affect.
• Work-role focus: This condition is first suggested by Kahn proposing that it is the work role that offers chances for employees to meet their needs which leads to engagement when the work role requirements match the employee profile and an opportunity to use his full self in the role.
In addition to the “work role focus” condition presented identified by Kahn, Emma proposes two complementary conditions:
• Activation: According to Emma, “Engagement is an active state, related to a great level of cognitive activity and energy. Activation is a response to a stimulus that triggers a variety of affective and cognitive reactions that could contribute to engagement.
• The positive affect: for Emma, the attainment of goals via motivated behavior is associated with positive affect which is a key factor in the motivation theory as people with high positive affect are more passionate, lively, confident, and vigilant which makes positive affect directly linked to engagement.
3. Psychological Factors and Employee Engagement
The employee engagement is linked to the emotional connection that the employee feels toward his company which makes him passionate about his job, optimistic about the results, and continuously investing his physical, cognitive and emotional energies in order to achieve his goals. The emotional connection which drives employee engagement is influenced by individual and psychological factors reflected in employee attitude and behavior at work such as the positive approach, assertiveness, and dedication.
According to Garg (2014), employee engagement is highly affected by the individual differences and the employee engagement levels at the workplace. In respect to this, different studies have been conducted by researchers and scholars to identify the independent variables that are related to the organization and the individuals which impact the professional association of the employee with the company.
Vansteenkiste et al. (2004) focused on the procedures that lead to motivation: Organismic Integration Theory. OIT is mainly related to the procedure that is adopted by the individual to motivate him/her to continue pursuing the task that is of no intrinsic interest to them. For example, self-motivated students score good grades by paying more attention to classroom teaching while the non-interested students lag in the study. Thus, the theory determines that self-determined forms of motivation play a major role in the performance of the individual.
Chen et al. (2015) presented the Basic Psychological Need Theory (BPNT) which mainly describes the human psychological needs and is associated with positive life outcomes. It exerts that self-sufficiency, competence, and relatedness are essential elements for good health conditions and is found across all cultures and individuals. The theory also emphasizes that psychological needs are essentially connected with the well-being and when the requirements of psychological needs are fulfilled, it provides immense satisfaction to the individuals which as a result is reflected in their work and performance.
Kasser and Ryan (1996) studied the Goal Content Theory (GCT) which is associated with the values and aspirations that are necessary to meet the basic psychological needs and well-being of the individual. It also includes intrinsic and extrinsic aspects that shape and guide individual behavior/experiences. For example, individuals pursuing intrinsic aims experience more satisfaction, high efficiency, low anxiety, and increased personal fulfillment levels.
Deci and Ryan (2014) added to the cognitive evaluation theory another dimension: the Relationship Motivation Theory (RMT) which is mainly associated with filling the gap that is related to the relationship between two partners. It describes that if the people are intrinsically motivated, they experience relationships to be more fulfilling in comparison to the people who enter into relationships under controlled mechanisms. Therefore, all the mini theories describe self-determination factors and outline clear and detailed aspects of the needs and motivational factors of the individuals in different stage life spheres such as classroom, work, family, culture, and others.
Harter et al. (2002) suggested that workforce involvement is highly based on different aspects at the workplace and in many cases is a resultant of employee’s behavior and attitude. It also included individual differences and psychological differences that may impact the engagement or association levels of employees and affect their performance at the organizational levels. The individual differences at the workplace may occur because of differences in age, experience and other personal attributes of the employees that affect their needs of recognition and valuation at the workplace. Moreover, employees may engage differently in the workplace because of their differences in experiences, variations in psychological needs, and particular conditions.
The natural aspect includes the personal traits of the individuals that are based on the differences in gender, tradition, inclination, and traits that have been inherited from ancestors. On the other hand, the psychosomatic structure includes personality traits, exposures gained in the past, education, anticipations, precedence, needs, and interests. Hence, it can be said that individual attributes act as major influencers of employee engagement.
Furthermore, Rothbard (1999) explained that gender difference is an important element of individual difference and forms the perception of employees towards work. In respect to this, different results were found by different researchers. For example, Johnson (2004) emphasized that females are more actively engaged at the workplace as compared to males. In addition to this, the marital status of employees is also considered as an essential aspect of individual differences. The study examined that married workers are more committed to the organization in comparison to the single working employees which indicates that engagement in personal life also impacts the professional involvement of the employees.
Truss et al. (2006) health and personal values (work to live or live to work) of the individuals also influence the association of employees at the workplace. The differences in these aspects also create differences in the skills, capabilities, and competencies of the working force and influencing their organization’s involvement. The experience also plays a role in determining the engagement levels of employees with the company and the long association of employees with the company increases their engagement levels.
Swaminathan and Ananth (2011) confirmed that a significant association is found between the educational qualification and engagement levels of employees. The graduate working force was found to be more engaged in comparison to postgraduates and undergraduates. The postgraduate employees were the second most engaged after the graduates and the undergraduates were the least engaged employees at the workplace. Hence, it can be summarized that the individual difference factors such as age, gender, education or experience play a major role in influencing employee engagement at the workplace. Furthermore, the engagement of employees is associated with their self-actualization and influenced by an intrinsic or extrinsic factors as individual difference factors such as age, gender, education or experience play a major role in influencing employee engagement at the workplace.
4. Influence of the Leader on Employee Engagement
According to Gerstner and Day (1997) Leader-Member Exchange Theory (LMX) is considered as a theory that is based on relationships and is associated with different aspects of the leadership. It is based on the notion that the leaders play a major role in the workplace and influence employees as per the quality of associations/relationships between them. The high-quality association is based on factors such as trust, loyalty and professional respect that impact the thinking, working, and engagement level of the employees.
Although leadership has a substantial impact on employee motivation, it is not the only factor that impacts motivation. Human values such as self-esteem, social recognition and self-actualization provide great effect on leader-follower relationship and its overall productivity. Also if the leader provides coaching, mentoring, support, and other benefits to the workforce that is associated with him/her, the employees get motivated and support their leaders in the form of loyalty and autonomous positive behavior. Moreover, when the antecedents such as fairness, trust, personal development, performance, similarity and expectations of the employees are fulfilled by the leader, he/she gets equal return in the form of job satisfaction and commitment of the employees. It also impacts the behavior of the employees and reduces the turnover rates, increases performance and improves organizational citizenship behavior. As a result, the employees also receive better career success in the form of promotion, career satisfaction and an increase in salary.
As a result, the employees who experience high levels of LMX, show better performance at the workplace. Hence, it can be concluded that managers/leaders play an important role that influences the career path of the employees by their guidance and the opportunities provided by them to the employee.
Shahin, Naftchali and Pool (2014) suggested that the commercial entities are hiring employees that do the extra miles by helping their co-workers, managers, and clients to increase the involvement of the entire workforce within the organization. The high engagement levels form an integral part of the success factors of the firm. Therefore, the management needs to propose strategies and approaches to help overcoming the employee engagement issues and barriers. It is very crucial because disengaged employees adversely impact the organizational performance of the firm by reducing productivity, profit-earning capacity, and revenue collection propensities. Therefore, Yunis, Jung and Chen (2013) propose that organizational performance is an important aspect of employee engagement and CSR activities that determine the success and failure of the organization.
Markos and Sridevi (2010) explained that managers and seniors also use two-way communication strategies so that the association between the employees and employers are developed adequately. It develops a constructive relationship with the workforce by providing them enriching career development activities and identifying their skills and contribution towards the firm. In addition to this, an engaged workforce is an essential asset to the company as they support the firm, cooperate and co-workers by adopting a passionate attitude towards work and motivating the colleagues to work and perform better.
Ferreira and De Oliveira (2014) propose that CSR activities and employee engagement can be determined with different attributes such as vigor, dedication, absorption, and organizational performance. While focusing on the vigor, it includes the personal characteristics of the employees such as high energy levels, mental efforts, making efforts, and the ability to face challenges. All these attributes highly impact the ability and strength of the employees to get associated with the work that is allocated to them at the workplace.
Ariani (2013) declares that dedication is viewed as another aspect that is responsible for engaging the employees at the workplace. Dedication provides mental and emotional strength to the individuals to carry out work. It also includes other factors such as motivation, eagerness, and satisfaction that impact the work potency of the employees.
Abu-Jarad, Yusof and Shafiei (2010) propose that organizational performance is highly associated with the success of the organization in the competitive market. It includes different factors such as work processes, leadership, firm culture, interaction, constructive work environment, loyalty, and others.
Gavrea, Lies and Stegerean (2011) indicate that the concept of organizational performance emerged in the year 1950s and was mostly related to attaining the objectives of the firm. While in the eras of the 1960s and 1970s, the organizational performance was defined as the process that is used by the organization to exploit natural resources and provide utilities to the communities. In the 1980s and 1990s, the organizational performance was majorly associated with achieving the firm’s goals by making optimized utilization of the resources.
Griffin (2003) claimed that in the 20th century, organizational performance is mainly associated with meeting the demands of the stakeholders along with maintaining sustainable growth propositions in the competitive market for long survival.
Carton (2004) specifies that organizational performance is associated with the effective utilization of resources that includes rightful human, physical and capital associations so that the common goals laid down by the management are achieved. It also includes analyzing the ability of firms to deliver quality work or service to the customer and stakeholders by meeting their expectations.
We can conclude that organizational performance is directly associated with CSR practices. If the CSR activities are carried out rightfully in the firm, the employees are motivated to engage with the work operations actively that enhances the efficacy levels of the firm. However, if the CSR activities are not carried out properly, the employees will not become motivated to engage with the work activities. Therefore, it reduces the efficacy levels of the firm. Hence, it can be said that there is a direct relationship between the CSR, employee engagement and organizational performance.
5. Relationship between CSR and Employee Engagement
According to Esmaeelinezhad, Boerhannoeddin and Singaravelloo (2015), many companies are supporting the CSR activities to increase the engagement of employees. Although the relation of employee engagement and CSR sounds little strange, practically the connection has a strong impact and even helps in increasing the organizational and job engagement of workers. CSR activities assist companies in setting a disciplined and reputed image in the minds of people. Who doesn’t want to be a part of an organization with a positive image in society?
Glavas (2016) suggests that corporate social responsibility is not only about contributing a part in societal activities like charity programs, volunteering events or raising societal issues, being fair enough with employees and treating them ethically also falls in the aspects of CSR. Irrespective of at what scale the company is functioning, participating in CSR is highly important for the motivation of employees and to encourage them to perform their best.
Many research available on personal engagement, confirm Glavas’ belief that employees show expressive engagement when they feel secure at the workplace. Regardless of what salary package is being offered, according to Glavas, workers only feel safe psychologically when they are assured by the company and its management that their self-esteem, status or career would not be affected negatively at any cost. When employees feel safe, they associate their physical and emotional presence with organizations. However, without using a CSR as a medium, it is impossible to address a company’s status positively. The demand of embracing a reputed corporate image doesn’t only come from media but also the internal sources. From employees who expect and put peer pressure on enterprises to maintain a valuable position in the societal boundaries.
We find the same idea also developed in Kurtessis, Eisenberger, Ford et al. (2017) work, 2017. One of the surveys conducted by Booking.com confirmed that 84% of people who were serving in corporate world were interested to pay their contribution in CSR activities and another research, performed in 2014, by the American non-profit organization, Net Impact, affirms that approximately 45% of Americans agreed to work on low salary just to be part of the workplace where CSR activities were supported at high range. The conducted survey simply proves that people who claim that their jobs offer them an opportunity to make an expressive social and environmental impact tend to acquire more satisfaction level than the ones who lack this inspiring possibility.
Lee and Bruvold (2003) emphasize that the CSR activities in the form of internal CSR activities are carried out by financial institutions such as banks. The banks use different processes such as e-learning modules, mentoring sessions, job shadowing, guidance, seminars, coaching, and mini-training sessions to enhance the skills and abilities of employees. All these activities promote positive attitude and behavior among the employees and encourage them to actively participate in the commercial organizational work activities. The provision of health, safety, and human rights facilities also create a positive work environment. Moreover, when the employees are provided with equal opportunities and fair compensation policies, the employees are encouraged to work diligently and contribute towards the organizational work attainment effectively.
Gardner (2007) proposes that the other CSR activities such as work-life balance are also promoted by the companies so that employees are motivated to accomplish their tasks effectively. It includes making provisions of flexible working hours and schedules so that the employees can create a balance between their professional and personal work. Providing work-life balance opportunities enables the female workers in the firm to meet their work and home responsibilities effectively. Moreover, the workplace diversity and career development opportunities also encourage employees to actively participate in the work activities effectively.
Frederick (1960) confirms that CSR activities are not only practiced by the organization to increase employee engagement level but also helps the firm to make efficient use of resources and get an edge in the competitive markets. CSR includes differential attributes such as legal obligation, social attributes, employee considerations, management inputs, and others that highly contribute towards employee motivation and work engagement by interconnecting all the work operations. CSR is also associated with making business decisions and encourages the involvement of employees in the decision-making process. As a result, when the employees are included in the decision-making process, they feel valued and recognized. It increases their motivational and engagement level in the firm activities. The active involvement of employees helps the entire organization in terms of enhancement of firm productivity and profit earning capacities.
6. Key Ideas on the Relationship between CSR and Employee Engagement
• Relationship between Internal CSR and Employee Engagement
Internal CSR activities include policies and practices of the firm so that the different needs and physiological wellbeing of the employees are fulfilled adequately: respecting the human rights of employees, providing work-life balance, training, career development opportunities, fair compensation, treatment with respect, constructive work environment that creates a positive work interactions, health and safety and other benefits so that the welfare and well-being of the employees are ensured.
Internal CSR positively change the attitude and behavior of employees and is highly responsible for increasing employee satisfaction and engagement levels in the organization.
The employee satisfaction creates a positive attitude toward the company and develops moral responsibilities which encourage employees to repay the firm by being highly engaged at work. Based on the above, we can conclude that the relationship between Internal CSR and Employee Engagement is associated with the following Mechanism: Employees’ perception of how their organization treats them which creates shared values between employees and the company which leads to employee identification that leads to a motivated behavior and create a favorable attitude toward the company.
• Relationship between External CSR and Employee Engagement
External CSR is related to the activities through which the firm provides benefits to the community. It includes the conduction of philanthropy, volunteerism, and environment protection, cause-associated campaigns, wildlife preservation etc.
The external CSR activity not only enhance the morale of employees but also creates a highly positive reputation of the firm which activate the employee identification process that leads to increase the employee engagement level as employees use the social status of the organization to analyze and examine their self-worth as an employee by identifying themselves with the prestigious image of the organization that is increasing with the implementing of corporate social responsibility initiatives so we can conclude that external CSR is associated with the following Mechanism: Employees’ perception of how outsiders view their organization: the perceived external prestige that creates a feeling of pride which leads to a positive affect toward the company and an increase in engagement level.
Employees are usually interested in the CSR activities that provide meaningfulness, a purpose for their existence, activities that provides the opportunity to use different skills that they usually use while at work, provides good social interactions and networking opportunity, activities that matches their work preferences or increase their sense of belonging. However, research regarding this aspect has been limited and needs more exploration in terms of the impact of CSR on employee engagement from employee’s perspectives. The information is still not completely revealed despite all the huge efforts invested to understand the engagement drivers but hopefully this research will provide additional information and more insights on why, how and when employees are mostly influenced by CSR.
7. Methodology
The phenomenological approach, particularly the Interpretive Phenomenological Approach (IPA) seems to be the best suitable methodology for our qualitative research as we are not looking to develop a theory but shed some lights about the relationship between the CSR and employee engagement hoping that it would help companies to build effective CSR programs that will have the desired outcomes and impact on employee engagement.
Sampling Plan
Normally a PA study consists of participants between 15 - 20 participants who have experienced the phenomenon and can provide a rich data. However, to get a solid finding, our study will have a minimum of 30 participants to make sure that it will provide the maximum amount of information on the topic by interviewing employees from different departments and branches, current as well as former employees.
Research Case Study
Bank Audi Corporate Profile
Bank Audi is an international bank and financial services firm established in Beirut, Lebanon, that provides financial products and services in the personal banking, commercial banking, private banking, Treasury and Capital Markets areas. Bank Audi has 116 branches and over 300 ATMs around the world, as well as global offices in 25 cities. It primarily operates in Lebanon, the MENA region, and Turkey.
As of September 30, 2021, the Bank had a network of 63 branches in Lebanon, covering the Greater Beirut area and other strategic regions, as well as a network of 50 branches in the MENAT region (outside of Lebanon), including 48 branches in Turkey, through its foreign subsidiaries. The Bank has two European subsidiaries, two MENA subsidiaries outside of Lebanon, and a subsidiary in Turkey.
After the sale of Bank Audi Egypt (sae), Jordan, and Iraq branches, the Bank and its consolidated subsidiaries had 3264 workers by the end of September 2021, including 1112 employees in Lebanon and 1111 employees at Odea Bank in Turkey.
Bank Audi’s private customer deposits totaled USD 20.8 billion as of September 2021, with shareholders’ equity comprising US$2.7 billion and consolidated assets totaling US$28.0 billion. Bank Audi was formed in 1830 but only became a bank in 1962.
The Bank is a significant Lebanese banking organization with a universal banking profile, offering a comprehensive variety of goods and services in commercial and corporate banking, retail and personal banking, and private banking, as well as auxiliary businesses including Capital Markets and factoring. Total assets were LL 42,155 billion at the end of September 2021, with shareholders’ equity of LL 4119 billion, customer deposits of LL 31,419 billion, and loans and advances of LL 7934 billion. The Group now works in Saudi Arabia, Qatar, Abu Dhabi (via a representative office), and Turkey, in addition to its historic presence in Lebanon, Switzerland, and France. The Bank had a network in Lebanon with 63 branches as of end-September 2021, encompassing the Greater Beirut area and other critical districts in Lebanon.
CSR at Bank Audi
Bank Audi’s management is dedicated to continuously adding value as a responsible corporate citizen by prioritizing the people, contributing to society on numerous levels, and safeguarding the environment. As a result, they continue to strengthen, diversify, and expand their corporate social responsibility (CSR) approach year after year, pursuing the objective of becoming sustainability leaders in the Lebanese context.
These efforts have resulted in a constant learning and improvement journey, as well as significant adjustments to their business model and resource usage patterns that are more restorative and inclusive, and that led the bank to become a more sustainable company that contributes to a better world. Their CSR strategy is thus an extension of the bank fundamental principles, which include Transparency, Human Capital, Heritage, Quality, Civic Role, and Innovation, as well as significant components of partnership and cooperation, all with the goal of improving the lives of people and society in countries where the bank is operating.
The bank was privileged to be the first in Lebanon to implement ISO 26000 Social Responsibility in 2012, and to incorporate its guidelines in different facets of the bank strategy and tracking each year.
The Process of Defining Material Aspects and Boundaries.
The process of developing a CSR strategy is a systematic approach that begins with the materiality process which identifies and assess the issues that are most important to the bank’s internal and external stakeholders and report it using the Global Reporting Initiative (GRI) Guidelines (Figure 1).
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Figure 1. Defining material aspects. Source: bank Audi CSR report 2014.
Through an open and constructive dialogue with both internal and external stakeholders, Bank Audi solicits new and fresh insights, using the feedback to refine their CSR strategy in a systematic approach that is based on the principle of stakeholder’s inclusiveness.
Once the issues and aspect boundaries have been identified, the prioritization process begins with several rounds of CSR Committee meetings to determine the key areas for CSR involvement for Bank Audi.
Materiality, stakeholder inclusion, and completeness, as described in the G4 guidelines, are all part of the materiality process which led to an ongoing journey of discovery and continuous improvement to create the roadmap of Bank Audi CSR Strategy.
According to their philosophy of Collaborative Value Creation (CVC), Bank Audi management believes in the power of collaboration and that by working together with their partners they can accomplish better results. As a result, Bank Audi has continued to closely collaborate with a diverse range of trusted partners in the country, including leading non-profits, foundations, associations, academic institutions, social incubators, and various social initiatives, allowing the bank to maximize its reach and social impact.
The Five Pillars of Bank Audi CSR Strategy
The basic CSR Strategy for Bank Audi relies around five main pillars, namely Corporate Governance, Economic Development, Human Development, Community Development, and Environmental Protection, in light of the meticulous materiality exercise (Figure 2).
The Five pillars of Bank Audi CSR strategy have created an environment where employees feel empowered, trusted, challenged, energetic and fully engaged at work.
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Figure 2. Five pillars of the CSR strategy. Source: bank Audi CSR report 2014.
Data Collection Techniques in Qualitative Research
Qualitative research is largely conducted through interviews and document review so our research will use both methods to gather as much rich data as possible and to reveal more insights about the relationship between employee engagement and CSR. The combination of two methods or more, is called triangulation approach which can be defined as “the combination of methodologies in the study of the same phenomenon”. Document analysis is frequently employed in conjunction with other qualitative research methods (Denzin, 1970: p. 291).
Data Analysis
The positive relationship between CSR and employee engagement is already an existing phenomenon; so, our aim is to understand the different mechanisms affecting this relationship. Therefore, the qualitative mode is the perfect approach as it provides content data, not numerical which will help us to provide meaning to the phenomenon through or beyond description of the interpretation and of the context and the phenomenon.
Our study will follow a qualitative approach; the data we need to collect for our study will be collected using two techniques: interviews and document reviews. This will provide us with more information and enable us to focus on us getting insights and reasoning from our data. In the beginning, we will take a vertical approach, document by document, interview by interview, to identify the main ideas and themes that emerge from the interviews and reports reviews
According to our research strategy, we will follow an inductive coding approach, which means that, prior to the data analysis phase, we will not have any set of codes. Once the data has been read thoroughly, then the themes will be created, and then the codes will be developed based on the themes we have generated from the data. The main challenge is categorizing the data in a meaningful way and identifying the correlations.
In our research, we must identify recurring themes in CSR reports and interview transcripts. We will use a descriptive statistical analysis to examine the way in which people communicate and make sense of their relationships by using words and their meanings, which are found in their reports and Interviews. Therefore, we will study the segments related to each theme, to identify the correlations between CSR and employee engagement at Bank Audi. Since there are so many segments in each theme, we will select the segments that are related to our research topic.
The main themes revealed from the primary Data are the following:
• CSR Drive Employees’ Behavior, Attitudes and Engagement
• Creating Credibility and trust is the Main Key to align employees to CSR Values
The main themes revealed from the secondary Data are the following:
• CSR is nurturing a culture of Responsibility and Ethical Conduct
• CSR is cultivating a caring attitude
Correlation between Themes
Interpretation of the correlation between themes (Figure 3)
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Figure 3. Third level coding the relationship between CSR and employee engagement.
The CSR culture at Bank Audi created a collective caring mindset which provided the environment and support that employee require to succeed in everything they do. In addition to empowerment, a caring environment provides employees with the resources they need to grow both personally and professionally. Integrating Corporate Social Responsibility in all the bank operations created credibility and trust among employees. In addition, it enhanced their commitment to the company’s mission and vision, as it means going beyond the corporate profit. As a result, credibility and trust were established throughout the organization and transformed into a collective caring mindset as it is illustrated below in Figure 4: collective caring mindset.
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Figure 4. Collective caring mindset process at Audi.
8. Research Findings
Collective Caring Mindset and Its Transformative Power
The caring mindset provided employees at Bank Audi with a sense of purpose, a mission to add value in any way that would allow them to make a positive change. It is an attitude that can have a powerful impact and can be the driving force behind creating a strong feeling of belonging and pride which drives employee’s engagement at Bank Audi to a very high level.
The main mediator is the Organizational identification process that made employees at Bank Audi feel personally connected and motivated to reflect the values of the Bank because employees working for an organization that care about the wellbeing of their employees and the community are more likely to align themselves with the company’s goals and strive to reflect those goals in their daily operations. This creates an emotional connection between employees and the organization and makes the employee fully engaged at work.
Engaging employees in the long term by appealing to their intrinsic needs (internal and specific to the individual) more than short-term motivations is known as Transformational leadership.
Transformational Leadership
The main reason I have decided to study CSR at Bank Audi is because I believed that the maturity level of the organization would allow me to gain so much knowledge and experience as the CSR model at Bank Audi is one of the best and the most advanced and sophisticated in the Middle East.
My interviews at Bank Audi in addition to my discussions with the Head of the social responsibility department gave me a very good understanding of the CSR model at bank Audi, and I must say the bank has truly earned the several awards it has received. When Mrs. Hasmig, the head of CSR, outlined the Bank journey to the current CSR model, I was so inspired by her accomplishments, enthusiasm, and engagement that I became eager to read the CSR Reports.
I have noticed that the reports demonstrated serious efforts to determine the community needs and prioritize them to support what really matters most and this is very different from so many CSR programs with the objective to create social media contents in order to improve the brand image and gain good reputation. At Bank Audi, The Head of CSR invests a lot of time, efforts, and resources to determine the current needs of the society in Lebanon and seek ways to support as much as possible using all available resources.
During the interview process, I discovered that the reasons that made employees start and continue to take part in CSR can all be traced back to the Head of CSR who they perceive to be an outstanding leader, extremely knowledgeable on the subject, and one who cares deeply for others. Then I realized that her accomplishments were not business goals to be achieved, and the CSR Business model was not the objective, was not the purpose, but rather a tool. A tool that she can refine and continuously improve; the more refined the tool, the better are the outcomes that can be achieved with it. I realized that her ultimate objective is helping others as much as she can inside the bank and outside it, in the community where the bank operates. Her genuine care for others and her determination provided her with the energy and determination to seek all means and ways possible to create a positive change.
Her strong belief and confidence that it is our responsibility to make a positive difference in every community in which we live, as well as her hard work that resulted in tremendous accomplishments, earned her the trust and admiration of Bank Audi employees. She was leading by example, demonstrating what needed to be done and how they would accomplish it.
Our research has suggested that Ms. Hasmig showed a number of qualities that made her a transformational figure. These include:
• Idealized influence: She is viewed as an exemplar of success.
“The Head of CSR is an excellent communicator, well connected, and she can efficiently identify the needs related to the society where we live. The Head of Corporate social responsibility moved the CSR at Bank Audi to a very high level, and she can take the credit for that” (Audi Interview/2022: 22).
“The CSR department is very active and professional. They have a lot of expertise in that domain” (Bank Audi Interview/2022: 24).
• Inspirational motivation: She inspires and motivate them
“I’m one of these lucky people who participated in several Corporate Social Responsibility activities and what pushed me is what we called a mobilizer, and the head of Corporate Social Responsibility department did a great job in this regard…. Corporate Social Responsibility has influenced the way our employees serve our clients with compassion, genuine care and with maximum attention. Employees engaged in a corporate social responsibility culture are ready to strive to solve other’s issues and problems” (Bank Audi Interview/2022: 1).
“It gives me a sense of purpose, which I think is necessary in any job. Working for a company that has a strong commitment to social responsibility really made me feel like I was working for something bigger than myself, and it made me feel like I was contributing to something that mattered” (Bank Audi Interview/2022: 25).
• Intellectual Stimulation: Support their personal and professional development by providing them with opportunities to learn and grow.
“Challenge them to be more creative, to think outside the box, and to get in touch with external stakeholders in order to come up with new ideas on how we can engage more and support more of our communities” (Bank Audi Interview/2022: 20).
• Individual consideration: She has a genuine care for others, and this was confirmed in all the interviews we have conducted at Bank Audi.
“Committed” is a pledge we made decades ago when Bank Audi was founded; a self-imposed commitment to safeguard the community’s best interest; a consignment we made to future generations; an engagement to all our stakeholders; and a devotion to protect the environment” (CSR Report, 2017: p. 4)
Transformational leaders encourage employee engagement in corporate social responsibility (CSR) initiatives by providing them with purpose, vision and motivation. In order to do this, the leader must demonstrate a positive attitude, make an effort to build relationships and trust among team members, promote open relations with the community and make sure each employee feels connected with larger objectives of organization. According to management researchers such as Lawrence R. Wilson, Donald C. Hambrick, James C. Spence and Jeffrey Pfeffer, transformational leaders engage employees through their personal example and create a greater sense of commitment to the company. Transformational leadership can improve a company’s brand image as well as its profitability and productivity.
9. New Model of Employee Engagement by Bank Audi
In our case study at Bank Audi, we discovered a new CSR model which focuses on creating a collective caring mindset, strong sense of responsibility, and creating opportunities for employees to participate in CSR initiatives, is a key to increasing employee engagement. A CSR Model that is based on building credibility and trust in the CSR objectives and mission has the potential to transform employees into active agents of change. Our research findings show that there are two conditions which activate this transformational power:
• Credibility and trust.
• Genuine care for others.
When there is a good level of credibility and trust in the CSR goals and mission, then employees can be highly engaged in the activities that contribute to those goals because they believe it is meaningful for them but based on our survey results, we cannot claim that any CSR model has the power to increase employee engagement. This being said, understanding the conditions under which certain models may be more effective than others will improve our understanding of how companies can use their corporate social responsibility strategy as means of engaging their employees.
Research findings suggest that corporate social responsibility can have a positive impact on people’s behavior when the organization supports a culture for employees that embraces care for others. Moreover, during the interview process, what became obvious is that the main factor in employee engagement is “the People” that the employee is interacting with. They make the difference at work, they create an environment where employees can feel valued, supported, and happy; they are the main reason for employee’s engagement or disengagement at work. It is true that people don’t leave companies, they leave managers. Employees stay in a job and feel engaged because of the manager.
If an employee leaves his job, it is because the employer didn’t give him a reason to stay! Bank Audi case demonstrated that respecting human rights, paying good salaries is not enough to keep talented employees at work. I remember one interview with a Lady who used to work for Bank Audi and had to resign because she had to relocate to another country, she spent the first week crying, she told me that today she is working for an international company, excellent salaries, benefits and good working conditions but for her, Bank Audi is the place where she can consider “home”.
Many people take jobs because they need money or want to advance their careers. They are not necessarily motivated to be engaged in their work and bring their best selves to the job. A lack of commitment can lead to a decrease in productivity and increase turnover among workers, which can be a costly financial drain on companies. In order for an employee to produce a truly satisfactory job performance, she or he must have the commitment, motivation and attitude to give it her best shot. To produce inspired performances, employees must feel personally invested in their jobs. Emotion is a crucial element in the quality and productivity of work.
People are emotionally and cognitively engaged when they know what is expected of them, have everything they need to complete their work, feel fulfilled, and have an impact on their work, when they feel a sense of belonging, work with trusted colleagues. One of the main findings that our case study revealed is the transformational power of “caring” attitude and mindset. People will be influenced by the persons that they consider care about them. This can result in positive changes to one’s behavior and engagement as well.
This emotional engagement of people through the care that the employees receive from the people around them is a major contributor to the process of creating an atmosphere in which people strive for excellence. This emotional engagement is reinforced by the confidence that comes from knowing what to do and having had practice in applying skills, knowledge, and information. In addition to emotional commitment, employees also need emotional satisfaction which is directly linked and affected by interactions with coworkers, management, and job security.
Bank Audi has a strong internal communication that focuses on reinforcing the emotional engagement of their employees. The goal of internal communication is to create a better working environment by injecting a sense of motivation in employees and encourage them to take part in the activities of the company. Therefore, internal communication is essential to increase employee engagement. This strategy involves creating an environment where employees feel like their opinions matter and are encouraged to express themselves freely, both individually and collectively. Internal communication is the main tool in creating the CSR culture that contributed to create the collective caring mindset and influence employee’s engagement at Bank Audi.
Moreover, another important insight generated from the analysis of the interview transcripts is the need to have a meaningful experience and sense of belonging and safety at work which confirms the antecedents to employee engagement detailed in the literature review part of our research and was also considered as one of the main pillars of employee engagement at Bank Audi. People feel valuable in their lives when they experience a sense of psychological meaningfulness.
In Fact, moments of personal involvement emerge from work situations that are seen to be psychologically important and secure, as well as those that permit psychological availability. Such emotions are the result of jobs that include a sense of challenge, creativity, variety, and autonomy. The role that they play provides them with an appealing identity and status; they appreciate themselves, interact with others in a proper manner. People also have a sense of psychological safety when they believe they can be themselves and express themselves freely at work. This is demonstrated by the fact that when people feel safe, they usually have an increased sense of well-being, less anxiety or stress and consequently are able to perform better at work. Psychological safety is important because it addresses the feelings of insecurity.
The presence of trusting relationships especially with superiors, clearly defined roles and expectations that define the boundaries of how one can safely express themselves, and the perception of failed initiatives as learning opportunities rather than a source of conflict all contribute to the development of psychological safety. People who lack these kinds of protective boundaries may experience feelings of insecurity leading them to protect themselves by withdrawing from their job rather than be fully engaged.
The factor “flexibility at work”, is one of the benefits of enjoying personal care from management toward employees and considered by employees as an additional factor that can increase their engagement. This factor is linked to the job demands and resources model (or JD-R model) mentioned in our literature review part and has been increasingly popular for researching employee engagement in the past few decades. This model suggests low employee engagement is caused by high job demands, such as job insecurity, work overload, time pressure, ambiguous roles, and role conflict. These factors deplete employees’ physical, mental, and emotional resources, which in turn reduces their motivation to perform well on the job. On the other hand, individuals are assisted in achieving their work goals, and the pressures of their jobs are reduced thanks to the availability of employment resources.
Our research found that transformational leadership is an important component of promoting employee engagement. Having a manager/leader who is engaged and appreciative, in a work environment in which employees are consulted, appreciated, and high commitment to HRM practices, such as job security, continuous training, career guidance, comprehensive benefits, and job rotation, all contribute to increased employee engagement.
The main challenge for organizational leaders is to find ways for their business employees to express their full potential. Transformational leadership is an approach to leadership that emphasizes the need to increase individual needs and desires among subordinates to achieve more. This is done by three processes: satisfaction, commitment and trust.
The relationship between leadership and trust is not a new field of study. Trust is the foundation of successful organizational relationships and the main driver of innovative ideas. Trust is the foundation of successful organizational relationships and the main driver of innovative ideas. Most relevant studies show that the amount of trust in an organization has a significant impact on organizational behavior, employee interaction and performance. Transformational leaders encourage the members of their team to do their best. They demonstrate high standards of ethical and moral values. They eliminate communication barriers existing in an organization and enable effective functioning of the organization. Transformational leaders make their followers understand the purpose of deviating from past practices and habits into new ones. Leaders are not only charismatic but also have an in-built power to attract people towards them which makes it easy for them to inspire their followers to support all their endeavors whole heartedly. An additional advantage of having a transformational leader in an organization is improvement of its overall productivity.
Moreover, the relationship between transformational leadership and workplace satisfaction has been one of the most researched topics in the field of management. Transformational leadership is essential for developing a strong and sustainable culture. It also cultivates a sense of ownership and responsibility in employees, leading to high levels of engagement. They motivate their followers by showing them a better vision for the future, creating awareness about the need for change and empowering them to take up challenges in achieving it. Transformational leaders increase the intrinsic motivation of subordinates, which stimulates creativity and intellectual stimulation encourages subordinates to think creatively (Bass & Riggio, 2005). Empowering employees and providing the right kind of support encourage individuals to identify with their organization and increase employee’s engagement.
The concept of “care” is found in more recent leadership theories including servant, transformational, authentic, and responsible leadership. However, these leadership theories take the leader-centered perspective where leaders care for followers rather than the co-creative nature of sustainable relational leadership. This is because servant leadership, transformative leadership, authentic leadership, and responsible leadership are all examples of more recently developed concepts in management studies which have grown out of a need for more ethical approaches to management.
Ethical co-creation also includes concepts of “ethical awareness” and “sense of caring”. Ethical awareness involves an individual’s understanding of what it means to have a moral purpose in life, and the responsibility to do no harm. The sense of caring perspective is not only about knowing how to care for oneself but also extends to caring for others. In examining the concept of caring for, it is clear that the practice of caring for an individual is best achieved when caring is done in a relational manner. This requires that we care about those around us, not just our family or those individuals with whom we spend the most time. With this acknowledgment it is necessary to create a context where people can be cared for directly and indirectly. An important aspect of caring about is related to the environment in which caring takes place, which entails creating and tending to relations that are conducive to the communication of care.
An important aspect of being able to work effectively is having a feeling of autonomy. This means that people believe they have control over the decisions that affect them. Organizations that provide this sense of autonomy, in that they allow employees to take action within their roles and make their own decisions, will be more effective because they are likely to develop happy, productive and motivated employees. Research by Winasi et al. (2021) observed that an employee’s impression that the outcomes obtained are the fruits of his or her labor was enhanced when the individual was given a high amount of autonomy at work. This view unquestionably affects the attitudes and behaviors of workers, particularly on their levels of job satisfaction and dedication to the firm.
According to social exchange theory, desirable aspects of a job, such as employee autonomy in the workplace, are viewed by workers as a valuable gift that can be compensated for through affective commitment (Chin et al., 2019) . Furthermore, by the norm of reciprocity, desirable aspects of a job are viewed as an investment in the development of workers, which generates a sense of gratitude, also known as a regulatory obligation, that encourages employees to remain with their organization.
Transformational leadership is heavily reliant on employee autonomy. To further understand the relationship between transformative leadership and employee autonomy in the workplace, we should consider the following explanation: The primary objective of a transformational leader is to cultivate the professional characteristics of a subordinate, namely the individual’s capacity for creativity and intellectual advancement. Transformational leadership has the potential to influence employees’ views of the qualities of their jobs, which in turn has an impact on the motivation and commitment of workers. This improves not only the quality of the work that is produced but also the likelihood that employees will engage in over-the-role behavior. Over-the-role behavior is defined as actions taken by a voluntary employee that goes above and beyond his required work tasks. This type of behavior has been defined as amongst other things, assisting coworkers in the completion of work duties, the desire to share experience and information, remaining at work beyond the allocated time, and involving management in the problems of the unit to change for the better. These behaviors are distinguished from other forms of task-oriented behavior as they go beyond what is strictly required by an employee’s job description. Employees can actually benefit from this because helping others in the organization brings them closer together and increases productivity and as a result their engagement level.
Transformational leadership is a management approach that focuses on employee engagement, empowerment, and motivation. A transformational leader has the ability to inspire staff members so that they can achieve their potential. This approach prioritizes long-term engagement over short-term motivations. The objective of the transformational leader is to formulate a mission and vision for the firm without focusing on financial performance. Thus, he possesses charm, inspiration, and the ability to inspire others. He has faith in the capabilities of his staff members and places his confidence in them. In this way, they are able to make their employees feel like part of a large family and this is what every employee we interviewed at Bank Audi has considered as what he likes most at the bank and the main reason behind the strong commitment, they show toward Bank Audi which makes Bank Audi indeed an “Employer of Choice”.
The main qualities of the transformative leadership at Bank Audi based on the participants perspectives are compassion and tolerance, honesty, and accountability are accorded a high level of importance. According to Batista there is a positive correlation between the values of the leader and transformational leadership, which in turn has a positive correlation with the values of the employees. In other words, companies with transformational leaders have employees who share those same values, and this relationship gets stronger over time.
The implications of using the collective mindset are that work groups are considered interdependent, with individuals operating in an environment where they are expected to care for one another. This is a radical departure from the hierarchical distribution of power, where threats and punishment were often used as tools to compel employees to conform. This style of management emphasizes a feedback loop that encourages employee development through teamwork and collaboration with leadership. Within the company, connections have enabled leadership development through conversation, dialogue, mutually increasing well-being, and a focus on caring for oneself, others, and the environment. Companies get essential competitive benefits, such as better levels of productivity and reduced rates of employee turnover, when their workers are interested in their job and devoted to the organizations they work for.
10. Conclusion
As employees are a company’s most valuable assets, it has become an important task for HR professionals to increase employee engagement which seems a complex process and companies need to treat this issue seriously by implementing programs that improve employee engagement and performance. These programs need to be based on some specific strategies in order to be effective.
Our analysis provided evidence that corporate social responsibility at Bank Audi increased employee engagement by creating a collective caring mindset. Audi was successful in embedding its corporate responsibility philosophy and culture across all levels of the organization through several initiatives that encouraged sustainability and innovation, ultimately defining the brand.
The key findings concluded that Bank Audi’s strong focus on CSR has contributed to an improved culture of responsibility, accountability and genuine care for others. This CSR culture influenced employees’ attitudes and behaviors and created a shared value that nurtured a collective caring mindset which appeared to be the main reason for employees’ engagement at Bank Audi. This insight contributed to a new relationship between CSR and employee engagement that was not explored before. The available studies focused on the correlation between CSR and employee engagement and did not include an examination of the impact of the CSR models and what factors make a model efficient in creating this relationship that leads to an increase in employee engagement levels. Therefore, our contribution to the available studies is that we looked at the CSR from employee’s perspectives and generated insights on the elements that should be present in the CSR business model to activate the transformational power of CSR, so it can create this emotional connection with employees and as a result influence their values, attitudes, and behaviors. Following the same perspective, driving employee’s behaviors and attitudes makes it possible to create a collective mindset that will provide the organizational glue needed to create the emotional connection between employees and the organization which will increase employee’s engagement.
Bank Audi case presented a new model of CSR that is based on the power of genuine care for others and their success, and it opened new perspectives on what actually matters most for employees, what actually makes their employment experience unique. It is important to note that this CSR model not only increased employees’ engagement but also created a competitive advantage for Bank Audi with the opportunity to build a strong legacy of excellence in banking over the years.
Bank Audi demonstrated how companies can really “rise by lifting others”. Lot of effort and work is invested to make that happen and it is possible because of the strong engagement of their employees as engaged employees are more productive, more creative, and more committed to the company’s business objectives. When employees feel that they are part of a company’s mission, they are energized to brainstorm new ideas, explore creative solutions, and make long-term commitments.