Impact of Islamic Spirituality (IS) and Islamic Social Responsibility (ISR) on Employee Engagement (EE) in Small and Medium Enterprises (SMEs) of Malaysia

Abstract

Employee Engagement (EE), as reported in Development Dimension International (DDI), lists among the top 10 topics of interest amongst CEOs and HR professionals for 2018 (Neal, 2018). In South East Asia, Malaysia and Singapore maintain the lowest Employee Engagement Score in 2017. EE has received extensive attention in scholarly research especially from a conventional perspective. There is also a dearth of empirical studies on EE in the Asia Pacific region, particularly from an Islamic perspective. This study on the impact of Islamic Spirituality and Islamic Social Responsibility (Taqwa) on Employee Engagement among SMEs in Malaysia is the first study in Malaysia. Two dimensions of Islamic piety (Taqwa), namely Islamic Spirituality (IS) and Islamic Social Responsibility (ISR) have been investigated empirically in terms of their impacts on EE. Gender and Age were taken as the moderating variables to study their effect on the relationship between IS and ISR to EE. Gender was chosen given the importance of females in making up a bigger composition of the Malaysian future labour force, while age was selected due to its effect on individual spiritual maturity (McFadded, 1995). Among several management theories such as leadership, corporate social responsibility (CSR), spirituality in management and social psychology, organisational citizenship behaviour (OCB) was chosen as the underlying theory of this research. SMEs are chosen as the study population due to their important contributions to the country’s economic development. The quantitative method has been employed on a sample of SMEs in four major states of peninsular Malaysia, namely Selangor, Wilayah Persekutuan, Johor and Penang. The unit of analysis is Muslim managers working in Malaysian SMEs. A total of 550 questionnaires were distributed and 289 completed responses were received. Twenty (20) hypotheses were formulated and ten (10) were found to be statistically significant. Multiple Linear Regression Analysis (MLRA) was adopted to test their relationships. The findings indicated that IS and ISR significantly explained EE variance while gender did not moderate the IS and ISR relationship to EE. Among the two dimensions of Islamic piety, the variance in EE was better explained by ISR. This study has contributed significantly to enhancing knowledge to existing EE literature and to managerial practices, especially from an Islamic management perspective. Practical suggestions to the organisation’s top management, HR professionals and policymakers were proposed.