Why Do Outsourcing Employees Have High Engagement? An Evidence of the Cause and Its Consequences

Abstract

Employee engagement is a positive behavior that has been proven to influence employee performance. However, the majority of previous studies have proven it to permanent employees in one company. The purpose of this study is to show competency factors, work culture and leadership behavior as causes of employee engagement on contract employees and their effects on performance. By distributing questionnaires to 258 outsourcing employees of the State Electricity Company (PLN) Jambi Area and using SEM AMOS in processing data, it was found that competence, work culture, leadership behavior and employee engagement had a significant positive effect on employee performance. Employee engagement acts as a full mediation in the relationship between competence, work culture and leadership behavior on performance. Work culture has the greatest influence on employee engagement. The managerial implication is to integrate the work culture of PLN and the outsourcing company so that outsourcing employees are more engaged in PLN