Drivers of Employee Engagement in the Banking Industry

Abstract

This study attempts to identify the factors that drive employee engagement in the banking industry. The empirical setting of the study was fourteen Indian banks. A survey with the help of a questionnaire was conducted to collect data (n=700). Data were analyzed using multivariate data analysis techniques. A model identifying the variables that drive employee engagement was developed and tested. Results of exploratory factor analysis revealed six factors that drive employee engagement: emotional satisfaction, perceived fairness, personal development, culture, clear communication, and compensation. Results of regression analysis showed that two of these factors, i.e. emotional satisfaction and compensation were significant in the overall model. Integration of the results with the reinforcement theory suggests that satisfaction of the emotional needs of the employees and system of compensation can be systematically, selectively and differentially used in banks to align employee behaviours with behaviours typically associated with high levels of engagement and organizational success.