Employee engagement, human resource management practices and competitive advantage

The topic of employee engagement has attracted enormous interest over the past decade or two. Macey et al. (2009) commented that “rarely has a term […] resonated as strongly with business executives as employee engagement has in recent years” (p. xv). Consequently, considerable progress has been made with respect to clarifying and defining the construct, distinguishing it from related, though not identical constructs (Hallberg and Schaufeli, 2006), and understanding its antecedents and outcomes (see Bakker et al., 2014; Christian et al., 2011; Crawford et al., 2010; Demerouti and Cropanzano, 2010; Halbesleben, 2010; Mauno et al., 2010 for meta-analyses and reviews). Despite this progress, relatively low levels of employee engagement continue to be reported in organizations across the globe. Aon Hewitt (2013), for example, reported that four out of every ten employees they surveyed were not engaged, and two out of ten were actively disengaged.

In this paper we argue that, in order to deliver its purported benefits, engagement needs to be explicitly embedded within an integrated system of HRM policies, practices and procedures (Guest, 2014). We present, as Figure 1, a high level model to help explain how a strategic focus on engagement can lead to competitive advantage. In so doing, we aim to provide integration across the human resource management and engagement literatures that, until now, have largely run in parallel. More specifically, by integrating HRM-performance models (Becker et al., 1997; Guest 1997), high performance human research practices (HPHRP) frameworks (Kehoe and Wright, 2013; Sun et al., 2007), job-demands resources theory (Bakker and Demerouti, 2014), and SHRM-engagement frameworks (e.g. Sparrow, 2014), we map a series of organizational level, job level, and individual difference factors that help explain how four key engagement-focused HR practices lead to engagement and subsequently to downstream performance outcomes. By drawing on constructs identified in the HR and engagement literatures, we specifically address the mechanisms by which HR practices and engagement contribute to competitive advantage.

In terms of broad empirical support for the proposed model, research has shown that HRM systems can influence perceptions of organizational climate (e.g. Gelade and Ivery, 2003; Zacharatos et al., 2005). Research has also shown that organizational climate can influence job resources and job demands (e.g. Dollard and Bakker,...