The Relationship among Leadership Commitment, Organizational Performance, and Employee Engagement

The increasingly competitive global economy has pushed companies to exploit their available resources as a ways of achieving competitive advantage. Leadership is critically important because it has a huge impact on the condition of the organization. The purpose of this quantitative study was to investigate the relationship among Leadership Commitment (LSC), Organizational Performance (ONP), and Employee Engagement (EYE) via their effects on a set of mediating variables of Employers Branding (EYB), Strategic Alignment (SGA), Organizational Agility (ONA), and Human Resource Practices (HRM). A conceptual model of these relationships was developed on existing theories. Data were collected from 26 petrochemical companies’ managers to be analyzed as identifiers of the latent variables in the model. This process was completed using the principles of structural equation modeling (SEM) which required confirmatory factor analysis on the measurement model and path analysis on the structural model. The analysis finds that Leadership Commitment directly affects Organizational Performance and Employee Engagement. The study also finds that Employers Branding, Strategic Alignment, Organizational Agility, and Human Resource Practices are an intervening factor between Leadership Commitment, Organizational Performance, and Employee Engagement. In addition, Strategic Alignment does not directly relate to human resource practice- it does so indirectly via Employers Branding and Organizational Agility. This result suggests that an increasing behavior of leader who commit to staying with their company, working toward organizations’ target success, focusing on achieving goals, and also working toward the success of organizational change, appears to influence the value of organizational performance as well as the engagement levels of employees.