The Moderating Effect of Employee Well-Being between Employee Engagement and Firm Performance: Evidence from the Apparel Industry in Sri Lanka

Abstract

Owing to globalization and dynamic business environment, organizations quest for sustaining their business performance by crafting various compelling strategies. Recently, employee engagement and well-being have gained dramatic popularity among managers and practitioners as a salient strategy to augment firm performance. Notably, the research studies on the nexus among employee engagement, employee well-being and firm performance are still nascent, and past findings are obscure. Moreover, the studies that have been conducted in developed countries cannot be generalisable to the developing countries since the variables are subject to country culture specific nature. To fill the void left by the earlier studies, the present study is designed to investigate the moderating role of employee well-being on the relationship between employee engagement and firm performance based on the sampled from Sri Lankan apparel industry. Using the convenience sampling technique, data were marshalled through a self-reported questionnaire from 177 employees working in the apparel industry in Sri Lanka. The data were analyzed using SmartPLS. The study shows a significant positive relationship between employee engagement and firm performance. The study further reveals a moderating effect of employee well-being on the relationship between employee engagement and firm performance”. The study contributed to the fronters of extant HRM literature and provided many useful practical implications that have been discussed at the end of the paper. Importantly, the present study adds to the evolving debate on the critical role of employee engagement in enhancing firm performance through employee well-being.