Direct and Indirect Relationship of Employee Engagement, Corporate Image, Employee Loyalty, and Business Performance among Private Business Organizations

Abstract

This study is very crucial for private business organizations to achieve business performance by formulating short and long-term strategies and plans to achieve the set business performance. The topic being studied is important for private organizations because it will allow organizations to improve their performance and business sustainability in the future. The purpose of this study is to measure the direct and indirect relationship between employee engagement, employee loyalty, corporate image, and business performance. This study uses a quantitative approach by using primary data for data analysis. A total of 329 clean data were used in data analysis using the Structural Equation Modeling (SEM) technique. This study uses Smartpls3 software to analyze multivariate data and the proposed hypotheses. Furthermore, model measurement and structural model assessment procedures were also carried out by using Smartpls3. An assessment of construct reliability and validity was done to confirm the existence of convergent validity and reliability. Then, discriminant validity is assessed by calculating cross-loadings and Hetrotrait-Monotrait (HTMT) ratios. Next, the inner model was assessed and from the results of hypotheses testing, it was found that employee engagement does not have a direct relationship with business performance, while employee loyalty and corporate image have a direct relationship with business performance. On the other hand, employee loyalty and corporate image have a significant mediating effect on the relationship between employee engagement and business performance. Findings from the analysis show that employee loyalty and corporate image are important mediators in the relationship between employee engagement and business performance. For future studies, it is suggested that other variables such as leadership style. Organizational commitment and peer influence are to be included in the model so that it will better perspective on the factors influencing the business performance of private organizations business performance.