Review of Economics and Development Studies Vol. 5 No 2, June 2019 303 Volume and Issues Obtainable at Center for Sustainability Research and Consultancy Review of Economics and Development Studies ISSN:2519-9692 ISSN (E): 2519-9706 Volume 5: No. 2, June 2019 Journal homepage: www.publishing.globalcsrc.org/reads Impact of Employees Core Self-Evaluations on Employee Engagement: Moderating Role of Organizational Culture 1 Tahreem Baloch, 2 Muhammadi Sabra Nadeem, 3 Muhammad Zia Ur Rehman 1 PhD Research Scholar, Department of Leadership and Management Studies, National Defence University, Islamabad, Pakistan, tahreem.baloch@hotmail.com 2 Assistant Professor, Faculty of Management Sciences, COMSATS, Islamabad, Pakistan 3 Assistant Professor, Department of Leadership and Management Studies, National Defence University, Islamabad, Pakistan ARTICLE DETAILS ABSTRACT History Revised format: May 2019 Available Online: June 2019 Core self-evaluations have predictive value for crucial work outcomes. However, less attention is given to examine the relationship between employee core self-evaluations and employee engagement. Based on trait activation theory present study propose a research framework that examines the relationship of employee core self-evaluations with employee engagement accompanied by organizational culture as a moderator. It was assumed that employees core self-evaluation traits significantly interact with their perception about the organizational culture and produce valuable work outcome like employee engagement. Confirmatory factor analysis was performed to demonstrate validity and reliability of proposed model and structural equation modeling was used to examine hypothesized model. The proposed model was supported empirically by data collected from 537 employees working in different branches of Pakistan Telecommunication Company limited (PTCL). The result indicated core self-evaluations of employees as predictor of their engagement levels, also innovative and supportive organizational culture were found to have positive moderating effect on the relationship of employee core self-evaluations with employee engagement. © 2019 The authors, under a Creative Commons Attribution- NonCommercial 4.0 Keywords Dimensions of Organizational Culture, Employee Core self- evaluations, Employee Engagement JEL Classification: M12, M14 Corresponding author’s email address: tahreem.baloch@hotmail.com Recommended citation: Baloch, T., Nadeem, M. S. and Rehman, M. Z. U., (2019). Impact of Employees Core Self-Evaluations on Employee Engagement: Moderating Role of Organizational Culture, Review of Economics and Development Studies, 5(2), 303-314 DOI: 10.26710/reads.v5i2.538 1. Introduction In today’s competing world, employees are considered valuable assets that make significant difference when it comes to competitiveness, innovation, and ultimately business success. Influence of employee’s personality traits on workplace behavior have long been studied by Organizational scholars (Staw & Cohen-Charash, 2005) but now researchers are more interested in examining the interaction flanked by personality traits and situational factors on work place behavior (Kacmar, Collins, Harris & Judge, 2009; Green et al, 2018). Present research contributes to the interactional debate by examining the way by which core self-evaluations merge with perceptions of organizational culture to influence engagement of employees working in Pakistan Telecommunication Company Limited. CSE has been proposed with a purpose to apprehend the impact of dispositional tendencies on employees http://www.publishing.globalcsrc.org/reads Review of Economics and Development Studies Vol. 5 No 2, June 2019 304 perception about their work (Ferris et al., 2013). Deficient research on exploring key characteristics of CSE theory has escorted present research to make inquiry about Why it is indispensable for employees to have a CSE and what rationale does CSE serve? To quench the thirst, present research intends to illuminate psychological process that relates CSE theory to workplace behavior. Though substantial literature has proven a positive relationship between CSE and job satisfaction, the present study emphasizes on a more active assessment of the job that is employee engagement. Provided that positive Core-Self Evaluations make employees focus on the constructive, stimulating, challenging and productive aspects of their work (Judge et al. 2005), it is expected that CSE links positively to employee engagement too. CSEs can influence employee engagement (Rich et al., 2010; Karatepe, 2013), but the effect of environmental factors on workplace behavior must also taken into account (Kacmar et al., 2009). Trait activation theory (TAT) enlightens personality traits interaction with environmental dynamic (Kacmar et al. 2009; Tett & Burnett, 2003). TAT implies that although every individual has distinctive dispositional tendencies yet certain traits are only demonstrated during appropriate situations (Tett & Guterman, 2000; Kacmar et al. 2009). Trevino (1986, p. 603) identified three types of situational moderators, (namely, immediate work context, organizational culture and work characteristics). Focus of present research is on organizational culture as a situational moderator. Organizational culture that is demonstrated by good working conditions, teamwork, effective dealing with employees, provision of flexible working policies, growth opportunities, and effective leadership positively promote employee engagement (Suharti & Suliyanto, 2012; Naidoo & Martins, 2014; Brenyah and Obuobisa-Darko, 2017). Keeping in view employee’s psychology, a research framework is presented in the study that examines the function of organizational culture as a situational moderator between employee core self evaluation and engagement of employees working in Pakistan Telecommunication Limited (PTCL). Three dimensions of organizational culture, namely, innovative, supportive and bureaucratic, presented by Wallach (1983) were used as moderator connecting the relationship of employee core self evaluations and engagement of employees in PTCL. Thus, present research paper aims at developing a better understanding of the moderational path that link CSE to work outcomes. 2. Literature Review Trait Activation Theory (TAT) has been projected to elucidate combined role of personality traits and environmental factors in predicting work behavior (Lievens, Chasteen, Day & Christiansen, 2006; Kamdar & VanDyne, 2007). TAT implies that every individual have distinctive dispositional profile however certain traits are only demonstrated during appropriate situations (Kacmar et al. 2009). It is asserted that dimensions of organizational culture are related to recognizing different reaction of core self-evaluation among employees of Pakistan Telecommunication Company Limited (PTCL). Perceptions takes vital role in enhancing the relationship of organizational culture with work related results (Cegarra‐Leiva, Sánchez‐Vidal & Cegarra‐Navarro, 2012). How effectively employees perceive their organizational culture may also have motivational impact on the employees. 2.1 Core Self Evaluation and Employee Engagement Though engagement is highly researched construct from the last two decades, still little research has been done so far on its antecedents (Saks 2006; Wollard & Shuck, 2011; Bailey, Madden, Alfes and Fletcher, 2017). Dearth of literature was found that examine direct influence of CSEs on employee engagement (Rich et al., 2010; Karatepe, 2013). CSEs is higher order construct and illustrated by four personality traits that are, self esteem, generalized self efficacy, internal locus of control and neuroticism. Four traits of CSE showed their independent association with employee engagement, for example, Organizational based self-esteem was found predictor of employee engagement (Rotich, 2016). Self-efficacy, personal resources and resilience were found positively associated with employee engagement (Del Líbano, Llorens, Salanova, & Schaufeli, 2012). According to Xanthopoulou, Bakker, Demerouti, & Schaufeli, (2007), personal resources include organizational based self esteem, self efficacy and optimism has positive influence on employee engagement. Internal and external Locus of control was found strongly associated with employee engagement (Paramanandam & Sangeetha, 2015; de Laat, 2016). The fourth trait of CSE, neuroticism, was also found to be related to employee engagement (Shukla, Parul, Adhikari & Singh, 2014; Ziapour & Kianipour, 2015; Gulamali, 2017). Based on reviewed literature, present research intended to examine impact of CSE construct on engagement of employees working in PTCL, thus the following hypothesis was proposed: H1: Employee core self evaluation is likely to have positive relationship with employee engagement. Review of Economics and Development Studies Vol. 5 No 2, June 2019 305 2.2 Organizational Culture as a Moderator Influence of personality traits on employee workplace behavior is evident from previous literature (Funder, 2006). However, now researchers are more interested in studying personality traits interactions with environment factors and the impact of this interaction on workplace behavior (Kacmar, Collins, Harris & Judge, 2009; Green et al., 2018). This paper intends to put insights into literature by examining interactions of employees core self evaluations with organizational culture to influence employee engagement. Core self evaluations (CSEs) encompasses stable personality traits that takes in subconscious and essential evaluations about individuals themselves and their abilities (Judge, 1997). Wallach (1983) defined Organizational culture as shared acquaintance about the values, norms, philosophies and beliefs of how things work. Culture can be divided into bureaucratic, innovative and supportive categories (Wallach, 1983). A bureaucratic culture is considered as systematic and organized that place emphasis on control and power and it has properly defined authority and responsibilities. Organizations that possess bureaucratic type culture are structured, mature, have proper hierarchies and are stable. Comparing to bureaucratic culture that is power oriented, innovative culture is result oriented and is recognized by challenging environment, entrepreneurial ambitions and risk taking; however , differing from the two supportive culture is team oriented and is based on teamwork, collaboration, encouragement, harmony, and trusting environment (Wallach 1983). According to Wallach (1983) employee tends to work efficiently and effectively when the employees motivation complement organizational culture. Moderating Role of innovative, supportive and bureaucratic organizational culture between employees CSEs and engagement is examined for the first time in present research. However, independent traits of CSEs showed positive association with organizational culture, for example, organizational culture as a predictor moderator between employees locus of control and job satisfaction. Suwarsi, and Budianti (2009), also found strong association between locus of control and organizational culture (Huizing, 2015). Emotional stability was also found positively associated with cross cultural adjustments (Peltokorpia & Froeseb, 2012, 2014). Based on the literature reviewed it was assumed that interaction between employees CSEs and organizational culture would influence employee engagement. Thus, following hypotheses were suggested, H2: Innovative organizational culture is likely to have a moderating impact on a relationship between employee core self evaluations (CSEs) and employee engagement such that CSEs–employee engagement relationship will be positive and stronger. H3: Supportive organizational culture will moderate relationship between employee core self evaluations (CSEs) and employee engagement such that CSEs–employee engagement connection will be stronger and positive. H4: Bureaucratic organizational culture will moderate relationship between employee core self evaluations (CSEs) and employee engagement such that CSEs–employee engagement relationship will be negative and weaker. Figure 1: Model of the Study Employee Core Self- Evaluations Employee Engagement Innovative Organizational Culture Supportive Organizational Culture Bureaucratic Organizational Culture Review of Economics and Development Studies Vol. 5 No 2, June 2019 306 3. Methodology 3.1 Participants and Procedure Simple random sampling was used to collect data from the employees of PTCL working across the country. Data was collected from employees of PTCL working in different branches across the country. A total of 630 questionnaires were distributed among PTCL employees, of whom 564 questionnaires were returned, therefore the effective response rate was 89.52%. Out of the 564 received questionnaires, 27 were either incomplete or unreliable responses. Thus, the usable response rate was 85.23% that were further analyzed using SPSS 20. And AMOS 20. The useable respondents profile and their characteristics are presented in Table 1 below. Table 1: Respondents Demographic Profile (N=537) Sample Percent Gender Male 285 53.1 Female 252 46.9 Age < 25 12 2.2 25-30 144 26.8 31-35 148 27.6 36-40 92 17.1 41-45 73 13.6 46-50 43 8 51-55 25 4.7 Education Bachelor 35 6.5 Masters 502 93.5 Experience 1-5years 71 13.2 6-10 years 251 44.9 11-15 years 156 29.1 >15 years 69 12.8 3.2 Measuring Instruments Different variables in the study were measured using scales that have been developed before, however confirmatory factor analysis (CFA) was performed to confirm the validity and reliability of the scales. 3.3 Employee Engagement Scale Employee engagement was assessed with the Utrecht Work Engagement Scale (UWES; Schaufeli et al., 2002). The items of the UWES were grouped into three subscales of vigor, dedication and absorption. Totally 15 items were included in the scale of employee engagement, among them five items were for measured the vigor, five items were used to measure dedication and five items were used to measure absorption. Five point likert scale (ranging from strongly disagree to strongly agree) was used to assesses items of employee engagement. 3.4 Core Self Evaluation Scale To measure Core Self-Evaluations of employees, Core Self-Evaluations Scale (CSES) developed by Judge, Erez, Bono& Thoresen, (2003) was used. According to Judge et al. (1997), core self-evaluations is a broad and higher- order trait that is specified by four well-established traits in the personality literature, namely, self-esteem, generalized self-efficacy, neuroticism, and locus of control. Core self-evaluations are a basic, assessment of one’s worthiness, usefulness, effectiveness and competence as a person. The CSES contain 12 items, and uses a five- point Likert scale to attain responses. 3.5 Organizational Culture Scale To measure organizational culture an instrument developed by Wallach’s (1983) called the Organizational Culture Index was used in the study. Wallach’s (1983) has devised the OCI into three dimension of organizational culture; these are bureaucratic organizational culture, innovative organizational culture and supportive organizational culture. OCI is a 24 item instrument, where each dimensions of organizational culture was assigned eight items. Five point likert scale (ranging from strongly disagree to strongly agree) was used to assesses items of each dimension of organizational culture. Review of Economics and Development Studies Vol. 5 No 2, June 2019 307 3.6 Results 3.6.1 Measurement Model Using AMOS 20. Software the validity and reliability of instrument was tested first. CFA was performed to examine the validity and reliability of the measuring instrument. Convergent validity of the instrument was assessed using each item factor loading of at least 0.60, average variance extracted (AVE) for a construct greater than 0.50 and composite constructs reliability greater than 0.70 (Hair et al. 2012). Table 2 presents the indices of the convergent validities. Table 2: Convergent Validity of the Measurement Model Items factor loading ranges from 0.62 to 0.94 and AVE ranges from 0.50 to 0.76. Composite reliabilities of all constructs were found to be > 0.9. AVE, s and composite reliabilities for each construct were computed from data of factor loadings by applying their specific formulas. Internal reliability of the each constructs along with number of items is presented in Table 3. Table 3: Internal Reliability of the Constructs Constructs No. of Items Cronbach's alpha Employee Engagement 15 .97 Core Self-Evaluations 12 .94 Innovative Organizational Culture 8 .96 Supportive Organizational Culture 8 .89 Bureaucratic Organizational Culture 8 .87 There are different Fitness Indexes that shows how the model is fitted to the data used in the study. According to Holmes-Smith (2006) and Hair et al. (2012) at least one fitness index must be used from each category of model fit. There are three model fit categories that are Absolute Fit, Incremental Fit, and Parsimonious Fit. Chi-square , GFI Items Factor Loadings AVE Composite Reliability Items Factor Loadings AVE Composite Reliability EEV1 .86 .72 .97 OC11 .85 .76 .95 EEV2 .91 OC2I .84 EEV3 .87 OC3I .87 EEV4 .80 OC4I .78 EEV5 .80 OC5I .90 EED1 .90 OC6I .84 EED2 .82 OC7I .86 EED3 .90 OC8I .75 EED4 .86 OC1S .803 .60 .92 EED5 .92 OC2S .901 EEA1 .94 OC3S .786 EEA2 .75 OC4S .738 EEA3 .74 OC5S .675 EEA4 .82 OC6S .762 EEA5 .83 OC7S .756 CSES1 .80 .638 .95 OC8S .74 CSES2 .87 OC1B .785 .50 .91 CSES3 .89 OC2B .724 CSES4 .88 OC3B .751 CSES5 .77 OC4B .868 CSES6 .73 OC5B .816 CSES7 .70 OC6B .663 CSES8 .62 OC7B .692 CSES9 .86 OC8B .723 CSES10 .91 CSES11 81 CSES 12 .72 Review of Economics and Development Studies Vol. 5 No 2, June 2019 308 and RMSEA represent absolute fit measures; CFI, TLI, NFI and AGFI reflects incremental fit measure; and Normed Chi-square and Chisq/df represents parsimonious fit measures (Keramati et al., 2010). To have a goodness of model fit, The comparative fit index (CFI) and Tucker–Lewis index (TLI) should be greater than 0.90, the root mean square error (RMSEA) must be less than 0.10 and chi-square/degree of freedom (χ2/do) needs to be less than 5 (Henry and Stone 1994). The testing results from CFA showed a good fit for the measurement model with the indices of CFI = 0.91, TLI = 0.90, RMSEA = 0.06, and χ2/df (1706/1332.8= 1.28). Discriminate validity was evaluated by comparing the square root of AVE of each construct by its correlations with other constructs. Result of comparison is presented in correlation matrix in Table 4. AVE square root for each construct is greater than the correlations with other constructs as accurately put by (Fornell and Larcker 1981). Thus, the results of measurement model indicate both validity and reliability at a highly acceptable level. Table 4: Correlation Matrix *Diagonal elements show the square root of the AVE. 3.6.2 Structural Model Fit Structural equation modeling (SEM) with AMOS 20.0 was used to evaluate the proposed model. MLE (Maximum likelihood estimation), that is considered as most common SEM procedure was used to analyze the data. According to Hair et al. (2012) MLE required a sample size that is at least 10 times the total number of instrument items, thus the sample size (537) of present study was adequate for the MLE to analyze data. The structural model aimed at testing the validity of the proposed model (Table 5) and also endows with a path analysis for the determination of constructs relationships, as given in Table 6. Figure 2: Structural Model The model fit of structural model was examined first. The resulting indices showed good fit between the observed data and the hypothesized structural model with a highly acceptable values of CFI = 0.98, TLI = 0.95, NFI =.97, GFI = .99, AGFI =0.97, RMSEA =0.053and χ2/do = 2.49 (7.49/3) with p-value of .058. Secondly, the path coefficients for the hypothesized relationships between variables were tested and the variance explained for the endogenous variables (R²). Result of hypothesized paths proved CSES as important antecedent of employee engagement (with β=.0.641*). Innovative and supportive organizational culture are also regarded as moderator (with (β= 0.70*** and 0.133*) between CSEs and employee engagement that strengthen their relationship. No significant result was found for bureaucratic culture to be a moderator (β= -0.46) between CSEs and employee engagement, however, negative coefficient and t-value indicates its inverse impact on the relationship. R² value = 0.46% shows the variance explained for the endogenous variable of the model. , thus, first three hypotheses are supported from the study. 1 2 3 4 5 1.Employee_engagement 0.84* 2.CSES .661** 0.79 3.innovativeOC .511** .452** 0.87 4.supportiveOC .501** .385** .382** 0.77 5. bureaucratic .039 -.012 -.075 .156** 0.70 Review of Economics and Development Studies Vol. 5 No 2, June 2019 309 Table 5: Model fit Indices for Structural Model Model Fit Indices Obtained Values Recommended Cut-off Values Absolute Fit Measures Chi-Square 7.49 (p = 0.05) The lower, the better RMSEA 0.053 <0.08 GFI 0.99 >0.8 Incremental fit Measures AGFI 0.97 >0.8 CFI 0.98 >0.9 TLI 0.95 >0.9 NFI 0.97 >0.9 Parsimonious fit Chi Square /df 2.49 (7.49/3) < 5 4. Discussion and Recommendations 4.1 Discussion The model proposed in the study examines the impact of core self evaluations (CSEs) on engagement of employees working in different branches of PTCL across Pakistan. The three dimensions of organizational culture (innovative, supportive and bureaucratic) were used as a moderator, where innovative and supportive organizational culture were assumed to positively influence relationship between employees CSEs and employee engagement thus further strengthen their relationship, while Bureaucratic culture was assumed to have negative influence and weaken the relationship between the two. Findings indicate CSEs as predictor of employee engagement. As CSEs is higher order construct and constituted from four personality traits that independently had proved their impact on employee engagement. Present research showed that collectively these four traits in the form of CSEs can cause variations in the employee engagement levels in PTCL. Table 6: Hypothesized Paths Structured Paths Coefficients t-value Conclusion Unstandardized Coefficients Standardized Coefficients B Std. Error Beta H1: CSES → EE .709 .036 .64* 19.929 Supported H2:CSES*Innovative→ EE .025 .011 .07*** 2.182 Supported H3: CSES*SupportiveOC→EE .032 .008 .13* 4.148 Supported H4:CSES*BureaucraticOC→EE -.016 .011 -.05 -1.441 Not Supported Employee Engagement → R² 0.46 *p<.0001. **p<.01. ***p<.05. Research findings of the present study strengthen the previous notion that personality traits can influence the workplace behaviour (Schneider, 1987; Funder, 2001; Staw & Cohen-Charash, 2005). Moreover findings from the research further strengthen the previous literature that examines the relationship between employees CSEs and engagement, for example the work of (Rich et al. , 2010); Karatepe, 2013). Innovative and supportive organizational culture showed a positive moderation impact between the relationship of CSEs and employee engagement. Though the relationship between culture and engagement has already established (Homans, 1961; Saks, 2006; Robinson et al., 2004) and four personality traits of CSEs also showed positive association with organizational culture (Unal and Turgat, 2016; Becker et al. (2014; Brown, 2009; Earley, 1994; Oettingen, 1995; Klassen 2004, Gajdzik, ‎2005; Evans, 2014; Syahputra 2014; Suwarsi, and Budianti, 2009), yet the moderating role of three dimensions of organizational culture between CSEs and employee engagement has been tested for the first time in present study. SEM results proved the model fitness of hypothesized model through exceptionally good model fit indices. Findings indicate that supportive and innovative cultures have positive moderation effects between the relationships of employees core self evaluation and their engagement levels. Thus, second as well as third hypotheses of the Review of Economics and Development Studies Vol. 5 No 2, June 2019 310 study are also supported by findings of the study. However, bureaucratic organizational culture did not show significant moderation impact, thus, fourth hypothesis of the study was not supported by findings. Over all, present research provides empirical evidence on personality traits interaction with environment factors so as to influence the work behavior (Gerhart, 2005; Kacmar, Carlson, & Bratton, 2004; Kammrath, Mendoza-Denton, & Mischel, 2005; Kacmar, Collins, Harris & Judge, 2018). Employees core self evaluations include personality traits and is found to have influence on employee engagement (that is considered as work place behavior) through the interactional effect of innovative and supportive organizational culture. 4.2 Theoretical Implications The findings of present study reveals employees core self-evaluations as predictor of their engagement and also perception of employees about organizational culture acts a moderator between the relationship of CSEs and employee engagement. From theoretical viewpoint findings of present study proved that “right” organizational situations that promote innovative and supportive organizational culture bring forth personality traits like CSEs that further promote workplace outcomes of employees like employee engagement. Practically results imply that organizations can be successful by harmonizing optimistic workforce to complimentary situations (like suitable organizational culture). 4.3 Practical Implications Findings of the study serve several practical insinuations. Firstly, the results entails that managers of the organizations are accountable to create and sustain such an organizational culture that encourage the constructive attributes in employees with elevated core self evaluations. Accordingly, when innovative and supportive organizational culture pair with high core self-evaluators it provides employees with opportunity to capitalize on their strengths. Results of present study also imply that looking for applicants with high CSE would be beneficial to organizations, provided that supportive and innovative work culture is designed by organization to trigger these qualities. However if the managers and higher authorities are not capable to create a culture that promote innovation and appreciate supportive behavior, then hiring applicants with high core self-evaluation may not be suggested to such organizations, because in such a unsupportive environment high CSE individuals are no better than individuals with low CSE. Thus, from findings it is recommended that CSE must be taken into account while taking placement decisions. CSE might be one of the many factors to consider when making placement decisions because individuals with high CSE bloom in innovative and supportive organizational culture and leads to positive work outcomes. Although this study attempts to put up knowledge on the relationship between CSE and employee engagement by examining moderation path accompanied by organizational culture, however results of the study must be interpreted by keeping in mind some limitations. First, it is a cross sectional study, thus, causal elucidation about specific order of the variables cannot be made. Moreover, the proposed research framework must be tested in different sector apart from telecom. 5. Conclusion Present paper examine impact of employees core self evaluation on engagement level of employees working in Telecom sector of Pakistan. SEM was employed to empirically examine the CSE impacts on employee engagement using three dimension of organizational culture as a moderator. The research contributes to conceptual insight of the CSE as critical antecedents of employee engagement. Furthermore, the research provides the crucial insights about the role of innovative and supportive organizational culture as a moderator between CSE and employee engagement. Findings of the study serve both theoretical and practical insinuations for organizational managers and practitioners who ought to take up the accessible resources effectively and efficiently in order to participate successfully in dynamic marketplace. 6. Future Research Further research investigating appropriateness of definite dispositional traits and their interaction with explicit job settings to influence workplace behavior, would subsists equally for practitioners and researchers. Moreover, present study included organizational culture as a moderator, even though the moderators was theoretically derived, yet further research can be done on exploring the impact of other work related moderators. Further, the model presented in the study was tested in telecom sector only; future research can be done on exploring the validity of model in different sectors. Review of Economics and Development Studies Vol. 5 No 2, June 2019 311 References Brenyah, R. S., & Obuobisa-Darko, T. (2017). 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