Three Seas Economic Journal 1 Vol. 3 No. 2, 2022 Corresponding author: 1 University of Sri Jayewardenepura, Sri Lanka E-mail: rashmikasanduni@gmail.com ORCID: https://orcid.org/0000-0003-4463-4163 2 University of Sri Jayewardenepura, Sri Lanka E-mail: madhushinarmada93@gmail.com ORCID: https://orcid.org/0000-0001-9691-3928 3 University of Sri Jayewardenepura, Sri Lanka E-mail: anuradhaiddagoda@sjp.ac.lk ORCID: https://orcid.org/0000-0003-2586-430X 4 Wayamba University of Sri Lanka E-mail: hiranya@wyb.ac.lk ORCID: https://orcid.org/0000-0002-4963-5125 DOI: https://doi.org/10.30525/2661-5150/2022-2-1 MEDIATING ROLE OF EMPLOYEE ENGAGEMENT ON THE RELATIONSHIP BET WEEN WORKPLACE SPIRITUALITY AND EMPLOYEE JOB PERFORMANCE Sanduni Rashmika Gurugamage1, Madhushi Narmada Ramanayake2, Anuradha Idda- goda3, D.H.S.W. Dissanayake4 Abstract. There is a growing trend of workplace sprituality in the management world. Not only workplace sprituality but employee engagement also catched the attention of the managerial employees because of its consequences. The main consequences of the emplyee engagement are employee job performance and organizational financial performance. The main aim of this study is to briege a population gap in the public listed banks Sri Lanka. Identified gap is that there is no evidance related to the Sri Lanka banking sector on the mediating effect of employee engagement on the relationship between work place sprituality and employee job performance. This is a quantitative study which uses random Sample of 92 of the managerial employees in the listed banks in Sri Lanka. The main purpose of the study is hypothesis testing and cross sectional study was conducted in a natural environment with the minimum researcher interference. Initially reliability and confirmatory validity is ensured using SmartPLS 3.3.9 software and partial least squares model is used to examine the hypothesis. This study found the positive significant relationship between spirituality and job performance and which have empirical and theoretical contributions. Key words: workplace sprituality, employee engagement, employee job performance. JEL Classification: M12, G21 1. Introduction Due to the COVID-19 pandemic and economic crisis employees frequently feel anxiety, fear, and depression. Working in an environment that supports the employees’ right to openly express their beliefs helps them to have better working relationships with colleagues, feel safer, and be more engaged in their work (Rathee & Rajain, 2020). Therefore, more and more organizations are inculcating spirituality in their environment, as the impact of a good environment is not only felt by the This is an Open Access article, distributed under the terms of the Creative Commons Attribution CC BY 4.0 Three Seas Economic Journal 2 Vol. 3 No. 2, 2022 employees but can be measured through economic outputs, using measures such as quality, productivity, and profitability (Rathee & Rajain, 2020). Employee engagement has become a buzz word in the management circles (Tharika et al., 2021) due to th consequesnes of organizationa financial performance and employee job performance (Iddagoda et al., 2022a). Iddagoda and Opatha (2020) conduct a study about the mediating effect of employee engagement. However their study is limited to the employee engagement factors such as reliogisity, personal character, high performance work practices, leadership and work life balance. Their unit of analysis is individual i.e managerial employees in the public listed companies in Sri Lanka. This indicate that there is a population gap which is related to the Sri Lanka banking sector on the mediating effect of employee engagement on the relationship between work place sprituality and employee job performance. The research objective is to identify the mediating effect of employee engagement on the relationship between workplace sprituality and employee job performance. 2. Workplace Spirituality Workplace spirituality is defined as the "recognition that employees have an inner existence that nourishes and is nourished by meaningful work taking place in the context of a community " (Ashmos and Duchon, 2000). Another definition of workplace spirituality is the desire to discover one's life's ultimate purpose and behave appropriately (Cavanagh, 1999). Employee-related issues are mostly stress-related illnesses, absenteeism, violence, and corruption plague modern businesses. These workplace issues are common in businesses when spirituality is lacking (Nasina and Doris, 2011). Furthermore, Nasina and Doris (2011) suggest that the employees become more productive, fulfilled and creative if they are free to bring their physical, intellectual, emotional and spiritual attributes to the workplace. Allowing the deepest, most spiritual aspects of human experience to be expressed may not only reduce stress, conflict, and absenteeism, but also improve work performance (Krahnke et al. 2003). According to Ashmos and Duchon (2000) spirituality in the workplace, both as an individual's experience and as a result of the organization's work environment. A spiritual workplace, according to them, is one that allows an individual to express his or her inner life through meaningful employment in the framework of a community. Dehler and Welsh (2003) define workplace spirituality as "A search for purpose, deeper self-knowledge, or transcendence to a higher level". This serves as the working definition of the study. As described by Ashmos and Duchon (2000), when it comes to spirituality at work, it's not about religion or persuading employees to accept Three Seas Economic Journal 3 Vol. 3 No. 2, 2022 a certain belief system. "Spirituality is all about employees feeling connected to one another and to their workplace community ". 3. Employee Engagement Employee engagement plays a major role in any organization which wants to gain the competitive advantage over the others. According to Baumruk (2004), employee engagement is con- sidered as the most potent indicator of a company 's viability. The concept of employee engagement was first defined by Kahn (1990) as the harnessing of organizational members’ selves to their work roles; self-employment and self-expression of people physically, cognitively, and emotionally in their work role performances. Schaufeli and Bakker (2010) define work engagement as "the psychological state that occurs as a result of an individual's behavioural investment of personal energy ". According to the definition above, an engaged employee is intellectually and emotionally connected to the organization, cares deeply about its aims, and is devoted to upholding its values. Another definition of employee engagement is "an energetic state of connection in personally full-filling activities that boost one's sense of professional efficacy " (Maslach and Leiter, 2008). Employee engagement is investing employees’ head, hands and heart in their performance (Rich et al., 2010). This definition is described more by Christian et al. (2011) as a broad concept "an individual invests their entire self in terms of physical energies, emotional and cognitive". Cook (2012) defines employee engagement as "how favorably the person thinks, feels, and is proactive in regard to accomplishing organizational goals for customers, colleagues, and other stakeholders". Moreover, employee engagement is the result of a mix of attitudes and behaviors (Iddagoda and Opatha, 2020). Employee engagement is a very crucial factor for an organization’s success and competitive advantage (Macey, Et al. 2009; Rich, et al. 2010). Furthermore, many claims have been made that organizations with higher employee engagement have increased productivity, customer satisfaction, profitability and shareholder returns (Crawford, et al. 2010; Harter, et al. 2002). Employee Engagement is the extent to which an employee gets involved in the job and the organizationcognitively, emotio- nally and behaviorally. is the definition given by Iddagoda et al. in 2016. This is the study’s working definition. 4. Employee Job Performance Employee Job Performance is defined as the overall outcome of an employee fulfilling his/her duty in terms of the quality, effectiveness, efficiency and standards which have been determined in advance (Motowidlo, 2003). Stewart and Brown (2011) define employee performance as the individual’s contribution to the organization in which Three Seas Economic Journal 4 Vol. 3 No. 2, 2022 they work. They believe that the success of an organization is determined by the performance of its people. Samsuddin (2006) defined job performance as the degree to which a person, unit, or division can complete tasks utilizing current capabilities and constraints in order to meet the organization's or company's objectives. The employee should feel responsible for successful tasks and duties performed by him/her (Opatha, 2009). In 1993, Borman and Motowidlo suggested two categories of job performance. They are task perfor- mance and contextual performance. Task performance refers to how well employees perform the activities that are formally part of their job and contribute to the technical core of the organization. Contextual performance refers to voluntary organizational actions that are not required by the job and do not directly contribute to the technical core. Contextual performance encompasses tasks that are not formally part of the job but are crucial for all jobs, such as assisting others, cooperating with others, and volunteering. Griffin et al. (2007) argued that Job performance in dynamic organizational contexts should represent not just an employee's ability to complete job responsibilities, but also the interdependence of work activities and job holders' adaptive and proactive behavior. According to Swanson (2007), organizational support, management support, coworker support, adequate resource provision, motivation, capability, and individual expertise all influence employee job performance. According to Seneratne and Rasagopalasingam (2017), one of the most important determinants of organizational success is employee job performance. Furthermore, Graso and Probst (2012) argued that quality and quantity are the most essential markers of job performance. Employee’s contribution to fulfilling the tasks and jobs in order to make a positive work environment while eliminating negative or harmful acts is the definition given by Iddagoda et al. (2021) for the construct of employee job performance. This serves as the working definition of this study. 5. Hypothesis Development Both the meanings of workplace spirituality and employee engagement imply a sense of fullness and completion. According to Milliman et al. (2003), according to nearly all scholarly definitions, spirituality entails a sense of wholeness. According to Krishnakumar and Neck (2002), "Employees will feel fulfilled when they come to work if spirituality is fostered". Krishnakumar and Neck (2002) argue that, "Spirituality is widely acknowledged as one of the most important aspects of human Workplace Sprituality Employee Engagement Employee Job Performance Figure 1. Nomological Network / Conceptual framework Three Seas Economic Journal 5 Vol. 3 No. 2, 2022 personality. As a result, if a company promotes spirituality, it is essentially encouraging employees to bring their complete selves to work". Connections are also an important part of workplace spirituality and employee engagement. People are emotionally attached to their work and to others when they are engaged (Kahn, 1990). According to Kahn when people had positive interpersonal encounters with coworkers and clients, they felt psychologically meaningful and engaged. He also discovered that psychological safety and engagement were enhanced by helpful and trusting interpersonal interactions. According to Whittington et al. (2017), those with a high spiritual strength have a higher chance of landing important job roles. Ke et al. (2017) found that when values in work, groups, and organizations are described and combined, and is known as employee engagement, employees feel and experience workplace spiritu- ality. Furthermore, past research has consistently found a positive relationship between workplace spirituality and employee engagement (i.e., Richman, 2006; Saks, 2011; Schaufeli, 2012; Whittington et al., 2017). Workplace sprituality practices have also been found to be a predictor of an employee's desire to uphold and accept the ideals of his or her chosen profession (Ballout, 2009). There are several connections between workplace spirituality and employee engagement and job-related results. According to Krishnakumar and Neck (2002) honesty, creativity, personal fulfillment and trust are few instances. In the long run, organizations that practice spirituality achieve higher profitability and productivity. According to Lloyd (1990) organizations that are steeped in spirituality at work, perform 86 percent better than firms that have little or no spirituality at work. Spiritual firms outperformed their opponents in terms of efficiency and rate of return ( Jurkiewicz & Giacalone, 2004). They also argued that spirituality in the workplace can improve organizational performance and yield stronger revenues and returns on investments. According to Fry (2003), workplace spirituality has personal benefits (joy, satisfaction, and devotion), as well as organizational ones (increased productivity, lower absenteeism, and lower turnover). Enabling the deepest, most spiritual expression of human experience may not only alleviate stress, conflict, and absenteeism, but also improve work performance (Krahnke et al., 2003). According to Weick and Sutcliffe (2006), persons who are more mindful of their work acquire a capacity for sensible action and hence perform better. According to van der Van der Walt and de Klerk (2014), employees are satisfied and perform well when the company 's spiritual ideals are upheld. Osman-Gani, et al. (2013), also found that there’s a significant positive relationship between spirituality and employees in their research. Managers can improve employee job satisfaction and performance by fostering an envi- Three Seas Economic Journal 6 Vol. 3 No. 2, 2022 ronment that fosters spirituality in the workplace (Shrestha, 2017). According to Milliman (1994), Spirituality values have positive implications on both personal well-being and job performance. According to previous research, "spirituality may be employed as a persuasive technique in many firms for manipulating the employees' psycho-social demands to their benefit" (Brown, 2003; Fernando, 2005; Pradhan and Jena, 2016). Saks (2011) states that the interest in workplace spirituality and employee engagement has increased considerably over the last decade among practiti- oners and scholars. Saks (2011) further states that there is a relationship between workplace sprituality and employee engagement. Meanwhile Anitha (2014) found that employee job performance is a consequence of employee engagement. These findings leads to the hypothesis given below. Hypothesis 1: There is a mediating effect of employee engagement on the relationship between workplace sprituality and employee job performance. Hypothesis 2: Workplace sprituality has an impact on employee job performance 6. Methodology Through a quantitative study the research objective was achieved. Accor- ding to Sekaran and Bougie (2010) there are six components of the research design. They are namely the purpose of the study, extent of researcher interference with the study, type of investigation, study setting, the time horizon of the study and unit of analysis. This research was explanatory or hypothesis testing. This is the purpose of the study. Type of investigation in the research is correlational. According to Sekaran and Bougie (2010) is that a correlational study is conducted with the researchers’ minimum interference in a natural and normal work movements. Consequently, the researchers’ interference was minimal, and the study setting was non-contrived. The unit of analysis was individual, that is, managerial employees in the public listed banks Sri Lanka. Sample is 92 employees of banking sector in Sri Lanka. Sampling rule is laid by Roscoe (1975) as cited in Sekaran (2003). That is, for most research, when deciding the sample size, a sample size larger than 30and less than 500 is suitable. The measurement scale for this study was the Likert-type scale. The rating scale of the study is five-point Likert- type scale. 7. Analysis The structural equation modeling method of partial least squares (PLS- SEM) was used to analyze the primary model in this study. Correlations between constructs and overall reliability and average variance extracted (AVE) are retrieved in Table 1. Because all latent variables were measured using Three Seas Economic Journal 7 Vol. 3 No. 2, 2022 pre-existing scales, content validity was assumed for the data ( Jawaad et al., 2019). The results of Table 3 reveal that the composite reliability of all latent variables is more than the required range of 0.7, indicating that divergent validity exists (Hair et al., 2019). Even more critically, the variance explained (AVE) for all variables is greater than the cut-off value of 0.4, indicating that the study also demonstrated convergent validity. The Hetero-trait Mono-trait (HTMT) ratio was used to assess discriminant validity. Its acceptable range is less than 0.9 (Henseler, Ringle and Sarstedt, 2015). As shown in Table 4, the HTMT ratio is less than 0.9 across all latent variables, suggesting that correlations between indicators across variables are fewer than correlations between indicators within the same latent variable, proving discriminant validity. There was no evidence of multicollinearity in the values of the VIF coefficient, which was a positive sign for further mediation analysis. After performing a confirmatory factor analysis (CFA), all items with loadings less than 0.5 were removed from the measurement model (Hair et al., 2019). Table 5 summarizes the findings of the CFA. Table 2 Discriminant Validity EE EJP EE EJP 0.432 SP 0.708 0.478 Table 3 Confirmatory Factor Analysis EE1 0.592 EE10 0.637 EE11 0.567 EE12 0.705 EE2 0.677 EE3 0.703 EE4 0.588 EE5 0.613 EE9 0.599 EJP3 0.625 EJP4 0.776 EJP5 0.763 EJP6 0.727 SP11 0.574 SP14 0.603 SP15 0.712 SP16 0.707 SP17 0.574 SP18 0.748 SP19 0.697 SP2 0.705 SP20 0.6 SP22 0.733 SP3 0.641 SP4 0.588 SP8 -0.632 Table 4 summarizes the path analysis results, which show a strong correlation Table 1 Reliability and Validity Results Cronbach's Alpha rho_A Composite Reliability Average Variance Extracted (AVE) EE 0.812 0.818 0.857 0.401 EJP 0.703 0.714 0.815 0.526 SP 0.827 0.897 0.877 0.433 Three Seas Economic Journal 8 Vol. 3 No. 2, 2022 between a company 's spirituality and its employees' job performance (EJP), as shown in the graph. Research shows that spirituality influences employee engagement. As a result, both H1 and H2 were found to be correct. However, employee engagement does not affect employee job performance, as shown by a t-statistic of less than 1.96 at a 5% significance threshold. According to the findings, there is no mediating role for employee engagement in the relationship between spirituality and employee job performance. Thus, if an employee's spirituality level is increasing, it is likely to have a more significant impact on his level of employee job performance to the company, regardless of his level of employee engagement. 8. Discussion Logical flow between research gaps and hypothesis is given under Table 6. Eventhough there is no mediating effect on the relationship between workplace sprituality and employee job performance, it is evident that there is a relationship between workplace sprituality and employee job perfor- mance. Employee job performance directly adds to the organizational effectiveness is a view of Iddagoda et al. (2022). Stewart and Brown (2011) defined job performance as the contribution that individuals make to the organizationthat employs them. This highlights the importance of employee job performance. Workplace spirituality (WPS) aims at meaningful work, sense of community, and value of organization (Hassan et al. 2016). Since there is a relationship between workplace sprituality and employee job performance the managers should take initiatives to implement workplace spirituality upliftment programs. For example yoga and mindfulness programs in the organization. Limitations This study is limited to a cross-sectio- nal study. Future studies This nomological network/conceptual framework can be tested in the other Table 4 Path Analysis Path Coefficient Standard Deviation T Statistics P Values Hypothesis Results EE -> EJP 0.097 0.155 0.623 0.533 Not Supported SP -> EE 0.614 0.064 9.636 0 Supported SP -> EJP 0.353 0.12 2.946 0.003 Supported Table 5 Meditation Results β Standard Deviation T Statistics P Values Result SP -> EE -> EJP 0.059 0.102 0.583 0.56 No Mediation Three Seas Economic Journal 9 Vol. 3 No. 2, 2022 sectors such as hospitality, health sector and education sector etc. Longitudinal study can be done in the banking sector in-orer to test this network/conceptual framework. 9. Conclusion This study found that spirituality is directly impact on organisational performance in the banking sector in Sri Lanka but there is no mediation effect by the employee engagement. This study is empirically contribute to literature with an developing economy and economy which faced by economic and political crisis. In addition, current Sri Lankan crisis situtation and COVID-19 situtation the employees are faced by higher stress level specifically banking sector which is an essential service. In this situation banking higher management must consider the programs to improve spirituality of employees for the improvement of job performance. Accordingly networking programs, meditation programs, religious actvities, mentoring programs can be introduced to improve the spirituality of emplyees. Thus this study will consists empirically and practical implications. References: Anitha, J. (2014). Determinants of employee engagement andtheir impact on employee performance. International Journal of Productivity and Performance Management, 63(3), 308–323. Ashmos, D.P., & Duchon, D. (2000), "Spirituality at work: a conceptualization and measure", Journal of Management Inquiry, 9(2), 134–145. Baumruk, R . (2004), "The missing link: the role of employee engagement in business success", Workspan, 47(11), 48–52. 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