Examining Employee Engagement in Shariah-Compliant Institutions: Perspectives from the Workforce

Employee engagement is crucial for organizational success, particularly in Shariah-compliant institutions where ethical principles are paramount. This sector faces significant human resource challenges that impact employee satisfaction and performance. This study investigates employee engagement from the perspectives of employees, focusing on its cognitive, affective, and behavioural dimensions. Employing a quantitative methodology, data were collected from 200 employees within the Islamic banking sector in Malaysia. The analysis utilized mean scores to assess engagement levels and identify areas for improvement. Findings reveal strong cognitive engagement (mean score of 5.46) and notable behavioural engagement (mean score of 5.15), while affective engagement showed a moderate score (mean of 4.90).  The results emphasize the need for Shariah-compliant institutions to enhance emotional connections among employees. By promoting active participation in organizational activities and ensuring fair treatment in decision-making and rewards, these institutions can boost job satisfaction, reduce turnover, and foster a positive work environment. Ultimately, the study provides valuable insights for improving organizational performance in alignment with Islamic ethical principles.

Employee engagement has become a critical concern in the modern workplace as organizations increasingly recognize its importance for overall performance, productivity, and employee retention [1,2]. In a world where businesses are seeking to enhance workforce motivation, commitment, and loyalty, employee engagement is seen as a cornerstone of organizational success. For institutions that operate within a Shariah-compliant framework, this concept is equally important, though the factors influencing engagement may differ due to the specific cultural, ethical, and religious values embedded in these organizations. In Shariah-compliant institutions, principles of Islamic governance, ethics, and human resource management practices create a unique environment, making it crucial to examine employee engagement within this context [3,4]. Past research on employee engagement has largely focused on traditional organizations, exploring factors such as leadership, organizational culture, work-life balance, and recognition systems as the main drivers of engagement [5-7]. Studies have repeatedly shown that engaged employees are more productive, demonstrate higher job satisfaction, and contribute to a positive organizational climate. These studies highlight that engaged employees exhibit a deeper emotional connection with their organization, which in turn leads to increased levels of discretionary effort and a willingness to go above and beyond their job requirements. In Shariah-compliant institutions, some research has been conducted to explore the distinct features of employee engagement, particularly in relation to Islamic values. The principles of fairness, equity, and ethical treatment of employees are emphasized, aligning with Islamic teachings on human dignity and justice [8]. Additionally, several studies suggest that Islamic work environments foster a sense of collective responsibility, which could enhance both individual and group engagement [9-11]. However, these studies are often limited in scope, focusing on small, specific sectors or geographical regions, and sometimes lack comparative analyses with non-Shariah-compliant institutions. As a result, there remains a significant gap in fully understanding how Shariah principles influence employee engagement on a larger scale, and whether these institutions truly succeed in fostering a highly engaged workforce.

Despite the available research on employee engagement, there is still much to uncover about its unique manifestation within Shariah-compliant institutions. Most studies, while valuable, do not thoroughly investigate the perspectives of employees themselves or delve into the day-to-day realities that shape their engagement levels. Moreover, the lack of comparative data with non-Shariah-compliant organizations limits our ability to draw broader conclusions about the efficacy of Islamic workplace practices in enhancing engagement. Thus, there is a need to further examine the drivers and barriers to employee engagement within this specific organizational context. One area that warrants deeper investigation is the role of organizational practices, leadership styles, and employee perceptions within Shariah-compliant institutions. While previous research emphasizes the importance of Islamic ethical values [12,13], it remains unclear how these values translate into practical workplace experiences that directly impact employee engagement. Do employees perceive the principles of fairness, ethical treatment, and collective responsibility as effectively implemented? Or is there a gap between Islamic ideals and the realities of organizational practice? These are important questions that remain underexplored. This study aims to address these gaps by examining employee engagement from the perspective of the workforce within Shariah-compliant institutions. By focusing on employees’ lived experiences and perceptions, this research seeks to uncover the key factors that contribute to or hinder engagement in these unique settings. The study will also explore how organizational practices, workplace culture, and leadership approaches interact with Islamic values to influence engagement levels. Ultimately, the goal is to provide a deeper understanding of employee engagement in Shariah-compliant institutions, with the hope of offering practical recommendations for enhancing engagement within this growing and influential sector.

Literature Review

Employee engagement is generally defined as the emotional and cognitive commitment an employee has towards their organization, which translates into motivation, dedication, and discretionary effort in their work. According to Kahn (1990), employee engagement occurs when individuals express themselves physically, cognitively, and emotionally during role performance, leading to heightened productivity and job satisfaction. Engagement is often seen as a combination of factors such as job involvement, enthusiasm, and psychological investment in work, which fosters a strong connection between the employee and the organization [14-16]. In the literature, several models of employee engagement have emerged. Schaufeli define engagement as a positive, fulfilling, work-related state of mind characterized by vigor, dedication, and absorption. This model contrasts engagement with burnout, positioning engaged employees as those who derive energy from their work. Meanwhile, Saks (2006) distinguishes between job and organizational engagement, suggesting that employees can be highly engaged in their specific roles but not necessarily with the organization as a whole. Critical reviews highlight limitations in existing literature, particularly the overemphasis on engagement as a one-size-fits-all concept. For instance, engagement is often treated as universally positive, but some scholars argue that excessive engagement may lead to workaholism or burnout Bakker, Albrecht, & Leiter. Additionally, many studies have focused on Western organizational contexts, leaving a gap in understanding how cultural and religious factors, such as in Shariah-compliant institutions, influence employee engagement. Employee engagement encompasses three key dimensions: cognitive, affective, and behavioural, each contributing uniquely to overall workplace satisfaction and performance [17].

Cognitive engagement

Cognitive engagement refers to the intellectual investment and mental focus an employee dedicates to their work. It involves the employee’s psychological presence and thought processes, such as problem-solving, creativity, and critical thinking in completing tasks Ben-Eliyahu. According to Rich, LePine, and Crawford (2010), cognitive engagement occurs when employees are deeply absorbed in their roles, consistently seeking ways to improve performance and approach challenges with a learning mindset. In the literature, cognitive engagement is often considered one of the three dimensions of employee engagement, alongside emotional and physical engagement (Kahn, 1990). While emotional and physical engagement deal with feelings and energy levels, cognitive engagement focuses on how employees intellectually connect with their work and how much attention and concentration they invest. Research by Bakker and Bal (2010) shows that employees with high cognitive engagement tend to experience higher job satisfaction and are more likely to develop innovative solutions to problems. However, cognitive engagement is not without its challenges. Critics argue that while it can boost productivity and performance, excessive cognitive load without adequate support may lead to mental fatigue or burnout Christian, Garza, & Slaughter.

Affective engagement

Affective engagement refers to the emotional connection and positive feelings an employee has towards their work and organization. It involves the extent to which employees feel emotionally involved, passionate, and enthusiastic about their roles [18,19]. When employees experience high levels of affective engagement, they are likely to feel motivated, express a sense of pride in their work, and demonstrate a strong desire to contribute meaningfully to organizational goals. Meyer and Allen (1991) link this emotional investment to higher levels of commitment and loyalty within the organization. Several studies have highlighted the importance of affective engagement in fostering deeper workplace connections. Research by Rafferty and Griffin (2004) shows that affectively engaged employees often experience greater job satisfaction and are more likely to demonstrate discretionary behaviours such as helping colleagues and going beyond their job descriptions. Affective engagement also enhances organizational citizenship behaviours, contributing to a positive work environment Macey & Schneider. However, critical reviews caution against idealizing affective engagement as purely positive. While it can improve morale and job performance, too much emotional investment can lead to emotional exhaustion or feelings of frustration when expectations are not met Brotheridge & Lee. Additionally, the focus on affective engagement often overshadows the importance of balancing cognitive and physical engagement, which are equally crucial for sustaining overall well-being at work.

Behavioural engagement

Behavioural engagement refers to the outward actions and behaviours that demonstrate an employee’s commitment to their work and organization. It includes proactive behaviours such as actively participating in tasks, collaborating with colleagues, and showing a willingness to go beyond the basic job requirements. According to Robinson, Perryman, and Hayday (2004), behavioural engagement is the visible manifestation of an employee’s emotional and cognitive engagement, as it is expressed through consistent effort and discretionary behaviour aimed at achieving organizational goals. In the literature, behavioural engagement is often examined in the context of performance outcomes. Research by Xanthopoulou suggests that employees with high behavioural engagement display greater productivity, increased task performance, and are more likely to engage in organizational citizenship behaviours. These employees tend to exhibit initiative, adaptability, and resilience in facing work challenges, which directly contributes to improved organizational outcomes. Despite its positive associations, some critiques highlight potential downsides to behavioural engagement. Bakker, Demerouti, and Sanz-Vergel (2014) argue that excessive behavioural engagement, especially without adequate recognition or support, can lead to over commitment and burnout. Additionally, many studies focus on short-term outcomes of behavioural engagement, neglecting to explore how sustained behavioural engagement impacts long-term employee well-being and work-life balance. This has led to calls for more research on the sustainability of high levels of behavioural engagement over time.

In Islamic institutions, the integration of cognitive, affective, and behavioural engagement plays a critical role in ensuring that employees align with both organizational goals and Islamic values. Cognitive engagement is essential as employees are expected to intellectually connect with their roles, ensuring that their work reflects the ethical and moral standards of Islam. Affective engagement becomes particularly significant in fostering emotional connections with the institution’s mission, as workers who feel passionate about upholding Islamic principles are more likely to remain committed. Behavioural engagement manifests through actions such as demonstrating integrity, collaboration, and a willingness to contribute beyond basic job responsibilities, aligning with the Islamic concept of Ihsan [20]. Studying the levels of engagement within Islamic institutions is crucial as it helps identify how well employees are emotionally, intellectually, and behaviourally invested in the organization's mission. It also ensures that their work contributes to not just organizational success but also the broader goal of promoting Islamic values in the workplace.

The data collection for this quantitative study was obtained through a questionnaire [21]. This research method employed descriptive statistics particularly mean analysis using the Statistical Package for the Social Sciences (SPSS) software as the instrument analysis tool. The instrument to measure employee engagement was adapted from Shuck and Rio and JRA Employee Engagement scale with the reliability value of 0.913 [22].  It consisted of cognitive, emotional and behavioural components of engagement respectively.  These three components are consistent with Kahn’s (1990) conceptualization of employee engagement and this structure has been used in survey measures constructed by academicians [23,24]. Data were collected from 200 employees in Islamic banking in Malaysia. Each question were measured using items with answer options and seven point Likert scale where 1 for extremely disagree and 7 for extremely agree [25,26]. These 7 points were chosen confirming that the data from Likert items and those with similar rating scales become significantly less accurate when the number of scale points drops below five or above seven [27].  Furthermore, in the light of findings, there are some supports for seven-point scales, but the popularity of five-point scales seems to be less justified [28]. Likert Scale is an effective approach to measure the respondents opinions based on itemized statement. It is also an effective way to gauge the respondent’s attitudes concerning certain issue [29] Organizational justice was measured using 19 items adapted from Niehoff and Moorman (1993) that had also been used by other researches such as Benk and Kenek, Rahman, Herminingsih, Allameh and Yaghoubi [30,31]. The descriptive statistics showed a typical distribution of responses across all variables. The mean and standard deviation (SD) were used to describe the sample characteristics. According to Hair, mean values can be classified into three categories: (i) low, (ii) moderate, and (iii) high. In this study, the categories are defined as follows:

Low: 1.00 – 3.00

Moderate: 3.01 – 5.00

High: 5.01 – 7.00

Moreover, behavioural engagement often translates into actions that embody the principles of service and excellence, furthering the institution's goals. It also serves as a key indicator of how motivated employees feel to actively participate in their roles, contributing to a dynamic and engaging workplace. Understanding the factors that influence this level of behavioural engagement can help organizations harness and enhance these positive behaviours among their employees. The mean score of 5.17 for overall employee engagement as in the Table 4, which encompasses cognitive, affective, and behavioural engagement, reflects a strong commitment among employees in the Islamic institution. This indicates that employees are intellectually invested, emotionally connected, and actively participating in their roles, contributing positively to the organization’s objectives and culture (Table 3,4).

The results of the study highlight a commendable level of employee engagement within the Islamic institution, characterized by mean scores of 5.46 for cognitive engagement, 4.90 for affective engagement, and 5.15 for behavioural engagement, culminating in an overall engagement mean of 5.17. These findings hold significant implications across various sectors, including academia, industry, government, and for the employees themselves. From an academic perspective, the study contributes to the existing literature on employee engagement by examining its dimensions within a Shariah-compliant context. It underscores the need for further research that addresses cultural and religious influences on engagement, thus enriching the theoretical frameworks surrounding this topic. The findings prompt scholars to explore how cognitive and emotional factors interplay in shaping workplace dynamics, particularly in religiously affiliated organizations. In the industry, these results emphasize the importance of fostering a supportive environment that encourages cognitive and behavioural engagement. Organizations that prioritize these aspects can enhance employee productivity and satisfaction, ultimately leading to improved organizational performance. The findings encourage employers to invest in training and development initiatives that promote critical thinking and collaboration among employees, aligning with the values of the institution. From a government perspective, the insights gained from this study can inform policy-making and support the development of frameworks that promote employee engagement in various sectors [32,33]. By understanding the unique needs of employees in Islamic institutions, policymakers can create supportive regulations that enhance job satisfaction and productivity. Finally, for the employees themselves, the study highlights the importance of engagement in their overall job experience. Higher levels of cognitive and behavioural engagement can lead to improved job satisfaction and personal fulfillment [34,35]. Employees who feel intellectually challenged and emotionally connected to their work are more likely to thrive in their roles, contributing positively to both their organizations and their own well-being. Overall, these findings underscore the multifaceted benefits of employee engagement and the necessity of addressing its various dimensions within diverse contexts.

In conclusion, the study reveals significant insights into employee engagement within Islamic institutions, highlighting strong cognitive and behavioural dimensions, alongside a moderate affective component. This comprehensive understanding of engagement can aid organizations in fostering a more productive and committed workforce. However, the moderate level of affective engagement suggests an area for improvement, emphasizing the need for strategies that enhance emotional connections among employees. Future research should explore the factors influencing affective engagement specifically within Shariah-compliant organizations, examining how cultural and religious values shape employees' emotional investment. Additionally, longitudinal studies could provide insights into the impact of engagement on employee retention and performance over time. Investigating the relationship between employee engagement and organizational outcomes, such as innovation and adaptability, would further enrich the literature. Ultimately, a deeper exploration of these dimensions can contribute to developing effective engagement strategies tailored to the unique contexts of Islamic institutions.

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