The Impact of Employee Engagement on Employee Retention: The Role of Psychological Capital, Control at Work, General Well-Being and Job Satisfaction

Abstract

Employee engagement and retention is a promising area in management as well as psychology. The purpose of this paper is to examine the effects of employee engagement (EE) on their retention (ER). We proposed a theoretical framework model explaining how employee engagement affects their retention. The original model linked engagement with control at work (CAW) and general well-being (GWB) through psychological capital (PsyCap). We extended this model by linking CAW and GWB to employee retention. We further added job satisfaction (JS) as a mediator between EE and ER. To establish its empirical validity, we conducted a survey from 200 employees working in different companies in Pakistan by using a close ended likert scale type questionnaire. Data was analyzed using confirmatory factor analysis and structural equation modeling. Findings suggested a positive significant relationship between EE and ER. PsyCap, CAW and JS play a significant mediator role for EE and ER, only GWB does not mediates the relationship between EE and ER. This research will help in understanding how to retain employees and mounting their psychological capital through training and development, since when employees will be happy and motivated, they can perform well and will have job satisfaction. As a result, the level of intention of employees to leave would be low. This study is preliminary the first to investigate the association between EE and ER through many other constructs (PsyCap, CAW, GWB and JS) in the Pakistani context.