The Role and Impact of Human Resource Management: A Multi-level Investigation of Factors Affecting Employee Engagement

The purpose of this study was to explore the role and impact of Human Resource Management (HRM) practices on employees work engagement, and the mediating role of the relational psychological contract in this relationship. Responses were gathered through questionnaires from 463 employees and 35 HRM representatives across 35 organizations. The HRM representatives gave information regarding the HRM practices in their organizations, while employees relayed their perception of work engagement and how they experienced the psychological contract with their employer. Multi-level regression analysis were used to investigate the assumptions. The analysis found no direct effect between the HRM practices and work engagement. However, a mediating effect was established with relational psychological contracts, between motivation enhancing HRM practices and work engagement. This suggests that performance based pay and performance appraisals indirectly affect employees work engagement through their relational psychological contract. This result adds knowledge to which factors enhance employee motivation in the Norwegian context. Future research is recommended on all the variables and relationships in this study as a small data set may have led to low statistical power and the intervention from confounding variables.