INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4140

Employee Engagement and its Impact on Organizational Development:

Evidence from Small and Medium Enterprises (SMEs) in Ghana

Richard Amoako*, Samuel Boadi, Priscilla Bempa Botwe

Department of Human Resource Management, All Nations University, Koforidua, Ghana

*Corresponding Author

DOI: https://dx.doi.org/10.47772/IJRISS.2025.910000340

Received: 12 October 2025; Accepted: 20 October 2025; Published: 12 November 2025

ABSTRACT

This study evaluated the intricate relationship between employee engagement and organizational development

within small and medium enterprises (SMEs) in Ghana. Pertinent literature was reviewed on the influence of

employee engagement on organizational development and relationship between employee engagement and

organisational development of SMEs in Ghana. The study used quantitative method through cross-sectional

survey design. Data were collected from 360 employees across various SMEs in the Eastern Region of Ghana.

Structural equation modeling (SEM) was utilized to assess the relationships between employee engagement

and organizational development outcomes. Results indicate a significant positive effect of employee

engagement on organizational development, suggesting that higher engagement levels correspond to improved

organizational performance, innovation, and adaptability. The findings underscore the importance of fostering

employee engagement as a strategic imperative for organizational growth and sustainability in the

contemporary business landscape.

Keywords: Employee Engagement, Human Resource Management, Organizational Development,

Performance, SME’s,

INTRODUCTION

In today's rapidly evolving business landscape, organizations encounter complex challenges that require

innovative approaches to maintain competitive advantage and ensure sustainable growth (Kiruja & Mukuru,

2018; Mensah, 2020). Human resources, particularly the engagement of employees, have become increasingly

recognized as vital to driving organizational success (Saks, 2022). Employee engagement refers to the

emotional commitment and dedication of an employee to their work and the organization. Engaged employees

not only exhibit higher levels of productivity but also contribute positively to the organizational culture and

overall performance (Albrecht et al., 2018). Organizational development (OD) encompasses systematic efforts

aimed at enhancing an organization's effectiveness and capability (Anderson, 2017). It involves strategic

interventions designed to improve productivity, innovation, employee morale, and overall organizational

performance (Shuck et al., 2019). Understanding the interplay between employee engagement and

organizational development is crucial, especially in the context of SMEs, which constitute a significant portion

of the economy in Ghana (Agyemang & Ofei, 2021).

Research Objective

The objective of this study was to empirically assess the impact of employee engagement on organizational

development within SMEs in Ghana. Specifically, the research aims to achieved the following objectives:

1. To examine the influence of employee engagement on organizational development of SMEs in Ghana

2. To examine the relationship between employee engagement and organisational development of SMEs in

Ghana

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4141

Research Questions

To achieve these objectives, the study addressed the following research questions:

1. What is the influence of employee engagement on organizational development of SMEs in Ghana?

2. What is the relationship between employee engagement and organisational development of SMEs in

Ghana

LITERATURE REVIEW

Influence of Employee Engagement on Organizational Development of SMEs

Employee engagement has garnered substantial attention in organizational behaviour research due to its critical

influence on performance outcomes. Engaged employees demonstrate higher levels of commitment, are more

likely to invest effort in their roles, and contribute positively to organizational culture (Cooke et al., 2022; Buil

et al., 2019). Engaged employees exhibit behaviours such as increased creativity, pro-organizational

citizenship, and a willingness to go above and beyond their job descriptions (Karatepe et al., 2020). Recent

studies underline the multifaceted nature of employee engagement, which includes cognitive, emotional, and

behavioural components (Saks, 2022). A meta-analysis by Bailey et al. (2017) found that business units with

higher engagement levels outperformed those with lower engagement levels in terms of productivity and

profitability. Furthermore, engaged employees tend to have lower turnover rates, which can significantly

reduce recruitment and training costs (Albrecht et al., 2018).

Increased involvement results in better service delivery, creativity, and teamwork of which all are essential for

SMEs to expand (Bakker & de Vries, 2021). The impact of a fully engaged employee is amplified in the

setting of SMEs, which typically have lower staff sizes and less resources. A sense of accountability and

ownership is fostered by engagement, and this can result in proactive problem-solving and ongoing

organisational improvement initiatives (Gupta & Sharma, 2021). Promoting employee engagement is not only

advantageous but also strategically important as SMEs in developing nations aim to be resilient and

competitive.

Relationship between Employee Engagement and Organisational Development of SMEs

Organisational development refers to intentional efforts aimed at improving an organisation's effectiveness,

adaptability, and overall performance (Anderson, 2017). Organisational development encompasses strategies

that foster innovation, employee morale, and adaptability (Shuck et al., 2019). Various studies have

highlighted the positive association between organisational development and factors such as employee

engagement, turnover rates, and customer satisfaction (Mensah & Amponsah-Tawiah, 2021; Krishnan &

Singh, 2020; Ahmed & Pilbeam, 2018). The relationship between employee engagement and organisational

development has become increasingly critical to investigate, particularly in the context of SMEs, which often

face unique challenges and resource constraints.

Understanding how employee engagement contributes to organisational development can provide valuable

insights for improving performance and sustainability in these organisations (Anlesinya, 2020). Employee

engagement can act as a driver for informal organisational growth processes including knowledge sharing,

team cohesiveness, and adaptive leadership in SMEs, where formal structures and systems are frequently

lacking (Boateng et al., 2023). Additionally, involving staff members in change projects actively improves

their sense of purpose and alignment with organisational objectives, which is crucial during times of

development or transition (Mwangi & Omolo, 2017). As a result, SMEs may create innovative, people-

centered, and flexible cultures that foster long-term success by including engagement techniques into

organisational growth plans.

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4142

THEORETICAL FRAMEWORK

This study employs Social Exchange Theory (SET) as its theoretical framework. SET posits that social

behaviour is the result of an exchange process in which individuals weigh the potential benefits and risks of

relationships (Cropanzano et al., 2017). Within the organisational context, SET explains how employees’

willingness to invest effort and remain committed is influenced by the perceived fairness, support, and rewards

they receive from their employers (Blau, 2017). Engaged employees are more likely to reciprocate

organisational support through enhanced performance, loyalty, and proactive behaviour (Saks, 2022).

SET provides a robust foundation for examining employee engagement in SMEs by highlighting the role of

mutual trust, obligation, and perceived organisational justice in shaping engagement levels. When

organisations invest in the well-being, development, and recognition of their employees, a cycle of reciprocal

positive exchanges is initiated leading to greater employee commitment and organisational development

(Nawaz & Pangil, 2021). In this way, SET helps to clarify the relational dynamics between employer and

employee, reinforcing the strategic importance of engagement practices in achieving sustainable organisational

outcomes.

METHODOLOGY

Research Design

The study adopted a quantitative research approach and utilised a cross-sectional survey design to gather data

on the influence of employee engagement and its relationship with organisational development among SMEs

in the Eastern Region of Ghana. This design was chosen because it allows the researcher to collect data from a

population at a single point in time, providing a snapshot of the current perceptions and conditions within the

organisations. According to Creswell (2018), cross-sectional designs are appropriate when researchers aim to

identify relationships between variables across a defined group. Additionally, Saunders et al. (2019) emphasise

that survey designs are particularly suitable for business and management studies where large populations are

involved, and quantifiable data are required.

Population and Sampling

The target population for this study comprised employees from various small and medium-sized enterprises

(SMEs) operating within the Eastern Region of Ghana. The total number of registered SMEs in the selected

region was 360, forming the accessible population for the study. As noted by Cooper and Schindler (2014), a

sample is a subset of the population selected for participation in the research to enable generalisation of

findings. To determine an appropriate sample size from the finite population, the study employed Yamane’s

(1973) formula, which provides a simplified method for calculating sample sizes while maintaining a specified

level of precision. This formula was used to determine the representative sample size as follows:

The formula for sample size determination for a finite population is given by:

# ⋅ %

⋅ ' ⋅ (1 − ')

! =

+ %

⋅ ' ⋅ (1 − ') − 1) ⋅ ,

where:

! is the required sample size.

# is the population size, which is 7,905 according to the Ghana Statistical Service.

% is the Z-score corresponding to the desired confidence level.

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4143

' is the estimated proportion of the population that possesses the attribute in question.

, is the margin of error

Assuming a 95% confidence level (% ≈ 1.96), an estimated proportion of 0.5 for maximum variability, and a

margin of error of 5% (, = 0.05).

Calculating this gives the appropriate sample size for the study.

Therefore, the calculated sample size for a 95% confidence level with a 5% margin of error is approximately

366 establishments. This sample size should provide a representative and statistically significant sample for

your study in the specified location.

Data Collection

Data were collected using questionnaire adapted from established scales measuring employee engagement and

organizational development. The questionnaire was divided into section. Section A, B, and C showing the

demographic information, assessing engagement levels and organizational development indicators.

Respondents rated their experiences using a 5-point Likert scale, facilitating quantitative analysis.

Data Analysis

The collected data were analyzed using SPSS (Version 26.0) and AMOS software. Structural equation

modeling (SEM) was employed to test the hypotheses and assess the relationships between the constructs. This

comprehensive analysis allows for a nuanced understanding of the dynamics at play and provides empirical

evidence supporting the study's objectives.

Results

Table 1: Demographic information

Variables

Categories

Frequency

Percent

Gender

Male

198

55.0

Female

162

45.0

Age

18-25 years

15.0

26-30 years

20.0

31-36 years

25.0

36-40 years

17.5

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4144

41-45 years

10.0

46-50 years

7.5

More than 50 years

5.0

Educational Background

No formal education

2.5

Basic/Primary

5.0

Secondary

15.0

Bachelor's Degree

180

50.0

Master's Degree

22.5

Tech/Voc

5.0

Years worked in the firm

Less than 6 years

162

45.0

6-9 years

126

35.0

More than 9 years

20.0

Years firm has been in operation

Less than 1 year

5.0

1-5 years

15.0

6-10 years

25.0

11-15 years

22.5

16-20 years

20.0

21 years & above

12.5

Number of employees in the firm Less than 6 employees

7.5

6-9 employees

12.5

10-29 employees

108

30.0

30-50 employees

25.0

More than 50 employees

25.0

Total

360

100.0

Source: Field Survey (2024)

Hypothesis Testing

The result established the effect of employee engagement on organizational development. The results show that

employee engagement has a significant positive effect (β = 0.365, t = 6.607, p = 0.000) on organisational

development, suggesting that higher levels of employee engagement correspond to higher levels of

organisational development, thus, supporting the hypothesis. This implies that when employees are highly

motivated, committed, and invested in the success of the organisation, it can drive meaningful progress and

improvements at the organisational level. This suggests that engaged employees, who feel a sense of purpose,

empowerment, and connection to the organization’s goals, are more likely to contribute proactively, provide

valuable insights, and collaborate effectively to drive innovation, increase productivity, and enhance overall

organisational capabilities. Engaged employees may be more adaptable to change, willing to take on additional

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4145

responsibilities, and more effective in their roles, all of which can contribute to the organization’s ability to

adapt, grow, and become more competitive. Conversely, organisations with disengaged or disinterested

employees may struggle to capitalize on opportunities, implement strategic initiatives, or realize their full

potential.

Table 3: Results of Hypothesis Testing

Paths

Path

coefficient

statistics

P values

Remarks

Employee Engagement -> Development

Organisational

0.365

6.607

0.000

Supported

DISCUSSION

The study assessed the effect of employee engagement on organizational development. The results show that

employee engagement has a significant positive effect on organisational development. This implies that when

employees are highly motivated, committed, and invested in the success of the organisation, it can drive

meaningful progress and improvements at the organisational level.

This suggests that engaged employees, who feel a sense of purpose, empowerment, and connection to the

organisation’s goals, are more likely to contribute proactively, provide valuable insights, and collaborate

effectively to drive innovation, increase productivity, and enhance overall organisational capabilities. Engaged

employees may be more adaptable to change, willing to take on additional responsibilities, and more effective

in their roles, all of which can contribute to the organisation’s ability to adapt, grow, and become more

competitive.

Conversely, organisations with disengaged or disinterested employees may struggle to capitalise on

opportunities, implement strategic initiatives, or realise their full potential. Recent research on the relationship

between employee engagement and organisational development has produced diverse findings. Several studies

support a positive association. For instance, Bailey et al. (2017) found a significant positive correlation

between employee engagement and business outcomes, including productivity and profitability. Albrecht et al.

(2018) reported that engaged employees contribute to improved organisational performance and competitive

advantage. Karatepe et al. (2020) observed that daily fluctuations in employee engagement were positively

related to financial and customer service outcomes. Saks (2022) discovered that employee engagement plays a

mediating role between organisational resources and organisational climate, leading to improved outcomes.

However, some studies present more nuanced or contradictory findings. Saks (2022) also emphasised that job

and organisational engagement are distinct constructs with different antecedents and consequences.

Gupta and Sharma (2021) observed that engagement mediated the relationships between organisational

support, personal initiative, and task performance. Buil et al. (2019) reported that employee engagement was

positively related to job performance, though the strength of the relationship varied depending on contextual

factors. Albrecht et al. (2018) found that engagement was influenced by job resources and leadership support,

which in turn affected organisational outcomes. Mensah and Amponsah-Tawiah (2021) discovered that the

relationship between engagement and performance was strengthened by proactive HR practices and perceived

fairness. Ahmed and Pilbeam (2018) observed that the impact of engagement on organisational citizenship

behaviour and turnover intentions was moderated by organisational culture and employee perceptions.

Saks (2022) noted in a critical review that while engagement is related to performance, it is conceptually

distinct from other job attitudes and requires further empirical clarity. Nawaz and Pangil (2021) found that job

satisfaction and perceived organisational support are key antecedents to engagement, influencing

organisational commitment and development. Boateng et al. (2023) observed that open communication and

participative decision-making were important drivers of engagement in Ghanaian SMEs. Bailey et al. (2017),

in their systematic review, found that while engagement generally had a positive effect on performance, the

evidence was not always consistent across studies. Lastly, Cooke et al. (2022) discovered that the relationship

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4146

between engagement and performance varied depending on the type of engagement strategy employed and the

organisational context.

Practical Implications

Organizations should prioritize initiatives that enhance employee engagement, including recognition programs,

career development opportunities, and a supportive work environment. By fostering an engaged workforce,

SMEs can enhance overall performance and ensure sustainable growth.

Theoretical Contributions

This study contributes to the literature by demonstrating the significant relationship between employee

engagement and organizational development, reinforcing the SET framework in the context of SMEs. The

findings highlight the need for organizations to strategically manage human capital to drive development.

Limitations of the Study

The study may have limitations related to the sample size and diversity. If the sample is not large or diverse

enough, the findings may not be generalizable to all organisations or industries. This limitation restricts the

ability to apply the results to a broader context. The study likely employs a cross-sectional design, which

captures data at a single point in time. This design limits the ability to make causal inferences and understand

the long-term effects of employee engagement and retention strategies on organisational development. The

reliance on selfreported data can introduce biases such as social desirability bias, where respondents may

provide answers, they believe are expected or favourable rather than their true feelings or behaviours.

The study might not account for various external factors (e.g., economic conditions, industry specific trends)

that could influence employee engagement, retention strategies, and organisational development, potentially

confounding the results. The findings may be context specific, focusing on a particular industry, geographic

region, or organisational size. This specificity can limit the applicability of the results to other contexts.

CONCLUSION

This study highlights the need for organizations to foster employee engagement as a strategic priority for

organizational development. By implementing effective engagement practices, SMEs can enhance their overall

performance and ensure sustainable growth in a competitive landscape.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to publication of this article, authorship

and the research.

Declaration of interest

None

REFERENCES

1. Acharya, A., & Jena, L. K. (2016). Employee engagement as an enabler of knowledge retention:

resource-based view towards organisational sustainability. International Journal of Knowledge

Management Studies, 7(3-4), 238-256.

2. Agyemang, F. G., & Ofei, S. B. (2021). Strategic human resource practices and SME performance in

Ghana: The mediating role of employee engagement. International Journal of Productivity and

Performance Management, 70(6), 1361–1380. https://doi.org/10.1108/IJPPM-11-2019-0505

3. Ahmed, S., & Pilbeam, C. (2018). Exploring employee engagement from the employee perspective:

Implications for HRD. European Journal of Training and Development, 42(7/8), 400–418.

https://doi.org/10.1108/EJTD-01-2018-0003

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4147

4. Albrecht, S. L., Bakker, A. B., Gruman, J. A., Macey, W. H., & Saks, A. M. (2018). Employee

engagement, human resource management practices and competitive advantage: An integrated approach.

Journal of Organizational Effectiveness: People and Performance, 5(1), 7–35.

https://doi.org/10.1108/JOEPP-08-2017-0063

5. Albrecht, S. L., Breidahl, E., & Marty, A. (2018). Organizational resources, organizational engagement

climate, and employee engagement. Career Development International, 23(1), 67–85.

https://doi.org/10.1108/CDI-03-2017-0055

6. Anderson, D. L. (2017). Organization development: The process of leading organizational change (4th

ed.). SAGE Publications.

7. Anlesinya, A. (2020). Exploring human resource management practices in small and medium-sized

enterprises in Ghana. Africa Journal of Management, 6(2), 132–153.

https://doi.org/10.1080/23322373.2020.1724825

8. Bailey, C., Madden, A., Alfes, K., & Fletcher, L. (2017). The meaning, antecedents and outcomes of

employee engagement: A narrative synthesis. International Journal of Management Reviews, 19(1), 31–

53. https://doi.org/10.1111/ijmr.12077

9. Bakker, A. B., & de Vries, J. D. (2021). Job demands–resources theory and self-regulation: New

explanations and remedies for job burnout. Anxiety, Stress, & Coping, 34(1), 1–21.

https://doi.org/10.1080/10615806.2020.1797695

10. Boateng, F., Anlesinya, A., & Osei-Kyei, R. (2023). The role of organisational culture and leadership in

small business resilience in Ghana. Journal of Small Business and Enterprise Development, 30(4), 751–

769. https://doi.org/10.1108/JSBED-07-2022-0304

11. Buil, I., Martínez, E., & Matute, J. (2019). Transformational leadership and employee performance: The

role of identification, engagement and proactive personality. International Journal of Hospitality

Management, 77, 64–75. https://doi.org/10.1016/j.ijhm.2018.06.014

12. Cooke, F. L., Wang, J., & Bartram, T. (2022). Can employee engagement be a buffer against crisis?

Evidence from the hospitality industry during COVID-19. International Journal of Hospitality

Management, 102, 103123. https://doi.org/10.1016/j.ijhm.2022.103123

13. Cooper, D. R., & Schindler, P. S. (2014). Business research methods (12th ed.). McGraw-Hill Education.

14. Creswell, J. W. (2018). Research design: Qualitative, quantitative, and mixed methods approaches (5th

ed.). SAGE Publications.

15. Gupta, M., & Sharma, P. (2021). Exploring employee engagement–a multidimensional approach. Human

Resource Development International, 24(1), 3–20. https://doi.org/10.1080/13678868.2020.1828125

16. Karatepe, O. M., Yavas, U., & Babakus, E. (2020). Work engagement and performance outcomes: A

study with frontline service employees. International Journal of Contemporary Hospitality Management,

32(6), 1987–2005. https://doi.org/10.1108/IJCHM-02-2019-0134

17. Kiruja, E. K., & Mukuru, E. (2018). Effect of employee engagement on organization performance in

Kenya’s horticultural sector. International Journal of Business Administration, 9(2), 64–73.

https://doi.org/10.5430/ijba.v9n2p64

18. Krishnan, S. K., & Singh, M. (2020). High-performance work practices and employee outcomes: The

mediating role of employee engagement. Employee Relations, 42(6), 1347–1364.

https://doi.org/10.1108/ER-06-2019-0250

19. Mensah, J. K. (2020). Talent management and employee outcomes: A psychological contract perspective.

Public Organization Review, 20(2), 275–291. https://doi.org/10.1007/s11115-019-00447-3

20. Mensah, J. K., & Amponsah-Tawiah, K. (2021). Human resource development practices and employee

engagement: Empirical evidence from Ghana. Journal of African Business, 22(2), 257–275.

https://doi.org/10.1080/15228916.2020.1742562

21. Mwangi, W., & Omolo, J. (2017). Influence of employee engagement on change management in small

and medium enterprises in Kenya. International Journal of Academic Research in Business and Social

Sciences, 7(7), 1–15. https://doi.org/10.6007/IJARBSS/v7-i7/3078

22. Saks, A. M. (2022). A critical review of employee engagement theory and research. International Journal

of Human Resource Management, 33(4), 659–693. https://doi.org/10.1080/09585192.2019.1681533

23. Saunders, M., Lewis, P., & Thornhill, A. (2019). Research methods for business students (8th ed.).

Pearson Education.

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 4148

24. Shuck, B., Bailey, C., & Rose, K. (2019). Untangling the predictive nomological validity of employee

engagement: A composite indicator approach. Human Resource Development Quarterly, 30(4), 449–470.

https://doi.org/10.1002/hrdq.21352

25. Shuck, B., Reio, T. G., & Rocco, T. S. (2019). Employee engagement and performance: A systematic

review and implications for practice. Human Resource Development Review, 18(3), 265–283.

https://doi.org/10.1177/1534484319839314

26. Yamane, T. (1973). Statistics: An introductory analysis (3rd ed.). Harper & Row.