The Impact of Industrial Relations Climate on Employee Engagement and Organizational Performance in the Digital Era
DOI:
https://doi.org/10.38035/gijea.v4i4.897Keywords:
Industrial Relations Climate, Employee Engagement, Organizational Performance, PLS-SEM, Digital EraAbstract
This study examines the impact of industrial relations climate on employee engagement and organizational performance in the digital era, focusing on members of Gapeksindo East Java. Using a quantitative approach, data were collected from 100 respondents and analyzed with SmartPLS based on the Partial Least Squares Structural Equation Modeling (PLS-SEM) technique. The results indicate that industrial relations climate has a positive and substantial effect on employee engagement. Furthermore, employee engagement significantly influences organizational performance, highlighting its role as a key mediating variable. In addition, industrial relations climate also demonstrates a direct positive contribution to organizational performance, although the indirect effect through employee engagement appears more pronounced. The measurement model confirms that all constructs meet the criteria for reliability and convergent validity, with satisfactory outer loadings, composite reliability, and average variance extracted values. The structural model shows strong predictive capability in explaining endogenous variables within the context of construction industry organizations. These findings suggest that fostering a supportive industrial relations climate can enhance employee engagement and ultimately improve organizational performance, particularly in the rapidly evolving digital environment. The study contributes to the literature by providing empirical evidence from a professional association context and offers practical implications for organizational management strategies.
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