The Conditions for Discretionary Energy: Implications for Organizational Business Performance

Abstract

Achieving sustainable organizational effectiveness and performance is the ultimate purpose of many organizations. Human resource development (HRD) professionals are increasingly being called upon to support the development of strategies that facilitate employee engagement in the workplace (Macey & Schneider, 2008). The aim of this study was threefold: (1) to provide a preliminary test of the conceptual framework defining the conditions of Discretionary Energy (DE), (2) to develop a preliminary composite measure of discretionary energy, the DE Index and (3) investigate the relationship of DE with company-level organizational financial measures. This study is an early step in building our understanding of the necessary organizational and people conditions to release discretionary energy that is linked to business performance of companies. Preliminary findings based on this exploratory, conceptual study rendered support for a three-factor model of discretionary energy. The composite DE index constructed based on this study, and its positive relationship with several financial indicators (e.g. Achieving sustainable organizational effectiveness and performance is the ultimate purpose of many organizations. Human resource development (HRD) professionals are increasingly being called upon to support the development of strategies that facilitate employee engagement in the workplace (Macey & Schneider, 2008). The aim of this study was threefold: (1) to provide a preliminary test of the conceptual framework defining the conditions of Discretionary Energy (DE), (2) to develop a preliminary composite measure of discretionary energy, the DE Index and (3) investigate the relationship of DE with company-level organizational financial measures. This study is an early step in building our understanding of the necessary organizational and people conditions to release discretionary energy that is linked to business performance of companies. Preliminary findings based on this exploratory, conceptual study rendered support for a three-factor model of discretionary energy. The composite DE index constructed based on this study, and its positive relationship with several financial indicators (e.g. EBITDA Margin, ROA) suggest that the DE index has broad practical implications for human resource and organizational development.