Employee Engagement: Literature Review

This literature review explores the concept of employee engagement, its history and evolution, antecedents, and impact on organizational performance. It discusses the importance of employee engagement in modern organizations and the benefits of having an engaged workforce. The review also examines different definitions of employee engagement and its measurement. Additionally, it highlights the role of psychological climate, job fit, and affective commitment as antecedents of employee engagement. The review concludes with the significance of effective communication in fostering employee engagement.

Employee Engagement: Literature Review

Running Head: Literature Review
Contents
Literature review..............................................................................................................................2
Introduction..................................................................................................................................2
What is Employee Engagement?.................................................................................................3
History and Evolution of Employee Engagement........................................................................6
Antecedents of Employee Engagement and their impact............................................................8
Importance of Employee Engagement.......................................................................................11
Practitioner and Management Tools for Employee Engagement..............................................13
Immigration and its Antecedents...............................................................................................16
Need for Immigration.................................................................................................................19
New Zealand Statistics of Immigration.....................................................................................21
Good v/s Bad Consequences of Immigration............................................................................22
Migrant Employees v/s Local Employees.................................................................................24
References......................................................................................................................................28
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Running Head: Literature Review
Literature review
Introduction
To survive in the modern-era organizations the employees have to be enthusiastic and should
even take initiatives at work. The firms are not only concerned about their own development, but
also compel the employees to work for their personal career development also. In other words,
the company wants their employees to be engaged and this could only be attained when the
employees know that their leaders and their company on a whole respects their work and the
services they are discharging are eventually contributing to the overall development of the firm.
An employee is engaged when his personal ambitions of pay, rewards and growth are met by a
firm.
In these increasingly competitive markets and global corporate world, the companies are
working hard to keep the employees satisfied and determined and obtain necessary business
results. However, in order to obtain higher performance, the satisfied employees are not enough
because they will just meet the work demands in a given time frame. To be highly competitive an
employer needs to work beyond the satisfaction attainment of the employees and should
motivate them to deliver services with full energy (Allen M. , 2014). So to survive in the modern
organizations an employee needs to be enthusiastic at the workplace, excited about the services
they deliver, show creativity at work, accept challenges and remain competitive while delivering
services at work.
If a company manages to maintain high morale among the employees, it receives a number of
benefits as the active staff members are more productive and they remain loyal to a firm for a
longer duration. It is believed that the production level of companies with high level of
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Running Head: Literature Review
engagement is quite higher than their counterparts with low level of employee engagement
(USC, 2015). This concept has emerged as a popular organizational concept among the
practitioner audiences. The engaged workforce has become the prime asset and the topmost
priority for corporate executives. The employee engagement can also be a deciding factor for the
effectiveness of the organization as this factor has not only a capability to affect the retention and
loyalty of the employees, but it has a positive impact on the level of customer satisfaction also.
The reputation of the company is also improved and there’s a noticeable change in the overall
value of the stakeholder. Thus, to survive in this highly competitive environment the managers of
the firm are turning to the HR to set agenda for the improvement of the employee engagement
practices and commitment strategies (Wachter & Yorio, 2014).
What is Employee Engagement?
Employees are considered as a crucial asset of any organization and in the last few decades, there
has been a “talent war” which has compelled the organizations to not only attracts the topmost
talent, but also to retain it for a longer duration. One of the toughest challenges faced by the
CEOs, Human Resource Managers and other leaders in an organization is to connect the
employees not only physically in the workplace, but to compel them to establish an equal
emotional and mental connection with their work and the services they deliver on the daily basis.
The engaged employees contribute positively towards achieving the organizational
goals(Sanders, 2012).
Employee Engagement is a complex and a broad construct that includes ideas such as
commitment, loyalty, satisfaction, motivation and extra role behavior. An employee, who is
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Running Head: Literature Review
highly engaged, extends himself to meet the specific needs of the organization, take initiatives
when the firms are stuck and have to take crucial decisions, reinforces and creates the culture of
a firm, stays focused and vigilantly deliver his/her services and even possess a belief that their
services could make a huge difference in the firm’s status and brand identity in the current and
prospective markets. At a practical level, a firm usually defines Employee Engagement as an act
where employees consider themselves as an integral part of the company and usually have pride
and loyalty to the company. To make the strategies of the firm successful such employees
usually go “above and beyond the call of duty” (Kamau & Sma, 2016).
As the concept of Employee Engagement has gained a lot of popularity, there have been a
number of changes in its definition, conceptualization and measurement. The researchers in the
academic community have, however lagged in defining the term engagement as it is entirely a
new concept. Different researchers have given different definitions of this term. For instance,
Kahn (1900) who was considered as the “father of employee engagement movement” defines it
as the harnessing of organization members’ selves to their work roles. He also stated that “in the
engagement people involve and express them physically, cognitively and emotionally during role
performances” (Knight, 2012). This means an employee has to be present both physically and
psychologically in order to discharge his/her duties in an effective manner and also undertake
organizational roles and responsibilities. According to Mortimer, employee engagement can be
defined as the commitment towards the firm and its values and also the willingness of the
employees and leaders to provide a precise guidance to the coworkers and subordinates.
Robinson, Perryman and Hayday (2004) defined this concept as an optimistic attitude of an
employee towards the firm and a strong belief in its cultural values. An employee who has been
engaged for long is aware of all the changes that are occurring in the business world; hence he
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Running Head: Literature Review
delivers services in order to improve the sales and profits of the firm (Tran, 2018). According to
them a two-way relationship could be built between the employees and the employers hence the
organization must work to nurture and develop the engagement. The engaged employees are
more satisfied with the work they deliver and they not only have much energy, but they apply
this energy enthusiastically to work also. Saks (2006) defined “employee engagement” as the
extent to which an individual is attentive and absorbed in their jobs and role given to them in the
workplace (Kular, Gatenby, Rees, Soane, & Truss, 2008). According to the author, Employee
Engagement is also a positive attitude one develops for the company he/she is serving. This
concept also improves the relationships between the employees and their leaders by establishing
better communication among them. Mone and London (2010) defined employee engagement as a
condition of the employee in which he/she feels motivated, involved, committed and passionate
towards the organization and demonstrates those feelings in his/her working behavior. This
means if an employee is highly engaged, then he is happy and this would be eventually reflected
in his working behavior. Bhatla (2011) tried to establish a close relation between engagement of
an employee with the firm and his/her psychological state during that period. He even stated that
an employee is highly engaged when it has a psychological commitment towards the assigned
task and this reflects the employee’s dedication towards his/her work (MacLeod & Clarke,
2018). Mani (2011) states that an engaged employee is aware of the changes occurring in the
business environment and hence closely aligns with his/her colleagues and leaders to improve
his/her individual performance and create a number of benefits for the organization. The engaged
employees put a focus on the future of the firm and also over his/her own future career growth.
Johnson (2014) has described this concept as the workplace approach in which the managers and
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other leaders ensure that the employees are highly committed towards the goals and objectives of
the firm (Mehta & Mehta, 2013).
History and Evolution of Employee Engagement
The Employee Engagement appears a relatively new concept, but it goes back to over 25 years
when the term appeared for the first time in the academic journals in the year 1990. In the period
of 70s and 80s the HR focused on Employee Satisfaction only. This concept had no connection
with the quality of services delivered by the employees and even with the performance of an
individual employee. This concept only considers an employee and its connection with the firm
and not about the organization as a whole. Till this period an employee was just considered as a
“personnel”. With the advancements in the thoughts and ideas, the focus shifted from
satisfaction towards commitment and at that moment the “personnel” actually became “human
resources”. The employee will be loyal and committed towards an organization in return of the
job offered to him/her. Although commitment is a crucial element of engagement, however, it
cannot replace engagement (Shuck & Wollard, 2009).
As the global competition began to increase at a rapid pace, there was a requirement that the
employers should become more flexible and competitive. As the traditional industries were
closed and employees were cut back, at that moment the people realized that they need to be
more flexible in their career choices and grab the opportunities wherever they find them. The old
contract of “job for life” was broken and people were free from to explore and move from job to
job. This was benefitting the employees, but the employers were losing their top talents and
along with that a good amount of money and crucial resources of the company too. In the midst
of all these events the concept of Employee Engagement rose and an important act in this period
was the publication of a paper in Institute of Employment Studies (IES) titled, ‘From People to
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Profits, the HR link to the service-profit chain’ (Byrne, 2019). This paper showed that with the
improved behavior and attitude of the employees at the workplace, there could be an
enhancement in the customer satisfaction and retention level and at the same time in the overall
sales performance. For the service based businesses, the old mantra ‘Staff is your greatest attest’
was demolished and a new one ‘Staff is your only asset’ was adopted. Due to this the leaders
began to invest greater assets in the incentives of the staff and as a result, there was a drastic
increase in the level of the employee commitment, motivation, productivity and eventually the
profit rates of the firm (Sharma & Kaur, 2014).
There was acceleration in the adoption of the concept of employee engagement by the firms as
another seminal study was conducted in the year 2002 which showed a precise link between the
employee engagement and the profit rates of the firm. The concept that was introduced back in
1990 was confined only to the academic level, but now this new concept of employee
engagement was applied at the practitioner level (Harvard Business School, 2013). The leaders
began to observe that this concept has a capability to affect a number of business measures like
employee recruitment and retention, sales, profits, turnover, customer satisfaction, etc.
There has been a drastic evolution in the concept of Employee Engagement. Two decades ago
when this concept gained popularity, then the focus shifted on overall satisfaction of the
employees as the employers had a belief that satisfied employees deliver better services than the
unsatisfied ones. But, the employee satisfaction process did not work out which forced the
employers to adopt employee commitment. This was introduced to improve staff loyalty to
reduce employee turnover. But, this also failed during the economic crisis as the employers had
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Running Head: Literature Review
to lay off employees who in turn started looking for better opportunities instead of sticking to the
firm due to loyalty. After this finally came the concept of Employee Engagement through which
the employers discovered that the employees were more productive, loyal, satisfied and efficient
if they felt legitimately connected to the company. With the introduction of this concept the
employees started to provide the best possible services to the firm (Vance, 2006).
Antecedents of Employee Engagement and their impact
Employee Engagement elements are directly and indirectly related to the overall performance of
the organisation. Shuck and Rocco (2011) considered factors like job fit, psychological climate
and affective commitment and established a close link of such factors with employee
engagement. A good job fit has a tendency to engage an employee cognitively and behaviorally
and thus the overall employee performance is improved. Also, when the employees receive
psychological meaningfulness at work, then they develop a great passion to accomplish their
tasks. The affective commitment refers to the emotional connection of an employee to his/her
work and the duties discharged by him/her at the workplace (Aston, 2014).
Psychological Climate was defined as “capturing the meaningful psychological representations
made by the individuals relative to the structures, processes and events that occur within
organizations. In the year 1996, Brown and Leigh developed a model of psychological climate,
performance, effort and involvement and along with this stated that to achieve a high level of
employee engagement the employers need to maintain a positive psychological environment
across the workplace. Later a number of reformations were made to this model and it was
discovered that a good psychological climate has an effective relationship with the employee’s
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Running Head: Literature Review
capability to deliver best performance in the workplace and even develop the willingness to be
regular at the job (Shimazu, Schaufeli, Kamiyama, & Kawakami, 2015).
High Level of Employee Communication leads to proper communication of organizational goals
and objectives to the employees. According to a study conducted by Andrew and Sofian (2012),
the process of engagement is highly influenced by the type of communication that occurs
between employees and even among the leaders and the subordinates. When the voice of the
employees is heard and when they are made aware of the ongoing activities in the company then
they feel more attached towards the company and hence deliver their services in an enthusiastic
manner.
According to Andrew and Sofian (2012), training, skill development and learning play a crucial
role in the overall development of the employees. When a learning-oriented culture is created in
an organization, then it becomes an effective way to enhance the engagement of the employees
in the firm’s activities and decisions. Most of the young employees are always interested to learn
new skills and gain myriads of knowledge in their core working areas and even in the ones that
are quite new to them. The reason behind this is they want to keep their work interesting and
fresh. Also by learning new skills and developing good knowledge about different tools and
technologies help the employees to seek different job opportunities and activate the motivation
process while the employees readily throw themselves to work (Wang, 2016).
Co-workers support is crucial in creating a positive working environment in the organization.
Cooperative workers drive positive energy and the workers tend to deliver better services in the
workplace where the team members support and motivate each other to perform better. Rewards
and Recognitions are also important in establishing firm engagement with the employees Kahn
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Running Head: Literature Review
(1990) reported that the engagement of the people varies as a function of their perceptions of the
benefits, rewards and recognition they receive from the role they are performing at the firm. This
means that if the employees are not recognized for their work and efforts, then there will be a
situation of burnout where such employees will either develop an aversion of working at such
places or they will simply quit and search for a better opportunity in the markets (Shenoy &
Uchil, 2018). Also, the rewards may push the uninterested employees towards delivering better
performances in the workplace and even motivate the hard workers to strive in challenging
conditions in the markets. The highly engaged workforce expects that the senior and co-workers
acknowledge their efforts and the creativity of their skills and ideas. If this acknowledgement
occurs periodically then an employee remains highly engaged for a long term (Wang, 2016).
Saks (2006) argued that one way of repayment for an individual towards his organization is
Engagement. If an individual develops a good level of engagement, then he may repay the
organization foe what it has taught him in his employment period. The employee chose to engage
with employees on the level of resources it receives in return from the firm.
Robertson and Cooper (2010) established a great relationship between employee engagement
and psychological well-being. The individuals who are psychologically stable have a tendency to
deliver better performance in the workplace and they even behave differently which leads to
better ways of employee engagement. The psychological well-being could be provided by the
company to its employees by not giving much stress to the employees about the work and giving
them proper rewards, recognition and incentives in a timely manner (Kumar & Renugadevi,
2013). Roof (2015) showed that there is a specific link between spirituality and engagement. The
spirituality has a positive and specific correlation with the engagement of the employees towards
their organization. This factor is directly and indirectly related to elements like vigor and
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dedication which eventually empowers an individual to perform in a better manner in the
workplace.
Importance of Employee Engagement
Employee Engagement is a crucial decision for a company as it seeks to retain the talented
employees for a longer period. This concept allows the leaders to effectively utilize the available
human resource and even remove unnecessary obstacles in the way of success of the
organization. Kang (2014) suggested that engaged employees provide a competitive advantage to
the organization and also generate a favorable business environment where a business not only
develop in an enhanced manner, but survives for long. This means that when employees are
firmly engaged to a firm, then they perform better than the others in the market and eventually
increase the sales improving the brand image for the company in the current and prospective
markets. The leaders provide a great working environment for the employees and in return the
employees perform in an enhanced manner to give a competitive edge to the companies over
other similar companies in the markets. The engaged employees are less likely to quit the firm
because they are happy and content in serving their company. The engaged employees cannot be
easily lured by other opportunities available in markets. Hence, in other words, it could be said
with the implementation of employee engagement concept a company can simultaneously reduce
the turnover rates and improve employee retention rates (Kumar & Pansari, 2015).
The engaged employees are said to be more committed to the company as compared to the other
and due to this there is a challenging task for the leaders of the firm and other managers to
provide a healthy working atmosphere to them. There are a number of advantages of the
Employee Engagement. Ference (2009) suggested that employee engagement instills enthusiasm
and passion among the employees towards their job due to which they feel motivated in
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Running Head: Literature Review
completing the tasks in a given time frame (Kaur, 2017). Engaged employees develop passion,
commitment and alignment with the current strategies and goals of the firm and evolve their
skills to attain them quickly. These employees do not only devote their strength and enthusiasm
to achieve the strategic goals of the firm, but also take care of the future of the organization.
They usually provide constructive ideas and thoughts to the firm which keeps it stable for long.
Haid and Sims (2008) proposed an idea that the engaged employees realize the importance of
customer satisfaction and their positive experience with the company. So, an engaged employee
will work harder than the others to deliver high quality product and services and attract a good
customer base for the company (Anitha, 2013).
Jose and Mampilly (2012) stated that engaged employees are highly optimistic and extremely
focused towards their work and are always energetic to work for the sustainable development of
the firm. This means when engaged employees are attached to the firm, then there are few
chances that the company will perform any task that is non-sustainable and will always
implement those strategies that are for the betterment of all the stakeholders of the company. A
sense of loyalty is created by an engaged employee in the competitive environment and provides
a highly energetic working space for the others who are quite new to this concept and want to be
engaged with the firm for a longer term. When an employee is engaged with a firm, then it
boosts the business growth (Barik & Kochar, 2017).
The engaged employees are better communicator because they care for their job. The disengaged
employees are not able to establish such communication with the employees, employers and the
customers. The incorporation of the concepts of employee engagement not only helps the
employees to establish a high level of communication among them, but at the same time it can
also help in the creation of innovations and new ideas (Barik & Kochar, 2017).
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Employee Engagement is also considered as a symptom of success. The success in this case
doesn’t indicate only the business success, but the engaged employees are a result of personal or
a team’s success. The engaged employees are personally successful and they have a tendency to
pass on this success factor to the company they are working for. They have taken a lot of risks at
a personal level so they can easily motivate their team members to take risks and attain quick
success (May, Gilson, & Harter, 2004).
Practitioner and Management Tools for Employee Engagement
Fostering employee engagement is a key for creating a productive office environment. For the
last few decades, the relationship between employees and employers have undergone a
significant number of changes and hence the senior executives have to adopt a number of tools
and strategies to not only attract the talented people to their firms but also to keep them satisfied
so that they are retained for a longer duration (May, Gilson, & Harter, 2004).
While recruiting the employees the recruiters should be quite honest and should not promise
something that their company can never deliver. The skilled employees always want the risks
and challenges in their lives so the recruiters should try to portray the past risks their firms have
taken instead of giving them false hopes of a peaceful future with lots of money. The recruiters
should set clear goals for the candidates and expect precisely from their contribution in their firm
(Endres & Mancheno-Smoak, 2008).
The new generation of the employees, who wants to be engaged in the work culture of the firm,
usually has a low tolerance level for the hierarchical approaches prevailing in the traditional
companies. They usually prefer open communication and honesty. So instead of taking orders
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Running Head: Literature Review
directly from their seniors they want a discussion over every single decision that involves them
and is going to affect their performance, along with the performance of the company, in the
coming future. A horizontal structure in the organization is usually preferred by the engaged
employees as such structure gives a chance to all big or small participants of the company to
provide their suggestions and valuable feedbacks over a crucial activity, change or decision of
the firm.
The engaged employees often look for a certain degree of flexibility while they are working in a
firm under a bunch of senior executives. So in order to enhance their engagement, the firms
could use a strategy of providing them a number of benefits where they can foster good
communication with the leaders they are working for and even with their colleagues and
subordinates. By putting into practice a range of beneficial programs, a company can keep the
employees engaged for a longer period. These benefits include paternity or maternity leaves,
health club discounts, annual leaves for vacations with family and other incentives (Endres &
Mancheno-Smoak, 2008). The flexibility will also allow the employees to have a great work-life
balance which will motivate them to deliver better services in the company. Having an employee
voice in the company makes the employees more attached to the firm. The companies could
develop channels through which each employee can raise issues and even give his/her valuable
feedbacks whenever or wherever required. The leaders can even lead discussion forums in which
the employees could lodge complaints about unwanted activities prevailing in the workplace or
even about unrequited behavior exhibited by any senior or colleague. When the voices of the
employees are heard regularly, then they feel motivated and never develop an aversion about
their workplace (Barik & Kochar, 2017).
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In the past the training period was a considered crucial for an employee as during this period all
the participants were led by the leaders and managers towards the specific goals of the firm. But,
there are a number of cases in which these sessions can become obsolete or simply manager-led
exercises. In such a case, the leaders should communicate with the subordinates in a friendly
manner and allow every team member to take decisions. The leaders could also challenge the
employees to step out of their comfort zone so that they begin to deliver services other than the
normal activities they perform at the work (Andriotis, 2016).
With technological advancements the companies can tap into a new world of opportunities and
new technological ideas and thoughts could be used as a great tool to improve the engagement of
the employees towards the firm. It is crucial that a business keep up with the ongoing trends in
the markets and train their employees to adapt to such transformations in an easy manner. The
adoption of new technologies often makes a workplace more interesting and challenging.
Sometimes employees leave a firm, even remaining loyal for a long period, just because they are
not getting much growth opportunities. With the adoption of new technology, the employees are
given an opportunity to learn about something new and dynamic. This increases their interests in
their work and they deliver services with more perfection (Andriotis, 2016).
Connectedness is a crucial tool which could be used to keep the employees engaged. The
employees need to feel that the management has an interest in their work and what they feel and
say about the ongoing changes in the workplace or even in the external markets. The managers
should allow the employees to provide their input in the crucial matters of the company. They
should be kept informed about the bigger organizational picture. To make them more connected
to the firm, the company could also hire experts who provide them proper training to face the
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emerging challenges in the markets. This will make the employees feel that the company cares
for their career growth and hence they’ll give a better input (Logix, 2012).
Immigration and its Antecedents
Immigration is defined as to remove into a country for the purpose of permanent residence.
Immigration has become a crucial topic of discussion across the globe. As the transportation
facilities have improved, the job-seekers can easily move to a number of new locations to
explore new opportunities. The media is also playing a great role in attracting with transnational
information and in creating a fundamental network for the immigrants (Dustmann, Frattini, &
Glitz, 2007). The conflicts, human rights violation and unequal treatment often force human
beings to leave their country, homes and families with the hope of improving their life quality.
Immigration is defined as an international movement of a person to a country of which he/she
doesn’t possess a citizenship. In the immigration context, there is a number of Push and Pull
factors which form the prime reasons for due to which a person leaves his/her own country.
These factors have been represented below:
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(Francis, 2017)
Due to Safety Factors people are compelled to leave their native places as they might cause
danger to their lives. The immigrants sometimes face persecution and discrimination based on
nationality, race, religion, political beliefs and status in the social groups. These discriminations
when become fierce then they are forced to move towards a new locality where there is a safe
environment and they can easily live according to their own terms. Some formal activities like
wars and gang activities also force the immigrants to leave their native place and search for a
better living environment.
Economic factors also lead to immigration and is considered as the most prominent reason for
migration. Due to this factor, the people move from poor developing nations towards
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Running Head: Literature Review
economically stable countries and from lower waged areas towards countries where higher
wages are provided and job opportunities are also better than their native places. People also
move from rural areas to urban areas which are rich in job opportunities and can even provide
better living standards to the people (Striking Women, 2019).
Environmental Factors cause involuntary immigration of people. Natural Disasters, Crop Failure
or Pollution causes immigration. Crop Failure often leads to food scarcity and drop in the price
of agricultural products. There is a scarcity of agricultural jobs due to which people migrate to
urban areas for better job opportunities. Pollution of water and soil can deteriorate health
conditions in both rural and urban areas and due to this people migrate to attain better living
conditions. Natural Disasters like Earthquakes and Droughts make the people devoid of basic
services and proper shelter. To start a new life and earn better for living, the people leave such
disaster prone regions and settle for better in a new continent (State Secretariat for Migration,
2014).
Social Factors instill a feeling of attaining a better lifestyle and earn a good amount of money
among the people who are not getting a living up to their expectations. Immigrants often move to
explore better opportunities and living standards in developed countries. They usually roam in
search of such job opportunities that not only give them better wages, but also important benefits
to their families and numerous career growth prospects (Dustmann, Frattini, & Glitz, 2007).
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Need for Immigration
Only handful countries across the world are able to see the prime benefits of immigration and the
net positive migration each year. These include Australia, the USA, Canada, Europe, New
Zealand, etc. However, countries like South America and Africa are experiencing net migration
lose. As immigration is considered important criteria for boosting the economy of a country,
there are other specific reasons due to which most of the countries should adopt this concept
while effectively managing its loopholes (Thet, 2014).
Firstly, the concept of immigration has a capability to diversify local economies. Immigrants
bring new perception, ideas, thoughts and beliefs with them which add up to the already existing
perceptions and cultural beliefs of the local people of a country. With this added diversification,
the communities become quite strong as now they can face various challenges with a number of
solutions. The immigrants who are not able to find any service usually start their own business
and become financially stable. This increases local production, generate better profits and
eventually add up to the country’s economy (American Psychological Association, 2012).
Secondly, Immigration also helps in the creation of Global Market as remittances are common in
countries which invite and support immigrants. Immigrants even take back their talent and
knowledge to their home country and improve its economic level as well. Thirdly, the
immigrants also support lower levels of crime (Orrenius, 2016). It is believed that the illegal
immigrants act as a precursor for the increase in local crimes, but a research conducted within
the state’s Department of Justice (in Texas) revealed that the number of illegal immigrants was
lesser than the local prisoners (McElmurry & Kerr , 2016).
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Fourthly, the immigrants also increase Entrepreneurism. They have a lot of skills and
experiences and they are also very productive. Hence create new jobs, drive innovations and
even work smartly to make existing business a bit flexible. The businesses develop a tendency to
invest more and more in such employees as they develop worker specialization while working
hard at the workplace. Fifthly, the immigration also has a tendency to raise GDP of a country as
the productivity and hard work of the immigrants can increase the GDP by 0.4% in a year. A
one-tenth increase in the US GDP equates to $18 billion in economic impacts. This means that
the immigration provides a total annual value of up to $ 72 billion to the total economy of a
country (UNIDOSUS, 2019).
Sixthly, immigration also has a capacity to encourage the economic recovery as the immigrants
have a capacity to move to a new location in a frequent manner as compared to the local citizens.
This means that if a place is struggling with the economy then it can improve its current status by
allowing the immigrants to enter the area and work. The immigrants also have a capability to
keep the labor market moving even when the occupations comprise of Hi-Tech jobs because they
possess a great expertise and command over what they have learned. Seventhly, the researchers
have suggested that the immigrants are not the only ones who are benefited by migrating to a
new location, but the other workers of the companies are benefited as well. The supervisors,
managers, translators, etc. are provided with an ample of new opportunities which they haven’t
experienced in their work life till now. As the demands for the new workers rise in the markets,
the prices for the goods and services eventually fall. This allows every single entity to benefit
from the lower costs (Orrenius, 2016).
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New Zealand Statistics of Immigration
To support the economy, New Zealand has been dependent on the immigrants. The government
has also used the immigrants to supplement its labor force. It becomes a responsibility of the
government to provide all possible services to the immigrants as they act as a crucial asset for the
economy. Some of the immigrants have adapted themselves completely according to the lifestyle
of the country and work there as a crucial resource. Most of them have a job offer before they
arrive in NZ and some of them enter NZ on a temporary basis. As the immigration rates are
rapidly increasing, so the government is working continuously to improve the employment rates
of the country so that all the migrants are well settled in their jobs and lives (Brookings, 2016).
An important aspect of settling in New Zealand is that the migrant’s family feels settled and start
adopting the habits and lifestyle of the place and try to make it as their home. Researchers have
suggested that around 60% of the partners of the migrants find a good place to work within a
year or two (Australian Associated Press, 2017). However, the partners of the migrants work so
hard that they began to seek for visas and face a number of obstacles. Two of such obstacles in
settling is getting them a suitable job and improve their English language skills (Provost, 2013).
The Delivering and Funding Settlement services are not that efficient and the governance
structure that has been put in place to look into these complexities has not been working
functioning as required.
New Zealand has relied on labor immigration to improve and support the economy for many
years. When compared with other OCED (Organization for Economic Cooperation and
Development) countries, it was revealed that NZ has high inflows and outflows of people. One in
four people in the NZ’s workforce was born overseas and various opportunities brought them
here. But this scenario changed a little bit and in the year 2010, every one in seven people living
21

Running Head: Literature Review
in NZ was born overseas. Most of the people have migrated permanently to Australia. Since the
late 1990s, a loss of around 259,000 local inhabitants has been offset by a gain of 384, 000
migrants and this produced a net gain of 125,000 people (Trlin, Spoonley, & Bedford, 2010).
In the 1990, in the immigration policy of New Zealand the concept of immigration changed in
three crucial respects. Firstly, in the year 1991, NZ adopted point systems similar to those of
Canada and Australia. In this system, for the selection of the migrants, there source country was
now not given much importance rather their economic status was considered and their socio-
demographic behavior was evaluated (Nadkarni, 2019). Secondly, as the points systems were
gaining popularity, the migrants were chosen on the basis of their skills and knowledge and the
profits they can offer to the growing economy of the country. Thirdly, the ethnic mix of the new
migrants changed drastically. A lot of migrants came from Britain, but this was the time when
countries like East Asia, South Asia and Middle East contributed a number of migrants to New
Zealand (Scheffler, 2007).
Good v/s Bad Consequences of Immigration
Some researchers argue that immigrants flood across borders in order to steal the jobs, create a
significant burden on the tax payers and threaten indigenous culture. While there are other group
of researchers that argue that the concept of immigration was developed in order to boost the
dwindling economies of certain powerful nations, to meet the need of skills shortage and help in
creating a more dynamic society. Both the points of views could be accepted. The evidences
reveal that although immigration provides a number of economic benefits still the country where
the immigrants are settled and even their native countries have to face a number of challenges.
22

Running Head: Literature Review
Around the world, there are 230 million migrants, making up about 3% of the total world’s
population (Peri, 2013). This share has not been changed since a long period but the share in the
total population increases as the global population is booming. Till 1990s the total number of
countries in the world was 50 and now this number has increased to 200. This indicates that as
there are more borders across the world, hence the number of immigrants and other migrants is
also increasing rapidly (Goldin, 2016).
Due to the increasing needs of the economies, the countries are allowing skilled labors to
migrate frequently. The governments of developed and developing countries are becoming more
flexible towards immigration rules and are trying to develop a significant position in the war for
talent. The immigrants provide a great revenue to the government and the native people also get
a chance to survive on dynamism brought by the immigrants as they move from one country to
another. If the immigration and migration are happening rapidly across the world, then the
question arises that why it has been criticized so much? The answer to this, as believed by a
number of researchers, is that the immigrants have a tendency to take jobs and destroy the
economy of a country. But, the evidences provided by the opposition have proven this statement
wrong. For instance, in the US most of the founders of the leading companies like Google, Intel,
PayPal, eBay and Yahoo are immigrants. Also, the skilled immigrants account for almost half of
the Silicon Valley startups and over half of the patents. A research conducted by the Federal
Reserve Bank of the San Francisco revealed that “immigrants have the capacity to expand the
economy’s productivity by stimulating a lot of investments and even promoting specialization
which eventually produces efficiency gains and boosts income per worker” (Cohen, 2013).
Some researchers who are in the favor of immigration concept have concluded that the
immigrants show great contributions in the taxes of a country as compared to the benefits and
23

Running Head: Literature Review
services they receive in return. A report published by the World Bank over immigration shows
that increasing immigration by a margin equal to 3% of the workforce in developed countries
would generate global economic gains of $356 Billion. Some economist across the globe also
predicts that if the borders are completely dissolved for the immigrants and if the borders of all
the countries are dissolved and immigrants are allowed to move freely across the globe, then this
would produce profits as high as $39 Trillion in the coming 2-3 decades (Peri, 2013).
It is believed that in the coming future to attract more and more skilled and talented labors
because the global markets will become more competitive and they will require a wide variety of
talent to keep on growing. As the population is booming at a rapid pace, so is the number of
immigrants. To control the negative aspects of immigration, the mangers could be compelled to
manage them wisely, but while doing so they have to keep in mind that a good migration often
leads to dynamism in a society (OECD, 2014). Immigration is good and in this modern era of
globalization, if the government and other organizations impose barriers over migration, then it
will pose a great threat to the economic growth and sustainability of a country.
Migrant Employees v/s Local Employees
Immigrants are better employees and this statement can be proven by giving a number of
reasons. For instance, immigrants are a good asset as they are always in survival mode and it is a
human tendency to discharge duties in an effective manner in the survival mode. When
immigration occurs, the immigrants usually disconnect from their influences, possessions and
networks (DesMarais, 2017). The sense of security that one experiences in his own country is
replaced by uncertainty and in such conditions when they are compelled to operate in fewer
24

Running Head: Literature Review
resources, then they develop a sense of alertness, awareness and responsibility. The immigrants
are also more excited to share the part of their cultural values and beliefs with their co-workers
and leaders. There is a reflection of their cultural beliefs and tradition in their way of working.
This eventually increases the level of diversification in the company and the mix people from
different backgrounds often make firms more competitive (Reddy, 2018).
Immigrants are also more flexible and therefore they prove to be great fits in startup jobs.
Startups work on a concept of doing things quickly and while using fewer resources and
therefore require special types of workers. As the immigrants have a number of life experiences
hence they tend to be more flexible and resourceful. Moving to another country requires a lot of
risks and this makes the immigrants as great risk-takers. The immigrants take good risks and this
makes them great employees and great entrepreneurs. In the today’s innovative and competitive
world only those survive who take risks and the immigrants have a tendency to fail quickly, but
also recover quickly. The returning migrants also bring a lot of contacts along with them, which
may empower their friends and relatives residing back in their native countries. This may even
create job opportunities for them too (ILO, 2018).
The Immigrant workers make better employees, but they have a significant number of loopholes
associated with them. The prime disadvantages of immigrants are:
 Immigrants can contribute to overpopulation. The wealthiest nations are the prime targets
for the immigrants and hence population increases drastically in such countries. When the
population levels become unbalanced then a number of resource access issues arise in
areas where high levels of immigration take place (OECD Factbook, 2007).
25

Running Head: Literature Review
 Immigrants also have a tendency to create wage disparities as they are ready to grab
employment opportunities at a lower wage as than the local residents. Immigration
creates a condition when there are a large number of immigrants who readily takes up the
job at lower wages and this creates wage disparities. Due to less income, there are fewer
supportive employment opportunities.
 Immigrants also reduce chances of growth in developing nations. Immigrants take the
knowledge and talent away with them when they migrate to other developed nations for
their individual growth. So, while planning for a better life for themselves the immigrants
often compromise the growth of their native countries.
 Diversity is not accepted and embraced by people easily. The immigrants often bring new
perspectives, ethnicities and culture along with them in an already established community
which causes friction. The local people have a basic fear associated with the immigrants
and this will compel the government to device a high level of security monitoring tools
and techniques and a number of negative personal interactions (Leonard, 2019).
 Immigrants can also lead to human rights violations as the immigration process can put
an individual in a state of desperation. The immigration can lead to the development of a
number of organized crime activities in extreme situations. The immigrants might face a
number of racism issues which may lower their will power of delivering a high level of
services. They may be exploited in the country on the basis of their cultural differences
and even on the basis of the knowledge they possess or the ways in which they discharge
their duties in the company.
 When immigrants move from a country for better opportunities, then they cause a number
of economic disadvantages in their native country. The manpower of the native country is
26

Running Head: Literature Review
usually relocated to a new place so the native place cannot grow like the other developing
nations (Leonard, 2019).
There are a number of pros and cons associated with the concept of immigration, but the benefits
of immigrations over-shadow the liabilities associated with the process because this economy
desperately needs talented people to become a part of growing economies. If the countries are
able to address these challenges in an efficient manner, then there are chances that this concept
can be used to grow the economy in a positive way. The local employees have no threats from
the immigrants rather they may learn new techniques and ideas from them if the leaders’ mange
them in a proper way (Anita, 2019).
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Running Head: Literature Review
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