The effects of job crafting and engagement in improving the performance of micro, small and medium enterprises

Purpose: Previous studies have found mixed results regarding the effect of job crafting (JC) on employee engagement (EE) and employee performance (EP). JC was also influenced by the type of work and tenure. Therefore, the present study examined the relationship between JC and EE in increasing in-role (IRP) and extra-role performance (ERP). Additionally, it analyses JC on manufacturing and service micro, small and medium enterprise (MSME) and differences in tenure. Design/methodology/approach: The study was conducted using 1032 employees who work in MSME in Indonesia, especially in Yogyakarta. Validity and reliability tests were carried out for the questionnaire, and Chi-square was used to test the JC difference for the type of work, analysis of variance was used to test the JC difference on tenure, and structural equation modeling (SEM) to analyze the relationship model. Findings/results: The results of SEM with a two-step approach found that EE mediated the effect of JC on performance. Depending on the type of work performed, the challenges of manufacturing companies differed from those of service companies. The tenure also distinguished the JC that was carried out. Practical implications: Job crafting is a phenomenon of employee creativity that is important for achieving a good fit in the workplace and increase EE and EP. The human resources department needs to optimize this concept by regulating the procedures for conducting JC. Originality/value: The results found that the effect of JC was only on IRP and was different, negative, positive and insignificant. Furthermore, JC is proven not to affect ERP.