The Influence of Organizational Culture on Employee Engagement: Small and Medium Enterprises in Tanjay City

Abstract This study explores the influence of organizational culture on employee engagement in small and medium enterprises (SMEs) in Tanjay City, Negros Oriental. Employee engagement plays a key role in enhancing productivity and employee retention. However, most research has focused on large corporations, resulting in a limited understanding of their impact on smaller businesses. This study seeks to address this gap by exploring how leadership practices, communication practices, and reward and recognition systems influence employee engagement, particularly in terms of job satisfaction and commitment to the organization. A descriptive-correlational design was used, with survey questionnaires collecting data from 266 SME employees. Statistical analysis, including Spearman’s Rank Order Correlation and Kruskal-Wallis Test, revealed a strong positive relationship between organizational culture and employee engagement. Businesses with strong leadership, effective communication, and structured reward systems had higher engagement levels. However, engagement did not significantly differ based on age, sex, education, job level, or length of employment. These results suggest that fostering a positive and inclusive organizational culture is essential for enhancing employee engagement across diverse demographic groups. The study provides valuable insights for SME owners and business leaders in designing strategies to strengthen workplace culture, improve employee well-being, and enhance business competitiveness in local economies. Keywords: organizational culture, employee engagement, leadership practices, communication practices, rewards and recognition, small and medium enterprises