The Mediation Role of Employee Engagement on the Relationship between Aspects of Human Capital Management and Employee Job Performance

Abstract

This study examined the mediation role of employee engagement on the relationship between the aspects of human capital management and employee job performance in the Ethiopian banking sector. This study reports the responses of 426 respondents from twelve banking institutions in Addis Ababa, Ethiopia, drawing on the social exchange theory and the resource-based view theory. This study is structured on a quantitative approach, with stratified and simple random sampling techniques. Exploratory and confirmatory factor analyses were applied to test the factors and verify the factor structure of a set of observed variables. The scales were tested for reliability and validity. Structural equation modeling (SEM) with AMOS was used to test the hypothesized relationships. The results revealed that the aspects of human capital management, namely knowledge accessibility, learning capacity, workforce optimization, leadership practice, and career advancement, positively relate to employee job performance. Moreover, the results of bias-corrected bootstrapping iteration revealed that employee engagement partially mediates this relationship between aspects of human capital management and employee job performance. Finally, the limitations and future research implications are discussed.