Organizational learning, employee satisfaction, loyalty and employee performance in the banking sector in Nairobi county, Kenya

Abstract

In the contemporary working environment, insight into employee performance is of crucial importance. Previous empirical evidence has found mixed results regarding the relationship between organizational learning and employee performance suggesting for further research incorporating mediating variables into employee performance model. The purpose of this study was organizational learning, employee satisfaction, loyalty and employee performance in the banking sector in Nairobi County, Kenya. Specific objectives were to evaluate the effect of, organizational learning, employee satisfaction and employee loyalty on employee performance. Additionally, the study examined the effect of organizational learning on employee satisfaction, mediating effect of employee satisfaction on organizational learning and employee performance, the effect of employee satisfaction on employee loyalty, organizational learning and employee loyalty, mediating effect of employee loyalty on organizational learning and employee performance and lastly the mediating effect of employee satisfaction and loyalty on organizational learning and employee performance. The study was guided by Social Exchange Theory, Adaptive and General Learning Theory and Knowledge Management Theory. Positivism Philosophy, Explanatory research design and multistage sampling techniques were adopted in collecting data using a structured questionnaire from a sample size of 411 employees of commercial banks in Nairobi County with target population of 2433. Cronbach Alpha and factor analysis were used to test the instrument reliability and construct validity, respectively. Data was analyzed using Hierarchical and multiple regression models using Hayes model 6. Findings showed that organization learning (β =.671, p <.05, R.718, R2.516, ΔR2 .347), employee satisfaction (β =.244, p <.05, R.749, R2.561, ΔR2 .045), and employee loyalty (β =.199, p <.05, R.766, R2.587, ΔR2 .026) significantly affect employee performance. Additionally, results indicate that; organizational learning significantly affect employee satisfaction (β =.614, p <.05, R.618, R2.382), employee satisfaction mediates the relationship between organizational learning and employee performance (β =.109, CI= .045, 185), employee satisfaction significantly affects employee loyalty (β =.337, p <.05, R.658, R2.433), organizational learning positively and significantly affects employee loyalty (β =.298, p <.05). Further, findings show that employee loyalty mediates the relationship between organizational learning and employee performance (β =.059, CI= .021, .116). Finally, study findings reveal that employee satisfaction and employee loyalty significantly mediates the link between organization learning on employee performance (β = .041, CI = [.018, .073]. There is overwhelming evidence from the study indicating that organizational learning is key in improving employee performance, it also creates satisfied and loyal employees. The study recommends that commercial banks should improve on organization learning through enhancing knowledge awareness, intellectual cultivation and information sharing to ensure effective employee satisfaction and loyalty for increased performance. There is however need for further study to cover other financial institutions and service industry or other sectors.