This paper aims to investigate the impact of risk culture on employee performance by exploring the mediating roles of employee satisfaction and employee engagement in the relationship between risk culture and employee performance.
The study employed partial least squares-based structural equation modeling (PLS-SEM) to assess both the direct effects and mediation effects, using a sample of 311 employees from the banking and insurance sectors. In contrast to PLS-SEM, a fuzzy set qualitative comparative analysis (fsQCA) technique was also applied to discern the causal configurations that lead to improved employee performance.
The findings revealed a significant direct effect of risk culture on employee performance, employee satisfaction and employee engagement. The findings also revealed that employee satisfaction significantly mediated the relationship between risk culture and employee performance, whereas the mediating role of employee engagement is partially significant. The fsQCA findings illustrated that a diverse combination of risk culture dimensions, employee satisfaction and employee engagement can result in enhanced employee performance.
This study provides important implications for the banking and insurance industries, suggesting that organizations should prioritize the development of a strong risk culture to improve employee-related outcomes such as performance, satisfaction and engagement, which are key factors for achieving optimal organizational success.
The paper specifically highlights the importance of integrating risk culture into human resource management, providing valuable insights for organizations seeking to enhance their risk management practices and culture.
