Impact of High Performance Work Practices on Employee Loyalty and Financial Performance through Mediation of Employee Satisfaction: An Empirical Evidence from the Financial Sector of Pakistan

Since last two decades, in response to changes in the competitive working world of business and management, organizational researchers have focused their attention towards high performance work practices that enhance the employee loyalty and organizational performance via employee satisfaction. In consistent with this stream of research, this study aims to find the impact of three High Performance Work Practices – employee training, appraisal system & empowermenton employee loyalty and financial performance via mediation effect of employee satisfaction. For this purpose, data was collected from a sample of 400 employees of the financial sector of Pakistan. SPSS 17 has been used for data analysis. Factor analysis and Cronbach’s alpha confirmed the validity and reliability of the instrument. Similarly, correlation and regression analysis were applied to find out the relationship among independent variables (employee training, appraisal system and empowerment), mediating variable (employee satisfaction) and dependent variables (employee loyalty and financial performance). The findings show positive and significant relationship among all variables and employee satisfaction partially mediates the relationship between independent variables and dependent variables. Theoretical & managerial implications along with limitations and recommendations for future research have also been discussed in the paper.