article · International Journal of Organizational Leadership
Effective management of employee relationships positively influences the overall performance of commercial banks in Ethiopia, but its impact depends heavily on employee dedication. An assessment of 336 participants across commercial bank branches in Gambella and Jimma examined how workplace relationships and organisational commitment interact to drive institutional success. The findings show that employee relationship management alone is insufficient to maximise bank performance without high levels of organisational commitment acting as a key intervening factor. Grounded in human capital and human relations frameworks, the evidence indicates that banks achieve better operational outcomes when staff feel deeply committed to their institution alongside sound relationship management practices. Consequently, strengthening workplace connections alongside initiatives that build workforce loyalty is critical for financial institutions seeking to improve their operational performance.
Financial institutions rely heavily on their workforce to deliver services and maintain performance. This research demonstrates that human resource initiatives cannot focus solely on communication and relationship management. Ensuring that employees feel genuine commitment and loyalty to their organisation is essential for those workplace practices to successfully translate into stronger institutional results.
The insights can directly inform human resource strategies, workforce development programmes, and management policies in commercial banks and related service industries. Because the findings are based on survey data from operational bank branches, the underlying management recommendations are applied and ready for adoption by banking executives and policymakers seeking to refine internal organisational practices.
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The study concentrated on how organizational commitment mediates the relationships between employee relationship management and bank performance in selected commercial banks in Ethiopia, with organizational commitment playing a mediating role. The theoretical and empirical review of related literature has been used to construct the hypotheses and frame the study variables. Simple random sampling, purposive sampling, and multistage sampling techniques were used to select 336 samples from selected branches of commercial banks operating in two regions of Ethiopia: in Gambella town of Gambella region and Jimma town of the Oromia region. Questionnaires, interviews, and observation were used to collect data, and the Structural Equation Modeling was mainly used to see the relationship between employee relationship management and organizational performance moderated by organizational commitment using AMOS software. The result indicated that employee relationship management has a positive relationship with organizational performance, with organizational commitment playing a moderating role. The effect of employee relationship management on bank performance in Ethiopia is shown to be insufficient without organizational commitment as a moderating role. As a result, Ethiopian policymakers are advised to take into account both the employees' dedication and relationship management to enhance the performance of commercial banks in Ethiopia. This outcome is believed to be explainable in terms of the Human Capital Theory and the Human Relations Approach.
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DOI: 10.33844/ijol.2024.60419
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