The Effect of Selected HRM Practices on Perceived Organizational Performance: The Mediating Role of Employee Motivation in a Case Study of Dashen Bank S.C.”
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Date
2026-10-03
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Addis Ababa University
Abstract
This study investigates the effect of selected HRM practices on perceived organizational performance considering employee motivation as mediating variable to explain the mechanism through which HRM practices influence perceived organizational performance, in the context of Dashen Bank S.C. The researcher is motivated by the need to understand how the selected HRM practices contribute to the perceived organizational performance in a service-oriented banking environment, where employees’ attitude and perception plays vital role. A mixed research approach with cross-sectional explanatory design was employed for this study. Quantitative data were collected from 271 Dashen Bank permanent employees using close-ended and structured questionnaire, while qualitative data was gathered from 10 HR Business Partners of the Bank. Descriptive, correlation, regression and mediation analysis were conducted to analyze and interpret the collected data. The findings revealed that among the selected HRM practices, extrinsic reward, intrinsic reward and career development have significant effect on both employee motivation and perceived organizational performance, while performance appraisal have not significant effect on employee motivation and perceived organizational performance. Additionally, employee motivation has significant positive effect on perceived organizational performance. Furthermore, employee motivation partially mediates the relationship between the selected HRM practices and the perceived organizational performance in the Bank. The study concludes that the selected HRM practices enhance organizational performance directly and indirectly through uplifting employee motivation. It further recommends strengthening performance appraisal system, linking performance with extrinsic and intrinsic reward, and enhancing career development system can be resulted in enhanced employee motivation and organizational outcomes. This study contributed to the body of HRM literature, particularly in Ethiopian banking sector and provides practical insights for HR strategy enhancement of the case organization
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Keywords
HRM Practices, Employee Motivation, Perceived Organizational Performance, Mediation, Ethiopian Banking Sector