Lakew Alemu (PhD)Hiwot Habtu2025-04-082025-04-082024-06-01https://etd.aau.edu.et/handle/123456789/5306Currently, there is intense competition in the Ethiopian banking industry. One of the key challenges for banks is their ability to foster employee engagement, which contributes to excellent organizational performance. Over the past decades, employee engagement has received quite strong attention from researchers and practitioners alike. However, research endeavors in this area have not given adequate emphasis on the defining role of job satisfaction in the relationship between employee engagement and employee performance. The main objective of this study was to explore the direct effect of employee engagement on job satisfaction and to analyze the indirect link between employee engagement and performance through job satisfaction. Data collected from 297 survey participants using a cross-sectional design. The analysis was conducted used two complementary approaches, namely, the Process macro developed by Andrew Hayes and the regression method developed by Baron and Kenny. The results show that the two dimensions of employee engagement, vigor, and dedication are significantly affecting organizational performance, while absorption does not. Furthermore, job satisfaction partially mediated the relationship between vigor and dedication and organizational performance. The study suggests that engaged employees play a vital role in organizational success. Prioritizing skill development, recognition programs, and a supportive work environment can enhance both employee engagement and job satisfaction. Practical implications, limitations, and future research directions are suggested.enThesis