Impact of Socially Responsible Human Resource Management on Banking Employee Outcomes: The Mediating Effects of Organizational Trust and Organizational Pride

Abstract

The purpose of this study is to examine the association between socially responsible human resource management (SRHRM), organizational trust, organizational pride, affective commitment, employee engagement, and turnover intention. Specifically, this study has explored the multiple mechanisms of organizational trust, and organizational pride between the linkages of two dimensions of SRHRM: Employee oriented HRM (EOHRM), General CSR facilitation HRM (GFHRM), and employee outcomes (affective commitment, employee engagement, and turnover intention). We have employed three-wave time-lagged data from the full-time employees of the banking sector of Pakistan. Partial least squares structural equation modelling (PLS-SEM) was used to test the hypothesized model. Results indicated that EOHRM has a significant direct effect on organizational trust, pride, affective commitment, and turnover intentions while the direct effect on employee engagement is not supported. Moreover, the results support the intervening role of organizational trust and pride between EOHRM and employee outcomes. Results further revealed that GFHRM has a significant direct association with organizational pride and trust, while the direct effects of GFHRM on all three employee outcomes are not supported. Furthermore, indirect relationships between GFHRM and employee outcomes through organizational trust and pride are supported. This study is unique in exploring multiple psychological mechanisms of organizational trust, and pride to clarify the association between SRHRM and employee outcomes through social identity and social exchange theories. The results of this study are beneficial for the HR department of banking sector organizations that are facing challenges in retaining their skilled workers and want to see their workforce committed and engaged. This study has highlighted several potential areas that could be investigated in future research. These include, exploring other mechanisms, for instance, emotional exhaustion, employee wellbeing, and meaningfulness between SRHRM and employee outcomes; and testing the current model in other sectors i.e., manufacturing, and petroleum. Future researcher may also examine the impact of potential moderators for instance job insecurity, personality traits and organizational environment.