CC BY
7
Nexus of Employees Engagement between Talent Management
and Career Development
Quratulain Zafar1, Syed Nabeel Haider2, Qaiser Rashid Janjua3, Asif Hanif Qureshi4, Dr. Hafiz Ahmad Ashraf5, Amir Ali6, Joseph Fredrick Mutupha7
1 Assistant Professor, Hassan Murad School of Management, University of Management Technology Lahore 2UCP Business School, University of Central Punjab Lahore Pakistan 3Assistant Professor, Air University Islamabad 4Assistant Professor, Incharge Career Development Center, Abasyn University, Peshawar
5University of Central Punjab 6Lecturer Computer Science, Department of Statistics and Computer Science, FLSBM, UVAS, Lahore, Pakistan
7PhD in Public Administration and Management
2nabeel.haider@ucp.edu.pk,3qaiser.janjua@mail.au.edu.pk, 5pccahmad@gmail.com, 6amir.ali@uvas.edu.pk,
7jmutupha@yahoo.com
Abstract
This study aims to investigate the effect of talent management and career development on organizational effectiveness by taking employee engagement as mediator. For accomplishment of research objective, data was collected through survey method from 390 managers from the permanent employees working in commercial banks operating in KP province, Pakistan. The proposed model was tested using structural equation modeling in AMOS. The findings reveal that talent management significantly influences employee engagement and organizational effectiveness. Similarly, career development has a significant impact on employee engagement and organizational effectiveness. Moreover, employee engagement plays a significant mediating role in the relationship between employees development practices and organizational effectiveness. These results provide practical implications for bank management, highlighting the importance of prioritizing employees development practices and offering development opportunities to employees. By doing so, organizations can create a competitive advantage and enhance their overall organizational performance.
Keywords: Employees Engagement, Talent Management, Career Development
INTRODUCTION
Businesses operate with the objective of achieving high productivity and gaining a competitive edge in the global economy. To accomplish this, organizations require talented and engaged employees. In today's fiercely competitive era, the role of human resource management has become more crucial than ever. Talent management (TM) plays a vital role in managing the aptitude, skills, and enthusiasm of employees within an organization. It encompasses various aspects such as recruitment, selection, onboarding, performance management, career development, and employee engagement (Romans & Lardner, 2005; Schweyer, 2010). Research indicates that the most significant challenge in human resource management is building the company's ability to attract and retain talented individuals. While numerous studies have explored the link between talent management and individual or organizational performance, limited attention has been given to understanding the role of talent management in enhancing employee engagement.
Talent management has evolved from a reactive to proactive approach in obtaining better results from human capital. It focuses on acquiring personnel with the best knowledge, skills, and abilities (KSAs). Organizations have recognized that having the right talent is crucial for smooth operations. Talent management is seen as a key factor in staying competitive and is associated with improved employee and business performance.
Managing talent involves attracting and retaining qualified employees, as well as developing their skills. Unlike other company assets, the human asset takes time to develop and is considered the most valuable. Finding and nurturing talent is challenging, and it is essential to invest efforts in developing and managing talented employees. Talent is in high demand and is a driver for organizational success.
Existing literature highlights the significant impact of talent management on individual and organizational outcomes. However, previous research has not thoroughly explored the relationships between talent management, career development, employee engagement, and organizational effectiveness. To address this gap, this study aims to develop a framework guiding bank management in enhancing performance through individual development opportunities. Additionally, the study investigates the mediating role of employee engagement in the relationship between talent management, career development, and organizational performance. The goal is to achieve optimal organizational performance by leveraging employee development practices.
Saddozai et al. (2017) found through qualitative inquiry in their study of banks in Pakistan and China that TM is necessary to improve the overall performance of the banking sector. According to Salau et al., (2018), TM plays a critical role in enhancing the performance of Africa's technology-driven private banks, which leads to the organization's higher performance.
In Pakistan, as in most other countries of the world, BS is large scale corporations with many workers working at all levels. These organizations are based on structuralist paradigm ideas. BS is the epicenter of innovation, and enhancing organizational performance (OP) is the most crucial goal. The literature indicates that TM increases bank performance. The lack of effective TM practices, on the other hand, is one of the key causes of weak performance. Hence, the current study will attempt to solve the problem of a lack of TM practices having a detrimental impact on performance in BS Pakistan.
This paper contributes to the existing body of knowledge by empirically establishing the link between individual development practices (talent management and career development) and organizational effectiveness, which has been overlooked in the field of human resource development. Additionally, it elucidates the mediating role of employee engagement in the relationship between talent management and organizational effectiveness. The study also provides guidance to bank management on offering development opportunities to employees to enhance engagement levels and improve organizational effectiveness. Lastly, this research addresses the call for further investigation made by De Vos and Dries (2013) and Lyria, Namusonge, and Karanja (2017) regarding talent management and individual development strategies and their outcomes.
LITERATURE REVIEW
The concept of talent had become more prominent for business researchers and practitioners after the publication of the report of McKinsey Consultancy Company in which the phrase 'war for talent' was introduced (Collings, Scullion, & Caligiuri, 2019; He, Li, & Keung Lai, 2011). Iqbal, Qureshi, Khan, and Hijazi, (2013) documented that organizations get their value addition and performance by the talented workers who contribute through their ability and potential (knowledge, skills, expertise and good ideas) and also by other resources. Likewise, Lawler (2005) argued that the competitive edge of an organization is achieved only when the right talents are placed at right position because they are the most important asset of organization who are capable of creating innovation and development by using the required sources. Therefore, organization's success can be gained only when right talent working at the right place can contribute to their organization.
It is clear from the above literature that talent in organizations means an individual who is highly skilled, has extra ordinary knowledge, potential, and competencies to perform specialized tasks in an organization. In addition, these individuals are very few and working on key positions to improve OP for its long term sustainable competitive advantage. Different HR designs are used in organizations to find and manage skilled employees who work in key positions and contribute to the company's success (Collings & Mellahi, 2009; Neetu, 2023). Roles in important positions of an organization are viewed strategically to contribute more to the organization's performance (Becker & Huselid, 2006; Khan et al., 2020). By building TM architecture, the TM is used to manage a company's talented personnel.
Theoretical Foundations of Talent Management
The literature shows that the theoretical foundations of TM were discussed by various authors and various theories support the concept of TM (Becker et al., 2009). Likewise, the theory of resource-based view (RBV) (Barney, 1991), the theory of psychological contract (Rousseau, 1989), human capital theory (Becker, 1964), the social exchange theory (Blau, 1964), and contingency theory (Ingram, 2016). Also Lewis and Heckman (2006) discussed that it was also found from the literature that the TM is yet under-theorized and further an improved conceptual framework is required for "theoretical scaffolding" (Gallardo-Gallardo et al., 2015; Morley et al., 2015). The aforementioned theories support the performance management of an organization, human resource management and also found more relevant and suitable to study the TM in organization to improve its performance.
Career Development
Career development involves managing knowledge, effort, freedom, and growth to pursue a personally determined and evolving desired future. It entails providing structured guidance to facilitate learning (Ali & Mehreen, 2018; Lester et al., 2023). This process benefits both the employee and the organization. The objective of career development is to align employee aspirations with the challenges faced by the organization, leading to enhanced organizational effectiveness. Organizations aiming to attract, motivate, and retain employees need to prioritize employee career development. Historical evidence demonstrates that organizations supporting their employees in this aspect have achieved success (Renee & Bradley, 2007). Organizations play a significant role in facilitating employee development, which has a positive impact on their careers. Counseling sessions offer valuable support to employees in their self-development journey by providing guidance and direction towards achieving career goals. When organizations invest in their employees' career development through training sessions, they benefit from having a highly talented and satisfied workforce (Saeed et al., 2013).
Employee Engagement
Employee engagement refers to the degree to which employees demonstrate a deep commitment to their work, exhibit loyalty to the organization, and invest their full physical, mental, and emotional energy into their tasks. It goes beyond job satisfaction and retention, encompassing a profound connection and empowerment within the work environment. According to Kahn (1990), employee engagement involves the active involvement of individuals in their work roles, encompassing cognitive, emotional, and physical aspects. Companies with engaged employees experience mutual benefits, as employees work in a meaningful manner, resulting in improved outcomes. Having a highly engaged workforce is indicative of a strong organization, regardless of its size or location (Rama, 2009).
Talent Management and Organizational Effectiveness
Talent management is a crucial challenge faced by HR professionals to elevate standards and status. It is a distinct management ideology, different from previous concepts like personnel management, HRM, and strategic HRM (Jadoon et al., 2022). The suggested talent management strategy development ratio is 70:20:10, with 70% focused on working affairs, 20% on relationships, and 10% on general development activities. In the globalized age, identifying the right talent is essential for organizational effectiveness. Properly conducted and evaluated talent management programs simplify the talent management strategy. Leaders' change-promoting behavior positively impacts worker readiness for change, enriching organizational culture and improving firm performance. Talent management should encompass all HR functions, as having the right talent is a significant advantage for any enterprise. Retaining talented employees is challenging due to high employee mobility, but engagement and career development efforts can help minimize it. Talent management practices create a competitive advantage and enhance organizational effectiveness. Companies must focus on competitors and core competencies to succeed.
Career Development and Organizational Effectiveness
Employee career development is crucial for a well-functioning social order, as it enhances skills and personal growth. Organizations that neglect employee development risk losing talented workers. Employees prioritize their career and personal growth throughout their work life. Effective human resource departments provide managerial support within relevant departments, emphasizing the need for employee-manager cooperation. Individualistic career management has gained importance, and understanding the differences between individual and organizational career satisfaction is key. The relationship between the two aspects can be understood by combining occupational philosophy and managerial philosophy. Protean career orientation significantly affects perceived employability, while organizational roles impact individual capacity development. Singe's Learning Organization Model, which focuses on personal opinions, mental states, group building, collaborative vision, and system thinking, is an important model for studying career development in learning organizations.
Employee Engagement and Organizational Effectiveness
Effective talent management policies and practices demonstrate a commitment to employees, leading to lower turnover rates and higher employee engagement, which directly impacts organizational productivity and success. Engaged employees perform 20% better and have lower turnover chances (Hussain et al., 2022). HR faces the challenge of strengthening workforce engagement, which can be achieved by providing a sense of regard and honor to employees. Organizational culture and values play a role in enhancing or decreasing employee engagement. Managers should create an environment where employees are cognitively and emotionally engaged, provided with necessary information and feedback. Employee engagement is influenced by individual perceptions and their approach to organizational responsibilities (Latif, 2022). Different employees have varying levels of commitment and engagement. Highly engaged employees require comprehensive information, while those with cognitive focus need access to relevant information to achieve organizational goals Ullah et al., 2022).
Hypotheses
H1a: Talent management and employee engagement are positively related.
H1b: Talent management has a positive relationship with organizational effectiveness.
H2a: Career development is positively associated with employee engagement.
H2b: Career Development is positively related to Organizational Effectiveness.
H3: Employee engagement is positively correlated with organizational effectiveness.
H4: Employee engagement acts as a positive mediator between talent management and
organizational effectiveness.
H5: Employee engagement serves as a positive mediator between career development and organizational effectiveness.
Conceptual Framework
■ Talent ! Management
Employees Engagement
Organizational Performance
■ Career ! Development
/
J
Figure: Conceptual Model
RESEARCH METHODOLOGY
This research is quantitative in nature, making the structuralist method more applicable. A deductive research approach will be employed to examine the theory. This study used a quantitative approach to describe how the study's variables affect and interact with one another, and the current investigation will test the model using a quantitative research method.
The questionnaire that is used to collect data for this study was divided into three parts. All of the questions in this part was graded on a five-point Likert scale, and their codes are listed strongly disagree, disagree, neutral, agree, and strongly agree.
Population and Sampling
The population for this study consist of all the 11138 branch managers in the 22 private banks listed with the State Bank of Pakistan. However, data will be collected through questionnaire from the 390 managers as suggested by Reisinger et al., (2006), in Peshawar, Mardan, Charssada, Abbottabad, and Nowshera, KP province through convenience sampling.
Table 1
List of Private Banks
Sr. No Bank Bank
1 ABL Samba
2 Askari Bank Silk Bank
3 Bank Al-Habib Ltd. 14 Soneri Bank Ltd.
4 Bank Alfalah 15 Standard Chartered
5 Bank Islami 16 Summit Bank
6 Dubai Islamic 17 UBL
7 HBL 18 Faysal Bank
8 Habib metro 19 Citi Bank
9 JS Bank 20 SME Bank
10 MCB 21 Al-Baraka Bank
11 MCB Islamic 22 Meezan
Source: State Bank of Pakistan. (https://www.sbp.org.pk/loaddata.html?val=all)
DATA ANALYSIS
The proposed model and structural hypotheses were tested using structural equation modeling (SEM) in AMOS 24.0 version. AMOS was chosen due to its capability to conduct factor analysis (CFA) and regression analysis (path analysis) simultaneously. Prior to the main analysis, the sample set was examined for outliers, missing values, and multicollinearity (VIF < 10 and Tolerance = 0-1). No issues were found in the sample set.
Table 2
Descriptive Statistics, Reliability and Correlation Matrix
Constructs Mean SD ALpl"ui {a) CR AVE 1 2 3 4
1TM 3.792 0.5978 0.757 0.8127 0.5228 0.723
2CD 3.740 0.6442 0.797 0.8123 0.5224 .438" 0.723
3EE 3.658 0.6266 0.800 0.8008 0.5018 .594" .342" if. 70S
40E 3.720 0.5556 0.775 0.7973 0.5676 .528" .486" .563" 0.753
Table 2 presents descriptive statistics, inter-correlation results, and the square root of average variance extracted (AVE) values. The findings confirm the expected correlations: talent management significantly correlates with employee engagement (r = .594, p < .01) and organizational effectiveness (r = .528, p < .01). Similarly, career development significantly correlates with employee engagement (r = .342, p < .01) and organizational effectiveness (r = .486, p < .01). Additionally, employee engagement positively and significantly correlates with
organizational effectiveness (r = .563, p < .01). These results support the initial proposed structural relationships in the study.
Table 3
Confirmatory Factor Analysis
Variables Paths Loadings
Talent Management TM1 <— Talent Management TM2<— Talent Management TM3 — Talent Management TM4<— Talent Management 0.800 0.769 0.615 0.694
Career Development CD1 <—Career Development CD2 <— Career Development CD3 <— Career Development CD4 <— Career Development 0.691 0.826 0.755 0.600
Employee Engagement EE1 <— Employee Engagement EE2 <— Employee Engagement EE3 <— Employee Engagement 114 — Employee Engagement 0.742 0.729 0.709 0.650
Organizational Effectiveness OE1 <— Organizational Effectiveness OE2 <— Organizational Effectiveness OE3 <— Organizational EffectiveiiL-ss 0.764 0.718 0.777
Table 4
CFA Model Fitness indices
Fitness Indicators Measurement Model Structural Model Threshold indices
CMIX/OT 3.000 2.440 <3
CEI 0.931 0.983 <.90
SRMR 0.051 0.053 <.06
RMSEA 0.080 0.068 <.08
P-Value 0.000 0.000 >.05
TLI 0.913 0.968 >.90
NH 0.912 0.970 >.90
NNFI 0.911 0.954 >.90
M 0.950 0.989 >.95
CEI 0.959 0.963 >.95
AGFI 0.923 0.944 >.90
Table 3 shows that all items estimates are significant at p<.05. Furthermore, the model fit indices suggest a good fit to the data (see Table 4).
Table 5
The Findings of Hypotheses Testing
Paths Estimate S.E C.R(t) p-value Decision
H la: TM-s-OE 0.197 0.053 3.477 0.000 Accepted
Hlk TM hkEE 0.550 0.054 10.688 0.000 Accepted
H2a: CD^OE 0.280 0.042 5.766 0.000 Accepted
H2b: CD->EE 0.101 0.050 1.963 0.050 Accepted
H3: EE->OE 0.350 0.048 6.439 0.000 Accepted
Bootstrapping Indirect effect S.E LB 95% CI UB 95% CI P-Value
H 4: TM—>EE—>OE 0.192 0.038 0.122 0.268 .001 Accepted
H5: CD—iEE-fOE 0.035 0.016 0.005 0.069 .0270 Accepted
After confirming the measurement model, we transformed it into a structural model, which also exhibited good fit indices according to Hair et al. (2012) (see Table 4). The standardized path coefficients of the structural model were computed (see Table 5). As expected, talent management had a substantial effect on employee engagement (B=.550, t= 10.688, p=.000) and organizational performance (B=.197, t= 3.477, p=.000), confirming H1a and H1b. Similarly, career development directly influenced employee engagement (B=.101, t= 1.963, p=.050) and organizational performance (B=.280, t= 5.766, p=.000), supporting H2a and H2b. Employee engagement (B=.350, t= 6.439, p=.000) had a positive and significant effect on organizational effectiveness, confirming H3. Mediation analysis using the bias-corrected bootstrapping approach of Preacher and Hayes (2008) was conducted to test H4 and H5. Table 5 presents the indirect effect of employee engagement with a 95% confidence interval. Employee engagement significantly mediated the relationship between talent management and organizational effectiveness (indirect effect=.192, p=.001), supporting H4. Similarly,
employee engagement mediated the relationship between career development and organizational effectiveness (indirect effect=.035, p=.027). Furthermore, none of the control variables had a significant impact on the criterion construct (organizational effectiveness).
DISCUSSION
This study aimed to investigate the impact of talent management and career development on organizational effectiveness, and how employee engagement mediates the relationship between these factors and organizational effectiveness in the context of a retail branch banking network. The findings confirmed that talent management and career development have a significant influence on organizational effectiveness. Furthermore, employee engagement was found to positively and significantly mediate the association between employee development factors and organizational effectiveness. The study accepted all five hypotheses.
The results align with previous research by Ifeoma et al. (2015), Guest (2014), and Abbasi et al. (2010), which found a significant effect of talent management on employee engagement and organizational effectiveness. (Lyria et al., 2017; Khan & Ullah, 2021) demonstrated that talent management creates a competitive edge and improves company performance. Kimani and Waithaka (2013) identified factors that enhance talent management practices and subsequently increase organizational performance in state-owned enterprises. The positive relationship between career development, employee engagement, and organizational effectiveness is consistent with the findings of De Vos and Dries (2013) and Saeed et al. (2013). Jan (2010) highlighted the role of organizational support for career development in engaging employees and achieving superior organizational performance. The current study further supported the mediating role of employee engagement in the relationships between employee development factors and organizational effectiveness. These findings contribute to the understanding of how talent management practices and career development opportunities can improve organizational performance, providing valuable insights for bank managers.
IMPLICATIONS
This paper makes several significant contributions. Firstly, it empirically establishes the relationship between development factors (talent management and career development) and organizational effectiveness within the context of commercial banks, filling a gap in the literature on employee development and organizational performance. Secondly, it examines how talent management and career development, along with employee engagement as a mediator, contribute to organizational effectiveness. This is the first study to investigate this relationship in such depth. Thirdly, the study both theoretically and empirically tests the mediating role of employee engagement in the association between development factors and organizational effectiveness. Lastly, this research responds to the call for future studies by Fornell and Larcker (1981), De Vos and Dries (2013), and Lyria et al. (2017), addressing their limitations and expanding knowledge on talent management.
In addition, the present study provides guidance to bank management on implementing proactive talent generation strategies and motivating employees through career development opportunities to achieve organizational goals. Such opportunities can enhance employee engagement levels. Additionally, the study offers outcome-oriented insights to bank managers on how talent management strategies, including career development, enhance employee engagement and improve organizational effectiveness. Organizations should prioritize training and development practices to retain skilled employees and gain a competitive advantage. Furthermore, providing employees with resources that satisfy their needs and enhance efficacy can harness their energy and contribution to the organization.
CONCLUSION
The findings of the study demonstrate that talent management has a significant influence on employee engagement and organizational effectiveness. Similarly, career development also has a significant impact on employee engagement and organizational effectiveness.
Furthermore, employee engagement plays a crucial mediating role in the relationship
between employee development practices and organizational effectiveness.
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