Improving the Work Engagement of Employees in Pakistani Banking Sector: The Influence of Psychological Safety and Trust in Leadership

Abstract

The importance of employee work engagement in today's world, cannot be denied specially in banking sector where employees have to work in a psychologically challenging, service oriented and competitive environment. Using Theory of Personal Engagement and Social Exchange Theory, this research focuses on the impact of Work Role Fit and Emotional Regulation on Work Engagement taking into consideration the possible influence of Psychological Safety and examining the moderating effect of Trust in Leadership. Quantitative Cross-sectional Survey research design was used in this research involving 383 employees from commercial banks, Islamic banks and microfinance institutions (MFIs) located in different cities in Pakistan. To test the formulated hypotheses, Partial Least Squares Structural Equation Modeling (PLS-SEM) was carried out using the statistical package for social sciences (SPSS) software SmartPLS 4. Findings suggest that Work Role Fit and Emotional Regulation have significant positive relation with Psychological Safety. WE, in turn, has a significant positive effect on Psychological Safety. The results further show that the positive association between PS and WL is significantly strengthened by the levels of Trust in Leadership. The study extends theory of Personal Engagement with the involvement of Social Exchange Theory and is also an empirical study of the banking sector in Pakistan. The results provide practical suggestions for the banking institutions, focusing on the need to match staff to appropriate roles, build emotional regulation skills, and improve the trust-based leadership approach to increase employee engagement and organizational performance.