Employee Training and Financial Performance: Mediating Effects of Perceived Service Quality and Customer Satisfaction

The financial performance of an organization is a key indicator of organizational success. It is also important that employees should be equipped with relevant technical and updated knowledge and soft skills so they can provide an improved level of service quality. Employee training is a systematic way to improve employee performance or in other words service quality of a company. In a service-profit-oriented organization, service quality has a large impact on the profitability of an organization. This study aims to find the impact of employee training on the financial performance of banks. A conceptual framework is proposed to observe the linkage of employee training and financial performance of banks, while customer satisfaction and perceived service quality are being tested as mediating variables. The valid sample size was 287 and a random sampling technique is used. In order to test the model, covariance based structural equation modelling (SEM) has been used. Results revealed that all hypotheses have been accepted i.e. customer satisfaction and perceived service quality partially mediate the relation between employee training and financial performance of the organization.