The effects of leader-member exchange on employee performance at commercial banks in Ho Chi Minh City: The role of job satisfaction and work engagement as mediating variables

Abstract

Our paper aimed to identify how leader-member exchange directly and indirectly impacts the performance of staff in commercial banks located in Ho Chi Minh City, through mediating variables: work engagement and job satisfaction. We applied a convenient method of collecting direct data. SmartPLS 3.2.9 was used to analyze Partial Least Squares Structural Equation Modeling (PLS-SEM) to test our model’s hypotheses with official samples being at 567. The results indicated that the total positive and significant effects on the performance of staff working at commercial banks were sorted in ascending order: work engagement, job satisfaction, and leader-member exchange. The effects of leader-member exchange on staff working at commercial banks’ work engagement and job satisfaction were directly significant and positive. Moreover, staff working at commercial banks’ job satisfaction and work engagement played a positive and mediating role in the correlation between leader-member exchange and employee performance. Finally, we have practical implications for commercial banks to improve employee performance.