Talent Management Practices, employee engagement, organizational justice and sustainable competitive advantage of Commercial Banks in Nairobi County in Kenya

Abstract

The inability of commercial banks to attain sustainable competitive advantage that can be defended over time and that which competitors are unable to imitate have exposed banks to survival challenges in their operating environment. Commercial banks have been struggling to sustain their competitive advantage possibly due to stiff competition, bad debts, internal & external frauds and inability to retain their strategically talented employees. The purpose of this study was to analyze the moderated mediation of organizational justice and employee engagement on the relationship between talent management practices and sustainable competitive advantage of commercial banks in Nairobi County in Kenya. The specific objectives of the study were: - to establish the effect of talent management practices on sustainable competitive advantage, the mediating effect of employee engagement and the moderating effect of organizational justice. The research was anchored on the resource based view theory supported by Herzberg's motivation and/Hygiene theory and the Equity theory. Positivism research philosophy and explanatory research design was adopted. Simple random sampling technique was used, and 5-point likert scale questionnaires were employed in collecting data from the 42 commercial banks with a target population of 3,098 employees and a sample size of 354 employees. Descriptive and inferential statistical techniques were used to analyze data. Pearson correlation analysis was used to check for the associations between the study variables, and hierarchical multiple regression analysis was used to test the hypotheses at a .05 significance level. The results showed a significant direct effect of talent management practices (β=.566, p=.000), employee engagement (β=.216, p=.000) and organizational justice (β=.101, p =.001) on sustainable competitive advantage. Organizational justice moderated the relationship between talent management and employee engagement (β=.104, p=.000, ∆R2=.0127), and between talent management and sustainable competitive advantage (β=-.814, p =.000, ∆R 2=.0101). There was a positive & significant complementary partial mediation of employee engagement (β=.118, bootstrap lower limit =.067, bootstrap upper limit = .179). Moderated mediation of organizational justice on the indirect relationship between talent management and sustainable competitive advantage via employee engagement was positive and significant (β=.0261, bootstrap lower limit =.0005, bootstrap upper limit=.0527). The study findings is of great importance to academicians, students, scholars and bank management as it informs them on the effectiveness of talent management practices, employee engagement and organizational justice in achieving sustainable competitive advantage. The study concluded that a high level of organizational justice enhances the relationship between talent management practices and sustainable competitive advantage through employee engagement. It is critical for bank managers to consider developing and implementing responsible talent management practices, alongside highly engaged employees and organizational justice strategies that promote fairness, transparency, justice, equity, respect, dignity and civility to make employees realize their full potential for sustainable competitive advantage. Further research should be done in the context of other sectors and the effect of the dimensions of organizational justice in enhancing sustainable competitive advantages by applying structural equation modelingThe inability of commercial banks to attain sustainable competitive advantage that can be defended over time and that which competitors are unable to imitate have exposed banks to survival challenges in their operating environment. Commercial banks have been struggling to sustain their competitive advantage possibly due to stiff competition, bad debts, internal & external frauds and inability to retain their strategically talented employees. The purpose of this study was to analyze the moderated mediation of organizational justice and employee engagement on the relationship between talent management practices and sustainable competitive advantage of commercial banks in Nairobi County in Kenya. The specific objectives of the study were: - to establish the effect of talent management practices on sustainable competitive advantage, the mediating effect of employee engagement and the moderating effect of organizational justice. The research was anchored on the resource based view theory supported by Herzberg's motivation and/Hygiene theory and the Equity theory. Positivism research philosophy and explanatory research design was adopted. Simple random sampling technique was used, and 5-point likert scale questionnaires were employed in collecting data from the 42 commercial banks with a target population of 3,098 employees and a sample size of 354 employees. Descriptive and inferential statistical techniques were used to analyze data. Pearson correlation analysis was used to check for the associations between the study variables, and hierarchical multiple regression analysis was used to test the hypotheses at a .05 significance level. The results showed a significant direct effect of talent management practices (β=.566, p=.000), employee engagement (β=.216, p=.000) and organizational justice (β=.101, p =.001) on sustainable competitive advantage. Organizational justice moderated the relationship between talent management and employee engagement (β=.104, p=.000, ∆R2=.0127), and between talent management and sustainable competitive advantage (β=-.814, p =.000, ∆R 2=.0101). There was a positive & significant complementary partial mediation of employee engagement (β=.118, bootstrap lower limit =.067, bootstrap upper limit = .179). Moderated mediation of organizational justice on the indirect relationship between talent management and sustainable competitive advantage via employee engagement was positive and significant (β=.0261, bootstrap lower limit =.0005, bootstrap upper limit=.0527). The study findings is of great importance to academicians, students, scholars and bank management as it informs them on the effectiveness of talent management practices, employee engagement and organizational justice in achieving sustainable competitive advantage. The study concluded that a high level of organizational justice enhances the relationship between talent management practices and sustainable competitive advantage through employee engagement. It is critical for bank managers to consider developing and implementing responsible talent management practices, alongside highly engaged employees and organizational justice strategies that promote fairness, transparency, justice, equity, respect, dignity and civility to make employees realize their full potential for sustainable competitive advantage. Further research should be done in the context of other sectors and the effect of the dimensions of organizational justice in enhancing sustainable competitive advantages by applying structural equation modeling