The Impact of Human Resource Management Practices on Employee Satisfaction: The Mediating Role of Organizational Culture

Abstract

This study examines the influence of human resource management (HRM) practices on employee satisfaction, and the mediating role of organizational culture in this relationship. Drawing on social exchange theory and institutional theory, a conceptual model positing that HRM practices shape organizational culture, which in turn enhances employee satisfaction, was developed and empirically tested. A convenience sampling technique was employed, and data were collected via self-administered questionnaires from 305 employees working in the banking and financial services sector in Malaysia. Partial Least Squares Structural Equation Modelling (PLS-SEM) using SmartPLS 4 was utilized for data analysis. The results confirm that HRM practices significantly influence both organizational culture and employee satisfaction. Furthermore, organizational culture partially mediates the relationship between HRM practices and employee satisfaction. The findings extend theoretical understanding of how HRM practices operate through cultural mechanisms to enhance satisfaction. Practical implications for HR managers and organizationalMediation leaders, as well as directions for future research, are discussed.