Employee Engagement as a Mechanism Linking Total Quality Management to Organizational Performance

Purpose: The paper will explore the employee engagement as an intervening variable between Total Quality Management (TQM) practice and organizational performance to fill the theoretical gap of how TQM impacts on performance outcome. Despite the established link between TQM and performance, the mediating role of employee engagement remains underexplored, particularly in banking contexts. Design/methodology/approach: Survey data were collected from 265 management-level employees across five major Nigerian commercial banks. The hypothesized mediation model was tested by means of Partial Least Squares Structural Equation Modeling (PLS-SEM) based on the Ability-Motivation-Opportunity (AMO) theory and Social Exchange Theory. Findings: TQM practices significantly predicted employee engagement, which subsequently predicted organizational performance. The mediation effect accounted for 55.2% of the total effect. The model yields a statistically significant predictive relevance of 37.2% on the engagement of employees and 51.6% on the performance of the organization. Originality/value: This research can contribute to the TQM literature by stepping out of the black box input/output paradigms to shed some light on the psychological process by which TQM is created. The research combines the operations management and the organizational psychology approach by establishing that employee engagement moderates more than half of the performance implications of TQM. Findings have practical implications to practitioners who may want to achieve maximum success in TQM implementation in the sense that they have clearly identified employee engagement as well as technical quality enhancement. It is the first empirical study of engagement as a TQM-performance mediator in the banking industry. The study concludes that employee engagement is a critical mediator, suggesting that banks should integrate engagement-focused practices within TQM implementation.