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Role of job satisfaction in microfinance institutions' performance: considering performance appraisal, training and development

Author

Listed:
  • Emelia Ohene Afriyie
  • Yan Jin
  • Mariama Yakubu
  • Iddrisu Awudu

Abstract

Purpose - This study aims to examine the influence of training and development (TAD), including performance appraisal (PFA), on the performance of microfinance institutions in a developing economy. Design/methodology/approach - A random sampling drew 100 microfinance institutions in Ghana's Greater Accra Region. Then, a purposive sampling approach selected a cross-section of employees in these institutions. Finally, the data were collected from a sample of 367 respondents, such as managers, utilizing a survey questionnaire. Structural equation modeling (SEM) was used to test hypothesized relationships. Findings - The study results indicate that PFA has a statistically significant positive relationship with organizational performance, and this relationship is partially mediated by job satisfaction (JBS). Interestingly, the TAD process does not have a statistically significant positive relationship with organizational performance when JBS is present in the model. In fact, JBS fully mediates the relationship between TAD and organizational performance. Research limitations/implications - The study is limited to microfinance in tiers two and three in Greater Accra city of Ghana and did not include the entire country. Although the city of Accra provides a generalized representation of the research, which can be replicated, some variables and results may be impacted if other tiers of microfinance organizations are incorporated. Practical implications - TAD, as well as PFA, enhance the performance of microfinance and can be utilized as tools for competitive advantage in small and medium-sized enterprises (SMEs) (e.g. microfinance institutions). The study accentuates the value of TAD, PFA and JBS in microfinance in a developing country like Ghana. Originality/value - This is an original study investigating the effect of TAD and PFA practices on the performance of SMEs in a developing country like Ghana. Also, the study analyses JBS as a mediation variable to performance using SEM, which advances the research methodology in this research field.

Suggested Citation

  • Emelia Ohene Afriyie & Yan Jin & Mariama Yakubu & Iddrisu Awudu, 2023. "Role of job satisfaction in microfinance institutions' performance: considering performance appraisal, training and development," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 73(6), pages 1749-1771, September.
  • Handle: RePEc:eme:ijppmp:ijppm-08-2022-0384
    DOI: 10.1108/IJPPM-08-2022-0384
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