EXAMINING THE IMPACT OF TRAINING AND DEVELOPMENT ON EMPLOYEES’ PERFORMANCE IN BANKS: A MODERATED MEDIATION APPROACH BASED ON SOCIAL EXCHANGE THEORY

Abstract

In today’s competitive banking sector, employee performance is critical for organizational success. This study examines the impact of training and development (T&D) on employees’ performance, with compensation acting as a mediator and perceived organizational support (POS) as a moderator. Grounded in Social Exchange Theory (SET), the research argues that employees reciprocate organizational support and fair compensation through improved performance, particularly when T&D opportunities are provided. A quantitative research design was employed, collecting data from 320 employees across major banks in Pakistan. The findings reveal that T&D positively impacts performance, and this relationship is partially mediated by compensation. Furthermore, perceived organizational support strengthens the T&D performance relationship. These results provide actionable insights for HR managers to enhance employee performance through strategic T&D programs, fair compensation, and supportive work environments.