Organisational learning culture and employee engagement in the banking sector: the mediating role of psychological well-being

Abstract

This study aims to examine how organisational learning culture (OLC) strengthens employee engagement (EE) in the Pakistani banking sector and whether psychological well-being (PW) explains this relationship. This study responds to a persistent gap in the literature: learning-oriented organisational practices are often linked directly to performance and engagement, but the psychological process through which employees convert these practices into sustained engagement remains underexplored in South Asian, high-pressure service settings. This study used a quantitative, cross-sectional survey of employees in Pakistan’s public and private commercial banks. The authors screened for incomplete, patterned and inconsistent responses and used 362 questionnaires for final analysis. The research used reliable instruments for measuring OLC, PW and EE; adopted translation and pilot testing; and tested the measurement and structural models through SPSS 29 and AMOS using structural equation modelling. This study confirmed that OLC has a significant positive effect on PW and EE, and PW has a significant positive effect on EE. The mediation test showed that PW partially mediates the impact of OLC on EE. Therefore, learning-focused practices positively affect engagement directly and indirectly through the promotion of employee resilience, meaning, optimism and well-being. The findings suggest that banks can boost engagement by leveraging learning culture and well-being as complementary resources. This study integrates OLC, PW and EE in a single explanatory framework and validates it in Pakistan’s banking sector, where hierarchical structures, workload pressure and rapid digital and regulatory change shape employee responses to organisational practices. The findings extend social exchange theory, the job demands–resources model and broaden-and-build theory by showing how organisational learning resources become psychological resources that sustain engagement in an emerging-market service context.