A Framework of the Effect of Human Capital Development on Employee Performance: The Mediating Role of Job Satisfaction in UAE Private Banks

Abstract

Human capital development plays a crucial role in enhancing employee performance, while job satisfaction serves as a key mediator in motivating employees to achieve high levels of workplace productivity. Despite its importance, the effect of human capital development within UAE private banks has not been thoroughly investigated. Thus, the aim of this paper is a framework that links the effect of human capital development on employee performance in the UAE banking sector, as well as the mediating effect of job satisfaction on this relationship. A review of the literature is conducted to understand these relationships and propose a framework to correlate them within HSBC Bank, Abu Dhabi Commercial Bank, and Emirates Islamic Bank. Quantitative methodology was applied to test the hypothesized relationships and validate the proposed conceptual framework. A questionnaire was administered to collect data from a sample of employees in the selected banks. Simple random sampling technique was applied in the survey procedure. SPSS and AMOS software were utilized to conduct data analysis in this study. The results showed that human capital development has a significant effect on employee performance. In addition, the results reveal that job satisfaction partially mediates this relationship. The outcome of this paper contributes to the theory of self-determination theory and provides novel evidence on the substantial role of human capital development in fostering workforce performance, especially with the interaction of intrinsic and extrinsic satisfaction factors. It is recommended based on the results that human capital development practices should be actively promoted in UAE private banks, as it has a direct and positive impact on employee performance. Leadership and HR development programs should focus on enhancing training, mentoring, and performance appraisal while strengthening both intrinsic and extrinsic job satisfaction. The implications of this research are the validated framework provides bank managers and policymakers with a useful guide for improving workforce performance in the private banking sector.