The Impact of Organizational Culture on Employee Performance: The Moderating Role of Abusive Supervision in the Banking Sector of Rawalpindi and Islamabad

Abstract

Organizational culture has been acknowledged as a significant factor in employee performance in service-oriented organizations, and can be systematically undermined by negative supervisory behaviors. The present study aims to explore the effect of organizational culture on employee performance and how abusive supervision moderates the relationship between organizational culture and employee performance in the banking sector of Rawalpindi and Islamabad, Pakistan. The study was quantitative, cross sectional survey study and grounded in Conservation of Resources Theory, Competing Values Framework and Social Learning Theory. Structured self-administered questionnaires were used to collect data from 300 full-time employees of public, private and Islamic commercial banks. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) software, which was developed by SmartPLS. The measurement model had good convergent validity (AVE > 0.63 for all constructs) and discriminant validity (HTMT < 0.85 for all construct pairs). The results of the structural model showed that organizational culture had a significant positive effect on employee performance (β = 0.42, t = 6.85, p < 0.001), while abusive supervision had a significant negative effect on employee performance (β = −0.31, t = 5.12, p < 0.001).The results of this study suggest that positive organizational culture is not enough to foster optimal employee performance when combined with abusive supervision. The study is also a significant addition to the organizational behavior literature by empirically confirming the boundary condition of abusive supervision in the Pakistani banking context that weakens the culture–performance relationship.