The Impact of Talent Management Initiatives on Employee Performance: The Mediating Role of Employee Engagement in the Banking Sector, Sri Lanka

Development of talent pools is believed to be a source of competitive advantage in today’s dynamic business environment whereas the role of talent management practices has been emerging with the recognition of importance. Though a plethora of studies have been conducted for human resource management and organizational outcomes, there is a dearth of studies investigating on talent pools, talent management practices and its impact on desirable employee level outcomes. The study aimed to examine the impact of talent management initiatives on perceived employee performance empirically in the context of licensed commercial banks in Sri Lanka. Also, it uncovered a theoretical gap by investigating the mediation role of employee engagement in talent management-performance link. The study was conducted on a sample of 245 talented banking employees. The data was analysed using structured equation modeling with the aid of AMOS version 22. The findings reveal talent management initiatives have significant and positive effects on perceived employee performance and employee engagement. Further, it divulges perceived employee performance is significantly and positively influenced by employee engagement. In this study, employee engagement has bridged the gap between talent management-performance link resulting a partial mediation. Accordingly, the findings have proposed adopting talent management initiatives is worthwhile as it leads to better engaged employees and improved performance of talented individuals at work.