The Impact of Learning Organization Practices on Subjective Performance of Employees: The Case of Islamic Financial Institutions (IFIs) of Developing Countries

Abstract

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Purpose: The objective of this study is to explore the relationship between learning organization practices and subjective performance of employees moderated by employee engagement in in emerging financial markets of Malaysia, Pakistan, and Indonesia. There are identified continuous learning, collaboration and team learning, system to capture learning, empower employees, the connection to organization, strategic leadership, inquiry and dialogue as seven dimensions of learning organization practices. All of them affect more or less the subjective performance of employees in any organization.

Research Design: We select the sample of 230 people working in different departments of Islamic Financial Institutions (IFIs) of developing countries; Malaysia, Pakistan, and Indonesia. Data is collected from the concerned organizations.

Findings: On empirical basis, the relationship is found highly significant, learning organization is affecting subjective performance of employees with maximum coefficient of β=.681, which means an increase in learning organization practices will affect subjective performance of employees positively in emerging Islamic financial markets of Malaysia, Pakistan, and Indonesia.

Practical implications: The study recommends that learning organization practices should be considered to increase the subjective performance of the employees in IFIs of developing countries.

Originality/ value: An association between learning organization practices and subjective performance is explored with major concentration on conventional institutions of the developed countries, whereas this study explores the impact of learning organization practices on subjective performance of employees in the case of Islamic financial institutions (IFIs) of developing countries.