Influence of Workplace Environment and Participative Decision-Making on Job Loyalty of Banking Employees: Determining the Mediating Role of Job Satisfaction

Influence of Workplace Environment and Participative Decision-Making on Job Loyalty of Banking Employees: Determining the Mediating Role of Job Satisfaction

Farhan Sarwar1, Tehreem Anjum1*, and Bilal Abassi2

1UE business School, University of Education, Lahore, Pakistan

2Department of Management Sciences, The University of Azad Jammu and Kashmir, Chella Campus, Muzaffarabad, Pakistan

* Corresponding Author: [email protected]

Abstract

The current study attempted to discuss the significance of employee loyalty and its impact on a company's success. Employee loyalty plays an essential role for low turnover rates, enhanced productivity, and improved customer service. The current study aimed to explore the mediating role of job satisfaction and employee loyalty in the banking sector in Pakistan's service industry. A survey was conducted to gather the data from the banking sector which constituted population of this study. The statistics were investigated by using SPSS and Smart PLS. By analyzing the data, the study established that participative decision-making is positively related to job satisfaction, whereas workplace environment has an insignificant relationship with job satisfaction. Additionally, job satisfaction was found to be a significant intervening variable with a positive relationship to employee loyalty. The findings revealed that when employees experience high levels of satisfaction with their work, they are far more inclined to exhibit firm loyalty to their employers. The current paper explored factors, such as a supportive work environment and fair compensation that contribute to employee loyalty. Moreover, it also investigated the role of job satisfaction and identified intrinsic and extrinsic factors influencing loyalty and commitment. The study also highlighted the crucial role played by employee loyalty to determine a company's success. Organizations should recognize that fostering employee loyalty leads to several benefits. At the same time, it also establishes job satisfaction as a mediating factor between participative decision-making and employee loyalty, highlighting the fact that employees who have a significant level of job satisfaction are more inclined to demonstrate strong loyalty towards their employers.

Keywords: employee loyalty, job satisfaction, participative decision making, workplace environment

Introduction

Managing a business in the current era has become increasingly complicated and challenging. Not only are the organizational managers facing the challenge of recruiting suitable candidates, however, they are also struggling to retain them. This predicament is affecting both the manufacturing and service sectors alike (Guillon & Cezanne, 2014). The loyalty of employees plays a crucial role to determine the growth and durability of a business in any industry. The importance of employees cannot be overstated since they represent a considerable investment for companies. When employees are loyal, they are more dedicated to the organization, work diligently, and exhibit a strong commitment towards it. These devoted employees wholeheartedly believe in the company's objectives and work tirelessly to contribute to its well-being. In essence, employee loyalty acts as a catalyst in an industrial system, akin to the role of enzymes in accelerating the speed of a biochemical reaction during metabolic activity in a living system (Mehrzi & Singh, 2016; Ibrahim & Falasi, 2014). According to a study conducted by Khuong and Tien (2013), around 39% of employees resign from their jobs after working for 1 to 2 years, while the majority leave after 3 years. This can result in increased management costs to ensure that new employees are adequately trained and can handle their responsibilities. Additionally, the research determined that younger employees with strong academic backgrounds are more likely to consider changing jobs after being employed for a certain period of time. These employees are particularly susceptible to leaving for more attractive offers from other companies. Therefore, it is important for organizations to find behaviors that improve employee loyalty.

To ensure employee satisfaction and commitment, management creates various incentive packages, appraisals, work systems, and training programs that align with organization's policies. This, in turn, enhances the employee's dedication to the company and increases their work satisfaction. As employees continue to work for the company, they become more valuable, leading to increased loyalty and contentment with their job.

Employee loyalty and dedication are vital for the success of any company. Without them, companies cannot achieve their goals, vision, and objectives, as employees are the backbone of business infrastructure (Frempong et al., 2018). According to scholars, employee loyalty is closely tied to customer loyalty and is a critical factor to determine an organization's growth and long-term success (Ding et al., 2012). When workers are dedicated to the company's success and view working for the company as beneficial to them, the organization can thrive (Bettencourt et al., 2001).

Employee loyalty is considered essential for the success of any organization as it results in a low turnover rate and enhanced productivity (Wang & Wu, 2017). Without employees' loyalty, dedication, and the ongoing work they do, which is essential to business infrastructure, companies and organizations would not be able to accomplish their goals, visions, and objectives (Frempong et al., 2018). Employees who are dedicated to the success of their company, perceive their employment as beneficial for their personal interests (Bettencourt et al., 2001).

Employees’ loyalty basically demonstrates organizational citizenship behavior which involves a sense of dedication to organization and a desire to promote its interests and reputation to external parties (Court et al., 2001). It is a common observation that when an employee is dedicated to their work and strongly believes that their company is the best place for them to work.Any organization can thrive well if employees are loyal to their organization, since they are more likely to stay with the company for a longer period of time which reduces turnover rates and the costs associated with hiring and training new employees. At the same time, such organizations may lead to higher productivity levels and better business outcomes because it is easier to engage and motivate the employees (Saputra & Mahaputra,2022). Employees who exhibit loyalty towards their organization tend to possess a better comprehension of the company's objectives and principles. Resultantly, it could lead to an enhanced customer service experience since employees would be inclined to exceed expectations in order to fulfill customer requirements (Stojanovic et al., 2020). Several factors, such as organizational culture, work environment, and decision-making practices contribute to employee loyalty (Ali et al., 2020). Among these factors, employee participative decision making and workplace environment are crucial determinants that have received significant attention from researchers.

Job satisfaction is essential for employee loyalty. If employees are contented with their job, there is a higher probability that they would display engagement, dedication, and allegiance towards their employer and organization. Job satisfaction is derived from a combination of various factors, such as fair compensation, job security, opportunities for growth and development, participative decision making, recognition for performance, a supportive work environment, and a sense of purpose or meaning in their work (Al-Abdullat & Dababneh, 2018).

One of the main motivation behind this research was that this dimension in banking sector is still untapped and in Pakistan’s service sector, banking industry is a fast paced industry that is powered by tremendous growth and needs continuous improvements. Intrinsic factors, such as a sense of purpose and fulfillment in work, are more critical for long-term employee loyalty and job satisfaction. Whereas, extrinsic factors, such as compensation and benefits play a more significant role. However, the current study aimed at an amalgamation of both along with frames participative decision making (intrinsic) and workplace environment (extrinsic) and a key factor for employee loyalty.

Literature Review

Employee loyalty is a conscious decision to prioritize the best interests of their employer, even if it means sacrificing personal interests beyond what is legally or morally required (Elegido, 2013). This loyalty creates a strong bond between the employee and their workplace, even if it is not financially beneficial (Logan, 1984). Anderson and Weitz (1992) argued that commitment is a long-term relationship where parties choose to forego short-term benefits of other options in favor of long-term gains from the relationship. Employee commitment can be categorized into three levels. Affective commitment refers to employees who are so dedicated to their company that they stay because they want to (Pepe, 2010). Continuance commitment indicates employees who remain in their job for a prolonged period because they are aware of the cost of leaving, rather than due to a desire to stay. Normative commitment describes employees who stay in a company because they feel a sense of obligation to do so instead of the fact that they want or need to.

The level of job satisfaction among an organization's employees has a significant impact on their effectiveness. Employees place great importance on workplace satisfaction as it provides them with stability and fulfillment, leading to increased engagement, loyalty, and punctuality. This ultimately results in reduced labor turnover over time which benefits the employer by ensuring workers’ loyalty, a steady workforce, and increased labor efficiency while reducing, recruiting and training costs, and improving organizational performance. According to Locke (1976), employment satisfaction is a positive emotional state that results from an assessment of one's job and job experience. Job satisfaction is a complex psychological response to work that encompasses cognitive, affective, and behavioral elements (Hulin & Judge, 2003). Achieving goals is a key factor in an organization's success and offering privileges to employees can enhance their loyalty to the organization.

Antecedents of Job Satisfaction

Various authors have observed the impact of several factors on job satisfaction. The current study specifically focused on two factors that are believed to be highly significant when it comes to employee loyalty and commitment in HR activities. These factors are discussed below.

Participative Decision-Making

Participative decision-making refers to the process of recognizing and valuing an individual's innovative ideas and viewpoints, providing them with knowledge regarding the company and involving them in decision-making processes. This can take the form of formal or informal decision-making and requires mental, emotional, and physical participation from employees (Youssef & Luthans, 2007). Participative decision-making, such as engaging in collective decision-making, has been associated with positive work attitudes and commitment (Cassar, 1999). Allowing employees to participate in decision-making enables them to assess whether they are part of an unfair hierarchy. When employees' ego needs are met through participative decision-making, their actions can become more constructive towards achieving corporate objectives and goals.

Workplace Environment

Workplace environment can significantly impact the job satisfaction of employees. Herzberg's two-factor theory highlights the importance of hygiene factors which can lead to frustration when they are inadequate. In this context, the term "working environment conditions" refers to the workplace environment which includes factors, such as airflow, lighting, equipment, and overall physical conditions of the workplace as well as workload and facilities provided by the organization. Other studies have shown that various factors can influence how human beings react to their environment (Brill, 1984). Poor air quality, inadequate lighting, and other environmental factors can negatively impact employee health, causing fatigue, headaches, discomfort, eye and nose sensitivity, and skin irritation. Brill (1984) also noted that a person's comfort level is affected by air and temperature conditions. Furthermore, noise from multiple sources can disrupt the workplace environment, leading to reduced levels of both environmental and job satisfaction (Sundstrom et al., 1994).

Theoretical framework

Participation in Decision-Making and Job Satisfaction

According to Cassar (1999), employee participation is related to positive work attitudes and commitment and includes behaviors, such as participating in collaborative decision-making. Boon et al. (2006) discovered a connection between employee participation and loyalty as well as the positive effects of participation on job satisfaction and the alteration of certain personality traits in employees. When workers are engaged in decision-making, employee absenteeism is decreased, employee loyalty increases, efficiency improves, and low turnover and work satisfaction are ensured (Youssef & Luthans, 2007). Whereas, the participation strategy has a positive impact on employee job satisfaction which can lead to improved results. It is not necessarily a guarantee of success. The job characteristics theory states that if an employee recognizes the value of their work and feels empowered to contribute their talents and ideas in decision-making, their job satisfaction would increase. Employees who are engaged in essential knowledge and preparation processes, then their satisfaction level would be high and high motivation leads to higher work satisfaction.

Hypothesis 1: There is a positive relationship between participative decision-making and job satisfaction.

Workplace Environment and Job Satisfaction

Employee happiness is often influenced by working climate. Working conditions include certain factors, such as room, equipment, and other related environmental factors as well as the type of job and company policies that help the organization. If one of the two-factor theories, hygiene, is not taken into account, it can cause dissatisfaction (Herzberg, 1974). People are motivated to do their best to achieve maximum results because of the positive working environment. Waqas et al. (2014) pointed out that in financial sector, work climate was also a significant factor in job satisfaction. Employers must strengthen the workplace climate. Donald and Siu (2001) established a relationship between workplace atmosphere, personnel' mental and bodily well-being, and job contentment. Workplace atmosphere is one of many factors that influence job satisfaction. Although, some research has been conducted, there is still a need to improve job satisfaction as a result of work environment.

Hypothesis 2: There is a significant relationship between workplace environment and job satisfaction

Job Satisfaction and Employee Loyalty

Employee loyalty is a deep sense of belonging to an employer, even though it requires him/her to do anything that is not in his/her best interests. It is described as a deliberate dedication to furthering one's employer's best interests, even if doing so may necessitate sacrificing certain aspects of one's self-interest beyond what is needed by one's legal and other moral obligations (Elegido, 2013). The dictionary meaning of employee dedication leads one to assume that it is a synonym for loyalty, however, it has a particular definition in terms of work. Employee commitment is a long-term relationship viewpoint that allows parties to forego the short-term advantages of other organizations in favor of long-term benefits of staying in a relationship (Dagger et al., 2011). In a study conducted by Smith (2015), participants were more interested in the relationships formed and connections between staff, coworkers, managers, superiors, representatives, and clients than in the good benefits and compensation. There is a connection between work satisfaction and employee loyalty and dedication, according to definitions and analysis.

Hypothesis 3: Employee loyalty is positively influenced by job satisfaction

Job Satisfaction as a Mediator

Job satisfaction is currently a highly significant and extensively discussed subject in the research. Numerous studies have identified that job satisfaction plays a crucial role in influencing work outcomes and workplace policies (Brown & Peterson, 1993). Participative decision-making refers to a management practice where employees are involved in the decision-making process in the workplace. Employee loyalty is the degree of commitment and attachment that an employee has towards their employer. Job satisfaction, on the other hand, refers to an individual's subjective evaluation of their work experience. It acts as a mediator between participative decision-making and employee loyalty. When employees are involved in the decision-making process, they tend to feel more valued. This practice, in turn, can boost up their morale and raise their job satisfaction. Resultantly, job satisfaction can increase employee loyalty. Several studies have found that participative decision-making can lead to higher job satisfaction among employees. Conversely, a negative workplace environment can decrease job satisfaction and employee loyalty (Halim et al., 2021).

Hypothesis 4: Job Satisfaction acts as a mediator between participative decision-making and employee loyalty.

Hypothesis 5: Job Satisfaction acts as a mediator between workplace environment and employee loyalty.

Figure 1

The Model of Quantitative Theoretical Framework


Methodology

Participants

The objective of the current research was to investigate whether work satisfaction has an impact on employee loyalty and commitment. The study also aimed to identify various factors that influence work satisfaction, loyalty, and commitment in order to establish a more productive and efficient management system. The data for this study was gathered from employees in the banking sector of selected banks in Lahore. About 300 questionnaires were distributed of which 240 were received. After the analysis of missing values and inconsistent responses, 234 questionnaires were retained. A questionnaire was given to employees in selected banking institutions in order to gather the data on work satisfaction, engagement, and loyalty. The questionnaire comprised of 25 items and four sections including demographic information, factors affecting job satisfaction, loyalty and commitment, and additional job satisfaction questions. All the items were measured on a Likert scale.

Measurements

The scale to determine employee loyalty was adapted from Allen (1990) with 6 items and the Cronbach's Alpha value was reported to be (α = 0.743). The job satisfaction scale was adapted from (Hackman & Oldham, 1975) which included 6 questions, the measure's reliability was examined, and the Cronbach's Alpha value was reported to be (α = 0.797). A scale was generated to analyze participative decision-making which consisted of 6 items taken from Campion (1993) and Siegel and Ruh (1973). The measure's reliability was determined and the Cronbach's Alpha value was found to be (α = 0.843). In order to analyze the workplace environment, a scale of 6 items was adapted from ( Friis, 1981) and the Cronbach's Alpha value was reported to be (α = 0.855).

Data Analysis Strategy

For descriptive analysis SPSS25 was used. The measurement model and structural model were tested using a two-step approach using partial least square structural equation modeling with SMART PLS 3.The use of PLS is appropriate when the study aims to test complex relationship between constructs, such as mediation, the data is not normal and the sample size is relatively small (Hair, 2019).

Research Findings

Measurement Model

Table 1

Measurement Model for Reliability and Convergent Validity

 

Loading

Cronbach

CR

AVE

Loyalty

 

0.743

0.839

0.566

L1

0.664

 

 

 

L2

0.772

 

 

 

L3

0.803

 

 

 

L4

-

 

 

 

L5

-

 

 

 

L6

0.764

 

 

 

JS

 

0.797

0.856

0.502

JS1

0.775

 

 

 

JS2

0.742

 

 

 

JS3

0.784

 

 

 

JS4

0.621

 

 

 

JS5

0.567

 

 

 

JS6

0.733

 

 

 

PDM

0.843

0.885

0.565

PDM1

0.565

 

 

 

PDM2

0.77

 

 

 

PDM3

0.76

 

 

 

PDM4

0.767

 

 

 

PDM5

0.801

 

 

 

PDM6

0.818

 

 

 

WPE

0.855

0.89

0.576

WPE1

0.728

 

 

 

WPE2

0.639

 

 

 

WPE3

0.79

 

 

 

WPE4

0.854

 

 

 

WPE5

0.706

 

 

 

WPE6

0.814

 

 

 

Table 1 shows the results of measurement model for reliability and convergent validity. Two items were removed from employee loyalty since they were lower than 0.4. All other items have factor loadings greater than 0.5. For all of the constructs, the Cronbach Alpha is greater than 0.7 indicating a good level of internal consistency among the items.  Similarly, the composite reliability values are greater than 0.8 for all of the constructs which suggest items are highly consistent. The convergent validity is also sufficient for all of the constructs ranging from 0.502 to 0.576.

Table 2

Discriminant Validity

 

Loyalty

JS

PDM

WPE

Loyalty

0.753

0.715

0.389

0.148

JS

0.557

0.708

0.695

0.212

PDM

0.311

0.576

0.752

0.306

WPE

0.107

0.163

0.24

0.759

Table 2 depicts the discriminant validity assessment of four constructs, that is, employee loyalty, job satisfaction, participative decision-making, and workplace environment. The upper values are the Heterotrait-Monotrait (HTMT) ratio which compare correlations between different constructs (Heterotrait) to correlations within the same constructs (Monotrait). A value below 0.9 is generally considered a good discrimination which suggests that the elements are separate and distinguishable from one another (Henseler et al., 2015). The diagonal bold values are the square root of the average variance extracted (AVE). Values in lower diagonal represent the correlation between constructs. According to Fornell and Larcker (1981), the square root of AVEs is greater than correlation among all the constructs indicating adequate discriminant validity. 

Table 3

Beta Coefficients, Significance Values, F2 Effect Sizes and Adjusted R2 Values

 

Beta

t Statistics

p Values

F2

JS -> Loyalty

0.565

7.513

0

0.309

PDM ->  Loyalty

-0.019

0.223

0.412

0

PDM -> JS

0.569

9.597

0

0.458

WPE ->  Loyalty

0.02

0.255

0.399

0.001

WPE -> JS

0.026

0.396

0.346

0.001

Adjusted R2

Loyalty

0.302

 

 

 

JS

0.326

 

 

 

The results presented in table 3 include beta coefficients, t statistics, p values, and F2 values to determine the relationships between job satisfaction, participative decision-making, workplace environment, and employee loyalty. The results of structural model analysis show that there is a significant positive relationship between job satisfaction and employee loyalty. This suggests that employees having higher job satisfaction are more loyal towards their organization. Moreover, participative decision-making has a significant positive relationship with job satisfaction as well, indicating that employees who are involved in decision-making processes at work are more satisfied with their job.

On the other hand, participative decision-making has a non-significant relationship with employee loyalty (beta coefficient = -0.019, t = 0.223, and p = 0.412). It suggests that employees’ participative decision-making may not necessarily lead to higher loyalty towards their organization. Workplace environment has a small, however, significant positive relationship with employee loyalty (beta coefficient = 0.02, t = 0.255, and p = 0.399), indicating that employees who perceive their workplace environment positively, are more loyal. Similarly, workplace environment also has a small, however, significant positive relationship with job satisfaction (beta coefficient = 0.026, t = 0.396, p = 0.346), suggesting that employees who perceive workplace environment positively are more satisfied with their job.

Finally, the R2 adjusted values for employee loyalty and job satisfaction are 0.302 and 0.326, respectively. These values indicate that the structural model explains 30.2% of the variance in employee loyalty and 32.6% of the variance in job satisfaction. Overall, the results suggested that improving employee job satisfaction by involving them in decision-making processes and creating a positive workplace environment can lead to increased employee loyalty towards the organization.

Mediation Analysis

Table 4

Mediation Analysis

 

Beta

95% CI

PDM -> JS ->  Loyalty

0.322

0.242

0.42

WPE -> JS ->  Loyalty

0.015

-0.088

0.062

Table 4 shows mediation results as depicted by the bias corrected and accelerated confidence intervals (BCa-CI) values. A presence of zero value between lower (5%) and upper (95%) confidence interval depicts insignificance. The mediation analysis results show that job satisfaction mediates the relationship between participative decision-making and employee loyalty. However, the relationship between supportive workplace environment and employee loyalty was not found to be mediated by job satisfaction.

Figure 2

SMART PLS Inner and Outer Model


Discussion

The current research attempted to analyze the impact of factors influencing job satisfaction on employee loyalty in private sector organizations and institutes located in Lahore. The study also highlighted the significance of two HR factors, namely participative decision-making and workplace environment in fostering employee loyalty and commitment.  It showed that participative decision-making has a positive relationship with job satisfaction and has a stronger impact as compared to workplace environment. The involvement of employees in decision-making processes makes them feel empowered which leads to higher job satisfaction, positive work attitudes, and dedication, ultimately promoting employee loyalty.

Job satisfaction can increase as a result of participatory decision-making. Participative decision-making refers to involving employees in the decision-making process, which gives them a sense of ownership and control over their work environment. This can result in higher job satisfaction as employees feel that their opinions and ideas are valued and respected (Cansoy, 2019). When employees are given a voice in decision-making, they may feel more connected to their organization and motivated to perform well.  This may result in increased job contentment and involvement since employees would sense that their job holds significance and that they are making a valuable impact on the organization. Additionally, participative decision-making could help to build trust and communication between employees and management, which can further improve job satisfaction and organizational performance (Chan, 2019).

However, it is important to note that participative decision-making may not be appropriate in all situations or for all employees. Some individuals may prefer a more directive management style, while others may not feel comfortable speaking up in group settings. Therefore, it is vital for organizations to consider the needs and preferences of their employees while implementing participative decision-making processes.  Employee actions would be more constructive against corporate objectives and goals if their ego needs are met through decision-making engagement. Employee actions would be more constructive against corporate objectives and goals if their ego needs are met through decision-making engagement (Garcia et al., 2019).

According to the results, workplace environment has an insignificant influence on job satisfaction. Results concluded that workplace environment doesn’t affect employee job satisfaction. Depending on the type of work environment, employee satisfaction can be either positively or negatively affected by their workplace surroundings (Frempong et al., 2018). There is a negative correlation between the work environment and employees' job satisfaction, whereas extrinsic rewards are the most effective motivators for increasing job satisfaction (Campion, 1993).

The physical, social, and psychological aspects of workplace can all influence how employees feel about their jobs and organization (Raziq & Maulabakhsh, 2015). A positive workplace environment can promote job satisfaction by providing employees with a sense of comfort, safety, and support. This may include things, such as comfortable and ergonomic workspaces, good lighting and temperature control, access to amenities, such as break rooms and kitchens, and opportunities for socialization and collaboration with colleagues. A supportive workplace culture may also promote job satisfaction by fostering positive relationships between employees and management, encouraging open communication, and recognizing and rewarding employee contributions. This can include things, such as offering employee training and development programs, providing regular feedback and recognition, and establishing a clear and fair system for performance evaluation and compensation (Kretzschmer et al., 2017). However, the current research showed a contradiction with the existing literature. This may be due to the fact that this study focused on banking sector and in the current banking sector of Pakistan, the workplace environment is most of the times comfortable and easy to work in. The hierarchal structure makes it easy for employees to communicate and work in their own specific areas. The competitive environment is regulated by rules and SOP’s making it easier to understand, however, employees may find that too rigid to work with tight deadlines.

On the other hand, a negative workplace environment can have a detrimental effect on job satisfaction. This can include factors, such as poor communication, lack of trust and respect between employees and management, bullying or harassment, and a lack of support for employee well-being and work-life balance. Overall, creating a positive workplace environment that prioritizes employee well-being and job satisfaction can aid in attracting and retaining the top talent, boosting employee commitment and productivity, and improving organizational performance (Agbozo et al., 2017).

The current research suggested that employee’s job satisfaction has a significant and positive influence on their loyalty with the organization, with satisfied workers being more likely to remain loyal. Job satisfaction also has a crucial role in determining the employee effectiveness inside an organization. While, there may be other factors contributing to job loyalty, it is crucial for management to focus on enhancing satisfaction levels to promote employee loyalty. Ultimately, an employee's contentment in their career and their decision to remain with or leave the organization hinges on their level of satisfaction with their job (Frempong et al., 2018).

The mediation analysis signifies that job satisfaction mediates the relationship between participative decision-making and employee loyalty. This means that when employees perceive a participative decision-making process in their organization, it positively influences their job satisfaction, which, in turn, leads to higher levels of employee loyalty. However, the supportive workplace environment and employee loyalty relationship is not mediated by job satisfaction which shows that although a supportive workplace environment may contribute to higher levels of employee loyalty, this relationship is not influenced significantly by job satisfaction.

Conclusion

The current research aimed to identify the factors that contribute to job satisfaction and their impact on employee loyalty. Given that, job satisfaction is a widely recognized factor for organizational success, this study focused on exploring its influential factors and its association with job loyalty. Through the analysis of the data, the study determined that participative decision-making is positively related to job satisfaction, whereas workplace environment has an insignificant relationship with job satisfaction. Additionally, job satisfaction was found to be a significant intervening variable with a positive relationship to employee loyalty.  The results suggested that factors contributing to job satisfaction have a significant impact on employee loyalty; thus, the more satisfied employees are, the more likely they are to remain loyal to the organization.

Limitations and Future Research Direction

The current research provided valuable insights into the impact of participative decision-making and workplace environment on job satisfaction and employee loyalty. This study's focus on the banking industry in Lahore is one of several restrictions that prevent it from being applied more broadly. The sample size and specific organizations included in the study may not be representative of the entire private sector population which reduces the external validity of the research. At the same time, the study only examined two HR factors, namely participative decision-making and workplace environment as predictors of job satisfaction and loyalty. There are other factors that could also influence these outcomes, such as compensation, career advancement opportunities, organizational culture, and work-life balance. Neglecting these factors may limit the comprehensiveness of the research. Future directions for this research include exploring numerous other HR factors to obtain valuable insights and may examine the impact of factors, such as compensation and benefits, career development opportunities, work-life balance initiatives, and leadership styles on job satisfaction and loyalty. Additionally, other sectors, such as Information Technology (IT), telecom, manufacturing, and retailing could be tapped to determine if the same phenomenon is true.

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