Mediating Role of Job Satisfaction in the Relationship Between Islamic Work Ethics and Employee Retention in the Islamic Banking Sector

Abdul Qadeer .

doi:10.20884/1.hakikat.2025.1.2.16177

Abdul Qadeer . Shaheed Bneazir Bhutto University, Nawabshah

DOI: https://doi.org/10.20884/1.hakikat.2025.1.2.16177

Abstract

This research examines the mediating effect of job satisfaction on the Islamic Work Ethics (IWE) and employee retention practices relationship in the context of the Islamic banking industry in Pakistan. The analysis is anchored on the Social Exchange Theory, which attempts to answer how the observance of IWE enhances satisfaction and leads to retention. A self-administered structured questionnaire was given to employees in different Islamic banks and a total of 252 responses were received and deemed valid. The study is quantitative in nature and uses SEM analysis through AMOS and SPSS to assess the direct and indirect effects of the variables. The results of the study indicate a strong positive relationship between Islamic Work Ethics as a practice and job satisfaction as well as employee retention. In addition, job satisfaction was shown to partially mediate the relationship between IWE and retention, which indicates that organizations need to pay attention to policies that encourage ethical behavior at work. These findings suggest that HR and managerial practitioners in Islamic financial institutions need to formulate strategies that foster employee retention on ethical grounds while improving their satisfaction levels.

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