Analyzing the Impact of Organizational Trust on Job Engagement: A Mediating Role of Employee Loyalty

Abstract

This research aimed to investigate the mediating role of employee loyalty in the relationship between perceived organizational trust and job engagement. The study utilized data from 268 employees across two private banks in Mongolia and conducted thorough analyses to evaluate the reliability and correlation of the variables via structural equation modelling (SEM). The study revealed that organizational trust had a positive impact on both employee loyalty and job engagement. These findings underscore the critical importance of organizational trust in fostering employee loyalty and promoting increased engagement in one's work. Additionally, the study identified a positive influence of employee loyalty on job engagement, indicating that loyal employees are more likely to be engaged in their roles. The research determined that employee loyalty fully mediated the connection between organizational trust and job engagement. While organizational trust directly affects engagement, its impact is also channelled through enhanced employee loyalty. This highlights the intricate relationship between organizational trust, employee loyalty, and job engagement in the workplace. The results of this study deepen the understanding of organizational trust and have important practical implications for improving employee loyalty and engagement. Specifically, the findings suggest that fostering transparency and open communication between management and employees can increase trust, leading to higher retention rates and greater willingness to go above and beyond job duties.