Exploring the influence of the critical factors on intentions of employee turnover in the banking segment: a comprehensive mediating analysis

Abstract

The banking sector in Saudi Arabia is integral to achieving the Vision 2030 plan. High employee turnover has been identified as a critical concern, resulting in increasing expenses and lower profitability in the industry. Therefore, a comprehensive investigation is required to determine the variables leading to the high turnover intention and loss of competent employees. This study aims to investigate the relationships between organizational commitment, organizational identification, and employee turnover intention, as well as the mediating roles of employee performance and corporate reputation. A quantitative cross-sectional design was used to collect data from 550 employees in the banking sector through a survey questionnaire. Structural equation modeling was conducted to analyze the data. The findings indicated significant correlations between seven of the eight hypotheses, whereas an insignificant correlation was seen between organizational identification and turnover intention. Furthermore, three mediating associations received partial mediation, and one exhibited full mediation. Model fit indices demonstrated a satisfactory fit, with values below the suggested threshold of 0.08, while the AVE values surpassed the criterion of 0.50. All variables together explained 29% of the turnover intention variance, which met the substantial threshold. The findings demonstrated the importance of these factors in addressing the issue of high employee turnover, which in turn affects the stability and prosperity of the banking industry and, therefore, the Saudi economy as a whole.

Introduction

The banking industry is an essential economic player in Saudi Arabia [1]. High turnover rates can disrupt the stability of banking institutions by leading to loss of institutional knowledge, which adversely affects service quality and operational efficiency. According to Kasa, Kichin [2], stable workforce contributes to better customer service and improved performance metrics as experienced employees are more adept at handling complex financial products and customer relationships. Estimates suggest that the cost of replacing an employee can range from 50 to 200% of their annual salary, depending on the role. This includes expenses related to advertising for positions, interviewing candidates, onboarding, and training new hires [2]By reducing turnover intention, banks can significantly lower these costs, allowing them to allocate resources more effectively.

Many Saudi Arabian banking sector employees want to leave due to job dissatisfaction, limited career growth opportunities, or other issues affecting their commitment to the organization [3]. This situation raises concerns about employee retention and organizational stability within the Saudi Arabian banking sector [4]. The Saudi Arabian banking sector faces a significant challenge, which is staff turnover. The increasing rate of turnover intention among employees is causing concern among financial institutions [5]. As a bank loses valuable employees, it increases expenses, substantially impacting the banking sector’s profitability [6]. The loss of qualified, skilled, and experienced employees in the banking sector can adversely affect the sector’s overall performance, as these employees are crucial for maintaining high service standards and contributing to the industry’s growth [7].

Previous research on turnover intention in the Saudi banking sector has explored various factors, including job embeddedness [8] affective, continuance, and normative commitment [9], transformational leadership [10], perceived performance appraisal effectiveness [11], motivation, and job satisfaction [12], satisfaction, and abusive supervision [6]. Additionally, studies have examined variables such as organizational culture and personality type as independent factors influencing turnover intention [5, 7], have focused on variables like organizational culture and personality type, respectively, as independent variables influencing turnover intention. However, there remain gaps in understanding how organizational identification and corporate reputation affect turnover intention.

This current study introduces organizational identification and commitment as independent variables, with employee performance and corporate reputation serving as mediating variables to explore this issue within the sector. This conceptual framework distinguishes the present research from earlier studies, which predominantly assessed organizational commitment and job satisfaction as mediators [13]. Moreover, while previous studies have looked at corporate reputation, they did not consider it as a mediating factor regarding turnover intention [14]. By focusing on organizational identification as an independent variable, this study highlights employees’ sense of belonging and its influence on turnover intentions, largely overlooked in prior research. Therefore, it is essential to investigate how employee performance and corporate reputation mediate the relationship between organizational identification, commitment, and turnover intention. This study aims to fill the existing gaps in the literature and provide new insights that can inform strategies to reduce turnover intention in the banking sector.

Consequently, a comprehensive investigation is needed to understand the causes of high turnover intention and the subsequent loss of qualified employees in this sector. To address this, the study examines the relationships between organizational commitment, identification, and turnover intention. Second, it aims to investigate the mediating role of employee performance and corporate reputation in the relationships between the variables of this study.

Motivation behind this study

The Saudi banking industry is crucial to the nation’s economic transition. However, the sector faces a significant challenge of high staff turnover rates, which can negatively impact profitability and stability. While previous studies have examined various factors influencing turnover intention, a gap exists in understanding how organizational identification, employee performance, and corporate reputation are interconnected. This research addresses this gap by investigating the mediating role of corporate reputation and employee performance in the relationship between the variables in the study model. This study aims to provide valuable insights into the Saudi banking industry by analyzing the relationships among these factors. The research addresses these topics to improve our understanding of turnover intention in the Saudi banking industry and offers practical suggestions for organizations looking to improve staff retention.

Literature review

The literature review provides a comprehensive overview of the complex interplay between essential variables, such as organizational commitment, organizational identification, corporate reputation, employee performance, and employee turnover intention in many different contexts. It sets the stage for the hypotheses that will be tested in the study, aiming to contribute valuable insights to the field.

The banking sector is vital for facilitating economic growth by providing essential financial services, supporting investment, and contributing to the diversification of the economy under Vision 2030. This vision aims to reduce dependence on oil revenues and promote a more sustainable economic model. The banking sector’s ability to adapt and innovate is critical for achieving these goals, making it a key player in the broader financial landscape of Saudi Arabia [15].

The banking sector in Saudi Arabia faces several significant challenges that impact its stability and growth. Key issues include the sluggish economy leading to increased financial strain and the need for reform within the sector. The banking industry is also sensitive to oil volume fluctuations, posing a financial stability risk. The emergence of FinTech also presents both opportunities and challenges, as traditional banks must adapt to rapid technological advancements while managing competitive pressures. Furthermore, maintaining effective regulatory oversight and addressing customer relationship management is critical for enhancing service quality and ensuring long-term sustainability in a changing economic landscape [1]. Another significant challenge is the rising turnover intention among employees in the Saudi banking sector. This can lead to increased recruitment and training costs, decreased productivity, and a loss of institutional knowledge [14].

Relationship between corporate reputation (CR) and turnover intention (TI)

Numerous studies, drawing from prior research, examine the complexities surrounding the impact of corporate reputation on turnover intention. Schwaiger [16] emphasizes that a strong company reputation can significantly enhance employee retention. Employees who perceive their organization as reputable demonstrate more outstanding commitment and reduced turnover intentions. A solid reputation fosters loyalty and lessens the desire to leave, thereby reinforcing organizational cohesion. Similarly, Alniacik, Cigerim [17] assert that organizations with an exceptional reputation have an advantage in recruiting and retaining highly competent employees. This discovery underscores the correlation between a company’s reputation and its employees’ intention to remain with the organization. The continuous interaction between employees and corporate reputation establishes a reinforcing cycle in which the company’s reputation incentivizes employee contributions and employees who enhance their reputation [18, 19].

Conversely, companies with poor reputations encounter significant challenges. Dortok [18] notes that firms with low reputation ratings suffer adverse financial consequences, further exacerbating employee dissatisfaction and increasing turnover. This highlights the detrimental effects of neglecting corporate reputation management and underscores the damaging effects of disregarding it. Cable and Graham [20] stress that maintaining a strong business reputation is essential for reducing uncertainty for both current and prospective employees, indicating that reputation is a crucial factor in employee retention.

Additionally, Strickland-Jackson [21] asserts that a good reputation attracts talented personnel and reduces employee turnover. This underscores the importance of reputation management in minimizing organizational churn. Poor working conditions, including interpersonal relationships, the physical environment, and the availability of adequate resources, can also contribute to increased employee turnover. In summary, effective corporate reputation management is vital in human resource strategies, particularly for minimizing employee turnover. Based on the literature, the following hypothesis is proposed:

Hypothesis one

Corporate reputation significantly impacts the intention of employee turnover in the Saudi Arabia banking segment.

The association between employee performance (EP) and the intention of employee turnover (TI)

Numerous studies have investigated the factors influencing turnover intention, revealing valuable insights. One important factor is work-family conflict, which can negatively impact employee engagement. Addressing this conflict may enhance engagement levels and reduce the likelihood of turnover, leading to a more stable and productive workforce [22]. Insecurity and disagreements can lead to increased turnover intentions, encouraging employees to seek opportunities elsewhere. However, by providing competitive compensation, organizations can effectively reduce this turnover risk, as it creates a positive influence on employees’ commitment to stay with the company [23]. This indicates solving workplace problems and delivering competitive remuneration might improve employee performance and retention. Positive organizational citizenship behaviour has also been highlighted as a critical factor in improving performance and reducing turnover intention [24].

Burnout is another significant predictor of turnover intention. Studies showed that burnout leads to lower creativity and affective commitment and greater intention to leave the organization [25].

In conclusion, based on the above discussion, enhancing employee performance reduces turnover intention. Work-life balance, competitive pay, a friendly company culture, and good HR practices may help employers accomplish this. Consequently, this research suggests the following hypothesis:

Hypothesis two

A significant relationship exists between employee performance and intention of employee turnover in the Saudia Arabia bank segment.

The association between organizational commitment (OC) and corporate reputation (CR)

Organizational commitment has been found to play a crucial role in shaping corporate reputation. Employees who exhibit organizational solid commitment are more likely to view the company’s reputation positively [26]. This relationship underscores the need to cultivate employee loyalty to improve internal and external views of business reputation.

Furthermore, corporate social responsibility (CSR) initiatives have been shown to amplify this relationship. Organizations emphasizing corporate social responsibility, including social and non-social stakeholders such as workers and consumers, often foster enhanced employee commitment. This heightened dedication enhances the business reputation [27]. Corporate reputation and image are vital in fostering employee engagement and performance. By cultivating an engaged workforce, businesses can enhance their customer service, boosting customer satisfaction and strengthening their overall reputation. Investing in employee dedication not only benefits staff morale but also contributes positively to the company’s standing in the market [28].

In summary, organizational commitment enhances business reputation, boosting staff performance and consumer happiness. Organizations prioritizing their workers’ welfare and dedication are more inclined to attain enduring reputational success. In light of this discussion, the following hypothesis is posited:

Hypothesis three

There is a significant impact on organizational commitment and corporate reputation in Saudia Arabia’s banking sector.

The association between employee organizational commitment (OC) and employee performance (EP)

Organizational commitment reflects a worker’s loyalty and dedication to their organization. Research consistently demonstrates a strong correlation between organizational commitment and employee performance, underscoring its critical importance for success. Jaramillo, Mulki [29] emphasize that the correlation between organizational commitment and performance is robust among sales workers. They find that greater devotion to one’s work leads to improved performance, and this connection is even more pronounced in collectivist societies compared to individualistic ones. This suggests that cultural context plays a significant role in influencing how organizational commitment affects performance.

In addition, Suharto [30] identifies a significant correlation between organizational commitment and job performance, specifically among civil servants in Lampung Regency. This finding underscores the universality of this relationship across various sectors, including the public sector. Moreover, Darolia, Kumari [31] further build on this by revealing that organizational support enhances the impact of commitment on performance, particularly in male-skilled specialists. Their research demonstrates that when employees feel supported by their organization, their commitment intensifies, leading to better performance outcomes.

Given this insight, the above discussion clearly indicates that corporate commitment significantly impacts employee job performance. Employees with more organizational commitment often demonstrate elevated productivity and effectiveness. As a result, the present study hypothesizes:

Hypothesis four

There is a significant impact of organizational commitment on employee performance in Saudi Arabia’s banking segment.

The association among organizational commitment(OC) and the intention of employee turnover(TI)

The intricate interplay between organizational commitment and employee turnover intention has been examined across various contexts. Research repeatedly indicates that elevated organizational commitment correlates significantly with reduced turnover intention. For example, a study conducted among ICU nurses revealed a significant inverse relationship between organizational commitment and turnover intention. Organizational commitment played a crucial role in moderating the impact of burnout on employees’ intention to leave, highlighting its protective effect in high-stress environments [32].

Additionally, when employees feel supported by their organization, their commitment increases, reducing turnover intention. This was evidenced by research that found a positive correlation between organizational support and commitment and a corresponding negative impact on turnover intention [33].

Further illustrating this relationship, research on school personnel in Korea further illustrated this connection, showing a positive correlation between coaching leadership, organizational commitment, and job happiness. Organizational commitment has shown a significant negative impact on turnover intention, underscoring its importance as a crucial component in employee retention [34]. In light of these findings, this study proposes the following hypothesis:

Hypothesis five

there is a significant influence on the intention of employee turnover among employees in Saudi Arabia’s bank segment.

The association among organizational identification (OI) and corporate reputation (CR)

Organizational identification has emerged as a critical determinant of corporate reputation. Studies indicate that when employees strongly identify with their organization, they become ardent advocates and protectors of its reputation, actively contributing to its positive image [35].

However, the relationship between organizational identification and corporate reputation is complex and offers opportunities for deeper exploration. Various factors, including the ethical climate within the organization, can play a crucial role in shaping this relationship. When an organization demonstrates a strong commitment to ethical practices, it can significantly enhance the connection between employee identification and the overall corporate reputation. Employees are more likely to align themselves with and advocate for companies that uphold high ethical standards [35].

Furthermore, the influence of organizational identification on corporate reputation can differ across industries and contextual settings. Some industries may show a more pronounced correlation between identification and reputation, while others might experience more nuanced effects due to unique cultural or market dynamics [36, 37]. With this understanding, this study aims to propose the following hypothesis:

Hypothesis six

There is a significant relationship between organizational identification and corporate reputation in the banking sector of Saudi Arabia.

The association between organizational identification(OI) and employee performance(EP)

Organizational identification significantly impacts employee performance. Employees who strongly identify with the organization are more committed to their jobs, prioritize the company’s interests, and adhere to its policies. This commitment enhances the company’s relationship with its employees [38].

Research consistently supports the idea that a strong bond between employees and the organization positively impacts job performance. One study revealed that authoritative leadership could enhance job performance and organizational citizenship behaviour when mediated by relational identification. This means that employees with a deep connection to their workgroup and alignment with its cultural norms are more likely to excel, even under authoritarian leadership [39].

These established correlations between organizational identification and employee performance indicate that employees who strongly identify with their organization exhibit higher motivation and commitment to their tasks. Based on these insights, the following hypothesis is proposed:

Hypothesis seven

A significant association exists between organizational identification and the performance of employees in Saudi Arabia banking segment.

Relationship between organizational identification(OI) and intention of employee turnover (TI)

Organizational identification, defined as employees’ strong sense of belonging to their organization, plays a significant role in influencing turnover intention [38]. Previous studies have explored this relationship, highlighting how organizational identification impacts employees’ decisions to remain with or leave their employer.

For example, a study of nurses in Thailand found that feeling connected to their organization reduced the likelihood of leaving, especially when they had positive leader relationships and felt deeply involved in their work [40].

Another study focusing on knowledge workers found that organizational identification moderated the relationship between career growth and turnover intention. Specifically, career growth had a reduced impact on turnover intention among employees with high organizational identification. Conversely, in situations of lower organizational identification, career growth played a more significant role in influencing turnover intention [41].

In a study of Chinese employees, perceived organizational support positively influenced psychological ownership, which in turn reduced turnover intention. The research showed that psychological ownership mediated the relationship between perceived organizational support and turnover intention, highlighting the complex dynamics between organizational identification and employees’ intent to leave [42].

Collectively, these studies suggest that employees with higher levels of organizational identification are less likely to leave their organization, as they feel a stronger attachment and sense of belonging. Based on these insights, this study proposes the following hypothesis:

Hypothesis eight

A significant relationship exists between organizational identification and intention of employee turnover in Saudi Arabia’s banking segment.

Corporate reputation as meditating

Prior research has frequently examined corporate reputation as a mediating variable in the relationship between various variables. For instance, a survey of manufacturing companies listed on the Indonesia Stock Exchange found that corporate reputation mediated the relationship between firm size and firm value, suggesting that a strong reputation enhances the positive effects of firm size on its value [43]. Similarly, A study of Vietnamese state-owned commercial banks found that customer satisfaction and bank reputation mediate the relationship between corporate social responsibility (CSR) and bank performance, indicating that CSR has a more substantial impact on performance outcomes when combined with customer satisfaction and bank reputation [44].

Additionally, Research in the cosmetics industry found that consumer purchase intentions are influenced by perceptions of a company’s CSR practices, with brand equity, credibility, and reputation as mediating variable. This emphasizes the significant influence of corporate reputation on consumer decisions [45].

From a theoretical standpoint, the Theory of Planned Behaviour (TPB( provides a robust framework to explore the relationships between organizational identification (OI), organizational commitment (OC), corporate reputation (CR), and turnover intention (TI). According to TPB, a company’s reputation may impact three main variables that drive behaviour: attitudes, subjective norms, and perceived behavioural control [46,47,48,49]. There is less desire to leave and more commitment to the company when employees have a positive attitude about it, subjective solid norms that favour remaining, and a high degree of perceived behavioural control [46,47,48,49] .

Using TPB for entrepreneurial readiness and Islamic banking product adoption, we discover that corporate reputation deepens these ties by increasing the perceived advantages of participating with the business. In entrepreneurial studies, reputation shapes favorable attitudes, social norms, and confidence to undertake entrepreneurial activities. In Islamic banking, company reputation promotes customer satisfaction and service utilization by establishing trustworthiness and dependability [50].

Integrating empirical literature results with the TPB framework supports the concept that corporate reputation mediates and amplifies the linkages between OI, OC, TI, and organizational outcomes. A good business reputation helps retain staff, increase customer happiness, and boost performance. Thus, using the TPB paradigm to examine corporate reputation as a mediating variable may help banks improve commitment and turnover.

In summary, this combination of theoretical and empirical findings lays the groundwork for developing the conceptual framework for this study research that will support testing these relationships and clarify corporate reputation’s role in organizational performance. Consequently, these insights help this study propose the following hypotheses:

Hypothesis nine

Corporate reputation serves as a significant mediator in the relationship between organizational identification and intention of employee turnover among employees in the banking sector of Saudi Arabia.

Hypothesis ten

Corporate reputation acts as a significant mediator in the relationship between organizational commitment and intention of employee turnover among employees in the banking sector of Saudi Arabia.

Employee performance as mediating

Previous research has frequently explored employee performance as a mediating variable in various organizational contexts. For instance, employee performance has been investigated as a mediator in the relationship between training programs and overall organizational performance, demonstrating how training enhances performance, which in turn positively impacts organizational outcomes [51]. Similarly, Kweku, Otoo [52] examined how employee performance mediates the relationship between human resource practices and organizational performance, illustrating performance’s vital role in linking HR strategies to organizational success.

From a theoretical perspective, Social Exchange Theory offers a robust foundation for understanding the intricate relationships among organizational identification (OI), organizational commitment (OC), employee performance (EP), and turnover intention (TI) in this study. According to this theory, individuals engage in social exchanges with their organizations, contributing their time, effort, and skills for various rewards, including salary, benefits, and job security [53, 54]. These reciprocal exchanges can foster a sense of obligation and loyalty towards the organization, leading to heightened levels of OI and OC [55]. Higher OI and OC are associated with increased extra-role performance (EP), as employees are more likely to go above and beyond their roles to contribute to the organization’s success. For example, research conducted in the banking sector has demonstrated the utility of Social Exchange Theory in unraveling these relationships and supporting using employee performance as a mediator in his study model [56].

In summary, these studies and SET theory underscore the significance of employee performance as a mediator in elucidating the links between numerous variables and organizational results. Employee performance acts as a mediating variable, elucidating the relationship between corporate policies and employee actions about overall performance indicators.

Building on this body of literature, the following hypotheses are proposed:

Hypothesis eleven

Employee performance significantly mediates the relationship between organizational identification and intention of employee turnover among employees in the banking sector of Saudi Arabia.

Hypothesis twelve

Employee performance significantly acts as a mediator in the relationship between organizational commitment and intention of employee turnover among employees in the banking sector of Saudi Arabia.

Consequently, guided by the problem statement, literature review, and grounding theory, this research has crafted a conceptual framework, as depicted in Fig. 1.

Fig. 1

Research framework

Methodology

Research design

In the current study, we employ a quantitative research method, which is particularly suitable for establishing a deductive connection between the research field and the research questions. Quantitative research offers several notable advantages for this study. It allows us to measure the validity of concepts, describe the factors contributing to a specific phenomenon, and explore the relationships between various variables. As a result of these advantages, this research was structured into three rounds to develop the data collection instrument, which was a survey.

In the initial stage, we examined the survey for validity, focusing on its appearance and content. The second stage involved conducting a pilot study, a valuable method for evaluating the measurement tool’s reliability before performing the primary data collection [57]. Then, the main survey was developed to collect the data and test the hypotheses to achieve the aim of this study.

In the current research, a cross-sectional design is employed, following the linear progression described by Bryman and Bell [58], which entails moving from theory to findings. A total of 550 employees working at different management levels participated in this quantitative cross-sectional research. The participants were from various banks in Saudi Arabia, focusing on Riyadh, which serves as the central headquarters for all the banks. The data was collected with permission from the HR departments of each bank. During visits to these banks, respondents completed the survey questionnaires. The data collection spanned from 2020 to 2021 and was facilitated both offline and online. The survey covered questions about participants’ demographics, organization identification (OI), organization commitment (OC), employee performance (EP), corporate reputation, and turnover intention (TI).

Survey design

At the inception of the survey’s development, three demographic questions were included, inquiring about gender, age, and education degree. In this research, the four key components, namely organization identification (OI), organization commitment (OC), corporate reputation (CR), employee performance (EP), and dependent variable, which is turnover intention (TI), were assessed using established and reliable measurement instruments. These variables were refined and adapted to suit the specific requirements of current research. Each item was gauged on a 5-point (Likert scale), where 1 signified “strongly disagree,” 2 indicated “disagree,” 3 denoted “neutral,” 4 represented “agree,” and 5 corresponded to “strongly agree.” The questionnaire used in the present study was available in both Arabic and English versions, and the individual items of the questionnaire are detailed in Table 1.

Table 1 Items of questionnaire

Data collection process

Consequently, the research project encompassed three stages involving the validation of questionnaire surveys. The initial phase was dedicated to ensuring the survey’s validity in terms of its appearance and content. The second part of the research project centered around a pilot study, an effective technique for scrutinizing a measurement instrument to enhance its reliability and validity before embarking on the main research as outlined by Van Teijlingen and Hundley [57]. In the pilot study, 30 surveys were collected, and the reliability was tested using Cronbach’s alpha. Based on this, all construct items met the threshold, which is above 0.70. Subsequently, after the survey was validated, the main survey was used to collect data and test the current study hypotheses. The data collection was done from March 2020 to January 2021.

Data collection was carried out simultaneously in person and online. It’s worth highlighting that the study achieved a commendable response rate within the targeted sample for the current research.

Ethical approval

The study was conducted in accordance with the Declaration of Helsinki and approved by the institutional review board of King Saud University in meeting 18 with reference no (KSU-HE-19-516). Following the instructions, a concise introduction was included to inform participants about the study’s purpose and invite them to participate voluntarily in the survey. In line with this, we obtained informed written consent from all participants, ensuring their confidentiality and anonymity.

Demographic information

In this study, 550 bank employees from Saudi Arabia participated voluntarily after providing informed consent. The sample consisted of 86.6% males and 13.4% females. The majority of participants (28.65%) were aged 26–30, and 61.5% held a bachelor’s degree. Most respondents (50.7%) were below middle-level management.

Results

Analyzing by structured equation modelling PLS-SEM

The use of Structural Equation Modelling (SEM) is a valuable tool for addressing potential inaccuracies in variables when examining the impact of corporate reputation on turnover intention [65]. This study employed the SEM approach to construct a model that could elucidate the correlation between corporate reputation and turnover intention. SEM has evolved into a well-established research tool for non-experimental studies, particularly when dealing with complex hypothesis-testing methods. Moreover, SEM is a widely recognized and widely used technique for data analysis in the social sciences.

Common method bias test

Using the same sample for each variable in a study can potentially lead to an increase in common method variance, which could be detrimental to the validity of the internal study, as noted [66]. To mitigate the risk of such shared method variance, a clear psychological distinction was established among the independent factors, mediator variables, and dependent variables. This separation was implemented to minimize the potential for variation from a shared approach. To further safeguard against any perception of interdependence among the variables, this study offered the various variables in separate sections to avoid bias.

Common method bias pertains to a type of measurement inaccuracy that can undermine the reliability of a study. It characterizes a systematic error variation associated with the estimated and measured variables [67]. The allocation of variance is illustrated in Table 2, demonstrating that, in the aggregate, the variables account for 40.715% of total variation. This outcome, being less than 50% benchmark, indicates that common method bias has not significantly skewed the study’s findings. This aligns with the criteria set forth by MacKenzie and Podsakoff [67].

Table 2 Total variance explained

Model fit

Model fit assessment is crucial in determining how well a model aligns with the observed data, particularly in terms of the covariance matrix. In this context, fit pertains to the model’s capacity to accurately reproduce the data, often represented by the variance-covariance matrix. A well-fitting model exhibits a reasonable consistency with the data and may not require further specification [68].

The Standardized Root Mean Square Residual (SRMR) is a metric that quantifies the difference between the observed correlation matrix and the model-implied correlation matrix. A zero value indicates a perfect fit, as SRMR is an absolute fit measure. Importantly, SRMR doesn’t penalize the model for complexity. Generally, an SRMR value of less than 0.08 indicates a good fit [69].

Another measure commonly used in Structural Equation Modeling (SEM) literature is the Normed Fit Index (NFI), introduced by Bentler and Bonett [70]. NFI is calculated as 1 minus the Chi² value of the proposed model divided by the Chi² value of the null model. NFI values range between 0 and 1, with values closer to 1 indicating a better fit. NFI values above 0.9 are typically considered acceptable [71]. As indicated in Table 3, this study’s SRMR and NFI values suggest that the model shows an acceptable fit.

Table 3 Fit model summary

Measurement model-SEM

Test of the convergent validity for variables

Reliability and validity tests were conducted to assess the quality of the measurement model. Four indicators were employed for this evaluation: Composite reliability (CR), Cronbach’s alpha, and average variance extracted, as presented in Table 4, and outer loadings (OL) in Fig. 2. In each case, it’s typically recommended that the values number of CA, CR [72], and OL [73] should surpass the threshold of 0.70. Furthermore, the AVE (average variance extracted) value should exceed 0.5 for each construct, as outlined by [74, 75].

Figure 2; Table 4 illustrate that the outer loading values were consistently above 0.700. The CA values ranged from 0.802 to 0.943, surpassing the benchmark of 0.70. Similarly, the CR values exceeded the 0.70 threshold. Lastly, the AVE values were higher than the 0.500 standard, in accordance with the criteria established by [74, 75]. These results indicate that the measurement model shows strong reliability and validity.

Table 4 Constructs reliability and validity test

Fig. 2

Measurement model

Discrimination validity tests

In applying SEM, testing the discriminant validity is crucial to determining whether a measurement or construct can effectively differentiate itself from other measurements or constructs that should not be conflated. One facet of construct validity is content validity, which scrutinizes whether a measure genuinely appraises what it was designed to measure, as opposed to some other construct [76].

A discrimination test is a foundational element in any measurement system since it guarantees that a measure stands apart from other measures and genuinely captures a distinct idea. Various methods are available for assessing discriminant validity, and one of these methods involves scrutinizing the correlation between two constructs while factoring in error of measurement [77]. This research employs three tests to comprehensively evaluate discriminant validity: cross-loading analysis, Heterotrait-Monotrait Ratio (HTMT), and Fornell-Larcker criteria.

As indicated in Table 5, this study utilizes the Heterotrait-Monotrait Ratio (HTMT) test. The suggested cutoff point of 0.9 serves as the criterion in this investigation. All the contract values were less than 0.09, which approved the discriminant validity.

Table 5 HTMT- matrix

In addition, according to the Fornell-Larcker criteria, the square root of AVE for a specific construct should be greater than its correlation with all other constructs. Thus, it has been noted that the AVE value was the greatest number of the others in the same matrix, as you can see in Table 6.

Table 6 Fornell-Larcker

Lastly, the cross-loading test is the third approach used in this research to evaluate discriminant validity. This analysis examines whether the indicators loading on a specific latent construct exhibit stronger associations with that construct than any other constructs. The findings presented in Table 7 reveal that when evaluated row by row, the loadings of all latent variables (indicators) are notably higher for their respective constructs. This underscores a substantial level of one-dimensionality for each component under investigation. These findings collectively demonstrate the discriminant validity of the measurement model.

Table 7 Cross loadings

Structural model test

Model strength explanatory tool (R2) and (F2)

The R-squared (R2) statistic is a measure that quantifies the proportion of variation in the endogenous variable that can be attributed to the exogenous variable(s). In simpler terms, it gauges the extent to which changes in the independent variable(s) account for the variability in the dependent variable. R2 indicates the model’s explanatory power, often referred to as its in-sample predictive power [78].

R2 is a statistic ranging from 0 to 1, and higher values indicate a stronger ability to explain variance. As per a commonly accepted guideline proposed by Cohen [79], the value of R2 for dependent variables can be assessed using the following thresholds: 0.26 substantial, 0.13 moderate, and 0.02 weak [80].

The results demonstrate that the R2 values for each dependent construct surpass 0.29%. That indicates that the model possesses a substantial explanatory power, which aligns with Cohen’s classification of substantial explanatory power, as presented in Table 8 [79].

Table 8 R2 explanatory power

The concept of effect size, often denoted as f2, is a measure introduced. It quantifies the magnitude of the influence of each independent variable on the dependent variable in this study model. Effect size helps determine how much removing an independent variable in the SEM model impacts the squared correlation values and whether it significantly affects the dependent variable. An f2 value of 0.35 is considered large, indicating a substantial impact on the predictor variable at the structural level. An f2 value of 0.15 signifies a medium effect, and an f2 value of 0.02 suggests a minor effect of the predictor variable, following Cohen’s classifications [79].

As per the findings in Table 9, the f-square effect sizes exhibited a range of values. Notably, they were 0.012 (interpreted as a small effect size) for CR-TI, EP-TI, OC-CR, OC-EP, and OI-CR. The effect size for OC-TI and OI-EP was considered medium. However, OI-TI had no effect size, indicating a lack of discernible impact between them.

Table 9 Effect size F2

Test the direct effect relationships

During the hypothesis testing process, the twelve hypotheses have been scrutinized. Eight hypotheses were specifically tested as direct relationships, whereas the rest were investigated to test the mediating relations. The independent factors in the research framework were Organization Identification (OI) and Organization Commitment (OC), while Corporate Reputation (CR) and Employee Performance (EP) served as mediating variables. Turnover Intention (TI) was the dependent variable, and there were direct links between these five variables.

To test these hypotheses, a bootstrapping procedure was employed with 5000 samples, using both “Sign No Changes” and “Complete Bootstrapping” methods. Bias acceleration and correction were applied, and the tests were conducted at a one-tailed significance level of α = 0.05.

As presented in Table 10; Fig. 3, seven hypotheses demonstrated significant relationships, while Hypothesis 8 did not show a significant association between OI and TI. Specifically, CR had a significant positive direct effect on TI (β = 0.171, p < .001), supporting Hypothesis 1. Similarly, Hypotheses 2 through 7 were supported, demonstrating significant direct relationships between variables such as EP and TI (β = 0.122, p = .009), OC and CR (β = 0.238, p < .001), OC and EP (β = 0.322, p < .001), OC and TI (β = − 0.670, p < .001), OI and CR (β = 0.369, p < .001), and OI and EP (β = 0.373, p < .001). However, Hypothesis 8 (OI -> TI) failed to show a significant relationship, β = 0.008, t (4999) = 0.155, p = .877, suggesting no significant direct effect of OI on TI.

Table 10 Test the direct relationships

Fig. 3

Relationships path SEM

Analysis of the mediations

In this analysis, bootstrapping was employed to establish the mediation effects, following the methodology suggested by Preacher and Hayes [81]. Several scholars have recommended this approach for research examining indirect effects’ influence [82]. The findings obtained through bootstrapping are believed to provide more accurate probability estimates. One notable advantage of this approach is that it effectively assesses significance and constructs confidence intervals in many circumstances. Additionally, it does not necessitate the assumption of normal distribution for the mediator and outcome variables [83]. Hence, bootstrapping is a validated strategy for these two key reasons. First, it offers robust assessments of significance and confidence intervals, and second, it doesn’t rely on making numerous assumptions, resulting in findings that better reflect real-world conditions [84].

Bootstrapping offers more accurate probability estimates and is not reliant on the assumption of normal distribution for the mediator and outcome variables. In this study, 5000 bootstrap samples were employed to assess indirect effects.

The findings in Table 11; Figs. 4 and 5 show that three hypotheses were partially mediated, while Hypothesis 11 was fully mediated. Specifically, CR partially mediated the relationship between OI and TI (β = 0.063, p < .001), as well as between OC and TI (β = 0.041, p = .002), supporting Hypotheses 9 and 10. Employee Performance (EP) fully mediated the relationship between OI and TI (β = 0.046, p = .017), supporting Hypothesis 11, while EP partially mediated the relationship between OC and TI (β = 0.039, p = .018), supporting Hypothesis 12. These findings suggest that while some direct relationships exist, the mediating variables of CR and EP also significantly influence the relationship between OI, OC, and TI.

Table 11 Mediation analysis

Fig. 4

Indirect relationship between OC- TI

Fig. 5

Indirect relationship between OI- TI

Discussion

Based on the results, seven hypotheses demonstrated significant relationships, while Hypothesis 8 did not show a significant association between OI and TI. Three hypotheses regarding the indirect relationship were partially mediated, while Hypothesis 11 was fully mediated. The findings for H1 demonstrate a significant relationship between company reputation and turnover intention, aligning with previous research [85, 86]. Studies conducted in Turkey and Portugal highlight that a strong corporate reputation lowers turnover intention, whereas a poor reputation can drive employees to leave [85,86,87]. These findings emphasize the importance of maintaining a positive corporate image as a critical strategy for retaining talent and reducing the financial and operational costs associated with high employee turnover.

For H2, the findings revealed a negative correlation between employee performance and turnover intention, consistent with prior research. High-performing employees are generally more engaged and satisfied, making them less likely to leave their organizations. This trend is particularly evident in specific industries, such as media, where performance is closely tied to career satisfaction and growth opportunities [88]. These results underscore the critical role of enhancing employee performance as a strategic approach to minimizing turnover intentions, highlighting the need for organizations to invest in performance development and employee engagement initiatives.

H3 highlights a significant impact of organizational commitment on corporate reputation, consistent with findings from the Indonesian cement industry [89]. Employees who are highly committed to their organizations tend to perceive and portray them more favorably, enhancing their reputation. This underscores the importance of fostering organizational commitment as a means to boost overall performance and attract key stakeholders. Similarly, H4 confirms a positive relationship between organizational commitment and employee performance, aligning with studies on civil servants and skilled professionals [30], Darolia, Kumari [31]. Organizational commitment serves as a critical driver of employee performance, strengthening the link between a supportive work environment, quality of work-life, and improved productivity [90]. These findings reinforce the need for organizations to cultivate a commitment to achieve better performance outcomes and maintain a competitive edge.

H5 indicated that a strong organizational commitment significantly reduces the likelihood of turnover. This relationship is supported by studies on nurse-physician collaboration, highlighting how commitment influences turnover intention through job satisfaction [91, 92]. These findings highlight the importance of fostering a committed workforce to improve job satisfaction and mitigate turnover rates, ultimately reducing the costs and disruptions associated with employee departures.

H6 findings reveal a significant connection between organizational identification and corporate reputation, consistent with prior research [93]. Employees who strongly identify with their organization are more likely to experience job satisfaction and view their organization positively, thereby enhancing its reputation. Similarly, H7 highlights a strong connection between organizational identification and employee performance, supported by studies on charismatic leadership and supervisor support [94,95,96]. Employees who identify closely with their organization tend to exhibit higher levels of motivation and performance. These findings underscore the critical role of fostering organizational identification in improving employee outcomes and strengthening organizational effectiveness.

H8 presents unexpected results, showing no significant relationship between organizational identification and turnover intention. This is consistent with prior studies, indicating that various factors influence the relationship and may differ across industries and sample sizes [97]. The connection between how much an employee identifies with their organization and their intention to leave can vary depending on the industry. For example, research has found that the reasons for wanting to leave a job differ in healthcare compared to IT or social organizations [98, 99]. This highlights the potential influence of industry-specific factors on the outcomes of H8 rather than a universal pattern. Moreover, factors such as job satisfaction, managerial support, and the work environment often have a more pronounced impact on turnover intention than organizational identification [100]. These variables may overshadow the influence of identification in specific contexts, offering a possible explanation for the unexpected findings in H8. This suggests that future research should account for these contextual factors to understand turnover intention dynamics better.

In mediating relationships, H9 and H10 introduce corporate reputation as a partial mediator between organizational identification, commitment, and turnover intention. When employees perceive their organization positively, they are more likely to identify with it and remain committed, reducing turnover intention [101, 102]. The Theory of Planned Behavior (TPB) suggests that attitudes, subjective norms, and perceived behavioral control are the primary factors influencing behavior [46, 49]. In the workplace, organizational identification and commitment influence employees’ intentions to stay or leave, while corporate reputation mediates these relationships by shaping their beliefs and attitudes. A strong corporate reputation reinforces employees’ identification and commitment, reducing turnover intention. Conversely, a poor reputation can weaken these bonds and increase the likelihood of turnover, underscoring the critical role of maintaining a positive organizational image.

Finally, H11 and H12 highlight employee performance as a mediator between organizational identification, commitment, and turnover intention. Employees who strongly identify with their organization and exhibit high performance are less likely to leave, as organizational identification enhances performance and reduces turnover intention. This is consistent with Social Exchange Theory, which posits that organizational rewards and support reciprocate employees’ loyalty and performance, fostering a sense of obligation and increasing retention [55]. These findings emphasize the importance of nurturing organizational identification and commitment to boost performance and mitigate turnover intention.

Conclusion

To summarise, the banking industry in Saudi Arabia plays a critical part in the Vision 2030 plan, yet it faces an urgent issue with high staff turnover rates. This problem affects operational costs and threatens the sector’s profitability and stability. To address this issue, this study thoroughly investigated the association between organizational commitment, identification, and turnover intention. Furthermore, it investigated the roles of employee performance and corporate reputation in moderating these interactions. The study results indicated substantial connections in seven of the eight hypotheses, with just one negligible association between organizational identity and turnover intention. It also revealed that three mediating interactions were moderately mediated, while one was fully mediated. This study is crucial because it tackles the critical issue of excessive staff turnover, which not only affects the banking industry but also has a vital influence on the general stability and performance of the Saudi economy, following Vision 2030 objectives. There are many theoretical and practical implementations for this study.

Theoretical implications

Theoretically, this study is among the first to address the critical factors influencing turnover intention in the Saudi banking sector. Moreover, this study’s findings will extend the body of knowledge of turnover intention studies in the banking sector. This study also contributes to the literature by integrating various organizational variables into existing turnover intention models, providing a more comprehensive understanding of how regional and sector-specific dynamics influence employee behavior.

Practical implication

As practical contributions, this study has many recommendations to the bank sector that will help solve turnover intention: (i) Improve performance management systems to recognize and reward high-performing employees. Acknowledging and rewarding exceptional performance can increase employee commitment and reduce turnover intentions. This can be linked to financial incentives, promotions, or other recognition programs [103]. (ii) Banks should focus on building and maintaining a positive corporate reputation. A strong reputation not only attracts customers but also appeals to potential employees. A positive reputation can lead to higher employee commitment and, in turn, lower turnover intentions [14]. (iii) Leaders must exemplify a strong commitment to organizational goals and embody its values to inspire employees [104]. (iv) Encourage open and transparent internal communication that consistently reinforces commitment and identification, such as sharing success stories that highlight employees’ commitment and identification.

Limitations of this study

Although this study provided many contributions, several limitations should be addressed in future research to enhance its robustness and applicability.

First, the study uses a cross-sectional strategy, which captures data at a single point in time. This strategy may not capture changes in turnover intention, organizational commitment, or identification over time. Future research should consider adopting a longitudinal design to track these variables dynamically, providing deeper insights into their evolution and causality.

Second, the study focuses on the Saudi Arabian banking sector, which has unique cultural, economic, and regulatory contexts. Comparative studies in different cultural and industrial settings are recommended to determine the universality or contextual dependence of the observed relationships. For instance, exploring these hypotheses in non-banking industries could yield valuable insights.

Third, the study mentions that Hypothesis 8 showed an insignificant association between organizational identification and turnover intention. This highlights the need to investigate additional variables that might influence turnover intention, such as job satisfaction, managerial support, perceived organizational justice, employee engagement, and work environment.

Moreover, future research could explore variables such as leadership styles, job embeddedness, and perceived organizational justice to enhance the model’s explanatory power. Testing alternative theoretical frameworks could also strengthen the understanding of turnover intention and its predictors.