Exploring Work Experience, Risk Management, and Job Performance: The Moderating Effect of Employee Competency
Keywords:
work experience; risk management; job performance; employee competency; PLS-SEMAbstract
This study examines the relationship among work experience, risk management, employee competency, and job performance in a regional banking organization. The study focuses on risk management as the mechanism through which work experience contributes to job performance and on employee competency as a condition that strengthens the use of work experience in managing risk. A quantitative explanatory design was applied, and data were collected from employees of PT BPR Bahteramas (Perseroda) across Southeast Sulawesi. The proposed relationships were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that work experience supports better risk management practices, while stronger risk management is associated with higher job performance. Risk management also serves as an important mediating mechanism linking work experience with job performance. In addition, employee competency strengthens the contribution of work experience to risk management. These findings suggest that experience becomes more valuable when employees possess the competencies needed to interpret prior work situations, apply appropriate procedures, and respond to risk consistently. The study highlights the importance of integrating experience-based learning, competency development, and risk management practices in employee performance management.
References
Anton, S. G., & Nucu, A. E. A. (2020). Enterprise risk management: A literature review and agenda for future research. Journal of Risk and Financial Management, 13(11), 281. https://doi.org/10.3390/jrfm13110281
Arena, M., Arnaboldi, M., & Azzone, G. (2010). The organizational dynamics of enterprise risk management. Accounting, Organizations and Society, 35(7), 659-675. https://doi.org/10.1016/j.aos.2010.07.003
Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), 1-13. https://doi.org/10.1016/j.ejor.2015.12.023
Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long Range Planning, 48(4), 265-276. https://doi.org/10.1016/j.lrp.2014.07.005
Florio, C., & Leoni, G. (2017). Enterprise risk management and firm performance: The Italian case. The British Accounting Review, 49(1), 56-74. https://doi.org/10.1016/j.bar.2016.08.003
Grace, M. F., Leverty, J. T., Phillips, R. D., & Shimpi, P. (2015). The value of investing in enterprise risk management. Journal of Risk and Insurance, 82(2), 289-316. https://doi.org/10.1111/jori.12022
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2022). A primer on partial least squares structural equation modeling (PLS-SEM) (3rd ed.). SAGE Publications.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2-24. https://doi.org/10.1108/EBR-11-2018-0203
Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43, 115-135. https://doi.org/10.1007/s11747-014-0403-8
Hoyt, R. E., & Liebenberg, A. P. (2011). The value of enterprise risk management. Journal of Risk and Insurance, 78(4), 795-822. https://doi.org/10.1111/j.1539-6975.2011.01413.x
Huang, S., Yu, Z., Shao, Y., Yu, M., & Li, Z. (2021). Relative effects of human capital, social capital and psychological capital on hotel employees' job performance. International Journal of Contemporary Hospitality Management, 33(2), 490-512. https://doi.org/10.1108/IJCHM-07-2020-0650
Koh, E. H. Y. (2019). Risk management competency development in banks: An integrated approach. Palgrave Macmillan. https://doi.org/10.1007/978-981-13-7599-6
Koh, E. H. Y., Avvari, M. V., & Tan, K. H. (2016). An integrated framework for competency development: Perspectives of risk managers in banks. Service Business, 10(3), 581-602. https://doi.org/10.1007/s11628-015-0283-0
Koh, E. H. Y., Mohan, A. V., & Tan, K. H. (2015). A more comprehensive approach to competency development: An exploratory study on the risk management function of banks. Asian Journal of Business and Accounting, 8(2), 1-24. https://jier.um.edu.my/index.php/AJBA/article/view/2712
Kolibáčová, G. (2014). The relationship between competency and performance. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 62(6), 1315-1327. https://doi.org/10.11118/actaun201462061315
Ng, T. W. H., & Feldman, D. C. (2010a). Human capital and objective indicators of career success: The mediating effects of cognitive ability and conscientiousness. Journal of Occupational and Organizational Psychology, 83(1), 207-235. https://doi.org/10.1348/096317909X414584
Ng, T. W. H., & Feldman, D. C. (2010b). Organizational tenure and job performance. Journal of Management, 36(5), 1220-1250. https://doi.org/10.1177/0149206309359809
Saiful, S. (2017). Contingency factors, risk management, and performance of Indonesian banks. Asian Journal of Finance & Accounting, 9(1), 35-53. https://doi.org/10.5296/ajfa.v9i1.10372
Salman, M., Ganie, S. A., & Saleem, I. (2020). Employee competencies as predictors of organizational performance: A study of public and private sector banks. Management and Labour Studies, 45(4), 416-432. https://doi.org/10.1177/0258042X20939014
Sarstedt, M., Hair, J. F., Nitzl, C., Ringle, C. M., & Howard, M. C. (2020). Beyond a tandem analysis of SEM and PROCESS: Use of PLS-SEM for mediation analyses. International Journal of Market Research, 62(3), 288-299. https://doi.org/10.1177/1470785320915686
Shmueli, G., Sarstedt, M., Hair, J. F., Cheah, J.-H., Ting, H., Vaithilingam, S., & Ringle, C. M. (2019). Predictive model assessment in PLS-SEM: Guidelines for using PLSpredict. European Journal of Marketing, 53(11), 2322-2347. https://doi.org/10.1108/EJM-02-2019-0189
Tewu, M. L. D., Bernarto, I., Suwarno, S., & Lisdiono, P. (2024). The effect of enterprise risk management and compliance practices on the firm performance of Indonesian banking companies. Indonesian Journal of Business and Entrepreneurship, 10(1), 52. https://doi.org/10.17358/ijbe.10.1.52
Tjun, L. T., Basri, Y. Z., & Augustine, Y. (2022). Enterprise risk management and bank performance: A study of the Indonesian banking industry. Economics and Business Quarterly Reviews, 5(2), 94-104. https://doi.org/10.31014/aior.1992.05.02.417
Yoewono, H., & Prabowo, A. (2024). Enhancing bank performance: Integrating enterprise risk management with mobile banking applications. Journal of Economics, Business, and Accountancy Ventura, 27(2), 207-216. https://doi.org/10.14414/jebav.v27i2.4572
Zulkifli, Z., Purwati, A. A., Renaldo, N., Hamzah, Z., & Hamzah, M. L. (2023). Employee performance of Sharia Bank in Indonesia: The mediation of organizational innovation and knowledge sharing. Cogent Business & Management, 10(3), 2273609. https://doi.org/10.1080/23311975.2023.2273609
