Interplay of organizational commitment in the relationship between HRM practices and organizational performance in Nepal’s public financial sector

This study investigates whether organizational commitment explains how human resource management (HRM) practices translate into organizational performance in Nepal’s public financial sector. Using a quantitative design, this study surveyed 450 officers‑level employees across nine public financial institutions. The data were analyzed using structural equation modeling. Reliability and validity were established via Cronbach’s alpha and confirmatory factor analysis. Diagnostic tests, such as distributional and multicollinearity assumptions, were examined. Mediation was tested using 5,000‑sample bias‑corrected bootstrapping. Results showed that HRM practice positively and significantly predicts organizational performance. Organizational commitment partially mediated this relationship, indicating that HRM practice predicts performance both directly and indirectly through employees’ psychological attachment to the organization. The findings, interpreted through Social Exchange, Psychological Contract, Human Capital, Resource‑Based View, and ability–motivation–opportunity perspectives, underline the importance of fair rewards, empowerment, communication, and development opportunities. We discuss the actionable implications for public managers and highlight limitations arising from the cross-sectional design and sector specificity, and offer directions for longitudinal and multi-level research.