The Impact of Effective Risk Management Committees on Employee Satisfaction and Performance in Malaysian Higher Education Institutions

Abstract

The rapidly evolving educational landscape, marked by rising competition, globalization, and sustainability challenges, has heightened the importance of effective governance in higher education institutions (HEIs). Risk Management Committees (RMCs) play a critical role in navigating uncertainties and fostering institutional stability. This study investigates the impact of RMCs effectiveness on employee performance, with employee satisfaction serving as a mediating variable, within the context of Malaysian HEIs. Drawing on institutional theory, the research examines how RMCs practices not only achieve functional objectives but also enhance legitimacy, contributing to improved employee satisfaction and performance. The data was collected through online questionnaires from 126 employees across public and private HEIs. Structural equation modelling (SEM) using SmartPLS 4.0 was employed to evaluate the relationships between RMCs effectiveness, employee satisfaction, and employee performance. The results reveal that RMCs effectiveness significantly impacts both employee satisfaction and performance, with satisfaction mediating this relationship. The study underscores the crucial mediating role of employee satisfaction, which bridges the relationship between RMCs effectiveness and employee performance. These findings highlight the critical role of satisfaction in translating governance practices into tangible performance improvements. This research provides actionable insights for HEI administrators and policymakers, emphasizing the need for robust RMCs structures and employee-centred strategies. The study also contributes to the literature by extending the application of Institutional Theory to the education sector, offering a comprehensive framework for aligning governance practices with employee outcomes.