The impact of mental repair on employee performance: the mediating roles of work engagement and resilience in microfinance

This study examines the impact of mental repair on employee performance, with a focus on the roles of work engagement and resilience in microfinance institutions in Nepal. This study employed a cross-sectional design and collected data through a self-administered survey that utilized adapted scales from previous research. A total of 407 participants from microfinance institutions were chosen using purposive sampling. The survey comprised 26 items that assessed six primary variables: mental repair, resilience, work engagement, social support, perceived organizational support and employee performance. This study analyzed the data using Partial Least Squares Structural Equation Modeling (PLS-SEM) in SmartPLS 4.0. The findings demonstrate that mental repair has a significant positive impact on work engagement, resilience, social support, perceived organizational support and employee performance. Likewise, work engagement, resilience and perceived organizational support have a positive impact on employee performance, whereas social support has an adverse effect on employee performance. Mediation analysis indicates that work engagement, resilience and perceived organizational support positively mediate the relationship between mental repair and performance, whereas social support negatively mediates it. Emotional intelligence influences several relationships: it strengthens the effects of social support and work engagement on performance but weakens the impact of mental repair and resilience. These insights highlight the complex psychological factors that affect employee performance and provide practical suggestions for human resource practices in Nepal’s microfinance sector.