MEDIATING ROLE OF EMPLOYEE PERFORMANCE ON INTERNAL CONTROL SYSTEM AND PERCEIVED PERFORMANCE OF CORPORATE ENTITIES

Abstract

This research intends to explore that how organizations based in Lahore, Pakistan, assess corporate performance in relation to how internal control systems are framed. The research also examines the impact of employee performance (EP) on this model. For this purpose, data were retrieved using a questionnaire from 200 managerial and professional employees working in the formal sector corporate entities. The research utilized a quantitative cross-sectional design. All constructs showed high reliability. The results of study provide significant information as regression analyses showed that ICS positively and significantly predicts both PCP and EP, while wholly EP predicts PCP. EP performance, in mediation, confirmed to influence impact of internal controls on the perceived corporate performance, validating the claim that ICS raises corporate perception when executed over structured employee disciplined behavior. Thus, from performance theory, ICS are simply governance constructs and become effective when enacted through employee conduct. The recommendation for research, which contributes to the corporate governance literature, is that reforms targeting perceived performance in firms from Pakistan must merge effective internal controls with reinforced employee performance to realize the substantive corporate performance.