Jayarathna, G.W.K.P.S.Sutha, J.2019-04-082019-04-082019-029789550481255http://erepo.lib.uwu.ac.lk/bitstream/handle/123456789/195/157.pdf?sequence=1&isAllowed=ySri Lanka becomes a world class apparel manufacturer supplying to universal super brands for over last three decades. The competitors in the business world can easily imitate assets like technology, processes, methods etc., while the human resource is unique to the one organization to another. Apparel companies are providing attractive compensations, transport facilities, quality work place, performance based allowances etc., to their employees. When the employees are engaged and involved in organizational activities they become profitable and stay longer in the company. However, due to the various causes, employee retention is very low in the apparel sector in Sri Lanka. Thus, this study empirically evaluated the mediation role of self-esteem between the employee recognition and employee involvement of the operational level employees of apparel companies in Katunayake Export Processing Zone. Convenience sampling technique was used to gather the data from 150 operational level employees via questionnaire method. Descriptive Statistics were used to describe the basic characteristics of the data set and Correlation and Regression describe the relationships of the variables. Further, Baron and Kenny and Sobel test were used to find the mediation effect of the self-esteem. The finding suggests that employee recognition is strong positively related to self-esteem and self-esteem is strong positively related to employee involvement, which is in accordance with the prior studies. A significantly positive relationship between employee recognition and employee involvement is found and it was mediated by selfesteem. This study was recommended to develop better employee recognition program with considering the self-esteem of employee to enhance the involvement of the employee. Researchers were suggested to consider other factors like motivation, job satisfaction etc., as mediator to determine the effect between employee recognition and employee involvement for future studies.enManagementEntrepreneurshipHuman Resource ManagementOther