This study investigates the influence of hierarchical differentiation on employee commitment among staff of selected financial institutions in Esan Senatorial District, Edo State, Nigeria. Anchored in Social Exchange Theory (Blau, 1964; Cropanzano & Mitchell, 2005), the study employs a descriptive survey research design using primary data from 259 respondents across two branches of GTCO Bank PLC and two branches of Zenith Bank PLC in the district. Hierarchical differentiation is conceptualized along four dimensions: status differentiation, authority centralization, vertical communication, and privilege stratification, while employee commitment is operationalized along three dimensions: affective commitment, continuance commitment, and normative commitment (Meyer & Allen, 1991). Data were collected through a structured questionnaire and analyzed using descriptive statistics (frequencies, percentages, means, standard deviations) and inferential statistics (Pearson correlation, simple linear regression, ANOVA) via SPSS v26.0. Findings reveal that hierarchical differentiation exists at a moderate to high extent (Mean = 3.35, SD = 1.16), with status differentiation (Mean = 3.58) and authority centralization (Mean = 3.52) most prevalent. Employee commitment registers at a moderate level (Grand Mean = 2.91, SD = 1.19), with normative commitment most developed (Mean = 3.08) and affective commitment least developed (Mean = 2.72). Regression analysis confirms a statistically significant negative relationship (β = -0.468, p < 0.001, R² = 0.219), indicating that hierarchical differentiation explains 21.9% of the variance in employee commitment and substantially impairs psychological attachment. The study concludes that excessive hierarchical differentiation undermines employee commitment in Nigerian banking by restricting reciprocity, limiting perceived organizational support, and creating exchange imbalances. Recommendations include flattening organizational structures, implementing participative decision-making mechanisms, and developing equitable reward systems to enhance employee commitment in financial institutions.

Keywords: Hierarchical differentiation; employee commitment; affective commitment; continuance commitment; normative commitment; financial institutions; GTCO Bank; Zenith Bank; Esan Senatorial District; Social Exchange Theory.