Does human capital mediate the nexus of human resource management (HRM) practices and organizational performance?

Frank Otoo; Manpreet  Kuar; Evelyn  Otoo

doi:10.20525/ijrbs.v11i5.1829

Authors

Frank Otoo Koforidua Technical Univrsity https://orcid.org/0000-0003-4378-3351
Manpreet Kuar GNA University, Phagwara https://orcid.org/0000-0001-8646-9616
Evelyn Otoo https://orcid.org/0000-0002-1242-5167

DOI:

https://doi.org/10.20525/ijrbs.v11i5.1829

Keywords:

Human Capital, HRM Practices, Banking Industry, Organizational Performance

Abstract

Human capital is a significant element in the attainment of sustained competitive advantage and economic survival of organizations. The study explored whether human capital mediates the nexus of human resource management practices and organizational performance. A field study was conducted among 11 internationally and 4 indigenously owned banks. The hypothesized relationships were supported by the data. The results show that the association between selective staffing with the levels of human capital was significant. The results also show that the levels of human capital influenced organizational performance significantly. The results further show that human capital mediated the nexus of HRM practices and organizational performance. The generalizability of the results obtained may be constrained since the present study focused on the banking industry. The study suggests the creation and maintenance of valuable human capital promote competitiveness and sustained competitive advantage. The study contributes to the extant literature by empirically evidencing that human capital mediated the nexus of HRM practice and organizational performance.

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