Impact of key HR practices (human capital, training and rewards) on service recovery performance with mediating role of employee commitment of the Takaful industry of the Southeast Asian region

Abstract

Purposecurrent study intends to examine key human resources practices (human capital, training and rewards) that influence employee commitment and service recovery performance (SRP) of Takaful industry agents in Southeast Asian region. The Takaful industry is facing stiff competition with conventional insurance industry in Malaysia and Indonesia as the Southeast Asian region has a large Muslim population. SRP is crucial in insurance industry specifically in the Islamic Insurance (Takaful) industry and plays a vital and key role in sustainable competitive advantage for value addition for firms in future to acquire market.Design/methodology/approachThe data was collected from 350 front line agents of the Takaful industry operating in Malaysia and Indonesia on convenience sampling technique. Data was analyzed by using PLS-SEM to examine the relationship between constructs.FindingsThe results show that human capital, training and reward significantly influence commitment of employee which further influenced SRP to be improved. Mediation effect was also found to be influential and statistically positive and significant by employee commitment between key HR practices (human capital, training, rewards) and SRP.Originality/valuecurrent study contributed to the body of knowledge in explaining relationship of human capital to employee commitment and SRP, further, inconclusive findings between training and rewards was also explained in the Takaful industry of the Southeast Asian region.