Abstract
This paper examines the components of Intellectual Capital (IC) as mediating variables between knowledge-based Human Resource Management (HRM) practices and organizational performance. Therefore, integrating research channels in the field of human resource and organization performance. Factor analysis and path analysis have been performed to test the research model and finally parallel mediation effects of the mediators have been examined. Outcomes of the study showed that HRM practices lead to the creation of Intellectual Capital, and the relationship between HRM and performance is positively mediated by components of IC in context of Indian service sector. Additionally, in comparison, amongst the mediators, organizational capital is found to be the most contributing component followed by human and relational capital. The findings of this research will assist the HR managers and organizations in the composition and positioning of HRM practices and IC.
Highlights
In the 21st century, organizations are facing various fluctuations, instability, competitiveness and rapid shifts in the market (Obeidat et al, 2016)
Exploratory Factor Analysis (EFA) has been performed using SPSS 26 followed by Confirmatory Factor Analysis (CFA) and path analysis in AMOS 22 and parallel mediation effects of the mediators have been examined using PROCESS in SPSS 26
Bartlett’s test result reveal that χ2 value (6615.877) is significant at 0.05 significance level, which leads to rejection of null hypothesis which indicates that correlation matrix is significantly different from an identity matrix
Summary
In the 21st century, organizations are facing various fluctuations, instability, competitiveness and rapid shifts in the market (Obeidat et al, 2016). Today knowledge-based resources have been increasingly recognized as valuable competitive tools and are contributing in greater Organizational Performance (OP). Strengthening OP is the most important aspect for any organization. It majorly depends on its valuable Human Resource Management (HRM) as it is the individuals who design and support the entire organizations’ system. It depends highly on the Intellectual Capital (IC) which includes the knowledge and expertise that employees possesses, information systems, processes and databases which an organization own, and relations that it maintains with its external stakeholders (Edvinsson and Malone, 1997; Bontis, 2004).
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