The Impact of Human Resource Development on Organisational Performance: Test of a Causal Model

Abstract

Although a number of studies have recognized the relationship between human resource development (HRD), and organisational performance, the mechanisms through which HRD leads to organisational performance remain still unexplored. The purpose of this paper is to investigate the pathways leading from HRD to organisational performance by using structural equation modelling. Specifically, we used this analytical tool to test a research framework that is constituted by a set of causal relationships between organisational and other contingencies, resourcing and HRD, skills, attitudes and behaviour, and organisational performance. Employing data from organisations operating in the Greek manufacturing sector, results indicate that the impact of HRD on organisational performance is positive and serially mediated through skills, attitudes and behaviour, and moderated by resourcing, organisational context and other contingencies. Thus, the paper not only supports that HRD has a positive impact on organisational performance but also explains the mechanisms through which HRD improves organisational performance.