HRD practices, employee competencies and organizational effectiveness: role of organizational learning culture
| Published date | 12 February 2021 |
| DOI | https://doi.org/10.1108/JABS-06-2020-0237 |
| Pages | 401-419 |
| Date | 12 February 2021 |
| Subject Matter | Strategy,International business |
| Author | Rama Krishna Gupta Potnuru,Chandan Kumar Sahoo,Kalyan Chakravarthy Parle |
HRD practices, employee competencies
and organizational effectiveness: role
of organizational learning culture
Rama Krishna Gupta Potnuru, Chandan Kumar Sahoo and Kalyan Chakravarthy Parle
Abstract
Purpose –This paper aims to examine the moderatingrole of organizational learning culture (OLC) on
the relationship between human resource development (HRD) practices and employee competencies
(EC) in enhancingorganizational effectiveness(OE).
Design/methodology/approach –An integrated research model of HRD practices, EC, OE and OLC
was developed. The validity of the model is tested by applying structural equation modelling (SEM)
approach to data collected from 506 employees working in 4 medium-size cement manufacturing
companies.
Findings –The results confirmedthat training and career development had a significant impacton EC,
the moderating effect ofOLC on the relationship between HRD practices andEC was found significant
and thereis a significant and positive relationshipbetween EC and employee perceivedOE.
Originality/value –This paper contributes to the HRD literature, integrating HRD practices, OLC and
EC. The researchis unique as it has applied moderated SEMto test hypotheses of the study.
Keywords Training, Career development, Organizational learning culture,
Organizational effectiveness, Employee competencies
Paper type Research paper
Introduction
Activities in the Indian cement industry have expanded tremendously in terms of internal
factors such as modernization and changing work settings and rapid changes in external
factors such as globalization and technological advancements are continuously pushing
firms to look for innovative ways to improve organizational effectiveness (OE).
Georgopoulus and Tannenbaum (1957) defined OE as “the extent to which an organization
as a social system, given certain resources and means, fulfils its objectives without
incapacitating its means and resources and without placing undue strain upon its
members”. According to Diaz-Fernandez et al. (2009), employee competencies (EC) are
resources that enable an organization to sustain and enhance its competitive advantage
and OE. EC is described as the collection of knowledge, abilities and skills that employees
possess and apply in their jobs (Ledford, 1995). Competencies are difficult to replicate or
imitate, given the intangible existence of these resources and the fact that they are
produced within the organization in general (Malik et al.,2019). Furthermore, they are
known as assets to be created and retained for the purpose of both the employee and the
organization (Heijde and Van Der Heijden, 2006). Strengthening the knowledge, skill and
workforce quality is an essential element of Indian cement organization’s sustainability
(Sangwan et al.,2019). The most challenging task is to hire skilled individuals those
adapt to changing business environment (Budhwar et al., 2019). Renowned scholars
Rama Krishna Gupta Potnuru
is based at the School of
Management Studies, GIET
University, Gunupur, India.
Chandan Kumar Sahoo is
based at the School of
Management, National
Institute of Technology
Rourkela, Rourkela, India.
Kalyan Chakravarthy Parle
is based at the School of
Management, Centurion
University of Technology
and Management,
Paralakhemundi, India.
Received 15 June 2020
Revised 11 August 2020
Accepted 2 October 2020
The author Rama Krishna Gupta
Potnuru would like to express his
earnest appreciation to his loving
parents Mr Sasi Bhushan Rao P.
andMrs Uma Devi P. and his
wife Mrs Swathi and children
P. Purnima Gupta and
P. Rutvika Guptaf ort heir
inspiration, unconditional love,
patience and cooperation at
every stage of his personal and
academic life, which has
facilitated the author to publish
this research.
DOI 10.1108/JABS-06-2020-0237 VOL. 15 NO. 3 2021, pp. 401-419, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 401
(Alagaraja et al.,2017) proposed that the recruitment of an appropriate candidate for the
required job would be associated with the acquisition and strengthening of employee
expertise related to company strategy and goals. It is considered essential for enhancing
workplace morale, higher productivity and helping to develop an organization’s core
competence which can contribute to OE (Shet et al., 2019;Chakraborty and Biswas, 2020).
Recent research on Indian cement production facilities (Roy, 2004;Singh and Banerjee,
2005;Babu and Reddy, 2013;Vijayalakshmi, 2012;Kumar, 2015;Singh and Modgil, 2020)
have recommended that workforce experience and competencies already appointed in
established cement plants need to be upgraded. The Indian cement industry thus needs to
focus on human resource development (HRD) practices to improve staff skills because of
which OE could be attained. Employees participating in HRD practicesis alone not enough
for enhancement of EC, as the competencies acquired through HRD practices may not be
transferred appropriately (Antunes and Pinheiro, 2020;Zaitouni et al.,2020). Therefore, a
firm must develop a learning environment within the organization so that the individual can
exchange, obtain and generate knowledge and skills, which can modify employee
behaviours.
The early directions of HRD research have examined the influence of HRD practices on
organizational performance. The primary research line investigated the different HRD
practices individually and assessed the corresponding effect of such practices on firm
performance. Another line of research accented the joint effect of interconnected HRD
practices rather than any specificpractice on organizational performance. Prior researchers
(Alagaraja and Shuck, 2015;Lee et al.,2018;Jain and Premkumar, 2011;Kundu et al.,
2019) duly established the importance of HRD and organizational performance linkage by
focusing on single output such as employee productivity. Despite a considerable amountof
work in the HRD field, the association between HRD and OE is still unexplored and
demands in-depth analysis (Alagaraja and Shuck, 2015;Lee et al.,2017). A seminal work of
Marsick and Watkins (2003) on organizational learning culture (OLC) is perhaps the most
significant contribution in establishing HRD and organizational performance linkage. They
highlighted OLC as a vital component of HRD that significantly affects the employee-related
outcomes within the organization. Empirical support for the impact of HRD practices as an
individual way or the combined way on OE has been found lacking (Alagaraja,2013;Katou,
2009). HRD alone is not enoughto enhance EC to a greater level because not all knowledge
and skills obtained from HRD practices are properly transferred (Froehlich et al., 2014;
Cooper et al.,2019;Hooi, 2019). Thus, an organization should create a learning culture in
the organization, so that employee can share, acquire and create knowledge and skills,
which can modify the behaviour of the employees (Potnuru, 2017). Therefore, OLC could
directly or indirectly influenceEC.
The role of HRD practices has become utmost important, as it shapes the overall
competencies of the employee. Despite the well-known fact that HRD practices contribute
to EC, the role of OLC cannot be undermined. The conducive environment for sharing and
acquiring of knowledge can happen in the presence of favourable OLC. Diverse studies
(Van Eerde et al., 2008;Jiang and Liu, 2015;Kim and Sung-Choon, 2013;van Esch et al.,
2018) have explored the constructs such as HRD practices, EC, OLC and OE; whereas
limited studies have investigated these four constructs simultaneously to reflect the
organizational dynamics. However, prior studies (Long et al.,2013;van Esch et al.,2018)
have scarcely studied the moderating role of OLC in enhancing EC through HRD practices
as evidenced through the extant review of existing literature. It was observed that this is an
important research gap, which needs immediate attention to be given in the present
scenario.
In the light of the above discussion, comprehensive understanding of HRD practices and
OE linkage, particularly in the context of Indian cement industry, has become highly
essential. The insights gathered from empirical validation of this linkage would assist the
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