Human resource management (HRM) practices and organizational performance. The mediating role of employee competencies
| Pages | 949-970 |
| Published date | 02 August 2019 |
| DOI | https://doi.org/10.1108/ER-02-2018-0053 |
| Date | 02 August 2019 |
| Author | Frank Nana Kweku Otoo |
| Subject Matter | Hr & organizational behaviour |
Human resource management
(HRM) practices and
organizational performance
The mediating role of employee competencies
Frank Nana Kweku Otoo
Department of Accountancy, Koforidua Technical University, Koforidua, Ghana
Abstract
Purpose –The purpose of this paper is to examine the mediating role of employee competencies in the
relationship between human resource management (HRM) practices and organizational performance.
Design/methodology/approach –An integrated research model was developed by combining principal
factors from existing literature. Data were collected through questionnaire from 600 employees of the selected
hotels. The validity of the model and hypotheses was tested using structural equation modeling.
The reliability and validity of the dimensions are established through confirmatory factor analysis.
Findings –The results indicate that some HRM practices impact organizational performance through their
influence on employee competencies. The study further revealed that employee competencies mediate the
relationship between HRM practices and organizational performance.
Research limitations/implications –The research was undertaken in the hotel industry and the
analysis based on cross -sectional data which cannot be general ized across a broader range of sectors and
international enviro nment.
Practical implications –The findings of the study have the potential to help policy makers, stakeholders
and management of hotels in adopting proper and well-articulated HRM practices in building human capital
and stimulating the necessary behaviors that create advantage for the organization.
Originality/value –This study extends the li terature by empirica lly adducing evidence t hat employee
competencies mediate d the relationship betwe en HRM practices and org anizational performa nce of the
hotel industry in Ghana.
Keywords Organizational performance, SEM, HRM practices, Hospitality industry, Hotel industry,
Employee competencies
Paper type Research paper
Introduction
In today’s hyper-competitive arena, organizations stakeholders are demanding that all
functional areas within the firm including human resources functions clearly demonstrate
their contributions to overall organization’s performance and ens ure that a firm’shuman
capital contribute to the achievement of its business objective (Baird and Meshoulam, 1998;
D’Aveni, 1994; Jackson and Schuler, 1995). Such resources take on special relevance when
dealing with labor-intensive service industries, especially, the hospitality industry where the
accomplishmentof the business is contingent predominantly on the social and technicalskills
of its personnel,their ingenuity and hard work, theircommitment and attitude for competitive
success (Gabriel, 1988). Creating competitive advantage through people requires careful
attentionto the practices that best leverage theseassets. Human resource management(HRM)
practices area set of internally consistent policies and practicesdesigned and implemented to
ensure that a firm’s human capital contribute to the achievement of its business objectives
(Delery and Doty, 1996). The hospitality industry encompasses different activities and
purposes including lodging, catering and other establishments besides hotels. However,
Dittmer (2002) argued that the hotel industry represents a key segment of the hospitality
industry.Several other authors (Enz, 2009;Poulston, 2008) deliberatethat the hotel industry is
a people industry.They further indicatedthat employees are cogitatedas the focal point of the
hotel industryfor the reason that they may possibly developa dazzling image for prompt and
Employee Relations: The
International Journal
Vol. 41 No. 5, 2019
pp. 949-970
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-02-2018-0053
Received 19 February 2018
Revised 1 November 2018
9 November 2018
Accepted 10 December 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
949
HRM
practices and
organizational
performance
cozy service or taint the perfect vacation reality. Hooghiemstra (1992) posited that
competencies are the underlying characteristic of a person that could be a motive, traits and
self-concepts, attitudes or values, content knowledge or cognitive or behavioral skills. Zhang
et al. (2008) opined that organizational performance is the extent of success to which the
organization reaches its aims. Majority of the studies on HRM practices in the hospitality
industry focus on developed economies such as the UK (Watson et al., 2007), the USA
(Kalargyrou and Woods, 2011), New Zealand (Poulston, 2008), Spain (Agut et al., 2003),
Germany (Langer, 2003), Australia (Davidson et al., 2010) and Ireland (Nolan et al., 2010).
However, with some exceptions (Honyenuga and Adzoyi, 2012; Mensah-Ansah, 2014), scant
research study exists on HRM practices in the West Africa hospitality industry. Therefore,
this study attempted to examine the role of employee competencies in the relationship
between HRM practices and organizational performance of the hotel industry in Ghana.
Literature review and hypothesis development
Human resource management practices
Minbaeva (2005) asserted that HRM practices are a set of practices used by an organization
to manage human resources through facilitating the development of competencies that are
firm specific, produce complex social relation and generate organization knowledge to
sustain competitive advantage. This view appears to be supported by Schuler and Jackson
(1987) who postulated that HRM practices are a system that attracts, develops, motivates
and retains employees to ensure the effective implementation and the survival of the
organization and its members. Huselid (1995) outlined HRM practices as personnel selection,
performance appraisal, incentive compensation, formal grievance procedures, information
sharing, labor/management participation, recruiting intensity and more training hours.
Similarly, Delaney and Huselid (1996) categorized HRM practices into recruitment and
selection, training and development, participation and reward. Therefore, for the purpose of
this study the following HRM practices are examined: recruitment and selection, training
and development, career planning, performance appraisal and employee participation.
Employee competencies
The notion of competency is complex and sometimes contradictory. Given the conceptual
ambiguity associated with competencies, there is also a lack of consensus regarding their
definition (Shippmann et al., 2000). Norris (1991) contend that as tacit understandings of
the word competence have been overtaken by the need to define precisely and to
operationalize concepts, the practical has become shrouded in t heoretical conf usion and
the apparently simple has become profoundly complicated. McClelland (1973) developed
the concept of “competency”as significant predictors of employee performance and
success. Mulder (2007) defined competency as a professional’s generic capability
consisting of the integrated set of knowledge, skills and attitudes of a person. Similarly,
Bhardwaj (2013) concurred with this definition when he referred to competency as a mix of
knowledge and skills that are needed for an effective performance. Hellriegel and Slocum
(2011) identified employee’s ethical competency, self-competency, diversity competencies,
across cultures competency, communication competency, team competency and change
competency as the seven key competencies that affect the behavior of individuals, teams
and effectiveness of an organization. Along the same lines, several authors found team
competency, ethical competency, change competency, communication competency and
self-competency as major competencies needed for hospitality occupations (Hai-Yan and
Baum, 2006; Jauhari, 2006). Accordingly, the following competencies are examined: self-
competency, team competency, change competency, communication competency and
ethical competency.
950
ER
41,5
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