Do HRD practices affect perceived market performance through operational performance? Evidence from software industry

Purpose: The purpose of this paper is to examine the effect of human resource development (HRD) practices on perceived operational and market performances in the software companies in India, and also the mediating effect of operational performance in the relationship between HRD practices and market performance. Design/methodology/approach: Data were collected from 516 professionals working in 37 software companies in India. Partial least square (PLS) was used to test the proposed structural equation model. Findings: The findings reveal that the HRD practices significantly affect market performance. However, operational performance, as a mediator, was found to have a crucial role in transferring the effects of HRD practices to market performance. Research limitations/implications: The findings of this study are in line with the theory of HRD which suggests a positive relationship between HRD and organizational performance. Practical implications: The results suggest that to enhance the market performance, organizations need to enhance operational performance by meticulously designing and implementing the series of HRD practices. Originality/value: This study is one of its kind to overcome the limitations of earlier studies to examine the effect of comprehensive dimensions of HRD on operational and market performance.