Human resource development (HRD) practices and banking industry effectiveness

Purpose: The purpose of this paper is to examine the mediating role of employee competencies in the relationship between human resource development (HRD) practices and organizational effectiveness. Design/methodology/approach: An integrated research model was developed by combining principal factors from existing literature. Data were collected through questionnaire from 550 employees of the selected banks. 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 HRD practices impact organizational effectiveness through their influence on employee competencies. The study further revealed that employee competencies mediate the relationship between HRD practices and organizational effectiveness. Research limitations/implications: The research was undertaken in the banking industry and the analysis based on cross-sectional data which cannot be generalized across a broader range of sectors. Practical implications: The findings of the study will help policymakers and management of banks in espousing suitable and well-articulated HRD practices to harness the competencies of employees and inordinately enhance organizational effectiveness. Originality/value: This study extends the literature by empirically adducing evidence that employee competencies mediated the relationship between HRD practices and organizational effectiveness of the banking industry in Ghana.