Impact of Human Resource Development Practices on Employee Performance in Ghana's Community Banking Sector

Abstract

Aim – This study investigates the influence of Human Resource Development (HRD) practices on employee performance in community banks, with a specific focus on the mediating role of employee competence. Design/methodology/approach – The study adopted an explanatory research design aligned with a positivist epistemology. Data was collected over three months using a self-administered questionnaire distributed to a sample of 254 employees selected through a stratified random sampling technique from the three leading community banks in Ghana's Ashanti region. Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis was then employed to analyze the collected data. Findings – The analysis revealed significant positive relationships between HRD practices and both employee performance and competence. Furthermore, the study confirms that employee competence mediates the relationship between HRD practices and employee performance. Limitation – The study employs a cross-sectional design, limiting the ability to establish definitive causal relationships. Practical implications – Community banks can leverage this research to design and implement targeted HRD programs that enhance employee skills and knowledge, leading to improved performance and ultimately contributing to the financial well-being of rural communities. Findings on the mediating role of employee competence suggest that HRD practices should go beyond just training and development, encompassing initiatives that foster a learning culture and encourage knowledge application within the organization. The study's focus on community banks in Ghana extends the generalizability of HRD practices research to developing economies, informing HR strategies for these institutions. Originality/value – This study emphasizes the vital role of well-planned HRD interventions in community banks, specifically in enhancing employee skills and knowledge for improved organizational performance. It provides valuable insights into HRD practices within these institutions, highlighting its potential to drive financial inclusion and support economic growth in rural areas. Additionally, the study advances knowledge on HRD-performance dynamics in an underexplored context: community banks in developing economies.