Untangling the Link between Human Resource Configuration and Performance of Malaysian Manufacturing Organizations: The Mediating Role of Strategic Human Capital

Abstract

Human resource (HR) configuration is very imperative in influencing the performance of an organization. However, the link between HR configuration and organizational performance is yet to be determined and little is known about the variables that could mediate this relation. By analysing data from a single industry, this paper aims to enhance understanding the mediating role of strategic human capital between HR configuration and organizational performance. Strategic human capital is a resource that permits an organization to accomplish competitive advantage and higher performance. To establish strategic human capital, however, is not easily fulfilled. As such it is timely to examine the influence of different types of HR configuration namely commitment, productivity, compliance and collaboration on strategic human capital, the impact on organizational performance and subsequently the mediation effect of strategic human capital. The study uses quantitative research approach where 164 responses were gathered. The data were analysed through PLS-SEM. The results indicated that each dimension of HR configuration affect organizational performance through the influence of strategic human capital. The results showed that the role of strategic human capital is important for the organizations to bring about. More importantly, it provides an insight with empirical evidences that prove the influence of strategic human capital in the relationship between HR configuration and organizational performance.