Mediating Role of Innovation Capability between Knowledge Based Human Resource Management and Organizational Performance: A Case of Higher Education Institutions in Malaysia
Keywords:
Education, Knowledge Based HRM, Innovation Capability, Organizational Performance, Expectancy TheoryAbstract
Education is widely recognized as a powerful catalyst for development and progress in the service sector. Implementing knowledge-based human resource practices (KHRM) offers significant competitive advantages for higher education institutions, particularly in underdeveloped countries. This study aims to identify how KHRM elements—recruitment and selection, compensation, empowerment, training and development, and performance appraisal—contribute to university performance, with innovation capability acting as a mediating factor. To achieve this, a quantitative research approach was adopted, utilizing a questionnaire survey conducted with 311 academic staff members from Malaysian universities. The research framework is grounded in the principles of expectancy theory. A structural equation model was applied to test the hypotheses derived from this theory. The findings reveal that four out of five KHRM elements significantly predict organizational performance: training and development, recruitment and selection, empowerment, and compensation. Among these, empowerment emerged as the strongest predictor of organizational performance. Additionally, innovation capability significantly predicts organizational performance. The results also indicate that three KHRM variables—training and development, performance appraisal, and compensation—predict organizational performance through the mediating role of innovation capability.
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