HUMAN CAPITAL INVESTMENT (HCI) DETERMINANTS AFFECTING THE INSTITUTION’S PERFORMANCE: THE PRACTICALITY OF PARTIAL LEAST SQUARES STRUCTURAL EQUATION MODELLING (PLS-SEM) APPROACH

Abstract

Purpose of the study: This paper aimed to assess the analysis of the role of human capital investment (HCI) determinants and its remarkable contribution towards the education institution's performance by adapting the Malcolm Baldridge Criteria for Performance Excellence. Methodology: This research adopted a quantitative study and a survey tool comprises of sixty items with seven Likert scale was utilized as an instrument to assemble data from 309 lecturers in UiTM Kelantan. Next to test the research hypothesis data were then analyzed using the Structural Equation Modelling approach on the SmartPLS3 platform. Main Findings: The analysis demonstrated the influences of HCI determinants towards the UiTM performance. The coefficient of determination (R2) value of 66.9% suggested that the variance of institution performance could moderately be explained by the observed variables, namely knowledge, skill, and training. The result also indicates the highest positive significant value for skill towards performance with β=0.283, t-value= 1.981 and p<0.005. It is proven that a persistent skill development significantly contributes to the performance. Applications of this study: The research finding is useful to help the Ministry of Higher Education (MOE) in Malaysia to identify the relevant determinants in improving human capital quality. Novelty/Originality of this study: There were a lot of studies that were conducted involving higher education in Malaysia. But the only limited number of studies was conducted by scholars in assessing the main contribution of human capital investment factors towards the institution's success.