Impact of HR managers’ competencies on organizational effectiveness: Mediating role of innovative HR practices

Abstract

With increased business intricacies, human resource (HR) managers must possess relevant competencies to meet market demands. The study investigates the relationship among HR competencies, innovative HR practices, and organizational effectiveness. It also conducts an importance-performance analysis for HR competencies to identify the skill gap. A structured questionnaire comprising 31 questions was used to measure various components of HR competencies, innovative HR practices, and organizational effectiveness. 247 HR managers working in various companies in Tamil Nadu are selected based on a purposive sampling technique. Importance-performance analysis was carried out for items and dimensions of HR competencies. Confirmatory factor analysis, correlation analysis, and mediation analysis using regressions are further carried out on the collected data. The skill gap analysis revealed that the abilities to use the latest insights in various HR practices, co-craft strategic agenda, align the company’s activities with customer needs, and connect people through technology must be improved. The regression results indicated that the competencies of the strategic positioner, credible architect, capacity builder, and technology proponent are needed to improve organizational effectiveness. The innovative HR practices partially mediated the relationship between HR competencies and organizational effectiveness. The study meets the literature gap in the area of the contribution of HR managers toward organizational effectiveness through their competencies and the adoption of HR practices.