Impact of Human Capital Development and Human Capital Isolation Mechanisms on Innovative Performance: Evidence from Industrial Companies in Jordan

Abstract

The aim of this study was to investigate the impact of human capital development mechanisms (training, incentives structure and attraction of skilled employees) and human capital isolation mechanisms (specificity of company resources and internal characteristics of knowledge in the company) on organizational human capital development and enhancement (well-educated, well-trained employees with suitable job experience). In addition, the study tried to examine the impact of organizational human capital on innovative performance (introduction of new products, replacement of old products, quality of new products and work processes innovations). A questionnaire was developed to collect data from a sample consisting of 500 managers working in selected industrial Jordanian companies at different levels of management. A total of 463 questionnaires were returned giving a response rate of 92.6%. The results found significant as well as positive impacts of human capital development mechanisms and human capital isolation mechanisms on organizational human capital, which in turn significantly affected innovative performance. The results of the study confirmed the acceptance of all hypotheses. The originality of the current study is that it tested and confirmed the important role played by different variables related to the development of organizational human capital which in turn delivers improvements in innovation performance. In light of these results, the study recommends the need to protect human capital through the use of isolation mechanisms in addition to the use of development mechanisms employed in the current study. For future studies, the study recommends the use of additional mechanisms associated with the development and isolation of human capital as this has demonstrated a positive impact in improving innovation performance.

Keywords: human capital development, human capital isolation mechanisms, innovative performance.

DOI: 10.7176/EJBM/11-15-21

Publication date:May 31^st 2019