Measuring the impact of human resource management (HRM) practices on pharmaceutical industry's effectiveness: the mediating role of employee competencies

Purpose The aim of this paper is to examine the mediating role of employee competencies in the association between human resource management (HRM) practices and organizational effectiveness of the pharmaceutical industry in Ghana. Design/methodology/approach An integrated research model was developed by combining principal factors from existing literature. The validity of the model was tested by applying structural equation modelling (SEM) to the data collected from 550 employees of the selected pharmaceutical industries. The reliability and validity of the dimensions are established through confirmatory factor analysis (CFA) and related hypotheses tested using SEM. Findings The results indicate that some HRM practices influence organizational effectiveness through their impact on employee competencies. The study further revealed that employee competencies mediate the association between HRM practices and organizational effectiveness. Research limitations/implications The research was undertaken in the pharmaceutical industry and the analysis based on cross-sectional data which cannot be generalized across a broader range of sectors and international environment. Practical implications The findings of the study have the potential to help stakeholders, policy makers and management of the pharmaceutical industry in espousing suitable and well-articulated HRM practices to influence and shape the skills, knowledge and behaviour of employees and inordinately enhance organizational effectiveness. Originality/value This study extends the literature by adducing evidence empirically that employee competencies mediated the association between HRM practices and organizational effectiveness of the pharmaceutical industry in Ghana.