Structure of Human Capital Enhancing Human Resource Management Practices in India

In any firms, human resource (HR) practices are the direct investments on employees’ human capital through which firms achieve competitive advantage and employees enhance their human capital. Recognizing the structure of HR practices comprised of distinct patterns would maximize the chances to understand the firms’ ways of developing core competencies. This paper analyzes 472 employees’ responses who work in Indian manufacturing industries to identify the patterns of human capital enhancing HR practices. Reward strategy, career-oriented training, performance appraisal, recruitment strategy, career management, and performance-oriented training are the patterns or factors derived from the HR practices, and validity of this structure is also proved by confirmatory factor analysis. Furthermore, there are certain associations found between these patterns and characteristics of both employees and firms from regression analyses.