Human capital impact on organizational performance of commercial banks operating in Yemen

Abstract

This study investigates the relationship between human capital and improvements in organizational performance in Yemeni commercial banks operating in Sana’a. The individual human capital dimensions such as knowledge, experience, skills, innovation, and employees’ morale were taken as human capital variables. A quantitative methodology was used, and a Likert-scale questionnaire was distributed to collect the data. A combination of convenience and random sampling techniques was adopted to distribute the questionnaire to eight banks and 162 employees of these banks. A descriptive approach was used to analyze the data statistically. The results indicated that all the human capital factors had a varying level of practical effect on the organizational performance and all of these were statistically significant. Overall, 76.4% change in performance was observed if human capital elements were employed effectively. Each element such as knowledge, experience, skills, innovation, and employees’ morale had a varying level of positive impact on performance as observed. It is recommended to adopt and put in place knowledge and skills improvement systems in organization to achieve a sustained organizational growth.