Effect of Human Capital on Organization Performance: An Analysis from Service Sector of Punjab, Pakistan

Abstract

In today’s fast changing environment, where globalization is taking place, competition is increasing day by day. So, it has become a challenge for organizations to remain competitive. In order to remain competitive, it has become necessary for organizations to find ways through which they can compete in competitive world. For this reason, human capital is such a resource that can provide organizations with competitive advantage as human capital resource cannot be easily copied or imitated. In order to find out the impact of human capital on organization performance, present study is carried out in service sector of Punjab, Pakistan. For this purpose data was collected from five major cities of Punjab, Pakistan. Respondents were faculty members of universities and officer grade employees of banking sector. Analysis showed that human capital does affect the career, job and life satisfaction of employees which are indicators of organization performance. Empirical analysis showed that human capital positively affects the career satisfaction as was shown by β = 0.500, and significant at p = 0.000. Same is case with human capital and job satisfaction as represented by β = 0.281, and significant at p = 0.000. Human Capital and life satisfaction was also found to be dependent as shown by β = 0.301, significant at p = 0.000.