Promoting human capital through talent management practices: Contextual role of psychological contracts

Abstract

The purpose of this paper was to explore the direct and indirect effects of skill enhancement practices on human capital based on a talent management framework. In this research, and according to the psychological contract theory, it was assumed that employees` responses to skill enhancement and talent management practices mediate those effects. Therefore, employees` perceptions of intended qualities and talents as well as related rewards would affect their obligations to develop their skills and consequently, would determine the state of the organizations` human capital. The present study with a descriptive-survey approach examined the aforementioned assumptions and relationships within the branches of a large bank in Tehran. Research questionnaires were distributed randomly within sample branches and necessary data were collected from the bank`s employees. Outputs of regression analysis and structural equation models showed that skill-enhancement practices had a significant and positive effect on human capital. Also, organizational talent inducements mediated the relationship between skill-enhancement practices and human capital. However, the findings did not confirm the mediating role of employees` obligations to develop their skills in the relationship between organizational talent inducements and human capital.