EXPLORING FACTORS OF HRD SYSTEM CAPABILITY: AN EMPIRICAL INVESTIGATION IN SERVICE INDUSTRIES IN INDIA

HRD system capability has been instrumental in managing the shift from the traditional focus to a more transient thrust on making the organization more productive and efficient. This research work conceptualizes HRD system capability as a second order factor and explores its effect on Immediate Capability, Intermediate Capability and Ultimate Capability by evaluating a model of structural equation. The model is validated using data collected from 151strategic decision makers from the selective service industries (Retail, Hotel and IT) across odisha in eastern India. The study follows a hierarchical approach using confirmatory factor analysis to test the second order factor model and structural equation modelling to test the overall model. The results show that both empirically and conceptually the second order factor model is acceptable and better than other competing models of HRD system capability. The findings support the hypothesis and evidence of a highly explanatory structural model. The second order factor model allows for analysis of HRD system capability at different abstraction levels. HR personnel involved in integrated strategic decision making should use global measures to determine the efficiency of the HRD system capability. The research indicates that HRD system capability is best represented as a second order factor and in doing so, it provides an improved measurement of the construct. Therefore, the researchers developed a more feasible model by integrating the variable in a nomological network than those that exists today.