INDIVIDUAL HUMAN CAPITAL AND PERFORMANCE: AN EMPIRICAL STUDY IN THAILAND by PAKORN SUJCHAPHONG Presented to the Faculty of the Graduate School of The University of Texas at Arlington in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY THE UNIVERSITY OF TEXAS AT ARLINGTON MAY 2013 Copyright © by Pakorn Sujchaphong 2013 All Rights Reserved ACKNOWLEDGEMENTS This dissertation, which represents the culmination of my doctoral studies, could not have been possible without the help and support of many individuals. I would like to thank many people for their support during this Ph. First of all, I would like to sincerely thank my chairperson, Dr. Gary McMahan, who has always believed in my project and provided me with great supervision.
Moreover, I would also like to thank Dr. Abdul Rasheed, Dr. Mary Whiteside, and Dr. Jared Kenworthy for their helpful advice on my project.
In addition, I would like to express my gratitude to the Dean of Mahasarakham Business School in Thailand, Dr. Prapruk Usahavanichkit, as well as friends and Ph. colleagues for supporting my studies. Narissara Kaewsurin; thank you so much for constantly being so supportive and providing me with advice in times of difficulty.
Furthermore, I would like to thank Dr. Weerasak Srichuanchuenskun and Dr. Sunthon Yontrakul from Mahasarakham Hospital and Dr. Husacha Neuytong from Kosumphisai Hospital for allowing me to have the data in their hospitals.
Also, I would like to thank all registered nurses in both hospitals who completed the questionnaire in this study. Moreover, I would like to thank Dr. Panupong Lisawat from University of Vermont to provide me insightful information about the activities in the hospital. Last but not least, to my mother and father, thank you so much for being everything for me.
I can never imagine life without both of you. The love and support from you has helped me to get through every problem throughout my studies. I love you with all my heart. April 22, 2013 iii ABSTRACT INDIVIDUAL HUMAN CAPITAL AND PERFORMANCE: AN EMPIRICAL STUDY IN THAILAND Pakorn Sujchaphong The University of Texas at Arlington, 2013 Supervising Professor: Gary C.
McMahan According to the resource-based view of the firm, human capital is a source of sustained competitive advantage of the firm (McMahan, Virick, & Wright, 1999; Wright & McMahan, 1992; Wright, McMahan, & McWilliams, 1994; Wright & McMahan, 2011). Based on micro-foundations, it is essential that one must begin with and understand the individuals that make up the organization before exploring it at the organizational level (Felin & Foss, 2005; Wright & McMahan, 2011). Hence, this study focuses on the individual level of human capital. The first research question of this study is "How does human capital affect the performance of employees?" The second research question of this study is "How does experience affect the performance of employees?" The third research question of this study is "How does social capital affect the performance of employees?" The purpose of this study is to theoretically develop and empirically test the relationships among multiple dimensions of human capital, social capital, employee behaviors, and performance by emphasizing the mechanisms (i., the mediators) between them.
This study revisited the Wright and McMahan (1992) model by employing it at the individual level, adding a social capital variable, and categorizing human capital into context-generic human capital and context-specific human capital. Based on the existing literature, I hypothesize the iv relationships among context-generic human capital, context-specific human capital, job tenure, social capital (specifically, strong ties), in-role behavior, target-specific organizational citizenship behaviors (OCBs), and individual performance as follows: (1) context-generic human capital is positively related to performance, (2) context-generic human capital is positively related to context-specific human capital, (3) context-specific human capital mediates the relationship between context-generic human capital and performance, (4) job tenure has a positive relationship with context-specific human capital, but this association diminishes as job tenure increases, (5) access to information resources mediates the relationship between social capital (specifically, strong ties) and context-specific human capital, (6) employee behaviors (i., in- role behavior and target-specific OCBs) mediate the relationship between context-specific human capital and performance, (7) employee behaviors (i., in-role behavior and target- specific OCBs) mediate the relationship between context-generic human capital and performance, and (8) context-specific human capital mediates the relationship between context- generic human capital and employee behaviors (i., in-role behavior and target-specific OCBs). All hypotheses were tested using a sample of nurses in Thailand. All data were tested using multiple regression analysis and structural equation modeling (SEM) analysis.
Both methods yielded the same results, except the relationship between context-generic human capital and OCB-S. The results of this study showed that (1) context- generic human capital was positively related to performance, (2) context-generic human capital was positively related to context-specific human capital, (3) in-role behavior and two target- specific OCBs (i., OCB-I, OCB-O) partially mediated the positive relationship between context- generic human capital and performance, and (4) context-specific human capital mediated the positive relationships between context-generic human capital and these four types of behaviors (i., in-role behavior, OCB-I, OCB-S, and OCB-O). For the different result between two methods, context-specific human capital partially mediated the relationship between context- generic human capital and OCB-S in the multiple regression method, while context-specific v human capital fully mediated these relationship in the SEM method. Moreover, job tenure and social capital were not significantly related to context-specific human capital.
vi TABLE OF CONTENTS ACKNOWLEDGEMENTS. iv LIST OF ILLUSTRATIONS. xi LIST OF TABLES. xii Chapter Page 1.3 Problem Statements and Research Questions .1 General Ability, Education, and Past Experience .2 Resource-Based View of the Firm .3 General Human Capital and Specific Human Capital .4 Context-Generic Human Capital and Context-Specific Human Capital.5 Cognitive Human Capital .6 Measurement of Human Capital .1 In-Role Behavior .2 Organizational Citizenship Behaviors .9 Gaps in the Literature .2 Human Capital and Performance .4 Mediator Roles of Employee Behaviors and Context-Specific Human Capital .2 Why Does This Study Use a Sample of Nurses? .3 Why Does This Study Need to Be Conducted in Thailand?.
ANALYSIS AND RESULTS .1 Missing Value Analysis .2 Missing Value Remedies.3 Common Method Bias.5 Internal Consistency Reliability .4 Multiple Regression Analysis .5 Structural Equation Modeling (SEM) Analysis .2 Discussion of Results. TABLES OF RESULTS (SUPPLEMENT). 181 x LIST OF ILLUSTRATIONS Figure Page 3.1 The Expected Result from Hypothesis 4 .2 The Conceptual Model (Adapted from Wright & McMahan, 1992) .1 The Model by Multiple Regression Analysis .2 Testing a Mediation Effect of Context-Specific Human Capital (Context-Generic Human Capital - Performance) .3 Testing a Mediation Effect of Access of Information Resources (Social Capital - Context-Specific Human Capital) .4 Testing Mediation Effects of Four Types of Behaviors (Context-Specific Human Capital - Performance) .5 Testing Mediation Effects of Four Types of Behaviors (Context-Generic Human Capital - Performance) .6 Testing a Mediation Effect of Context-Specific Human Capital (Context-Generic Human Capital - Four Types of Behaviors) .7 The Best Model by SEM Analysis (Model S3. 108 xi LIST OF TABLES Table Page 1.1 The Sample of This Study .2 Respondents' Profile of The Final Sample .3 A Regression Imputation Approach .4 Testing Common Method Variance using CFA .5 Testing Discriminant Validity .6 Internal Consistency Reliability Tests .7 Means, Standard Deviations, and Correlations .8 Multiple Regressions Analysis Results: Predicting Performance .9 Multiple Regressions Analysis Results: Predicting Context-Specific Human Capital .10 Multiple Regressions Analysis Results: Predicting Access to Information Resources .11 Multiple Regressions Analysis Results: Predicting Behaviors .12 Sobel Tests from Multiple Regression Analysis (Specific - Behaviors - Performance) .13 Sobel Tests from Multiple Regression Analysis (Generic - Behaviors - Performance) .14 Sobel Tests from Multiple Regression Analysis (Generic - Specific - Behaviors) .15 Fit Indexes for the Good Fit Model .16 Names of Variables in Model S1.17 Sequential Chi-Square Difference Tests .18 Control Variables in SEM Model S3.19 Sobel Tests from SEM Analysis (Specific - Behaviors - Performance) .20 Sobel Tests from SEM Analysis (Generic - Behaviors - Performance) .21 Sobel Tests from SEM Analysis (Generic - Specific - Behaviors).
111 C1 Context-Generic Human Capital : Item-Total Statistics & Inter-Item Correlation Matrix [30 items]. 164 C2 Access to Information Resources: Item-Total Statistics & Inter-Item Correlation Matrix [3 items]. 166 C3 Context-Specific Human Capital: Item-Total Statistics & Inter-Item Correlation Matrix [22 items]. 166 C4 In-Role Behavior: Item-Total Statistics & Inter-Item Correlation Matrix [10 items].
168 C5 OCB-I: Item-Total Statistics & Inter-Item Correlation Matrix [7 items]. 168 C6 OCB-S: Item-Total Statistics & Inter-Item Correlation Matrix [6 items]. 168 C7 OCB-O: Item-Total Statistics & Inter-Item Correlation Matrix [12 items]. 169 C8 Performance: Item-Total Statistics & Inter-Item Correlation Matrix [5 items].
169 xiii CHAPTER 1 INTRODUCTION 1.1 Introduction Strategic human resource management is "the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals" (Wright & McMahan, 1992, p., Arthur, 1992, 1994; Combs, Liu, Hall, & Ketchen, 2006; Delery & Doty, 1996; Huselid, 1995; Ichniowski, Shaw, & Prennushi, 1997; MacDuffie, 1995) have found the relationship between human resource practices and firm performance. However, human resource practices are only tools to enable human capital to fulfill organizational goals (Wright & McMahan, 2011), while human capital is a source of sustained competitive advantage (McMahan et al., 1999; Wright & McMahan, 1992; Wright et al. Since human capital tends to directly affect the performance of employees in an organization, this study will therefore emphasize human capital instead of human resource practices. In the field of strategic human resource management, the human capital resource can be defined as "the pool of human capital under the firm's control in a direct employment relationship" (Wright et al.
Moreover, Ployhart and Moliterno (2011) defined human capital as "a unit-level resource that is created from the emergence of individuals' knowledge, skills, abilities, and other characteristics (KSAOs)" (p. However, people often dislike the phrase "human capital" because they fear that a human will be treated as a material (Becker, 1964). According to Coleman (1988), human capital is similar to other types of capital because skills and capabilities of people make them more productive in just the same way as physical capital facilitates production in the organization. Moreover, Pfeffer (1994) argues that human capital is an essential resource in most firms.
Grant (1996), for example, argues that 1 knowledge, which is one of several components of human capital, is critical to firm performance. Several companies like Apple, Google, IBM, Intel, and Microsoft are known to hire only the best and brightest people to work for them. These companies need innovation from their employees to be successful. Steve Jobs, the co-founder of Apple, for example, said in his biography that "A players like to work with A players, they just didn't like working with C players" (Isaacson, 2011, p.
Coleman (1988) argues that people can gain more human capital from social capital. According to Burt (1997), "social capital is a quality created between people, whereas human capital is a quality of individuals" (p. Coleman (1988) gave an example that a person can save the time of reading a newspaper by asking his or her friends who pay attention to the news. In addition, Coleman (1988) shows that high school students were more successful when they had support from their parents and community.
Moreover, Chisholm and Nielsen (2009) argue that social capital allows individuals to access resources within an organization. Thus, employees could expand their human capital by acquiring information from their social capital. Furthermore, when employees work as a group, the combination of human capital and social capital is called "human capability" (Wright & McMahan, 2011). Wright and McMahan (2011) suggest that when the level of task interdependence is high, social capital will impact the performance of employees because it will increase coordination and cooperation among employees.
This shows that social capital could indirectly affect performance by increasing human capital. The next section will introduce the conceptual underpinnings for this study. First, human capital theories will be discussed at both the organizational level and the individual level.