Editorial Board

A Refereed Monthly International Journal of Management

Bridging Knowledge based Human Resource Practices and Employee Retention: The Integrative Role of Innovation Work behavior, Social Capital, and Knowledge-Sharing Behavior

 

 

Dr. Komal Khalid

Associate Professor,

Faculty of Economics and Administration

King Abdulaziz University, Jeddah, Saudi Arabia

Email: kmuddassar@kau.edu.sa

(Corresponding author)

 

 

Reem Alrehaili

Masters Student,

Human Resource Management

Faculty of Economics and Administration

King Abdulaziz University, Jeddah, Saudi Arabia

Email: ralrehaili0016@stu.kau.edu.sa

 

 

 

 

 

Abstract

The main objective of this research is to examine how knowledge-based HR practices influence employee retention through social capital and knowledge-sharing behavior and how knowledge-based HR practices affect employee retention through innovative work behavior in both private and public sectors in Saudi Arabia. PLS-SEM was deployed to analyze data and examine the study's hypotheses. Data were gathered through a self-administered questionnaire distributed using a purposive sampling technique from a sample of 249 participants. The findings highlight that innovative work behavior positively and significantly mediates the association between knowledge-based HR practices and employee retention. Additionally, a serial indirect effect of social capital and knowledge-sharing behavior positively influenced the relationship between knowledge-based HR practices and employee retention. This study used a cross-sectional rather than a longitudinal research design, which is a limitation. To generalize the result, more extensive research is needed to investigate further the relationship between knowledge-based HR practices and employee retention. This model can be applied to other sectors and services. This research offers valuable theoretical and practical implications and extends the social exchange theory. Organizations should focus on knowledge-based HR practices to increase employee retention by supporting innovative ideas with resources and incentives. Knowledge-based HR practices can help organizations retain employees through career development, mentoring, and coaching.

Keywords: Employee retention;Innovative work behavior;Knowledgebased HR practices; Knowledge-sharing behavior; Social capital.

 

Introduction

Human resource management is vital in attracting highly skilled individuals, particularly in intensified global and knowledge-based economic competition. Knowledge-based HR practices (KHRP) enhance the organization's capacity to generate, disseminate, and leverage novel information (Caputo et al., 2019). Knowledge-based HR practices (KHRP) can aid in recruiting, selecting, placing, retaining, and transforming crucial human resources for novel processes and products (Manzaneque et al., 2017). Knowledge-based HR practices (KHRP) are managerial procedures that facilitate the collection of distinctive and significant data within organizations, thereby enhancing innovation and productivity (Abubakar et al., 2017). Networks, norms, and trust facilitate cooperative efforts for mutual advantage in social capital (SC) (Ganguly et al., 2019). Community members use knowledge-sharing behavior (KSB) to exchange knowledge and information (Chang et al., 2017). 

External organization collaboration networks are associated with enhanced knowledge-sharing behavior (KSB), social capital (SC), and employee retention (ER) (Donate et al., 2016). KHRP improves knowledge transfer within an organization to affect the supply chain (Noopur & Dhar, 2019). Innovative work behavior (IWB) refers to the proactive actions taken by employees to generate, cultivate, and execute novel ideas to enhance organizational performance. To establish connections and collaborate to strengthen employee innovation (Singh et al., 2021). Organizations require employees who possess innovative qualities. Employee retention (ER) refers to the strategies and practices implemented by companies to retain their highly skilled and valuable employees (Abba, 2018). An effective KHRP can motivate and retain highly skilled individuals. Therefore, implementing an innovative work behavior (IWB) is essential for employee retention (Al-Shammari & Khalifa, 2019).

Previous studies concur that identifying KHRPis a catalyst for fostering innovation (Al-Shammari & Khalifa, 2019; Al-Tal & Emeagwali, 2019). Nevertheless, it needs to elucidate how KHRPenhances competitiveness. The lack of comprehensive and coherent analyses of HRM and knowledge in previous research has created a significant gap in the study of KHRPand employee IWB. There is a need to understand better how KSB can lead to improved ER and whether this relationship varies across different organizational contexts or industries. Additional research is required to ascertain successful methods for promoting KSB to enhance ER.

Saudi Arabia has enacted a comprehensive national strategy, known as Saudi Vision 2030, to bolster its economy by fostering economic growth and investment opportunities in response to heightened competition and global economic shifts (Elayan et al., 2022). Saudi Arabia's public and private sectors play a significant role in this Vision. Human resource professionals may need to reconsider their approach to managing their organizations to discover, cultivate, and retain skilled and motivated employees (Al-Kazlah & Badkook, 2022). Certain medium and large organizations recognize the significance of leveraging knowledge and expertise to drive innovation, productivity, and expansion. In Saudi Arabia, where there is a strong emphasis on hierarchy and traditional values, these organizations have effectively implemented KHRPthat align with their employees' cultural norms and expectations (Alshahrani, 2018; Al-Kazlah & Badkook, 2022). Despite significant investments in KHRP, Saudi Arabia must improve its research. This study aims to explain the subject by examining the variables KHRP, SC, knowledge-sharing behavior, and ER. This study investigates the mechanisms of SCand KSB in mediating the effects of KHRPon employees' IWBand ER in various organizational contexts, to gain insights into effective strategies for managing this phenomenon.

Literature Review

          Knowledge-based Human Resources Practices

KHRP use an organization's knowledge, expertise, and intellectual assets to improve performance and achieve goals (Abubakar et al., 2017). KHRP improve organizational knowledge processes. It also includes essential elements for managing and using organizational knowledge (Kianto et al., 2017). KHRP include knowledge acquisition, sharing, collaboration, learning and development, application, measurement and evaluation, retention and succession planning, knowledge culture, and leadership (Masenya, 2022). Previous research focused solely on input and output factors, ignoring the fundamental components that make these practices effective (Abubakar et al., 2017; Kianto et al., 2017). Technology and human resources can be used to implement the knowledge management system and establish KHRP(Al-Tal & Emeagwali, 2019).

Employee Retention

Retention is an organization's effort to keep current employees (Gabriel et al., 2022). Khalid and Nawab (2018) stated that ER strategies aim to reduce employee turnover and cut recruiting, hiring, training, and orientation expenses. Al-Tal and Emeagwali (2019)explained that KHRP uses knowledge-based dimensions like recruiting and selection, training and development, compensation, and performance appraisal to find candidates to improve an organization's knowledge management. KHRP boosts performance and retains dedicated employees. These practices indirectly impact employee commitment and retention (Vu & Nwachukwu, 2020). Hertzberg's Two-Factor theory states that hygiene factors, such as salaries, working conditions, supervision, and relationships, and motivation factors, such as personal growth, career development, and promotions, can motivate and help retain employees (Hassan, 2022).

Innovative Work Behaviour

IWB helps people start new, beneficial ideas, products, or processes (Leong & Rasli, 2014). IWB is an employee's intentional behaviour to generate new ideas that benefit people, groups, or organizations (Nguyễn, 2019). Afsar et al. (2017) defined IWB as identifying problems, brainstorming solutions, and implementing them. They believe IWB begins with innovation creating useful ideas in any field or solving difficult problems. IWB includes idea generation, promotion, and realization (Chang et al., 2017; Leong & Rasli, 2014).

KHRP boosts employee skills and IWB(Kianto et al., 2017). The environment that encourages IWB is characterized by a culture of innovation, supportive leadership, flexible organizational structures, resource allocation, collaboration and knowledge sharing, continuous learning and development, and a willingness to take risks and learn from failure (Anser et al., 2021). By implementing these elements, organizations can create an environment that stimulates and fosters innovative thought, creating new ideas, products, and processes that fuel success and growth (Singh et al., 2021). KHRP facilitates employees' IWBby rewarding them financially and non-financially, training and developing them to develop their competence and knowledge in the organization, and allowing them to choose how they want to do their work (Bos-Nehles & Veenendaal, 2019).

H₁: Knowledge-based human resources practices positively and significantly impact innovative work behaviour.

IWB is important in organizations and defines the behavior of creating, presenting, and implementing new ideas useful for performance within a group or organization (Anjum et al., 2016). The result of work, responsibility, the meaning of work, and knowledge of work results affect IWB and ER (Al-Shammari & Khalifa, 2019). It is also consistent with the premise that knowledge flow may be facilitated by individuals’ consistent commitment to learning within and outside the organization that enhances personal insights and collaborating discovery, resulting in new value, which results in IWB(Leong & Rasli, 2014).

H₂: Innovative work behaviour positively and significantly impacts employee retention.

The chance of enhancing innovative capability is increased through KHRP, which involves the acquisition, invention, sharing, and application of clever ideas (Leong & Rasli, 2014). Through KHRP, employees can identify and acquire the necessary skills for innovative activities (Elayan et al., 2022). The work outcome, responsibilities, significance, and feedback will affect an employee's performance and intention to leave their position. The chance that employees will remain in their position is increased by the IWB(Gabriel et al., 2022).

H₃: Innovative work behaviour positively and significantly influences the relationship between knowledge-based human resources practice and employee retention.

Social Capital

SC is described as the resources proposed to be accessible and beneficial to individual and collective groups (Rodríguez et al., 2022). Individuals and groups commonly accumulate SC due to their participation in social activities, and once acquired, it can be used to improve and encourage cooperation (Ferragina & Arrigoni, 2017). Open and transparent communication, consistency in actions, personal interactions, competence, expertise, fulfilling commitments, shared values and goals, reputation, and word-of-mouth recommendations build trust and trust-based networks (Esmaeilzadeh, 2019). These networks are components of SC, and it promotes economic agents’ collaboration and knowledge sharing making it required for innovation activities(Jiang & Liu, 2015).

KHRP is a collection of wisely chosen HR practices intended to improve knowledge of the organization and impact human capital (Noopur & Dhar, 2019). According to Al-Tit(2016) and Jiang and Liu (2015), KHRPsignificantly impacts SCby increasing the likelihood of interactions between workers and other network actors and developing a common understanding and body of knowledge. According to this, traditional HR should be redefined and repositioned as KHRPcan motivate employees to take part and participate in knowledge sharing (Al-Tit, 2016).

H₄: Knowledge-based human resources practices positively and significantly impact social capital.

Knowledge-Sharing Behaviour

Knowledge sharing is a critical step in developing knowledge resources in which individuals in an organizationexchange information in the form of concepts, recommendations, and skills that may be applied by all employees at the organizational level to maintain competitiveness(Donate et al., 2016). It is important to any organization, a crucial aspect of their competitiveness, and a necessity for future growth (Kim & Ko, 2014).

            SC includes interactive relationships and shared objectives. It is essential for knowledge sharing because exchanging knowledge requires social interactions among people impacted by their relative network(Zhang et al., 2017). Chang and Chuang (2011) have demonstrated the importance of KSB among coworkers in sustaining high levels of group and organizational productivity. SC has been highlighted as a key predictor of KSB since it is influenced by human interactions and connections(Chang & Chuang, 2011; Zhang et al., 2017).

H₅: Social capital has a positive and significant impact on knowledge-sharing behaviour.

"Knowledge sharing" is when organization members share knowledge (Nwaiwu & Imafidon, 2017). KSB at work helps retain employees. Turnover is a global issue caused by job insecurity, an unhealthy work environment, a lack of flexibility, and poor knowledge management (Edeh et al., 2022). According to studies, managers and HR professionals must use knowledge management to keep employees. If they do not, they will pay more to replace workers (Hom & Xiao, 2011). When an employee offers solutions to company issues, it greatly affects coworkers' support (Liu et al., 2020). Knowledge sharing boosts organizational support (Castaneda & Cuellar, 2020).

H₆: Knowledge-sharing behaviour has a positive and significant impact on employee retention.

KHRP aims to improve and enhance the knowledge within an organization as it encourages employees to build effective relationships with their coworkers, which positively impacts corporate SC(Singh et al., 2021). KSB in the society of learning is largely determined by SC, which is a key aspect of this understanding (Gabriel et al., 2022). Retaining employees increases knowledge transfer between the acquired and acquiring organization (Gope et al., 2018).

H₇: The relationship between knowledge-based human resources practices and employee retention is sequentially mediated by social capital and knowledge-sharing behaviour.

 

Figure 1: Theoretical Framework

                                                     

 

METHODOLOGY

Sample and Procedure

This study is quantitative. Self-administered questionnaires distributed to family and friends were used to collect data in three phases from October 2022 to February 2023. In the first phase, KHRP and respondent demographics were collected. SC and KSB data were collected in the second phase, while IWB and ER data were collected in the third phase.

The questionnaires were distributed using purposive sampling in four most populated cities of Saudi Arabia (i.e., Riyadh, Jeddah, Medina, and  Dammam). The questionnaire's purpose and confidentiality were explained to the participants. A translation agency used back-to-back translations to translate the English questionnaire into Arabic. Respondents filled it at their convenience in both languages. There were 274 responses. After removing outliers and incomplete surveys, 249 responses were valid for empirical testing.

Measurement

The survey includes demographic items (i.e., gender, age, education, and experience). A 5-point Likert scale was used to measure all the variables of the study ranging from (1 = strongly disagree to 5 = strongly agree). Most respondents are 31–40 years (SD 1.86) and have 6-10 years of experience (SD 1.66). 

Al-Tal and Emeagwali (2019) designed 13 items scale of KHRP, including staffing, training, performance appraising, and compensation items. The scale has acceptable validity (AVE = 0.507). Sample item of KHRP is “The sharing of knowledge is one of our criteria for work performance assessment.”For measuring the IWB10-item scale of Janssen (2000) was adopted, including idea generation, idea realization, and idea promotion that was developed. Sample item of IWB is “My ideas generate original solutions to problems.”These items have acceptable validity (AVE = 0.552).A 5-item scale of Youndt et al. (2004) was adopted to measure SCand have acceptable validity (AVE = 0.503).Sample item of SC is "Employees in my organization share information and learn from one another.”KSB construct is measured by a 12-item (out of 16) scale developed by Ramayah et al. (2014) representing organizational communication and personal interactions. The reliability and validity of this scale are within an acceptable range. Sample item of KSB is “I express ideas and thoughts in department meetings.”ER was measured by the intention to leave questionnaire developed by Cowin (2002) and had acceptable validity (AVE = 0.528). Sample item of ERis “If I wanted to do another job or function, I would look first at the possibilities within this organization.”

DATA ANALYSIS

This study used partial least squares-structural equation modeling (PLS-SEM) as a suitable tool for examining hypotheses. SEM captures several uncertainties and assesses the relationship between construct variables and items (Hair et al., 2020).

Results

Table 1 illustrates descriptive statistics used to characterize the data in this research, demonstrating the mean value, standard deviation, and correlation coefficients of all variables. It also indicates that the correlation matrix identifies that KHRPhas a highly significant and positive correlation with SC(0.607). The correlation matrix detects the lowest correlation between IWBand ER (0.315). Additionally, there are positive and significant correlations between all constructs.

 

Table 1

Descriptive Statistics and Pearson Correlation Analysis

 

 

 

 

 

 

 

 

 

 

 

Descriptive Statistics			Correlation Statistics
	Mean	SD	KHRP	IWB	SC	KSB	ER
Age	3.454	1.864
Exp	3.137	1.665
Edu	2.811	0.788
KHRP	3.923	0.562
IWB	4.187	0.489	0.604**
SC	3.758	0.775	0.607**	0.453**
KSB	3.838	0.575	0.513**	0.543**	0.549**
ER	3.689	0.780	0.426**	0.315**	0.534**	0.453**
**. Correlation is significant at the 0.01 level (2-tailed).

 

 

 

Measurement Model Assessment

All items should have a factor loading of no less than 0.40, reliability (including Cronbach alpha, rho_a, and composite reliability) of more than 0.70, and average variance extracted of more than 0.50.One item for KHRP, four for knowledge-sharing behavior, and two for ER were excluded and deleted because of low factor loading (less than 0.40).

Table 2 demonstrates that all items of variables had acceptable loadings between 0.403 and 0.810 (Dijkstra & Henseler, 2015; Hair et al., 2020). All variables' reliability values (Cronbach alpha, rho_a, and CR)were in the acceptable range (i.e., Higher than 0.700). As a result, all of our variables satisfied the convergent validity criteria (Dijkstra & Henseler, 2015).

 

 

 

 

 

 

Table 2

Assessment of Reflective Measurements

Constructs	Items	Type	Loadings	CA	rho-A	CR	AVE
Knowledge-Based HR Practices	KHRP1-KHRP12	Reflective	0.403-0.744	0.866	0.871	0.891	0.507
Knowledge Sharing Behavior	KSB1-KSB13	Reflective	0.448-0.653	0.897	0.899	0.914	0.562
Social Capital	SC1-SC5	Reflective	0.435-0.544	0.735	0.739	0.825	0.503
Innovative Work Behavior	IWB1-IWB10	Reflective	0.632-0.810	0.864	0.868	0.891	0.552
Employee Retention	ER1-ER4	Reflective	0.427-0.610	0.701	0.706	0.817	0.528
CA= Cronbach Alpha; CR = Composite Reliability; AVE = Average Variance Extracted; VIF = Variance Inflation Factor

 

Discriminant validity measured how well one hidden variable distinguished itself from others (Hair et al., 2011). Fornell-Larcker and HTMT were used to evaluate discriminant validity. HTMT discriminant validity was assessed using construct thresholds of 0.85 and 0.90. The test lacks discriminant validity if the HTMT value exceeds this level (Henseler et al., 2015). Table 3 shows that all constructs were discriminant. Fornell-Larcker bold values are the construct's square root AVE. Each construct's square root AVE should exceed its correlation with other constructs (Fornell and Larcker, 1981).

 

Table 3

Discriminant Analysis (HTMT and Fornell-Larcker Criterion)

Hetro-Trait Mono-Trait (HTMT) Criterion						Fornell-Larcker Criterion
	KHRP	IWB	KSB	SC	ER	KHRP	IWB	KSB	SC	ER
KHRP	1					0.712
IWB	0.640	1				0.628	0.743
KSB	0.665	0.634	1			0.649	0.620	0.749
SC	0.705	0.696	0.557	1		0.651	0.514	0.577	0.709
ER	0.622	0.592	0.688	0.722	1	0.613	0.599	0.687	0.662	0.726
Note: The bold numbers in diagonal in Fornell- Larcker section are the square root of AVE of each construct, and other numbers are correlations between constructs

 

Hypothesis Testing

Table 4 shows all direct effects, KHRP influences IWB(t-value = 35.521, p-value = 0.000, β-values=0.818), KHRP ->SC (t-value = 32.973, p-value = 0.000, β-values=0.848), IWB -> ER (t-value = 3.347, p-value = 0.019, β-values=0.164), SC-> KSB (t-value = 24.367, p-value = 0.000, β-values=0.777), KSB -> ER (t-value = 8.997, p-value = 0.000, β-values=0.653 are statistically positive and significant. Accordingly, H₁, H₂, H₄, H₅, and H₆ are supported.

For indirect effects, table 4 shows KHRP -> IWB -> ER, and mediation analysis indicates that IWB mediates the relationship of KHRP and ER (t-value = 3.304, p-value = 0.021, β-value=0.134), thus providing evidence to support H₃. Mediation analysis for the indirect relationship of KHRP -> SC -> KSB -> ER. The relationship between KHRP and ER is serially mediated by SC and KSB (t-value= 7.226, p-value = 0.000, β-value=0.430) and is statistically positive and significant, so H₇ is supported. Throughout all the hypotheses, all the BCCIs do not contain zero, between the LLCI (5%) and ULCI (95%).

Figure 2: Results of Hypothesis Testing

 

 

Table 4: Hypothesis Testing

Hypothesis	Direct / Indirect Effect	Path Coefficients	T Value	P values	BCCI		Hypothesis Support
					5.00%	95.00%
H1	KHRP -> IWB	0.818	35.521	0.000	0.762	0.856	Supported
H2	IWB -> ER	0.164	3.347	0.019	0.024	0.297	Supported
H3	KHRP -> IWB -> ER	0.134	3.304	0.021	0.019	0.247	Supported
H4	KHRP -> SC	0.848	32.973	0.000	0.789	0.891	Supported
H5	SC -> KSB	0.777	24.367	0.000	0.703	0.829	Supported
H6	KSB -> ER	0.653	8.997	0.000	0.505	0.790	Supported
H7	KHRP -> SC -> KSB -> ER	0.430	7.266	0.000	0.312	0.545	Supported
Note: Knowledge-based HR Practices (KHRP); Innovative Work Behavior (IWB); Knowledge- Sharing Behavior (KSB), Social Capital (SC); Employee Retention (ER); Bias Corrected Confidence Interval (BCCI)

 

 

Discussion

In today's fast-paced competitive business environment, organizations are increasingly aware of the importance of KHRP in enhancing SC, knowledge-sharing behavior, IWB, and ER. The purpose of this study is to explore the relationship between them. Applying the self-determination theory and linking social learning theory and social exchange theory cognizing to develop the theoretical model to reveal the relationship between KHRPand ERmediating by SCand KSB and the relationship between KHRPand ER, which IWBmediates. KHRPstrengthens employees to build successful relations with colleagues (SC), to expand organizational knowledge, and this supports knowledge sharing among them, which boosts their sense of belonging to the organization in which they work that matches the studies carried out by (Gope et al., 2018; Singh et al., 2021). KHRP indirectly, through IWB, positively and significantly supports ER. In other words, higher KHRP levels lead to higher IWB levels, resulting in greater retention. This meets the study carried out by (Elayan et al., 2022; Gabriel et al., 2022). Accordingly, this study's finding supports all direct and indirect impact hypotheses.

 

 

Theoretical Implications

This study applies SET to understand how an organization can use KHRPto make employees feel valued and appreciated (Singh et al., 2021; Thomas & Gupta, 2021). SET implies that people interact socially to gain benefits and avoid costs (Balu, 1964). In KHRP, employees may think KSB will boost SCand career prospects. SCand career opportunities may boost ER (Oparaocha, 2016). In organizations with KHRP, employees may believe that IWBwill lead to better career opportunities, higher salaries, and recognition (Bos-Nehles & Veenendaal, 2019).

Social capitaltheory suggests that social networks and relationships can provide resources and information to individuals and organizations. Knowledge sharing and collaboration among staff can help SCdevelop with KHRP. SLT explains the relationships between KHRP, IWB, and ER because employees learn from others and their environment, which affects their behaviour (Elayan et al., 2022). IWBresources, training, and incentives from KHRPcan help employees learn socially. Creating a continuous learning and innovation culture can improve ER (Gabriel et al., 2022).

Practical Implications

HR practices, including training, mentoring, coaching, and learning culture, must support employee knowledge-sharing and collaboration. Doing this will boost employee innovation, performance, and retention. Organizations should foster innovation by supporting innovative ideas with resources and incentives, rewarding innovative contributions, and forming cross-functional teams with diverse skills and expertise.

Saudi Arabia's competitive job market requires organizations to concentrate on ER strategies that meet employees' needs. This includes providing a supportive work environment, competitive compensation and benefits, career growth and development opportunities, and rewarding high-performers. Organizations must address cultural differences that may affect KHRPand IWB effectiveness, including understanding cultural norms and values influencing employee behavior and adapting HR practices and management styles to local culture.

KSB is crucial to organizational innovation and learning. Training and development programs in Saudi Arabia can help employees learn new skills and share knowledge. Organizations can also offer bonuses or promotions to employees who share their knowledge.

KHRP can build SC by encouraging employee collaboration and teamwork. Promoting a culture of collaboration and giving employees project opportunities can boost SC in Saudi Arabia. By offering career development, mentoring, and coaching, KHRP can help organizations retain employees. The findings give managers and scholars valuable insights and a foundation for future research.

Future Direction and Limitation

The main contribution of this research was to indicate how the use of KHRP can contribute to ER in the Saudi Arabia context. So, this is limited to Saudi Arabia and cannot be generalized to other countries. Thus, this model can be applied to doing similar work in other countries and other service sectors like tourism, telecom, and hospitality for the generalizability of the results. Also, limited sample size was utilized because of a time limit. Using cross-sectional data is another limitation. To make it more generalized by collecting a larger sample of a population. The research has focused on SC, and further studies could be considered the organizational and intellectual capital to assess whether they may enhance ER.

Conclusion

This study contributes to a better understanding of how knowledge should be handled for organizational benefits. Sets of related KHRP significantly impact employee outcomes. The study examined the influence of KHRP in enhancing ER, revealing that KHRP, directly and indirectly, creates ER. It was found that a serial indirect effect of SC and KSB positively influences the relationship between KHRP and ER. Although, it exposes that IWB positively and significantly mediates the relationship between KHRP and ER. 

 

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