Navigating the maze : HR analytics on firm performance and the mediating role of business process performance

Purpose The study aimed to examine the direct and indirect influence of human resource analytics (HR analytics), comprising high-quality data (HQD), analytical competencies (AC) and strategic ability to act (SAA), on firm performance (FP) through business process performance (BPP). Design/methodology/approach Data were collected through a structured questionnaire from a sample of 300 HR professionals of varied industries in India. A two-stage approach was utilized for assessing scale reliability and validity through confirmatory factor analysis and structural equation modeling to test the proposed hypotheses. Findings The results indicate that AC and SAA positively influence BPP and firm performance. BPP mediates the relationship between HQD and AC on FP. However, the mediating influence of BPP on the SAA-to-FP relationship was not significant. The results lend support for the use of HR analytics for enhancing BPP and FP. Practical implications The hypothesized finding recommends that the integration of HR analytics by HR practitioners and HR managers in organizations will promote business process effectiveness and enhance FP. Originality/value The study contributes to the sparse evidence of the value creation of HR analytics capabilities (HQD, AC and SAA) on BPP and FP, extending the theoretical logic of the resource-based view, dynamic capability and knowledge-based view. Further, it advances the literature by examining the mediational mechanism of BPP on FP. The results extend valuable insights for HR managers and practitioners to formulate strategies for effective utilization of HR analytics for organizational outcomes.