The Nexus Between Human Resource Management Practices and Service Recovery Performance in Takaful Insurance Industry in Pakistan: The Mediating Role of Employee Commitment

Abstract

Service recovery performance (SRP) is very important for the takaful insurance industry for maintaining and attracting new clients, which in turn serves as a competitive advantage for the survival and continued future of the businesses. If the insurance sector could not maintain SRP, then the competitive advantage of the organizations could be decayed. Therefore, under the theoretical foundation of equity theory and resource-based theory, this research has investigated the link between human resources management practices (HRMP) (such as human capital, training, job description, teamwork, empowerment, and rewards) and SRP directly and indirectly through the employee commitment. By using a convenient sampling technique data was collected from the employees working in the Takaful industry in Pakistan to empirically test the proposed hypotheses and validate the findings. Using cross research design and quantitative research approach. The Structural Equation Modeling (SEM) had presented the positive relationship between HRM practices and SRP. On the other hand, employee commitment had also mediated this relationship. As employee commitment is significantly mediated among most of the HRMP, this aspect is therefore considered to be a big contribution of the study in the context of Pakistan. Based on these findings, the current study has several important implications the practitioners and readers.

How Far Takaful Efficiency Has Been Researched?

“…Furthermore, research by Mihardjo et al (2021), shows that human capital, training and rewards have a significant effect on employee commitment which in turn affects service recovery performance (SRP) to be improved. Mao et al (2022), Service recovery performance (SRP) is critical for the takaful insurance industry to retain and attract new clients, which in turn serves as a competitive advantage for business continuity and a sustainable future. If the insurance sector cannot maintain SRP, then the organization's competitive advantage may deteriorate.…”