Effect of human capital on productivity and efficiency in the banking sector : an exploratory study of Sri Lanka and New Zealand

Abstract

The performance of world class manufacturing companies is not only based on equipment, material, and processes but also human capital. Thus, this research contributes and extends the existing knowledge on human capital to provide a comprehensive understanding by exploring following questions: “How do human capital effect on productivity and efficiency?” and ”How do human capital and its role on productivity and efficiency in the banking sector in Sri Lanka differ from that in New Zealand?”. This research employed a qualitative case study as a research approach. Data is collected, via conducting in-depth interviews, and gathering information from available secondary sources from 10 banks in two nations, Sri Lanka and New Zealand. Data analysis is done through content analysis which resulted in a comprehensive understanding of the relationship between HC and the productivity and efficiency in the banking sector in a developing country, Sri Lanka and a developed country, New Zealand. This study revealed that HC has the potential to enhance overall productivity and efficiency in the banking sector in both contexts. Comparative analysis suggests that although some differences existed, views on the importance of having HC to enhance productivity and efficiency in these two countries were consistent.