The Impact of Human Capital on Employee Productivity of Medium Scale Apparel Industry in Sri Lanka

Abstract

Human capital refers to the stock of knowledge, habits, social and personality attributes including creativity, embodied in the ability to perform labour so as to produce economic value. Further, several studies have found that a number of factors affect on human capital; education isin the premier position among these factors. It includes the knowledge that comes from formal education, non-formal education and informal education. The current study is carried out with the objective of identifying and analysing the impact of human capital on employee performance of medium scale apparel industry in Sri Lanka. As the data collection tool, a semi-structured questionnaire was used with a sample of 100 employees selected on simple random sampling techniques from 10 apparel companies which were selected on convenient sampling method. Structural equation method was used to analyse the data statistically. As the tool to analyse the data, SPSS Amos (version 21) was used. Finally, the research study finds that education, age, sex, civil status, rural or urban distinction, work experience, and training and development effect on employee performance. The study found that urban employees are more productive than rural employees; female employees are more productive than males; female employees with the age lesser than 25 years are more productive while males with age less than 30 are more productive; the impact of primary education with training and development are more productive. Further, being the employees in the urban sector, being a male aged between 30 to 35, having experience between 10 to 15 years and having education up to secondary education contribute to better employee performance.