Managerial Perception of Human Capital, Innovations, and Performance: Evidence from Banking Industry

Abstract

This paper aims to examine the relationship between the managerial perception of human capital, innovations, and bank performance. We specifically sought to examine the influence of human capital on bank performance, by introducing the factors of innovation speed and quality. The study was taken in the Serbian banking industry, with the focus on the perception and the viewpoint of CEOs and general managers of different departments. We used a two-phase survey to design the questionnaire and the correlation and regression analyses to examine our hypotheses. Our findings propose that, from managers’ perspective, human capital is critical to the success of banks, and that innovation speed is more influential than its quality. The backward multiple regression model shows that human capital and innovation speed account for 67.5% of the variability of the bank performance. The findings of this research can contribute to bank management policies by revealing how to enhance bank performance by focusing on human capital and innovation agility and readiness. The proposed research model could potentially be implemented in other sectors and industries to hopefully endorse the significance of the detected relationships.