The Relationship Between Human Resource Management Practices and Organizational Innovation: The Mediated Role of Human Capital Within the Banking Sector in North Iraq

In the world of globalization & increasing business competition, innovation has turned out to be a significant component of the sustainment of an organization. One of the important components that might impact an organization to innovate is Human Resource Management (HRM). This study aims to investigate the impact of human resource management practices on achieving sustainability in the banking sector through organizational innovation and incorporating human capital as a mediator. The study methodology used SPSS v25 to analyze data collected from 207 banking sector employees. The results demonstrate that the human capital of the organization will be increased by the practices of human resource management, which stimulates organizational innovation in the same fashion. The study also shows that human capital is a partial mediator of the relationship between human resource management practices and organizational innovation, highlighting its importance for converting human resource management activities into innovative results. Considering these results, banks are compelled to implement complete human resource management strategies which combine operational efficiency with workforce capacity development, to create a dynamic banking environment allowing for continued innovation. It is suggested a mediated model based on empirical data, contributes to the literature, and provides insights for banking institutions using human capital to drive innovation in difficult situations.