Binding human capital in the European foundation for quality management model of excellence/ Loren Para-Gonzalez

The role of the personnel function, measured by the people criterion of the model developed by the European Foundation for Quality Management (EFQM), in implementing improvements in organisational performance is tested in this paper. It is concluded that human capital allows organisations to obtain competitive advantage through the application of human resource practices. The existing empirical literature does not provide evidence about how human capital plays a mediator role, by increasing the effects of human management policy in the EFQM model. Human resource management can amplify the impact of the People criterion, as independent variable, on organisational performance, as dependent variable. The study reported in this paper has a cross-sectional design, and uses a sample of 200 medium-sized Spanish organisations. The results show how the people criterion of the EFQM model is an essential element in improving organisational results through human capital.