This study is based on the premise that the capabilities and performance of organisations are grounded in the attributes and behaviour of their members. The Human Capital Theory argues that investing in people (e.g. education and training) makes them more productive and, as a result, adds value to an organisation (Alnoor 2020; Aboobaker 2020; Chen, Lam & Zhu 2021). Consistent with this, Social Cognitive Theory posits the fundamental role of self-beliefs (self-efficacy) in motivating action, endurance in facing adversity and attainment of individual action based on Bandura’s theoretical model (Pervaiz et al. 2025). Neither theory removes nor even emphasises the need to understand what is going on at the individual level to produce outcomes at the institutional level.

Human resource competency, defined as the combination of knowledge, skills and attitudes required for effective job performance, is not an inherent or static trait but is shaped by various individual and contextual factors. Personal development efforts, such as continuous learning, professional training and skill enhancement, play a pivotal role in shaping HR competencies (Hagen, Burat & Kahale 2024; Leonard, Agrawal & Kothari 2024). Employees who engage in these activities are more likely to acquire the knowledge and capabilities necessary to foster innovation. For instance, individuals who pursue lifelong learning or specialised training can develop the creativity and problem-solving skills needed to contribute to organisational innovation (Adeoye & Jimoh 2023; Seevaratnam, Gannaway & Lodge 2023). Furthermore, work experience significantly impacts HR competency, as exposure to diverse roles and tasks enables individuals to refine their skills and apply them in innovative ways. Those with varied work experience are often better equipped to approach problems from multiple perspectives, which is essential for driving creativity and innovation within the organisation (Chaubey & Sahoo 2022; Komara & Yustikasari 2025).

Career motivation and psychological conditions are critical in shaping HR competencies. Highly motivated employees, driven by both intrinsic and extrinsic factors, are more likely to engage in activities that develop their competencies, leading to higher levels of job satisfaction, engagement and innovation. This motivation enhances their ability to embrace change, take calculated risks and explore new ideas, all of which are essential for innovation (Soleas 2021). Psychological factors, such as self-efficacy, emotional intelligence and resilience, also play a vital role. Individuals with high self-efficacy are more likely to engage in innovative behaviour, as they have the confidence to overcome challenges and pursue new ideas (Widjaya & Komara 2023). Emotional intelligence enables effective collaboration and knowledge sharing, while resilience helps employees persist in the face of setbacks, which is crucial for sustaining innovation efforts (Singh & Singh 2025; Yousaf, Javed & Badshah 2024). Together, these individual factors contribute to HR competencies, which in turn support organisational innovation by enabling employees to generate creative solutions, challenge existing practices and help implement new processes, products or services that add value (Soleas 2021).

The nurturing of oneself is a frank investment in humankind. Training, workshops, seminars and lifelong learning are among the activities that build the technical, theoretical, conceptual and moral knowledge on which HR competence is based. Hasibuan (2011) and Winedar and Wibowo (2019) suggest that the structured training process can contribute substantially to employees’ professional abilities. Therefore, it is hypothesised that:

Self-efficacy serves as a psychological motivational factor in the formation of competencies. Highly self-assured individuals are more active in pursuing learning opportunities, have a higher level of persistence when engaging with difficult tasks and are less discouraged when facing failure. As Bandura (1989) pointed out, such a belief encourages people to try harder and to master skills and knowledge more quickly. Thus, it is hypothesised that:

Together, the drive to improve (self-development) and the belief in success (self-efficacy) create the ideal conditions for the formation of superior competency.

Organisational innovation can be achieved through multiple avenues, including both direct pathways from individual factors and capabilities developed at the organisational level. The ‘direct pathways’ refer to the immediate and personal contributions of individuals, such as their self-development efforts, self-efficacy and competencies, which directly influence the organisation’s capacity for innovation. Specifically, when individuals engage in self-development (such as learning new skills, enhancing knowledge or improving their professional capabilities), they directly contribute to the creation of new ideas, processes or approaches within the organisation (Narenji Thani et al. 2022). Likewise, self-efficacy, or the belief in one’s ability to succeed, encourages individuals to take initiative, experiment with new ideas and persist through challenges, which are critical behaviours for fostering innovation at the individual level and can directly translate into organisational innovation (Dorfman-Furman 2024).

These direct pathways suggest that individuals with strong self-development efforts and high self-efficacy do not simply act as passive participants in the organisational innovation process; instead, they actively drive it. For example, a highly skilled employee with high self-efficacy may independently propose new methods for improving workflow or suggest innovative product ideas. Similarly, individuals who prioritise their professional growth are likely to bring new insights into their work, directly affecting the organisation’s ability to innovate (Alateeg & Alhammadi 2024). These direct pathways highlight the importance of fostering individual-level competencies and self-belief as critical drivers of organisational change and innovation. However, these individual contributions need to be supported by broader organisational capabilities to ensure that innovation is scaled, implemented and sustained across the organisation (Trivellato, Martini & Cavenago 2021).

Individuals who actively engage in self-development tend to be more open to new ideas, have broader perspectives and be more supportive of change, making them key drivers of innovation. Research indicates that self-development plays a crucial role in fostering openness to new knowledge, broadening perspectives and facilitating innovative behaviour (Narenji Thani et al. 2022; Wardani et al. 2024). Additionally, high self-efficacy drives behaviours essential for innovation, such as calculated risk-taking, creative problem-solving and persistence in advocating for new projects. Individuals with high self-efficacy believe in their ability to overcome challenges, which makes them more willing to innovate and continue their efforts despite facing obstacles (Jan et al. 2021; Vitapamoorthy et al. 2021). Therefore, it is hypothesised that self-development and self-efficacy have a significant positive influence on organisational innovation:

A skilled worker is the engine of creativity, playing a fundamental role in driving organisational innovation. Skills in key areas, such as complex problem-solving, social skills and systems analysis, are not only critical for addressing contemporary challenges but also for fostering a culture of innovation within organisations. The U.S. Department of Labor and Bureau of Labor Statistics have emphasised that these skills are essential for adapting to rapidly evolving technological and market landscapes, enabling businesses to remain competitive and resilient (Zoghi, Mohr & Meyer 2010). For instance, problem-solving skills allow employees to navigate complex situations, social skills enhance collaboration and communication and systems analysis enables the identification and implementation of innovative solutions. Moreover, studies have shown that organisations with a workforce skilled in these areas are more likely to adopt new technologies and processes that drive innovation successfully (Engelsberger et al. 2022; Patricio et al. 2022). While brilliant ideas are vital for innovation, they cannot be effectively implemented or scaled without the necessary competencies. Without a skilled workforce, even the most innovative concepts remain underutilised or fail to reach their potential (Bojesson & Fundin 2021). Therefore, investment in employee skills development is not just a matter of improving individual performance but is essential for ensuring the organisation’s long-term success and sustainability in a competitive, fast-changing environment.

The fundamental theoretical basis of this study considers HR competency as the bridge connecting individual potential and organisational effectiveness. Self-development creates the possibility for innovation and self-efficacy engenders motivation (positive effect), yet it is HR competence that enables organisations to act on this potential and motivation, yielding innovative results such as the efficient use of resources, better services or creativity in products (Narenji Thani et al. 2022). Good intentions and even high confidence might not lead to effective organisational change if competency is lacking. Therefore, HR competency plays a mediating role in the impact of individual potential on organisational innovation:

The four variables in this study were operationalised using a self-developed questionnaire with a five-point Likert scale (1 = Strongly disagree to 5 = Strongly agree):

To ensure the quality of the instruments, two stages of testing were conducted. Firstly, construct validity was tested through expert judgement by three professors and doctors in the field of education. Based on their feedback, several improvements were made to ambiguous and non-standard sentences. Secondly, empirical validity and reliability tests were performed. The validity test results showed that all items were valid (r calculated > r table). The reliability test using Cronbach’s alpha showed that all scales had good internal consistency, with alpha values exceeding the 0.70 threshold: Self-development (α = 0.750), self-efficacy (α = 0.748), HR competency (α = 0.752) and organisational innovation (α = 0.749).

The collected data were analysed using SPSS version 27. Path analysis was used to test the 11 hypotheses. This analysis included testing the goodness of fit of the model using statistics such as chi-square and Normed Fit Index (NFI), as well as testing the significance of path coefficients using t-tests to determine the direct and indirect effects among variables.

Ethical clearance to conduct this study was obtained from the Universitas Islam Syekh-Yusuf Tangerang ethics committee (No. 081.EC/LPPM/UNIS/IV/2025).

Initial analysis showed strong and positive relationships among the four research variables. As presented in Table 3, all Pearson correlation coefficients showed values above 0.80, which are categorised as very strong correlations. These positive correlation values indicate that an increase in one variable tends to be followed by an increase in the others, providing strong initial support for the hypothesised model.

The most central outcome of this research is the support gained for the model, which confirms HR competency as a necessary and key factor through which individual potential fosters innovation at the organisational level. The most interesting finding arises from the partially mediated nature of the relationship. The significance of both direct and indirect routes to innovation implies a two-way process in promoting innovativeness at UNIS. The direct route suggests that those with strong motivation for self-development and a belief in self-efficacy could become ‘innovators sparks’. An inspired teacher can develop new approaches to teaching in the classroom without guidance, or a confident administrator can devise better ways of performing their duties. This is an example of bottom-up innovation and individual agency in action.

The mediating role of Human Resource Management (HRM) capabilities underscores that individual innovations, while important, must be integrated and nurtured to achieve sustained organisational impact. Human resource competencies such as project management expertise, cross-functional collaboration and leadership serve as the organisational mechanisms that facilitate the scaling and institutionalisation of individual creativity. Without these capabilities, individual innovations may remain isolated, lacking broader organisational influence. Therefore, the model suggests that UNIS requires both individual contributions to innovation and an organisational framework that effectively channels and amplifies these contributions to drive long-term transformation.

The facilitative role of self–efficacy in instigating creative behaviour and performance is well established. For instance, time-lagged field data reveal that self-efficacy mediates the relationship between leader–member exchange and employees’ innovative behaviour (and climates that strengthen this link), pointing to its core importance as a microfoundation of innovation (Fernandes et al. 2023; Yildiz et al. 2021). Our findings extend this line of reasoning from innovativeness at the individual level to organisations. Our mediating findings dovetail with the literature on the ‘soft-side’ of innovation. A study in R&D Management highlights the role of HR practices in inbound open innovation, with intervening mechanisms of learning culture and knowledge-sharing logic, where ability and competency represent principal levels (Alassaf et al. 2020; Naqshbandi et al. 2023; Shahin et al. 2024). In line with these findings, our results reveal that enhancing HR competence enables personal resources to manifest as institutional innovation, adding to both a learning and knowledge–sharing culture.

Analyses in higher education and public sector settings demonstrate that knowledge sharing and related social processes are proximal facilitators of innovative work behaviours (Kim et al. 2025; Nishat & Haque 2025; Salehi & Sadeq Alanbari 2024; Shadmanfar & Makvandi 2024). Our model aligns with this work, but provides more specificity on how individual-level factors flow through competencies to influence innovation at a broader level than innovative work behaviour alone. Research relating HRM practices to performance often shows that the relationship is mediated either fully or partially by innovation, depending on the HRM practices and context under consideration (Cao, Le & Nguyen 2022; Lei, Khamkhoutlavong & Le 2021; Than et al. 2023). This partial mediation pattern accounts for the mixed evidence because the direct effects of individual psychology and learning investments on innovation persist, while HR competency accounts for more variance.

There are several theoretical implications of this research. This research expands the scope of both Human Capital Theory and Social Cognitive Theory within the innovation domain of higher education, a less-researched area compared to business literature. By conceptualising HR competency as a ‘converter’ that links individual potential to organisational outcomes, this study offers deeper insight into a more refined innovation model. It moves beyond simplistic models that connect single traits directly to organisational outcomes by empirically explaining how these connections are made. It expands simple models linking single traits directly to organisational outcomes by empirically clarifying the ‘how’ of such a link.

Most importantly, testing the model in the context of a private Islamic university in Indonesia challenges the notion that predominantly Western theories of management are necessarily universal. It is likely to involve additional inimical enemies, serving as a signpost for developing a system that cultivates the whole person and is based on ‘inner churning’.

This study has applied the results of those psychometric analyses to workplace contexts, thus demonstrating that integrated capability pathways addressing ability, motivation and opportunity are essential. Higher education institutions must undertake the development of a competency framework that articulates transversal competencies required for innovation, for example, project management, cooperative problem-solving, data literacy and change leadership. This framework will ensure that recruitment, induction, appraisal and promotion processes are integrated with focused upskilling initiatives such as mentoring, micro-credentials, peer observation or grant-writing boot camps. Furthermore, HR architectures based on competencies have been found to incorporate higher levels of performance in organisations (Luo et al. 2022; Mathews et al. 2020). Once one’s ability is in sufficient order, institutions need to develop their efficacy consciously, for example, emphasising mastery experiences, vicarious learning, persuasive feedback and maintaining a sense of psychological safety. Consistent with Social Cognitive Theory, such activities serve to build collective efficacy for change and explain how people can continue on their innovative paths when their programmatic efforts do not succeed.

Innovation also requires the availability of resources and social channels to be fulfilled. Formal routines for sharing knowledge, such as communities of practice (CoPs), open teaching and research asset repositories and cross-unit innovation sprints, are presented as highly efficient in stimulating knowledge flows that constitute a well-acknowledged antecedent of innovative behaviour in the higher education context. Ultimately, universities must reward the behaviours they wish to scale by integrating innovation metrics into their evaluation processes. Taking into account collaboration and knowledge-transfer contributions alongside tangible outputs is important for institutionalising innovation rather than at the individual level at which it may occur. Instead, competency development should be monitored over time and linked directly with innovation outcomes in a reinforcing loop.

The critical analysis and limitations must, however, be recognised. The extremely high intercorrelations among the constructs and the close-to-perfect fit indices of our model (e.g. SRMR = 0.000, NFI = 1.000) are atypical in organisational field studies and hence raise concerns regarding problems such as construct redundancy or overlap, saturation of the measurement model and residual common-method variance. To resolve this ambiguity, subsequent research may benefit from using more stringent tests of discriminant validity, multi-source or multi-wave designs and marker or latent-method variables to test for bias. Another limitation is the cross-sectional and single-site design, which limits inference of causality and generalisability. The particular context of a private Islamic university also comes with its structural determinants; for instance, rank distribution and the publication reward system may also have influenced the patterns presented herein.

Around such limitations, some new lines of research could be suggested. Longitudinal or quasi-experimental studies would help to infer causation and demonstrate whether innovation gains follow growth in competencies. Multilevel modelling would be appropriate to investigate the ways in which U-layer competencies or climates moderate the relations between I-agency and Oinnov. Researchers might also disassemble the mechanism by integrating knowledge-sharing and learning-culture variables as digitalised-mediated mediators, respectively, in the test of these ‘soft-side’ drivers of innovation, with interactive or complementary effects related to competency. Finally, it is suggested that efforts provide some validation of statements generated using this framework, whereby objective outcomes such as external grant funding (where granted), curriculum accreditation, publications indexed in Scopus or WoS and IP filings should be used to validate innovation outcomes, along with possible additional analysis of whether these dynamics differ by role (staff versus faculty members) or career stage.