BUILDING RESPONSIVE ORGANIZATIONS: THE HIDDEN POWER OF AGILE HRM & VALUE CO-CREATION

Abstract

Microfinance institutions are finding they need to build agile and responsive workforces to accommodate the dynamic financial services landscape, digital transformation and customer expectations. This study examines the relationship between Agile Human Resource Management (Agile HRM) and employees' responsiveness through the mediating role of value co-creation behaviour. The study is based on the principles of Service-Dominant Logic (SDL) and suggests that agile HR practices including employee empowerment, continuous learning, collaboration, and flexibility improve employees' responsiveness to the customer and organizational problems. In the present scenario of financial institutions advancing digitalization and customer-centric service models, it has become of great importance to understand the behavioural pathways that can explain the impact of Agile HRM on outcomes of the employees. The data collection method uses quantitative research design and data analysis techniques using SPSS and SmartPLS which is developed by Amos. The results indicate that the effect of Agile HRM on the employee responsiveness and value co-creation behaviour is significant and positive. In addition, value co-creation behaviour has a positive effect on the employee responsiveness and partially mediates the relationship between Agile HRM and employee responsiveness. The findings show that collaborative behaviours of employees can be nurtured in organizations practicing agile HR, which can subsequently improve customer satisfaction, service quality and adaptability. The study is important for the current literature of HRM and service management in the context of the microfinance banking industry, and provides practical implications for managers aiming to create resilient organizations that emphasize the customer and have high performance in the digital economy of 2026 and beyond.