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Purpose The purpose of this paper is to examine the mediating role of employee competencies in the relationship between human resource management (HRM) practices and organizational performance. Design/methodology/approach An integrated research model was developed by combining principal factors from existing literature. Data were collected through questionnaire from 600 employees of the selected hotels. The validity of the model and hypotheses was tested using structural equation modeling. The reliability and validity of the dimensions are established through confirmatory factor analysis. Findings The results indicate that some HRM practices impact organizational performance through their influence on employee competencies. The study further revealed that employee competencies mediate the relationship between HRM practices and organizational performance. Research limitations/implications The research was undertaken in the hotel industry and the analysis based on cross-sectional data which cannot be generalized across a broader range of sectors and international environment. Practical implications The findings of the study have the potential to help policy makers, stakeholders and management of hotels in adopting proper and well-articulated HRM practices in building human capital and stimulating the necessary behaviors that create advantage for the organization. Originality/value This study extends the literature by empirically adducing evidence that employee competencies mediated the relationship between HRM practices and organizational performance of the hotel industry in Ghana.