Article

Impact of HR Practices on Organizational Performance in Bangladesh

IJIBIT 01/2010; 3.

ABSTRACT Impact of human resource management practices on organizational performance has been a widely researched area for years. But unfortunately, very insufficient number of studies have been conducted on this area in the context of Bangladesh and other developing countries. This study was undertaken to fill this obvious research gap. Data collected from fifty manufacturing firms in Bangladesh shows that HR practices have significant association with organizational performance. Out of HR practices, only performance appraisal is found to have significant impact on organizational performance.

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    • "Green et al. (2006, p. 561) said that researchers have found positive relations between human resource policies and firm performance in which human resource polices is usually operationalized and measured as the existence or the effectiveness of a variety of sets of HR practices that are assumed to be universally effective. Absar et al. (2010, p.15) said ''Organizational performance is generally indicated by effectiveness (whether an organization can achieve its objectives), efficiency (whether an organization uses resources properly), satisfaction of employees and customers, innovation, quality of products or services, and ability to maintain a unique human pool''. In order to evaluate the effectiveness of human resource policies, researchers such as (Rogers and Wright, 1998; Becker and Huselid, 1998 cited in Vlachos, 2008) tied them to firm performance, however as there is no agreement on the optimal human resource policies there is no agreement on the best performance measurement tools. "
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    ABSTRACT: This study is conducted to measure the effect of human resource policies (planning, recruitment & selection, training & development, job analysis & design, motivation, performance appraisal, and employee participation in decision making) on organizational performance, to verify if there is a positive and significant relationship between human resource policies and organizational performance, and to measure the scope of application of human resource policies in the banks in Jordan. The study surveyed 25 commercial banks in Jordan including local, foreign, and Islamic banks (two banks rejected participation in this study because of what they deemed privacy of information). This was accomplished through designing a questionnaire that was distributed to employees in managerial levels. Three hundred and fifty questionnaires were distributed; 250 questionnaires were returned back and 46 questionnaires were disregarded because they were not completed by the respondents. The results show strong support for the model, indicating that human resource policies are positively related to organizational performance and have a statistically strong significance on it; R square is (70.2%). It has been concluded from the research results that the most important effect of human resource policy on organizational performance is the employees' participation in decision making. Nevertheless, this policy is not widely implemented. This could be attributed to a cultural attitude that discourages employees' participation in decision making or because of the nature of banking jobs that seem to be critical, risky, and systematic. Thus, it is worthwhile to give more attention to the participation of employees in decision making. The researchers recommend that the Jordanian banking sector should be more concerned with training and development policy in order to develop the employees and provide them with necessary skills and capabilities, especially in the content and the structure through suitable training and development programs. Finally the researchers recommend that any future research in the field investigate the obstacles that face the implementation of human resource policies in Jordanian firms and those in other Arab countries.
    European Journal of Economics, Finance and Administrative Sciences 01/2012; 51:44-64.
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    [Show abstract] [Hide abstract]
    ABSTRACT: This study is conducted to measure the effect of human resource policies (planning, recruitment & selection, training & development, job analysis & design, motivation, performance appraisal, and employee participation in decision making) on organizational performance, to verify if there is a positive and significant relationship between human resource policies and organizational performance, and to measure the scope of application of human resource policies in the banks in Jordan. The study surveyed 25 commercial banks in Jordan including local, foreign, and Islamic banks (two banks rejected participation in this study because of what they deemed privacy of information). This was accomplished through designing a questionnaire that was distributed to employees in managerial levels. Three hundred and fifty questionnaires were distributed; 250 questionnaires were returned back and 46 questionnaires were disregarded because they were not completed by the respondents. The results show strong support for the model, indicating that human resource policies are positively related to organizational performance and have a statistically strong significance on it; R square is (70.2%). It has been concluded from the research results that the most important effect of human resource policy on organizational performance is the employees' participation in decision making. Nevertheless, this policy is not widely implemented. This could be attributed to a cultural attitude that discourages employees' participation in decision making or because of the nature of banking jobs that seem to be critical, risky, and systematic. Thus, it is worthwhile to give more attention to the participation of employees in decision making. The researchers recommend that the Jordanian banking sector should be more concerned with training and development policy in order to develop the employees and provide them with necessary skills and capabilities, especially in the content and the structure through suitable training and development programs. Finally the researchers recommend that any future research in the field investigate the obstacles that face the implementation of human resource policies in Jordanian firms and those in other Arab countries.
    European Journal of Economics, Finance and Administrative Sciences 01/2012;