International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
HRM Practices and Employee Performance in Public Sector Organizations in Pakistan: An Empirical study
Author’s Details: (1)Muhammad Maqsood Khalid-PHD Scholar Superior University Lahore Pakistan
(2)
Chaudhry Abdul Rehman-Professor Business School, Superior University Lahore, Pakistan
(3)
Dr. Muhammad Ilyas-Assistant Professor Superior University Lahore Pakistan
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International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
HRM
Practices
Employee
Performance
Career Planning
Performance
Appraisal
Training
Compensation
Employee
Participation
The above model proposed that better employee performance (in terms of efficiency) can be achieved by applying the
proposed suite of HR practices i.e. career planning, training, performance appraisal, compensation and employees
participation in job related decisions in a coherent manner to result in the desired outcome.
Source: Author
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International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
employees‘ education, training and development, know the cost incurred on HRM intervention and what
fulfilling employees‘ needs with organizational goals). benefits reaped from this investment (Ashraf M et al,
2012).
Employee Performance
It is widely believed that HR practices wherever To inculcate functional HR practices with strategic HR
practiced affected organizational performance practices affect performance all the way for
positively (Huselid, 1995; Liao, Toya, Lepak, & Hong, organizational performance (Wright & Snell, 1998). In
2009; Sun, Aryee, & Law, 2007) but literature is not this stream, new work processes evolved and
unable to tell how this presumption could be fulfilled individuals are valued for their KSAs. This
(Huselid, 1995). Different researchers found that environment helps to create desirable working
organizational performance can be achieved through conditions and employees like to adapt to these
employees‘ involvement. It is the employees‘ attitude conditions. This opportune environment urges the
that translated HRM policies and practices into explicit employee to show the desired organizational behavior
performance (Nishii, L. (2008); Ramsay, Scholarios, & by using their talent (Boxall, 1996). Researchers like
Harley, 2000). Employee once attained the title of high Delaney & Huselid, 1996; Delery, 1998 regard
performer, he is spirited with intrinsic motivation and synergy of ‗human capital‘ and ‗processes‘ inevitable
encouragement. Such highly spirited employees to augment organizational performance. Extraordinary
enhance organizational performance. That is why performance however, is hard to sustain without
while conducting research on HR; employees‘ management support (Khalid et al,. 2011).
perceptions are given weightage (Bowen & Ostroff,
2004; Nishii & Wright, 2008). The way, in which By far key inputs, this study looks for the current
organizations run HR management system, it reflects application and effects of traditional HR practices such
their strategy and contextual circumstances. as career planning, training, performance appraisal,
Organizations decide the pattern of their people compensation and employee participation on
management. This pattern tells about communication generating high performance at individual and
system of the organization to share information with organizational level in Pakistani public organizations.
their employees (Bretz & Judge, 1994). Every HR
system is not supposed to deliver the desired effects on Career Planning
employees until it is implemented in clear terms HR planning executed by HRM department bears a
(Legge, 1989). Role of line manager has proved strong connection with career planning of individuals
effective enough to implement the intended HR system (Gerhart, B,. 2005). Career planning serves as a tool to
and fix the problems and challenges confronting at the attract the employees and motivate them to perform for
time of implementation (Den Hartog, Boselie, & their individual and collective development (Wright, P.
Paauwe, 2004). According to the findings of Nishii, L., M., & Snell, S. A. 1998). This attraction urges
(2008), HR system will be considered practical that employees to perform (Locke, E. A., 1997). Career
proves result oriented when put into practice by the planning has proved its effectiveness and look beyond
managers successfully. There exists difference in the traditional boundaries extended around a job.
perceptions between managers and non-managers Individuals are interested to join those organizations
about the perceived effectiveness of HR practices that offer more opportunities to them (Gardner,
(Nishii, L., 2008). This missing link creates gap among Wright, & Moynihan, 2011). Equal opportunities are
managers and non-managers regarding perceived offered to employees regardless of gender, ethnicity,
effects of HR practices on employees‘ performance. nationality, caste, color or creed. Civil service in
This gap in perception lays the need for research on public sector of Pakistan offers a progressive career
seeking perceptive agreement on HR outcomes planning that makes this service attractive in Pakistan
between the two stakeholders (Nishii, L., 2008). (Khilji S. E,.2006). Career planning in non cadre jobs
Employees‘ perceptions mediate between HR practices is however, passive. This causes perceptive differences
and employee performance (Liao et al., 2009). As a between cadre and non cadre employees.
result of integrated HRM system and practices, fresh
management thought has emerged. HRM is moving Researchers foresee that a work system can work well
from evolution towards revolution to gain financial when employees have the requisite skill set to do a
viability and ultimately competitive advantage (Ashraf good job, and that system must provide them requisite
M.et al, 2011). Citizens of developing nations need career growth opportunities to contribute(William et
high back up for higher productivity in business at this al, 1996). Role of HR department is to provide
critical juncture of the human history. They should get strategic opportunities for successful development
rid of lethargic habits and adopt mature habits based through career planning (Snell, 1992). Career planning
on knowledge and skills learnt during life (Khalid et is viewed as a phenomenon that matches employee
al, 2011). In future Pakistani organizations need to profile of abilities and skills with target organization.
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International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
Therefore, career planning adopted by organizations until conduct and until sense of responsibility of
inspires the individuals to join the organization and employee are evaluated and addressed.
excel in performance. The above discussion leads to Today‘s dynamic corporate world, organizations need
develop and test the following hypothesis: ―adaptive performance‖ from their employees to
unveil the useful dimensions of performance (Cambell,
H1: Employee performance is significantly 1997). Gareth (2003) states that efficiency and
correlated to career planning in the organization. effectiveness of an organisational performance can be
measured the way managers utilize its resources to
Training attain organisational goals. Efficiency and
Training is regarded as best HRM practice by dint of effectiveness in an organization provide measurement
which desired change in employee performance can be of performance. Efficiency is the visible yardstick of
acquired (Huselid, M. A. 1995). Training is seen as a resource utilization to realize goals. Effectiveness
tool to enhance organizational performance by however, has the limitation of ascertaining the
augmenting efficiency and effectiveness of workforce suitability of the goals set by managers and the level of
(Cook, C. W., and Hunsaker, P.L. (2001). Insufficient achievement of these goals (Jones et al., 2005). In
training equipment and non-availability of skilled other words, employee efficiency and effectiveness
training staff cause low performance (Paauwe, J. show linkage with organisational performance.
(2004). Paul, A.K. and Anantharaman, R.N. (2003) A good performance management system should
highlighted that capacitated and sincere training manage to conduct measurement, evaluation and
management helps to improve job performance. Task development of performance beyond job analysis
orientation and team work foretell performance. (Welbourne, T.M and Andrews, A.O. 1996). A
Using the factual analysis, training intervention, job performance management System reports appraisal
rotation and feedback programs can be used to get findings in form of expected and actual performance of
collective intellectual performance (Harel, G.H. and employees. This kind of reporting augments
Tzafrir, S.S. (1999). According to the findings of a employees‘ motivation for performance (Mayer &
quasi- experimental study, effective orientation of Davis, 1999). Primarily performance appraisal system
organizational vision, mission, objectives to the new relates to employee performance and unveils different
employees leads to predict stirring performance at channels of improvement. The following hypothesis
individual and organizational level (Z, S., 2009). needs to be proved or rejected:
Selection of trainees for training is prerequisite for
training transfer which contributes to employee H3: Performance appraisal system significantly
performance. Training literature helps to formulate the affects employee performance.
following hypothesis to test empirically (Kirkpatrick,
1974). Compensation Programs
About Compensation given to the employees, the
H2: Training significantly impacts employee Prophet Muhammad (P.B.U.H.) said: ―Whosoever
performance. engages a worker on work should mention the wages
in advances‖. Job seekers can be short listed on the
Performance Appraisal System basis of their knowledge, skills and ability (KSA) in
Islam views performance appraisal as a virtuous the light of injunction of the Holy Quran (39:9).
activity to count reward against the effort rendered.
The Qur‘an declares (39:3-5):―Not an atoms weight or A good integration of performance management
less than that or greater escapes Him in the heavens or system and compensation system create employees‘
in the earth but it is in a clear record. That He may willingness to perform (Wright et al, 2003). In
reward those who believe and do good works. For developing countries, in the awake of socioeconomic
them are a provision and a rich provision.‖ plight, compensation factor aligns employee behavior
Performance is attained through extra role playing with organizational strategy (Singh, 2004). A research
done by the employees beyond the limitations of study found that performance appraisal data
assigned job duties. This kind of employee maintained over the years can enable managers to take
performance contributes to organization success that is decisions about the poor and moderate performers and
generalizable to other areas. When employees are support them for improvement in parallel with high
willing to play extra role, organization finds strategic performers and establish the compensation plans
success resultantly (Ahmad, S., & Schroeder, R. G. (Walton, R., 1985). Feedback system on such grounds
2003). The extra role playing relates to circumstantial can reinforce workplace environment. Feedback
background of the employees (Lado, A.A. and Wilson, directly acquired in an open public setting, better
M.C, 1993). The desired results cannot be achieved conveys employees‘ reaction about compensation
(Gould-Williams, J. (2003). A good and positive
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International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
feedback shows degree of efficacy of the respondents. care of their employees and their working conditions
In developing societies, majority of subordinate to develop desired attitude and behavior among
employees show moderate motivation with low self employees (Shoemaker et al., 2006). Role of HRM
efficacy and subsequently causes low and passive assumes critical importance in this context. The
performance. In summary, compensation serves as an following hypothesis needs to test in the light of above
incentive for employee performance. discussion:
Results
Table 1 Demographic Profile of Respondents
Characteristics Categories Frequency Percent
Female 35 29
Gender Male 85 71
Total 120 100.0
Intermediates 25 21
Qualification Graduates 55 46
Post Graduates 40 33
Total 120 100.0
Employment Status Regular 48 25
Contractual 54 27
Total 199 100.0
The study undertakes the demographics of respondents as 29% females and 71% males. Qualification wise, 21%
respondents were intermediate, 46% were graduates and 33% were post graduates. The employment status of
respondents was showing 25% employees regular and 27% was on contract basis.
1 2 3 4 5 6
1 EmpPfm 1
2 Careerplanning .641** 1
** **
3 Training .695 .632 1
**
4 Pfmappraisal .704 .704** .647 **
1
5 Compensate .696** .538** .569** .512 **
1
6 Empparticip .474** .369** .490** .361** .444 **
1
* Correlation is significant at the 0.05 level (2-tailed).
** Correlation is significant at the 0.01 level (2-tailed).
Pearson correlation for Employee Performance with Career Planning, Training, Compensation, Employee
participation, Performance Appraisal (r=-.641,.695,.696,.474,.704p<0.01) respectively show that there is a positive
relationship between Employee Performance and Career Planning, Training, Compensation, Employee participation,
Performance Appraisal. Correlation coefficient value corroborates moderate and strong relationship between variables
respectively. Training, Compensation, Employee participation, Performance appraisal (r=.632, .538, .369, .704,
p<0.01) show respectively positive relationship between Training, Compensation, Employee participation,
Performance appraisal. Correlation coefficient value confirms moderate and strong relationship between variables.
Pearson correlation for Training and Performance Appraisal, Compensation, Employee participation
(r=.647,.569,.490,p<0.01) show positive relationship between Training, Performance Appraisal, Compensation,
Employee participation. Correlation coefficient value proves moderate relationship between variables. Pearson
correlation for Performance Appraisal and Compensation, Employee participation (r=.512, .361, p<0.01) show
positive relationship between Performance Appraisal, Compensation, Employee participation. Correlation coefficient
value confirms moderate relationship between variables. Pearson correlation for Compensation and Employee
participation (r=.444, p<0.01) show positive relationship between Compensation, Employee participation. Correlation
coefficient value confirms moderate relationship between two variables. Correlation results show high association of
variables among each other and bear positive relationship. This indicates that HRM practices such as career planning,
training, performance appraisal, compensation and employee participation can result in improved performance.
In order to examine the effects of independent fit model. R2 value is 0.690 reflecting 69% variance in
variables such as Training, performance appraisal and employee performance as perceived by the proposed
compensation on employee performance as dependent model.
variable, a multiple regression analysis was carried
out. Data was tested through multiple linear regression Discussion/ Findings
and found the statistical values significant at .007, .001 Pakistan is a country with low GDP per capita income.
and .001 respectively. P values being less than 0.05 Organizations need employee performance. A
show statistical relationship between these values. common man of 3rd world country is interested in well-
Values of F test found in ANOVA table as p<0.001 defined career planning (CP), training and
indicating statistical significance and high goodness of development system, performance appraisal (PA), and
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International Journal of Management Sciences and Business Research, 2013 ISSN (2226-8235) Vol-3, Issue 2
compensation program (Cp). Keeping in view of the HRM practices. As a result of outcome of this
socioeconomic context and literature review support, research, the HRM practices of the public
five HR practices i.e. CP, Training, PA, CP and organizations are likely to improve. Instead of
employee participation (EP) was selected. This study following traditional practices, the public
is based on the idea that HR practices in above organizations need to adopt scientifically approved
combination affects employee performance. measures such as to focus training, performance
appraisal and compensation practices to enhance the
Epistemological position in this study is positivism performance level. Alignment in HR practices support
with survey method as the strategy of inquiry. The performance which is beneficial for all stakeholders. A
study is cross sectional. Quantitative and descriptive suite of applications proposed by this study including
research was adopted because it explains the research adequate training programs, skill hunting performance
problem, sample characteristics, stance of the problem appraisal system, market oriented compensation
(Creswell, 2003). Perceptive and financial measures package should create an environment of sustained
prove more credible in research (Huselid, 1995). performance in public sector. Employee participation
Perceptive measures give a clue of impact of HRM and defined career planning are the areas to ponder.
practices on individual and collective performance.
Findings of this study addressed the gap of employee Limitations and Future Research Directions
performance. A combination of HR practices such as Research context was limited to Lahore based eleven
training, performance appraisal and compensation public organizations because of limited access to these
statistically regress each other at higher rates. organizations. Future research may extend this to other
However, career planning and employee participation cities as well as to provinces to prove more effective..
showed insignificant results. The findings imply that
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