MUHAMMAD TALHA

Measuring the impact of HRM on organizational performance (Anastasia A

katou, 2008)

Instructor: Mrs. Humaira Hamid

Outline

• Problem statement

• Theoretical framework

• Hypothesis

• Findings of the hypothesis

• Research design

• Methodology

Problem statement

1. Research objective (why):

to find “How human resource management(HRM) policies influence organizational performance”

2. Research question(what):

“what is the impact of HRM policies on organizational performance”

OR

“What is the impact of HRM policies on organizational performance in relation to HRM outcome as mediating variable”

Theoretical framework

HRM

OutcomeHRM policies

Organizational

performance

Business

strategies

H1

H2

H4

H3

Hypothesis

• H1: business strategies influence HRM policies in determining organizational performance.

• H2: A relationship exist between HRM policies and HRM outcome.

• H3: Improvement HRM outcome mediate the relationship between HRM policies and organizational performance.

• H4: A relationship exist between HRM policies and organizational performance.

Findings of the hypothesis:

With respect to business strategies, cost strategies have a direct negative effect on HRM policies, whereas quality, and innovation strategies, have positive direct effects on HRM policies, supporting thus hypothesis H1.

HRM policies have a direct positive effect on HRM outcomes, supporting thus hypothesis H2.

HRM outcomes have a direct positive effect on organizational performance, giving hence support to hypothesis H3.

HRM policies have a direct positive effect on organizational performance, giving hence support to hypothesis H4.

Research design

• Purpose of the study: Causal study.

• Type of investigation: Causal.

• Extent of researcher interference: Moderate Interference.

• Study settings: Non-Contrived (Natural environment).

• Unit of analysis: Organizational level (178,original sample).

• Time horizon: Cross sectional/ One shot.

Methodology

Defining the Elements/ population:

• Strata 16 manufacturing sector industries in Punjab

• Organizations with more than 50 employees are the candidate .

Time frame of the population:

• All the manufacturing sectors in Punjab from the last 2 years are selected from Pak-directory (http://www.pakdirectory.net)

Population:

• The total population was 2002

Methodology

• Sampling frame:

• The elements list from which we are going to select subjects were taken from the Pak-directory (http://www.pakdirectory.net)

• population of 2002

• Sampling size:

• Table 13.3 pg.# 268

Industries Population

Food products Beverages 254

Textiles and textile products 81

Footwear 98

Leather products 269

paper 131

Pharmaceuticals 75

Chemicals 133

Petroleum products 238

Rubber and plastic products 74

Basic metal industries 94

Machinery and equipment 118

Metal products .except machinery 104

Electric equipment 64

Electrical machinery 56

Motor equipment 116

furniture 83

Total 2002

Methodology

• Sampling frame:

• The elements list from which we are going to select subjects were taken from the Pak-directory (http://www.pakdirectory.net)

• population of 2002

• Sampling size:

• Table 13.3 pg.# 268

Methodology

• Data collection method:

• Questionnaire survey

• Responsibility of CEO, personnel officer, financial officer

• Response rate of 30%

• Scaling technique:

• Itemized rating scale

• Different anchors

Anchors

Organizational performance:• Five point scale (1-5)

• Anchors:1= very bad to 5=very good.

HRM policies:• Five point balanced itemized rating scale (1-5)

• Anchors:1=not at all effective to 5= highly effective

HRM outcome:• Anchors: 1=very bad to 5=very good

Business strategy:• Anchors:1=not very important to 5= totally important

Variables / Constructs

HRM Policies:

Selection, Training and Development, Performance appraisal, Compensation,

Promotion, Incentives, Work design, Participation, Involvement, Communication

HRM Outcomes:

Competence, Cooperation with management, Cooperation among employees,

Motivation, Commitment, Satisfaction, Retention, Presence

Business Strategies:

Cost reduction, Quality enhancement, Innovation

Organizational Performance:

Effectiveness, Efficiency, Development, Satisfaction, Innovation

Controls:

Size, Capital intensity, Industry, Degree of unionization

Sampling design

• Stratified sampling technique.

• Sectors Represents heterogeneity.

• Divide each sector representing a group.

• Strata: 16 manufacturing sectors industries.

• 322 chosen from cumulative stratum (strata).

• response rate = 30%

Statistical analysis

• Structural equation models (SEM) was used

• Via LISREL and the maximum likelihood estimation (MLE)