Determinants of HR Department Effectiveness and Organizational Performance in Vietnam

Abstract

Most research on the effectiveness of the human resource (HR) department has been undertaken in Western economies. There are few empirical studies on perceptions of the HR department’s effectiveness in developing economies such as Vietnam. This study examines how line managers evaluate the HR department’s contribution to the organization. Survey data were collected from 484 line managers in Vietnamese organizations. A structural equation modeling approach was used to analyze the quantitative data. The study concludes that the organization’s strategic orientations predict the types of HR roles, strategic involvement and influence of the HR department as well as the department’s effectiveness. Line managers perceive their HR department to be effective when the HR department contributes to the core competence of the organization. HR department effectiveness and core competence both have a positive effect on perceived overall performance of the organization.