Abstract
Human resources have been regarded as the most important asset for any organization because of its essential part in achieving the sustainable competitive advantage and survival. Managing human resources is very challenging and requires an effective bundle of practices that contribute to attaining the organizational goals. This study tries to confirm the importance of HRM practices in small businesses which came to play a vital role in the economies of the world, through clarifying the influence of HRM practices on the organizational performance, using a mediating variable (employees’ outcomes). Also the study attempts to highlight the key role of governmental support from view point of small businesses, through verifying the significant relationship between governmental support and the organizational performance. It was hypothesized that HRM practices will be positively related to the organizational performance (financial & operational), and that employees’ outcomes would serve as a mediator in the relationship between HRM practices and performance. Also it was hypothesized that the governmental support will be positively related to organizational performance. Structural Equation Modelling (SEM) with Amos has been applied in this research. The research sample consist (265) small manufacturing businesses in Malaysia. The statistical results showed significant relationships in direct and indirect models of study, and partially mediated in mediation models. DOI: 10.5901/mjss.2015.v6n1p97
Highlights
All economic point of views has shown consensus about the growing importance of small business, whether in the industrially developed countries or developing countries.In Malaysia, The importance of small businesses rises through its active contribution in generating income and value-added
These hasty changes are confronted by the inability of most of these businesses to keep up with these changes as well as utilizing them in their favor, due to the weakness of available resources for small businesses such as
Based on Cornell University study, the main objective of this study is to examine the relationship between HRM practices and organizational performance of small businesses through the mediator variable
Summary
In Malaysia, The importance of small businesses rises through its active contribution in generating income and value-added. Small businesses are facing many challenges and problems due to rapid environmental changes represented by the diversity of the labor market, development of information systems, globalization, and the constant change in product demands. These hasty changes are confronted by the inability of most of these businesses to keep up with these changes as well as utilizing them in their favor, due to the weakness of available resources for small businesses such as (necessary funding, advanced information system and active human resource)
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