Human Resource Management Practices as Antecedent of Organizational Performance: A System Dynamics Approach

Abstract

The purpose of this paper is to explore, based on the General Systems Theory, the importance of Human Resource Management (HRM) practices and their impacts on employee as well as organizational performance in developing countries context. Substantial developments have been seen in the human resource related areas of the organizations of the developed world but the scenario is still not very encouraging in developing counties like Pakistan. Organizations in developing countries are still following the traditional HR models that emphasize on managing the routine office activities. However, the current need is to develop a capable HR system to highlight the area where the particular HRM practices are proved to be useful to attain the targeted organizational performance. For this purpose System Dynamics approach was used to demonstrate the linkages between HRM practices and organizational performance in causal loop form in order to analyze the effect of different HRM practices on organizational performance. Through the causal loops results obtained, suggestions have been developed to enhance the efficiency and effectiveness of HRM practices for the improvement of organizational performance.