Abstract
Human Resource Management is relatively a new concept in small firms in Pakistan. The purpose of this study is to examine the impact of some of the human resource practices on organizational performance in small manufacturing firms. Using various statistical techniques confirming the adequacy of the model for small manufacturing firms, the result of the study based on the data collected through questionnaires, revealed that HR practices like recruitment, training, compensation and promotion do affect performance of organization. The intensity of these effect are positively mediated by HR outcomes i.e. employees skill, attitude and behavior. Thus it can be safely concluded that although the nature of HR practices in small firms is informal but the organizational performance can be improved by adopting carefully tailored HR practices keeping in mind the limited resources of small firms.
Highlights
Between mid-century and the late 1970s, Human Resource Management (HRM) research primarily focused on the development of valid and fair Human Resource (HR) practices in large organizations
With respect to the HR outcomes – organizational performance link, we found that all HR outcomes are positively and significantly related with organizational performance
Past research has demonstrated that there exists a relationship between HRM practices and organizational performance, it has neglected to investigate the mediating mechanisms, usually called the “black box”, through which HRM practices are hypothesized to affect organizational performance
Summary
Between mid-century and the late 1970s, Human Resource Management (HRM) research primarily focused on the development of valid and fair Human Resource (HR) practices in large organizations. These studies examine the relationship between various HR practices and individual performance and highlight different forms of discrimination in Staffing and promotion. The latest research examines the implications of enhanced HR practices on organization-wide performance measures (Jakimow, 2011; Guest, 1997) This line of research has led some researchers to propose a normative model of HR practices, referred to as the “best practices” or “high commitment” theory of HRM. The validation of HRM practices with respect to individual and organization performance reinforces their importance as an area of study
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