Strategic Human Resource Management and Organizational Performance: An Investigation of Profit-Oriented Companies in Zambia

Abstract

Human resources play a vital role in achieving organisational performance. A study on 169 profit-making organisations in Zambia examined the impact of different Strategic Human Resource Management (SHRM) components on performance. A quantitative approach was used, and the questionnaire was divided into three parts. The first part collected demographic data, the second part collected information about SHRM components such as Incentives and Rewards, Formal Training System, Recruitment and Selection, Formal Performance Appraisal, Career Development, Internal Career Opportunities, and Organization Development, and the last part collected information about organisational performance. A stratified random sample of 169 organisations’ managers was studied. According to the results, managers highly recommended Incentives, Rewards, recruitment, and Selection to achieve excellence. Formal Performance Appraisal received moderate evaluation, while Career Development received the least. The study concluded that SHRM components affect organisational performance regarding revenue growth rate, return on equity, return on assets, and profitability (p < 0.01). The study recommended aligning the SHRM strategy with other activities to improve performance, focusing on recruitment. Integrating HR practices with overall strategies can bring numerous benefits to organisations. By aligning these two critical components, companies can ensure that their human resources are being utilised effectively and efficiently. This can lead to improved productivity, increased employee engagement, and greater success. Therefore, it is important for organisations to carefully consider the advantages of integrating HR practices with their overall strategies and operations.