Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh

Abstract

Formulation and execution of Strategic Human Resource Management (SHRM) practices and its effect on perceived financial performance of any organization is a burning issue in the globalized competitive business era. This study aims to find out the relationship between SHRM and financial performance to ensure the sustainability and competitive advantage of the selected scheduled private commercial banks in Bangladesh. The research has been conducted on managers as sample of some private commercial banks during the period of January to November 2012 to collect the primary data. To evaluate the financial performance researchers have used annual reports of 2011 and 2012, journals, web sites etc. as secondary source. Survey research findings indicate that strategic integration and development of HRM were practiced to a full extent in the sampled firms. From the cross sectional analysis, the financial performance indicators show that the capital adequacy was mostly at satisfactory level compared with eh industry average. The quality of assets loan varies from bank to bank but most of them are performing at the desired level. Management efficiency was out-performing the standard in most of the cases. The profitability indicators ratio was also better than the average of private commercial banks. The result presented in this study suggests practicing intensive SHRM so that improved financial performance can be asserted to sustain in the competitive environment.