The Relationship between Human Resources Practices and Organizational Performance in Pharmaceutical Industry of Thailand

Abstract

Effective human resource management practices strongly influence employee performance by increasing employee productivity. Similarly, in developing countries proved that human resource is one of the key factors which contributes towards better employee performance and successful organization. High-quality employees provide a higher return on investment compare to the lower quality employees. Employees with the high potential could fill up the most valuable strategic positions in the organization in future and help in differentiation to gain competitive advantages. Additionally, talented human resources in the organization with high capabilities, knowledge and skills become the underlying source of learning a competitive advantage in the international marketplace. This study collected 320 questionnaires from the employees of the pharmaceutical industry using simple random sampling and after data screening 312 data utilized for further analysis. Structural equation modelling utilized to investigate human resource management practices and their effect on organization performance in the pharmaceutical industry in Thailand. The findings revealed contrary result in Thailand pharmaceutical industry that ethical climate does not have significant impacts on organizational performance. Therefore, it is important to look back the facts why this happens to observe them again with different industries in Thailand with related constructs.