Title:

The Effects of Human Resource Development on Operational and Financial Performance of Manufacturing Companies: A Large-Scale, Longitudinal Analysis
Author:

Young Sung, Sun, Seoul National University; Choi, Jin Nam, Seoul National University
Publication Date:

01-01-2011
Publication Info:

The Institute for Research on Labor and Employment, UC Los Angeles

Permalink:

http://escholarship.org/uc/item/5xz8p7bk
Building on strategic human resource management (SHRM) literature, we investigate the effect of human resource development (HRD) on the operational and financial performance of manufacturing organizations. We identify four different approaches to HRD that reflect management-driven or employee-focused HRD efforts with either quantitative or qualitative focus. We further propose that HRD practices predict organizational performance by shaping the competence and commitment of employees that reflect the prevailing, untested assumption in the SHRM literature. Multi-source data collected from 207 manufacturing companies at three time points over a five-year period largely support our theoretical propositions. Financial investment and managerial support for HRD show positive effects on employee commitment but not on competence. Perceived benefits of HRD enhance both employee competence and commitment, whereas the amount of participation in HRD is not a meaningful predictor of those employee outcomes. A series of structural equation models confirms that HRD practices improve employee competence and commitment that have direct effects on operational performance of the organization, which ultimately shapes its financial performance. The present study elaborates distinct values of different HRD practices, and highlights the significance of employee outcomes as the mediating mechanism between HRD and organizational performance.

Employee Perception on Commitment Oriented Work Systems

Paul Boselie
Tilburg University - Faculty of Social and Behavioural Sciences; Utrecht University of Applied Sciences

Martijn Hesselink
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Jaap Paauwe
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

Ton Van der Wiele

Erasmus University Rotterdam (EUR) - Department of Economics; Erasmus Research Institute of Management (ERIM)

23 2001, 01 ERIM Report Series Reference No. ERS-2001-02-ORG

Abstract: Human resource management (HRM) does matter! Prior empirical research, summarized and classified in the work of Delery and Doty (1996), Guest (1997) and Boselie et al. (2000), suggests significant impact of HRM on the competitive advantage of organizations. The mainstream research on this topic reveals encouraging results on organizational level. Further research on the perception of the individual employee may reveal new insights in the effectiveness of HRM in organizations. Now we have the opportunity to study recent empirical data of a Dutch employment agency. These data on individual employee level provide us new insights in the perception of commitment oriented HR systems and their relationship with perceived job security and employee trust. High scores on employee participation, payment system, training and development, information sharing, and support of the direct supervisor result in employee trust and high scores on perceived job security.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=370862

IMPACT OF HUMAN RESOURCE MANAGEMENT (HRM) PRACTICES ON ORGANIZATIONAL PERFORMANCE: A MEDIATING ROLE OF EMPLOYEE PERFORMANCE
ABSTRACT The objective of this study was to explore the impact of different Human Resource Management (HRM) practices (i.e. recruitment and selection, training and development, performance appraisal, career planning system, employee participation and compensation system) on Perceived Organizational Performance (POP) and Organizational Financial Performance. Another purpose was exploring mediating role of Employee Performance (EP) between HRM practices and Perceived Organizational Performance. This research study is based on the universalistic perspective showing that a fixed set of best practices can create surplus value in various business frameworks. The Harvard model developed by Beer et al. (1984) guided initial process of domain identification. The most relevant HRM domain recruitment and selection, training and development, performance appraisal, career planning system, employee participation, and compensation system followed by universalistic perspective has been selected for the study. Human Resource Professionals working in different companies of five industries Banking, Insurance, Leasing, Modaraba and Investment were selected for data collection. Primary data from 274 HRM professionals of 129 companies were collected using questionnaire. Secondary data was collected from the published financial reports of the companies listed with Karachi Stock Exchange (KSE) for the period of five years starting from 2004 to 2008. The demographic variables, Industry type, organizational life, no of employees, gender, employee age, education and experience were used with the purpose to find out control variables. The ANOVA identified two variables gender and education significant. Therefore throughout the study these two were used as control variables. For the analysis purpose statistical tools ANOVA, Correlation and Regression were tested using Excel and SPSS. Results identified that all human resource management practices were positively correlated with perceived organizational performance and perceived employee performance, while none of the HRM practice showed substantial contribution towards organizational financial performance. Correlation and beta values of HRM practices were significant with POP in the banking industry. Recruitment and selection ( = .662, p < .001) followed by employee participation ( = .516, p < .01) showed significance in the insurance, ( = .343, p < .001) performance appraisal in the modaraba, and recruitment and selection in the investment industry. Recruitment and selection, training and development and the compensation system significantly contributed towards the Marris Ratio in the modaraba industry. The compensation system in the insurance industry, performance appraisal and compensation system in the leasing industry contributed towards Tobins Q, employee participation in the banking industry, career planning system and employee participation in the leasing industry and compensation system in the modaraba industry contributed significantly towards Return on Equity (ROE). Recruitment & selection and employee participation in the banking industry, compensation system in the insurance industry and the modaraba and training & development in the investment industries contributed

towards Return on Assets (ROA). Employee performance has been tested as mediator between HRM practices and POP. As per recommendations (Barron & Kenny, 1986) partial mediation of employee performance has been proved between HRM practices and POP. This study indicated that organizations using HRM practices effectively on a wider scale generate higher performance. To survive and sustain for the future, it is important that the financial sector companies should implement HRM practices to boost employee performance and the organizational performance index (OPI).
http://prr.hec.gov.pk/Thesis/723S.pdf

7. Employee Perceived Training Effectiveness Relationship to Employee Attitudes (EJ801364)

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Author(s):Sahinidis, Alexandros G.; Bouris, John Source: Journal of European Industrial Training, v32 n1 p63-76 2008

2008-00-00 Journal Articles; Reports Research Peer-Reviewed: Yes Pub Date: Pub Type(s):

Descriptors: Job Satisfaction; Employee Attitudes; Motivation; Program Effectiveness; Program Content; Industrial Psychology; Correlation; Industrial Training; Foreign Countries; Questionnaires; Organizational Development Abstract: Purpose: The purpose of this study is to investigate the relationship between perceived employee training effectiveness and job satisfaction, motivation and commitment. Design/methodology/approach: The study examined the responses of 134 employees and lower managers, of five large Greek organizations, after they had completed a training program. The questions asked contained information about the employee attitudes towards the training received, as well as their attitudes towards their employers. Findings: The results of the study provide support to the hypotheses proposed, indicating that there is a significant correlation between the employee perceived training effectiveness and their commitment, job satisfaction and motivation. Additionally, high correlations were found between the latter three variables. Research limitations/implications: The study is limited to examining employee feelings, not taking into account their personal characteristics, which may be important. Practical implications: The implications of the findings of this study for managers and especially for Human Resource professionals are quite significant, given their roles in funding, designing and delivering training interventions. Not only does it appear to be important, offering training programs to ones employees but, the training program content must be perceived as effective and of value to those participating in it. This will have a positive effect, according to the findings of this study, on key employee attitudes, which appear to be related to a greater or a lesser extent, in the pertinent literature, to organizational performance outcomes including, productivity, turnover and absenteeism Originality/value: The study is ground-breaking, given that there are no prior studies examining the relationship between the variables considered in the present one.

3. Linking Career Mobility with Corporate Loyalty: How Does Job Change Relate to Organizational Commitment? (EJ730160)
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2004-10-00 Author(s):Kondratuk, Tammy B.; Hausdorf, Pub Date: Peter A.; Korabik, Karen; Rosin, Pub Type(s): Journal Articles; Reports Hazel M. Research Source: Journal of Vocational Behavior, v65 Peer-Reviewed: No n2 p332-349 Oct 2004 Descriptors: Employees; Career Change; Models; Professional Personnel; Motivation; Work Environment; Organizational Development; Affective Objectives; Correlation; Occupational Mobility; Performance Factors; Labor Turnover Abstract: Today's organizations are undergoing constant and substantial change due to many internal and external forces. These changes are impacting on the inter- and intra-organizational career mobility of managers and employees. This research assessed the relationship between career mobility history and a recent internal or external job change on organizational commitment using (Allen & Meyer, 1990) three-dimensional model. Professional-level employees participated in three survey administrations over an 18-month time frame. External career mobility history (i.e., number of external job moves over one's career) was negatively related to normative commitment, but not to affective and continuance commitment. Affective and continuance commitment were significantly lower for external movers prior to a move when compared to nonmovers over the same period. In contrast, only continuance commitment was significantly lower for internal movers prior to a move when compared to nonmovers over the same period. Affective commitment increased significantly after the move for both internal and external movers. Implications for research with respect to career mobility and organizational commitment are discussed

Title: A corporate's responsibility to employees during a merger: organizational virtue and employee loyalty Author(s):Rosa Chun, (Based at the Manchester Business School, Manchester, UK) Citation: Rosa Chun, (2009) "A corporate's responsibility to employees during a merger: organizational virtue and employee loyalty", Corporate Governance, Vol. 9 Iss: 4, pp.473 483 Keywords:Acquisitions and mergers, Corporate social responsibility, Employees, Organizational behaviour Article type: Research paper DOI:10.1108/14720700910985016 (Permanent URL) Publisher: Emerald Group Publishing Limited Abstract:

Purpose A company may ignore its non-obligatory responsibilities to employees during a major change such as a merger, leading to their disaffection and feeling of insecurity. The purpose of this paper is to explore how employee views of the merged organization differ by their pre-merger background, and to explain the impact of the poorly perceived organizational virtue on employees' emotional response to the merged organization including satisfaction, emotional attachment, job security and loyalty.

Title:Balancing HRM: the psychological contract of employees: A multi-level study Author(s):Marille Sonnenberg, (University of Tilburg, Tilburg, The Netherlands), Bas Koene, (RSM Erasmus University, Rotterdam, The Netherlands), Jaap Paauwe, (University of Tilburg, Tilburg, The Netherlands) Citation:Marille Sonnenberg, Bas Koene, Jaap Paauwe, (2011) "Balancing HRM: the psychological contract of employees: A multi-level study", Personnel Review, Vol. 40 Iss: 6, pp.664 683 Article type:Research pape DOI:10.1108/00483481111169625 (Permanent URL) Publisher:Emerald Group Publishing Limited Abstract:

Purpose This study aims to bridge two streams of HRM research: organisation level research on HRM and performance and individual level research on employee work perceptions and behavioural performance. This study seeks to analyse the value of organisation level HRM practices for individual level employees' assessment of the degree of violation of their psychological contracts. It also aims to examine the contribution of commitment HRM practices and traditional HRM practices in explaining perceptions of psychological contract violation.

Title: Relationship between Recruiting Sources and Employee Performance, Organizational Loyalty, and Absenteeism Author(s): Mohammad Khair" S Abu Zaid ; Source: Dirasat Journal, Administrative sciences Volume: 31, Issue: 2, 2004, 234 - 247 Abstract: The main objective of this study is to perform an empirical analysis on the relationship between the recruiting sources and organizational loyalty, employee performance, and absenteeism. The required data is collected through a self-administered questionnaire. The sample of the study contained 254 salesmen from 15 insurance companies. The data was analyzed by using discriminate analysis (t-test) to compare between two populations, one way anova (F-test). The main conclusions of this study are: First: The main recruiting source for the insurance companies depends on: newspapers, referral source, placement offices, and direct application. Second: The salesmen performance recruited from placement offices is less than that from other sources, while absenteeism of salesmen recruited from direct application is more than from other sources. Third: There is no difference in organizational loyalty among recruitment sources. Forth: The employee performance of informal recruiting sources is greater than that from formal sources, but the level of absenteeism is higher than that from formal sources. Also, the study didnt find a significant difference between the two sources regarding organizational loyalty. Fifth: There is a positive relation between organizational loyalty and employee performance...

http://www.arjournals.info/countarticle.php?art_id=10165&ccode=JO&flag=jordan&name=Jordan&pag enum=146

An empirical study of employee loyalty, service quality and firm performance in the service industry

Rachel W.Y. Yeea,

a

, Andy C.L. Yeungb,

, T.C. Edwin Chengb,

Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong

Received 25 September 2008; Accepted 20 August 2009. Available online 28 October 2009.
Abstract

Taking an operational perspective on the relations between employee loyalty and business performance, we examine the relationships among employee loyalty, service quality, customer satisfaction, customer loyalty and firm profitability, and the contextual factors influencing these relationships. We developed a research model grounded in the service-profit chain notion of Heskett et al. (1994) and empirically tested the model by conducting a survey of 210 highcontact service shops in Hong Kong. Using structural equation modeling (SEM), we observed that employee loyalty is significantly related to service quality, which in turn impacts customer satisfaction and customer loyalty, ultimately leading to firm profitability in high-contact service industries. Using multiple-group analysis of SEM, we found that the effect of employee loyalty on firm profitability through service quality, customer satisfaction and customer loyalty is robust under different scenarios of employeecustomer contact level, market competitiveness, and switching cost in the sampled shops. This finding supports the generalizability of the observed relationships in various operating contexts.