THE CONTRIBUTION OF HUMAN RESOURCE PRACTICES TO ORGANIZATIONAL PERFORMANCE: EVIDENCE FROM SRI LANKAN MANUFACTURING CONTEXT

Abstract

The objective of this paper is to show the importance of human resource (HR) practices as a powerful organizational strategy to pursue better organizational performance. The paper discusses quantitative findings of an empirical study on how HR practices namely training and development, performance appraisal, rewards, and employee relations practices (independent variable) contribute to organizational performance (dependent variable) through employee work effort (mediator). The study is based on a random sample of twenty manufacturing firms in Sri Lanka and the data were collected from senior managers through a structured questionnaire. The analysis of data is based on mean scores, correlations, and four – step regression procedure. The overall results support that employee work effort partially mediates the HR - performance relationship. The results imply that the adoption of HR practices leads to employee work effort, which in turn leads to organizational performance. The most influential HR practices on this relationship are performance appraisal, pay, benefits, and career path.

Keywords: HR practices, Human Resource Management (HRM), Organizational Performance, Employee Work Effort.

For full Paper: fmscresearch@sjp.ac.lk