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The impact of
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Received 21 October 2011
Revised 16 April 2012
3 December 2012
Accepted 15 April 2013
Introduction
Employees are one of the most important assets of an organization as they contribute
to its growth and success (Danish and Usman, 2010). Malik et al. (2010) concluded
that in the era characterized by rapid and continuous change, knowledge capital must
be retained in order for organizations to be productive and responsive to the needs of
their stakeholders. Likewise, universities as training and research institutions need
to attract, retain and develop their employees. Universities need employees who are
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well trained and motivated so that they are committed to their work of conducting
research and training for the development of the nations (Lew, 2009). Research
literature has shown that effective application of some human resources management
(HRM) practices enables university employees to be committed to their work for good
performance of the universities (Chen et al., 2009; Shahzad et al., 2008).
Implementation of appropriate HRM practices for university employees will
promote university performance as Lew (2009) noted that employees play a strategic
role in improving ratings in key areas like research quality, academic reputation of
faculty, academic program quality, research contribution to society, preparation
of tomorrows leaders and quality of graduates. Realizing the importance of promoting
university performance, many universities are embarking into strategizing its
HRM practices and Malaysia universities have jumped on the bandwagon. Even
its government aspires to turn Malaysia into an international hub for world class
education through establishment of top and leading universities (Sirat, 2005). For this to
materialize, it is significant that the countrys universities improve their world class
university ranking by attracting and retaining excellent and experience academicians
and support staff.
In 2010, the Malaysian Government launched its economic transformation
programme (ETP) which is the road map for fast tracking its economic development.
One of the sectors which will play an important role is education especially the higher
learning institutions. The nation needs more human resources capable of performing
different activities both in public and private sectors. Subsequently, the higher learning
institutions are expected to produce high-quality human resources. Training and
development of well-qualified human resources will depend on the performance
of the universities (Malik et al., 2010) subjected to effective implementation of different
bundles of HRM practices such as selection, compensation, information sharing,
participative decision making, job definition, training, career planning and
performance management among others (Delery and Doty, 1996; Smeenk et al., 2006).
Studies on the impact of human resource practices on performance with particular
reference to Malaysia have focussed on the private sector (Osman et al., 2011a;
Abdullah et al., 2009; Lew, 2009). Literature indicates that past studies have also
focussed on the impact of HRM practices on university performance with
academicians as the center of focus (Chen et al., 2009; Malik et al., 2010; Lew, 2009;
Rowley, 1996). Little empirical research has been conducted to examine the effects of
HRM practices on public universities performance in Malaysia. Therefore, this study is
to examine the impact of HRM practices on organizational performance in Malaysia
with a particular focus on a public university. The next section reviews relevant
literature followed by methodology and analyses of the results. Finally, the conclusions
and implications for the study are discussed.
Literature review and hypotheses development
Previous studies have found that HRM practices have an effect on employee
performance and competitive advantage of an organization (Guest, 2002; Wright
et al., 2003; Balochi et al., 2010; Qureshi et al., 2010; Khan, 2010). Pfeffer (1994)
identified 16 practices which can enhance a firms competitive advantage such as
employment security, selectivity in recruiting, information sharing, participation
and empowerment, training and skill development, incentives, high wages,
promotion among others. Meanwhile, Guest (2002) argued that the impact of
HRM practices on organizational performance depends on the response of workers
The impact of
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and selected, the organization will fail to achieve its objectives and will run
into a variety of personnel problems: high turnover, low productivity, high rates of
absenteeism and employee stress (Storey, 2007). Therefore, to maximize competitive
advantage a company should choose the recruitment method that produces the best pool
of candidates efficiently and effectively (Kleiman, 2000).
Recruitment is one of the major functions of HRM and it helps managers attract
and select best candidates which in turn leads to improved organization performance
(Rehman, 2012). Formal recruitment methods include newspaper classified
advertisements, network bulletins, posters and human resource banks, while
informal methods include personal connections and introductions through teachers
and other staffs (Chen and Cheng, 2012). The effectiveness of different recruitment
sources for new employees has been the topic of speculation and research for over
50 years and this effectiveness has primarily been assessed by examining job survival
rates and job performance (Breaugh, 2008; Rehman, 2012; Zottoli and Wanous, 2000).
In addition, Ferris et al. (2002) found that effectiveness of recruitment practices
has an impact on organizational effectiveness. Similarly, many researchers agreed
that effective recruitment and selection will lead to competitive advantage and high
performance of organization (Pfeffer, 1994; Storey, 2007; Zheng et al., 2006; Werther and
Davis, 1996). Therefore, we suggest the following hypothesis:
H1. Recruitment and selection has significant relationship with organizational
performance.
Training and organizational performance
Training refers to the methods used to give new or present employees the skills,
knowledge behaviors and other abilities they need to perform their jobs
(DeNisi and Griffin, 2001). Training is intended to modify individuals skills or
attitudes (Herold and Fedor, 2003). Training also contributes to the development
of positive dispositions toward growth and change as enacted by individuals as
well as groups and teams (Paul, 2009a). Given the increasing complexity of the tasks
and skills needed in modern society, developing effective training strategies is of
tremendous practical importance, i.e., training that improves performance of both
trained and untrained tasks would be highly efficient (Barzegar and Farjad, 2011;
Lee et al., 2012; Tung-Chun, 2001). Training enhances employees capabilities which
is instrumental in improving overall organizational performance (Mackelprang et al.,
2012; Millar and Stevens, 2012). Previous studies reveal that there is a positive
relationship between training and organizational performance (Qureshi et al., 2010;
Khan, 2010; Abdullah et al., 2009; Katou and Budhwar, 2006; Chang and Chen,
2002; Huselid, 1995; Singh, 2004). For example, Khan (2010), Katou (2008) and
Qureshi et al. (2010) concluded that HRM practices have profound effect on
organizational performance. HRM practices such as selection and training
and development enhances employee performance by providing relevant skills.
Similarly, Paul (2009b) revealed that employee training is also significant for
organizational performance as it is a mean through which organizational culture
and employee behavior can be aligned to outcomes. Thus, the following hypothesis
is suggested:
H2. Training has significant relationship with organizational performance.
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The questionnaire instruments were adapted from Singh (2004), Qureshi et al. (2010)
and Shahzad et al. (2008). The instrument was divided into three parts: Human
Resource Practices, University Performance and Demographics. The first part consists
of 35 items measuring the degree to which HRM practices construct including
recruitment and selection, training, performance appraisal, career planning, job
definition, employee participation, compensation are being applied in the chosen
university. The participants were asked to rate the 35 elements based on five-point
Likert scale ranging from 1 strongly disagree, 2 disagree, 3 neutral, 4 agree
and 5 strongly agree.
The second part measures university performance through 11 items. The
participants were asked to rate their perceived university performance against other
universities based on five-point Likert scale ranging from 1 strongly disagree,
2 disagree, 3 neutral, 4 agree and 5 strongly agree. The third part covers
demographic questions. It includes items such as age, gender, staff category, location,
department/school/faculty, work experience and academic qualification.
Findings
Out of 1,000 questionnaires distributed to the university staff, 329 questionnaires were
collected. In total, 29 incomplete questionnaires were excluded from the analysis.
Table I shows profile of the respondents. Out of the 300 participants, 111 were below
30 years, 98 were within the range of 30-40 years, 53 were within the range of
41-50 years and 38 were above 50 years. Majority of the respondents were below 40
years. Out of 300 participants, 33.7 and 66.3 percent were male and females,
respectively. Academic and support staff represent 30.3 and 69.7 percent of the
respondents, respectively.
Table II shows the factor analysis results. The principal component factor
analysis with varimax rotation approach were used, and resulted in eight factors with
factor loading ranging from 0.766 to 0.3915 indicating that each item loaded
significantly in the corresponding factor. In addition, Cronbach a for each factor
ranging from 0.704 to 0.922 for selection and recruitment, job definition, employee
participation, training, career planning, performance appraisal, compensation
and UTM performance.
Table III indicates the results of correlation analysis where all variables have
positive relationship and statistically significant at po0.01. The results are in line with
the findings of Qureshi et al. (2010) where it was found that the variables are correlated.
Career planning and performance appraisal have the highest correlation of 0.704 while
job definition and training has the lowest correlation of 0.434.
Background information
Age
Gender
Table I.
Profile of respondents
Staff category
Range
Frequency
Below 30
30-40
41-50
Above 50
Male
Female
Academicians
Support staff
111
98
53
38
101
199
91
209
37.0
32.7
17.7
12.6
33.7
66.3
30.3
69.7
0.663
0.628
0.669
0.699
0.694
0.693
0.766
0.736
0.725
0.703
Factor
1
0.598
0.609
0.651
0.644
0.677
0.729
Factor
2
Factor
3
Factor loading
Factor
Factor
4
5
Factor
6
Factor
7
(continued)
Factor
8
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HRM practices
133
Table II.
Exploratory factor
analysis and reliability
analysis
Factor
2
Table II.
0.451
0.794
0.761
0.712
0.694
0.683
Factor
3
0.757
0.715
0.782
0.757
0.724
0.692
0.676
0.611
0.703
Factor loading
Factor
Factor
4
5
0.559
0.623
0.587
Factor
6
Factor
7
134
Factor
1
(continued)
Factor
8
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Factor
1
3.084
6.048
Factor
2
2.179
4.272
Factor
3
1.91
3.744
1.563
3.064
Factor loading
Factor
Factor
4
5
1.494
2.928
0.556
Factor
6
1.326
2.6
0.391
0.493
0.461
0.471
0.463
0.518
0.438
Factor
7
1.185
2.324
0.463
0.458
0.432
0.593
0.581
0.566
0.543
0.535
Factor
8
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Table II.
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R&S
(R&S)
(T)
(PA)
136
(CP)
(EP)
( JD)
(EC)
(UP)
Table III.
Correlation matrix
1
0.592**
0.000
0.612**
0.000
0.544**
0.000
0.457**
0.000
0.485**
0.000
0.482**
0.000
0.507**
0.000
PA
CP
EP
JD
EC
UP
1
0.665**
0.000
0.589**
0.000
0.453**
0.000
0.434**
0.000
0.470**
0.000
0.497**
0.000
1
0.704**
0.000
0.620**
0.000
0.578**
0.000
0.549**
0.000
0.529**
0.000
1
0.628**
0.000
0.558**
0.000
0.582**
0.000
0.536*
0.000
1
0.547**
0.000
0.548**
0.000
0.491**
0.000
1
0.480**
0.000
0.504**
0.000
1
0.532**
0.000
Notes: R&S, recruitment and selection; T, training; PA, performance appraisal; CP, career planning;
EP, employee participation; JD, job definition; EC, employee compensation and UP, university
performance. **Correlation is significant at the 0.00 level (one-tailed)
Table IV shows that there are significant relationship between recruitment, training,
performance appraisal, career planning, employee participation, job definition,
compensation and university performance, thus, H1-H7 were supported.
Discussion and conclusions
The objective of the study is to examine the impact of HRM practices on organizational
performance. The study revealed that HRM practices have significant impact on
organizational performance. It has been found that university performance can be
attributed to HRM practices including recruitment, training, performance appraisal,
career planning, employee participation, job definition and compensation. This study
is consistent with Qureshi et al. (2010), Chen et al., 2009, Khan (2010), Huselid (1995),
Rizov and Croucher (2009), Chang and Chen (2002).
Universities need to have an effective recruitment policy to promote scientific selection
of prospective employees. The heads of department and assistant registrars should
participate in selection process as they have different preferences in the candidates.
Variables
Table IV.
Regression analysis
results
Recruitment
Training
Performance appraisal
Career planning
Employee participation
Job definition
Compensation
Overall
Proposed effect
R2
b-coefficient
F change
Significance level
0.257
0.247
0.28
0.288
0.241
0.254
0.283
0.437
0.507
0.497
0.529
0.536
0.491
0.504
0.532
103.286
97.89
115.796
120.269
94.554
101.444
117.53
32.439
0.000
0.000
0.000
0.000
0.000
0.000
0.000
0.000
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HRM practices
137
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Corresponding author
Dr Muslim Amin can be contacted at: tengkumuslim@yahoo.com