About the Author(s)


Muhammad Irfan symbol
Department of Economics, Faculty of Business Administration, Comsats University Islamabad, Islamabad, Pakistan

Nabila Khurshid Email symbol
Department of Economics, Faculty of Business Administration, Comsats University Islamabad, Islamabad, Pakistan

Jamila Khurshid symbol
Department of Economics, Faculty of Business Administration, University of the Poonch, Rawalakot, Pakistan

Arif Masih Khokhar symbol
Department of Economics, Faculty of Business Administration, Iqra University, Islamabad, Pakistan

Citation


Irfan, M., Khurshid, N., Khurshid, J., & Khokhar, A.M. (2023). Human resource development and organisational performance: Evidence from Pakistan. SA Journal of Human Resource Management/SA Tydskrif vir Menslikehulpbronbestuur, 21(0), a2020. https://doi.org/10.4102/sajhrm.v21i0.2020

Original Research

Human resource development and organisational performance: Evidence from Pakistan

Muhammad Irfan, Nabila Khurshid, Jamila Khurshid, Arif Masih Khokhar

Received: 16 June 2022; Accepted: 12 July 2022; Published: 22 Mar. 2023

Copyright: © 2023. The Author(s). Licensee: AOSIS.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Purpose: This study is an endeavour to find the effect of human resource development on organisational performance. Human resource development is essential for better organisational productivity and effectiveness.

Research purpose: This study specifically investigates the impact of organisational context, resourcing, training and development, skills, attitude and behaviour on organisational performance.

Design/Methodology/Approach: This research study focuses on manufacturing companies in Islamabad and Rawalpindi, Pakistan. A standardised questionnaire with a response rate of 85% was used to gather data from a random sample of 50 manufacturing companies. The structural equation modelling technique was used for data analysis.

Findings: Organisational performance has a positive association with all the independent factors studied in this article: resourcing, training and development, employees’ abilities, employee attitudes, employee behaviour and the organisational context. In addition, the outcomes of this research support the idea that human resource development methods might have a favourable influence on manufacturing business performance. There is no direct correlation between resourcing and organisational performance, although training and development activities are favourably connected with it.

Contribution: For the first time, this research aims to evaluate how human resource management (HRM) influences organisational performance in Pakistan by examining theoretically created pathways between key exogenous and endogenous factors.

Keywords: human resource development; organisational performance; manufacturing companies; Pakistan; structural equation modelling.

Introduction

Using human resource (HR) practices as vital strategic tools, companies may enhance employee morale and productivity by fostering positive behaviour and maximising workers’ existing knowledge, skills and attitudes and talents (Bartlett, 2001; Bates & Chen, 2004; Katou, 2009). A consequence of this effect is that human resource development (HRD) is now seen as the most basic and essential function in the human resources system (Dhamodharan, Daniel, & Ambuli, 2010; Gubbins, Garavan, Hogan, & Woodlock 2006). According to Lopez-Cabrales and Valle-Cabrera (2020) and Evans and Davis (2015), HRD programmes have an impact on company performance by creating an effective and productive staff that is able to meet the company’s aims and objectives. Every business must invest in employee development and training if it is to achieve greater results (Barton & Delbridge, 2004; Degraft-Otoo, 2012). The HRD system has become crucial and necessary for the survival of any company in today’s competitive globalisation and liberalisation environment. When the capacity for organisational learning is greater, high-performing work environments have a favourable impact on corporate performance (Zhu, Liu, & Chen, 2018). Because of this consequence, companies must build their HRD system to meet their objectives and aims for HRD to be an effective mediator in helping firms expand and develop their workers’ capacities to improve performance and profitability (Dhar, 2019). Furthermore, Dhar et al. (2017a) concluded that the components of HR accounting practice are important variables in the success of any organisation. Human resource development trends in developing nations seem to be moving slowly and steadily; enterprises in these countries are unable to devote sufficient time and resources to staff training and development. In comparison to the organisations in rich nations, the performance of developing-country organisations is quite poor.

Human resource development concepts in Pakistan remain ambiguous, and firms are unsure how to train and develop their staff for current tasks and future challenges. As a result, the organisation confronts major financial difficulties because the cost of training and growth is extremely high. As a result, to survive, organisations only spend on their most pressing demands, and they are unable to focus on the training and development of their staff in accordance with global HRD trends. However, global companies spent US$358 billion on training and development in 2020 (Statista, 2021). Consequently, Pakistani corporations’ performance is much worse than that of businesses in the United States of America and the United Kingdom. The most important question is whether or not HRD has a major influence on organisational performance in Pakistani industrial companies. Human resource development’s effect on Pakistani manufacturing production and performance may be better understood if this subject can be satisfactorily addressed.

As a result, this research aims to provide an integrated framework for analysing the influence of human resource management (HRM) performance on Pakistani manufacturing company. Instead of using the traditional regression equation technique, structural equation modelling (SEM) was used to include and empirically test the fundamental components of the HRM-performance linkage perspective. In addition to the analytical techniques employed in this research, a variety of contextual factors are taken into consideration, such as management style, organisational culture, the translation of HRM strategy into a clear set of work programmes and deadlines and HRM’s capacity to be proactive in strategy formation. For the first time, this research aims to evaluate how HRM influences organisational performance in Pakistan by examining theoretically created pathways between key exogenous and endogenous factors.

Operational model and hypothesis

The Becker and Huselid (1998) HRM performance linkage model has been characterised as the ‘most logical and detailed description of the mechanisms via which HR practices effect corporate performance’ (Wright, Gardner, & Moynihan, 2003). According to this concept, HRM approaches have a direct effect on employee skills and motivation, which in turn have a direct impact on the operational success and financial performance of a firm.

Impact of recruitment and selection on organisation’s performance

According to Onyango (2015), a company’s long-term success depends on its ability to properly resource its personnel. Recruitment and selection practices have a direct impact on an organisation’s effectiveness (Khan, 2010). When Abomeh (2013) looked at the influence of Abuja’s resourcing tactics on the organisation’s performance, she came to the conclusion that the efficiency of the recruiting and selection process had a major impact. Furthermore, Ogonyomi and Ojikutu (2014) found that Lagos-based recruiting and selection procedures should be outsourced to improve organisational performance. Personnel resourcing and development, according to Appelbaum and Reichart (1998), form the foundation of the examination-based viewpoint on which the group of employee assets and talents of an organisation is established. Dhar et al. (2017b) explored the impact of Islamic HR practices on organisational performance though organisational commitment. They conclude that Islamic HR practices have a significant impact on organisational performance through organisational commitment.

Impact of training and development on organisations’ performance

Kidombo, K’obonyo and Gakuu (2012) said that one of the primary goals of employee training and development is to help them become more effective in their work. According to Kalu and Akinyokun’s (2005) case study research, training and development of personnel have a substantial influence on the success of organisations. In addition, according to Kalu and Akinyokun (2005), Ombui et al. (2014) and Abogsesa and Kaushik (2017), for a company to succeed, it is important to encourage employees who are more driven than their colleagues. Workers’ performance and training and development were clearly linked. According to a research conducted by Ahmed (2014) on Kenyan employee performance, training and development have a considerable impact on an organisation’s productivity. According to Raghuram (1994), employees’ fundamental competencies are the most critical aspect in retaining competitive advantage and organisational success. Human resources are the source of competitive advantages and not the policies of any firm for recruiting, using and keeping personnel. Recruitment and selection may also be seen as a significant and wonderful starting point for assembling common human resources and talents. Recruitment and selection productivity is tied to an employee’s talents morale, expertise, work knowledge, potential and productivity (Khan & Abdullah, 2019). Expanding the talents and capabilities of workers is only expected to provide future returns via increased profitability and performance of the company (Shih, Chiang, & Hsu, 2006).

Effect of values and norms on organisations’ performance

According to cultural variables, such as values and norms, the personality and performance of the company are intimately linked to the values and beliefs of its employees (Søndergaard, 1994). Schwartz (1994) stated that employees’ conduct and the organisation’s long-term viability are influenced by cultural and psychological variables. Dhar, Mutalib and Sobhani (2019) explored the moderating effect of motivation between human capital and organisational performance through innovation capability among Dhaka Stock Exchang’s (DSE) listed Islamic banks of Bangladesh. The study’s findings specified that human capital has positive effects on organisational performance through innovation capability and among the dimensions of human capital, learning and education has the most significant effect on organisational performance. Moreover, motivation, being a moderator, diminishes the positive relationship between human capital and performance.

Blau (1964) and Eisenberger, Cummings, Armeli and Lynch (1997) opined that social trade theory and ideal standards of delayed correspondence trade have a significant influence on the organisation’s performance and output. For understanding the apparent organisational support, Shore, Tetrick, Lynch and Barksdale (2006) proposed that the type of employment be considered. Through improved working conditions, a helpful and cheerful workplace, a reward system and an overhaul of the surroundings, the company has given its employees a better open door with the purpose of increasing their competitive advantages over their rivals (Bartlett, 2001). Employee motivation, sense of responsibility and job satisfaction are all influenced by the process of resourcing and progression, which aims to provide workers with new capabilities (Fey, Björkman, & Pavlovskaya, 2000; Wright et al., 2003). Experts generally agree that one of the most important influences on performance is one’s level of motivation (Hardré, 2003).

Workers’ attitude and organisations’ performance

According to Eisenberger, Huntington, Hutchison and Sowa (1986), the perceived organisational support for the growth and profitability of the organisation speaks to the wishes and impressions of the company’s personnel. To paraphrase Gouldner’s (1960) theory, workers who have a good attitude and behave well contribute to the company’s overall productivity and performance, which in turn boosts their own performance. A 1995 study by Shore and Shore found that employees anticipate moral and genuine support, money-related assistance, promotion, various sorts of aid and help from the company. As George and Brief (1992) pointed out, it is crucial to keep the final aim of increasing occupation effectiveness and organisational performance in mind. When resources are distributed fairly and equally, according to Shore and Shore (1995), workers are more likely to show genuine loyalty to their organisations. The bulk of the company’s rules and practices have a significant impact on employee attitudes and behaviour. Employee training and development may provide a clear message to employees that the company’s best interests are served by keeping them for a longer duration (Katou & Budhwar, 2007).

Employee behaviour, attitude and organisations’ performance

Moreover, in Yoon and Lim (1999) found that in order to boost performance and productivity and organisational support, it was considered that good conduct from the organisation towards its workers may lead to these outcomes; on the other hand, negative behaviour from the organisation towards its employees could lead to these outcomes. According to the research of Rhoades and Eisenberger (2002), pleasant treatment of workers, organisational awards, decency and the flow of resources are all directly linked to the appearance of organisational support. Saks (2006) found that workers who felt supported by their bosses were more likely to carry out their responsibilities to the best of their abilities. Mullen et al. (2006) said that trainings, obligation and exchange of information may also have a negative influence on organisational support’s perceived quality. According to Campbell’s occupation performance theory (Campbell, 1990), workers’ attitudes influence the behaviour of their colleagues, which in turn affects the performance of the organisation (Wright et al., 2003). There is evidence to support the idea that employee satisfaction, inspiration and a sense of civic responsibility all play a role in reducing employee attrition. Representatives who are dissatisfied with their jobs and who have lost their sense of purpose and accountability to their employers are more likely to leave the company (Chiu & Francesco, 2003; Elangovan, 2001). Organisational inspiration and obligation are often seen as being intimately linked to a company’s ability to meet its workers’ needs, although this is not always the case (Bartlett, 2001).

Kuchinke (2003) said that an organisation’s competitive position is strongly influenced by its impalpable characteristics. According to Robbins and Sanghi (2007), the attraction of organisational traits, norms and beliefs has a significant influence on the organisation’s ability to perform. According to Stewart (2010), workers’ standards have a direct impact on the success of the organisation’s culture and performance management. It has been shown by Brooks (2009) that the trustworthiness of workers is dependent on their capacity to learn and get acquainted with the company culture in order to improve their performance at work. Lee and Chuang (2009) stated that ‘superior’ leaders raise the potential of subordinates and satisfy their needs in terms of achieving corporate objectives via various methods. The idea that initiative may be used to provide inspiring expectations for employees and to improve their capacity for acceleration and growth is stated by Sears and Rowe (2003). As per Davidmann (1995), the effectiveness of any organisation is for the most part made steadfast by the methodology of work co-appointment, duty level of workers and the level to which workers participate with each other, with management and group. Organisational setting is relied upon to emphatically (Budhwar & Sparrow, 1997) or adversely (Miles & Snow, 1984; Trompenaars, 1993) be associated with HRM policies and outcomes, contingent upon the particular methodology used. Numerous scientists additionally see that behaviour may not influence profitability (Pritchard, 1992). Fey et al. (2000) may likewise give some backing to the utilisation of staff skills, attitudes, motivation, retention and development as interceding variables between HRM policies and organisation performance.

Hypothesis for research

H1: Organisational context positively influences (1) sourcing, (2) employees’ skills and (3) employees’ behaviour.

H2: Organisational context positively influences (1) training and development and (2) organisational performance.

H4: Training and development positively influence (1) employee skills, (2) employee attitude, (3) employee behaviour and (4) organisational performance.

H5: Employees’ skills positively influence (1) employees’ attitude and (2) organisational performance.

H6: Employee’s attitude positively influences (1) employees’ behaviour and (2) organisational performance.

H7: Employees’ behaviour positively influences organisational performance.

A model’s fundamental linking route may be traced back to this discussion: Organisational context → resourcing → development → skills àattitude → behaviour → organisational performance.

Taking into consideration the causal pathway model, the overall structure of intervening models refers to an ‘aberrant connection’ and a ‘advance[ed] linkage’ (Black, 2001) that link the development of skills, attitudes and behaviour and the success of the organisation. The ‘immediate link’ between a company’s resourcing and development strategies and its employees’ abilities and mindsets and behaviour, as well as between organisational performance, is stated by Schuler and Jackson (2008).

Methodology

Sampling technique, sample size and data collection

This research study focused on manufacturing companies in Islamabad and Rawalpindi, Pakistan. Islamabad is the capital of Pakistan, while Rawalpindi is close by; both cities are regarded as twin cities. There are a total of 269 manufacturing companies, which serve as the population of this study. A simple random selection approach was used to choose a sample of 50 manufacturing companies for further investigation. The data for this inquiry were gathered via the use of a standardised research questionnaire. Katou and Budhwar (2006) developed the instrument that was used to measure the seven variables of the model. A total of 300 respondents were selected via chance sampling, however only 256 were able to complete a useable questionnaire, resulting in a response rate of about 85% overall. Organisational performance was constructed using six factors selected by the researcher: effectiveness, efficiency, development, innovations and the overall quality of organisational performance, in addition to stakeholder satisfaction and satisfaction with the study’s findings. It is HRD’s role to affect the fundamental issue of organisational performance, which is assessed by the dependent variable of organisational performance (Wang, Dou and Li, 2002). Respondents were asked to rate their organisation’s performance in the preceding year on a scale of 1–5, with 1 being the worst and 5 being the best, in order to reduce the number of errant deviations and anomalies.

Statistical techniques

Structural equation modelling and descriptive statistics were used to examine the data in this research. Using SEM and the AMOS 20 (IBM, Armonk, New York, United States) software, this study was able to deconstruct its data. To examine microscopic structures in detail, AMOS, SPSS @ IBM module is used to do Structural Equation Modeling (SEM), route analysis and confirmatory factor analysis (CFA). Analysis of covariance or causal modelling also exceuted by using this software.

Ethical considerations

This article followed all ethical standards of research and no human subject and animal object is used for study analysis.

Results

Descriptive statistics

Study results as reported in Table 1 show that the respondents’ answer direction is more towards agreement for particular variable items with higher mean values. A greater proportion of respondents’ responses were in disagreement, as shown by the lower mean values.

TABLE 1: Descriptive statistics.
Measurement development
Reliability

For assessing the unidimensionality, Cronbach’s alpha was used. According to Nunnally and Bernstein (1994) the adequate value of Cronbach’s alpha is 0.70. Table 2 illustrates the Cronbach’s values for all constructs. Nunnally’s Cronbach’s alphas were used to verify the internal consistency of the building (1978). A value of more than 0.70 was considered acceptable, with an acceptable alpha of 0.60–0.65. There was a significant increase in reliability while comparing the review instrument with the causal model, as seen in Cronbach’s alphas in Table 2, which increased from 0.70 to 0.86. Component loadings of 0.71 indicate enough individual reliability on its individual construct, which suggests that more than half of the variance in the business-like variable is imparted to the construct.

TABLE 2: Cronbach’s alpha.
Measurement development

There are several statistical approaches that may be used to examine the data as a single stream to better understand the model fit. Component analysis-based construct measurements are examined in this section to see how reliable they are. To determine whether each monitored variable should be maintained or avoided, reliability analysis tests examine the gage’s internal consistency. A generic measurement model and a particular measurement model for each construct gauge are used to verify that all measurements are legitimate and consistent with the construct’s dimensionality.

FIGURE 1: The operational human resource management–performance linkage casual model.

Fit indices

The use of SEM has grown over time, with three forms of SEM now recognised: primary models (type 1), followed by sequential structural model (type 2) and a combination of both (type 3) are all that are included in the third structure (McQuitty, 2004). For the purpose of conducting a comprehensive parameter test, this assessment research employs type 3 techniques, which integrate measurements with structural parameters. Quantitative data analysis approach SEM is used to establish and evaluate theoretical links between endogenous and exogenous variables (Byrne, 2001). This method integrates regression and component analysis into a single set of measurements, rather than using a single factual methodology. It starts with a model definition that partners factors acknowledged as influences on various variables and methods in which these effects are accompanied by the SEM methodology (Kline, 2005). For all the work that goes into developing a measurement strategy and specifying the theories that will be used to support it, the data that are collected is the final product (Diamantopoulos & Siguaw, 2000).

FIGURE 2: Estimated model using structural equation modelling.

FIGURE 3: Individual results.

Throughout the estimation process, fit statistics should be examined to check whether the proposed model is a fit for the data and if it is not, any required revisions should be made to enhance the model’s fit. Fit statistics may be broken down into three main categories according to Holmes-Smith et al. (2004):

  1. Absolute fit indices.
  2. Incremental fit or comparative fit indices.
  3. Measures of model simplicity.

Different types of indices are used to measure fit, and there are a few rules of thumb for determining a satisfactory match (Byrne, 2001). Researchers and academics from across the world provide their preferred fit indices in a variety of works. According to Knight and Cavusgil (2004), the comparative fit index (CFI), non-normed fit index (NNFI) or Tuker–Lewis indix (TLI), Delta2 (or incremental fit index, IFI), relative noncentrality index (RNI) and root mean square error of approximation (RMSEA) in LISREL 8 (Scientific Software International, Inc., Chapel Hill, North Caroline, United States) were fit metrics. Goodness-of-fit statistics, developed by McQuitty (2004), are less sensitive to the sample size. Among these indices are TLI, proposed by Marsh et al. (1988); IFI, suggested by Bentler (1990); and RMSEA, CFI and TLI recommended by Fan et al. (2003). Fit indicators CMIN/DF (chi-square divided by degree of freedom), IFI, TLI, CFI and RMSEA are evaluated in this research because these fit indices have been used in the past to evaluate model sensitivity and model complexity. In addition, the following subset is cited as a fit measure in the subsequent sections.

This measure of absolute discrepancy between indirect variances and variances to trial sample variances and covariance is known as CMIN/DF.

The IFI, TLI, normed fit index (NFI) and comparative fit index are often-used indices in SEM to quantify the relative improvement in model fit at the baseline level of comparison, respectively. Between 0 and 1 is the ideal range of values for each of the NFI, IFI, TLI or CFI metrics, although the quality near to one, such as 90–95, indicates an acceptable fit, and more than 95 indicates an extraordinary fit model. (Hulland, Chow, & Lam, 1996). Because of its single relative strength of combination qualities, RMSEA has been given much more attention than other fit indices. It was also said that the fit of the RMSEA ranged from 0.06 to 0.10, and that any number over 0.10 was regarded to be abnormal. Some researchers have suggested that RMSEA values between 0.05 and 0.10 may be regarded as a sufficient fit, as Hulland et al. (1996) have suggested.

Initial measurement model fit and modification

In this part, all of the data relating to initial model fit and CFA have been covered. On the basis of a hypothetical ground, CFA tests the one-dimensionality of a data set by validating the underlying structure (Mueller, 1996). In addition, the hypothesis testing model should be extended, if necessary, and the degree of fit should be examined.

Overall measurement of model fit

All of the aforementioned measurements of all of the independent and dependent variables in the proposed and competing models have been checked for model fit. For the models to fit the data correctly, one item was deleted from each of them. Currently, an overall measurement model test is being conducted in this part to assess if the measurement model is adequate. All independent and dependent variables’ covariance structures are computed. This measurement model was put through its paces using both independent and dependent variables in combination. The overall model is tested using overall construct variables, and then measurement is performed with some construct items. excluded. The total model’s initial fit indices were CMIN/DF 2.695, RMSEA 0.072, CFI 0.853, TLI 0.833, IFI 0.855 and NFI 0.787, as indicated in Table 4. The fit indices results are not promising, and several modifications in the construct variables through correlation, as well as the elimination of specific constructs, are advised.

TABLE 3: Fit indices reported in this study.
TABLE 4: Achieved fit indices.

Hypothesis testing is a very important part of any research study for giving the answer to the research questions presented in Table 5, and a planned framework and a set of hypotheses were designed, which are now tested in the hypothesis testing part of the research study by using the output of SEM. Furthermore, this section reports on the model’s hypotheses route findings in order to evaluate those hypotheses. The regression weights are as below in Table 5.

TABLE 5: Hypothesis testing through estimated β value.

The significant arrows connecting the model’s different variables imply the following connections, when looking at the SEM findings:

  • Organisational context positively influencing the resourcing (β = 0.280), employees’ skills (β = 0.154), employees’ attitude (β = 0.171), employees’ behaviour (β = 0.201), training and development (β = 0.194), organisational performance (β = 0.112) and supporting H1a to H1c and H2a to H2b, respectively.
  • Results further confirm that resourcing positively influence employees’ skills (β = 0.274), training and development (β = 0.742) and organisational performance (β = 0.029), thus supporting hypotheses H3a to H3c, respectively.
  • It was observed that training and development positively influence employees’ skills (β = 0.447), employees’ attitude (β = 0.231), employee’s behaviour (β = 0.126) and organisational performance (β = 0.162), thus proving the hypotheses H4a to H4d.
  • Employees’ skills positively influence the employees’ attitude (β = 0.381) and organisational performance (β = 0.143), thus proving hypotheses H5a and H5b.
  • Employees’ attitude positively influences the employee’s behaviour (β = 0.265) and organisational performance (β = 0.179), thus proving hypotheses H6a and H6b.
  • The hypothesised relationship (H7) between employees’ behaviour and organisational performance (β = 0.480) is also confirmed by results.

Discussion

Through the use of HRD initiatives, an organisation’s culture is strongly linked to better organisational performance (Deal & Kennedy, 1982). Organisational setting (organisational culture and management style), workers’ attitudes, organisational resources, employees’ behaviour, training and development and organisational performance are all linked to each other in this research study. Organisational context and resourcing have been demonstrated to be closely linked in prior studies, and it has been shown that supporting the merit system while increasing organisational resources improves performance. Cultural values and beliefs, as well as programmes for the development of human resources, are in line with the strategies used by the company to achieve successful outcomes. According to Schein (1990), organisational culture is defined as the total business of a company, such as HRD strategies, resourcing methods and performance management tactics. According to Klein (1996), the culture of an organisation has a considerable influence on its overall efficacy and quality of performance. Managerial styles have a considerable influence on organisational effectiveness and performance, according to Pathack (2005).

As stated by Ogilvie (2000) and Pathack (2005), a company’s productivity, efficiency and overall success are all affected by the management styles it has chosen. An organisation’s context has been shown to be strongly linked to other basic activities and business of firms such as resourcing, staff training and development and overall organisational performance, according to the results of this study and past research. Dhar et al. (2018) proposed that employee resourcing is an essential part of every company’s long-term success. Resources are favourably linked to employee skills and training and development, but adversely linked to organisational performance, based on the results of this research. Every company that wants to enhance its performance must prioritise employee education and development, along with adequate funding (Barton & Delbridge, 2004). Following resourcing, employee training and development programmes may boost team learning, reduce employee turnover, and equip staff with additional skills, making them more efficient, which may result in improved organisational performance (Thang, Quang, & Buyens, 2010; Vikram & Sayeeduzzafar, 2014). According to prior research, if an organisation’s resourcing strategy is more effective and reliable, it may contribute positively to organisational performance; otherwise, it may be negatively associated with organisational performance.

According to Stone (2002), training is essential to the achievement of organisational goals and objectives because it brings together the interests of the corporation and its personnel. In this study’s research findings, there was a favourable association between employee skills, attitude and conduct and organisational performance. Rama Devi and Shaik (2012) argued that organisations may train and develop their employees to gain a competitive edge by enhancing their abilities and job effectiveness, which in turn improves the organisation’s overall performance. According to Rama Devi and Shaik (2012), in order for an individual and a company to be successful, training and development are essential. Training and development have been shown to have a positive effect on employees’ abilities, attitudes and behaviours and an improved company performance. American Society for Training and Development recommended that every employee in a company should get 40 h of training each year (Kinicki & Kreitner, 2006).

Employee abilities have a significant impact on employee mood and organisational success. According to Bartlett (2001), Fey et al. (2000) and Wright et al. (2003), organisational performance may be enhanced through systems of resourcing and development planning aimed at improving the capacities of workers’ attitudes such as motivation, commitment and contentment. Prior research has shown that employees’ skills can be increased through training and development. It may lead to an improvement in organisational performance by contributing to a shift in their attitude and conduct towards their work. According to Shih et al. (2006), employees’ productivity and efficiency may be improved by spending money on their education and training. Campbell’s work performance theory states that an employee’s attitude and behaviour may have a beneficial influence on the performance of the organisation (Campbell, 1990; Wright et al., 2003). This research shows that an employee’s attitude has a significant influence on his or her behaviour and the success of the company. Employees’ attitudes may be changed via education, which has a beneficial effect on their behaviour and the success of the firm. Policies and procedures that a company adheres to have an impact on employees’ attitude and conduct. There was a strong correlation between employees’ attitude and behaviour and organisational success.

This research found a link between a company’s ability to operate well and the behaviour of its employees. Employee retention is a fundamental objective of training and development, which aims to instil in them the idea that the company’s success depends on their staying on board for as long as possible (Katou & Budhwar, 2007). An employee’s actions, such as staying in the company, being present at work and making a good impact on the company’s success, may convey a positive message among other workers (Guest, 2001).

Conclusion

This study is an endeavour to find the effect of HRD on organisational performance. In addition, it specifically investigates the impact of organisational context, resources, training and development, skills, attitude and behaviour on organisational performance.

The study’s independent elements, such as resourcing and training and development, employee skills, employee attitude and behaviour and the organisational setting, all had a positive link with organisational performance. According to the results of the study, HRD techniques have a favourable influence on the organisational performance of manufacturing organisations. However, training and development activities are favourably related with resource allocation, even when there is no clear link between resourcing and organisational success. This study’s results show that if a company improves its resourcing strategy, training and development may also have a favourable impact on the organisation’s success in attaining its targeted objectives.

Acknowledgements

Competing interests

The author(s) declare that they have no financial or personal relationship(s) that may have inappropriately influenced them in writing this article.

Authors’ contributions

M.I. constructed the manuscript and gathered the data. N.K. managed the data analysis. Lastly, J.K. and A.M.K. supervised consolidating this article for publication.

Funding information

This research did not receive any specific grant from any funding agency in the public, commercial or not-for-profit sectors.

Data availability

Data that support the findings of this study are available upon reasonable request from the corresponding author, N.K.

Disclaimer

The views and opinions expressed in this article are of the authors and do not necessarily reflect the official policy or position of any affiliated agency of the authors and the publisher.

References

Abogsesa, A.S., & Kaushik, G. (2017). Impact of training and development on employee performance: A study of Libyan Bank. International Journal of Civic Engagement and Social Change (IJCESC), 4(3), 53–68. https://doi.org/10.4018/IJCESC.2017070104

Ahmed, S., Ahmad, F.B., & Joarder, M.H.R. (2014). HRM practices-nonperformance relationships: A conceptual framework for RMG sector in developing economy. Mediterranean Journal of Social Sciences, 7(4), 87.

Abomeh, O.S. (2013). Assessment of recruitment practice on organization performance: Empirical study of hospitality businesses in Abuja. European Scientific Journal, 9(29), 43–57. https://doi.org/10.12816/0002287

Alcázar, F.M., Fernández, P.M.R., & Gardey, G.S. (2005). Researching on SHRM: An analysis of the debate over the role played by human resources in firm success. Management Revue, 16(2), 213–241. https://doi.org/10.5771/0935-9915-2005-2-213

Appelbaum, S.H., & Reichart, W. (1998). How to measure an organization’s learning ability: The facilitating factors-part II. Journal of Workplace Learning, 10(1), 5–28. https://doi.org/10.1108/13665629810370012

Bentler, P.M. (1990). Comparative fit indexes in structural models. Psychological Bulletin, 207, 238–246.

Bartlett, K.R. (2001). The relationship between training and organizational commitment: A study in the health care field. Human Resource Development Quarterly, 12(4), 335–352. https://doi.org/10.1002/hrdq.1001

Barton, H., & Delbridge, R. (2004). HRM in support of the learning factory: Evidence from the US and UK automotive components industries. The International Journal of Human Resource Management, 15(2), 331–345. https://doi.org/10.1080/0958519032000158545

Bates, R., & Chen, H.C. (2004). Human resource development value orientations: A construct validation study. Human Resource Development International, 7(3), 351–370. https://doi.org/10.1080/1367886042000218031

Becker, B.E., & Huselid, M.A. (1998). High performance work systems and firm performance: A synthesis of research and managerial implications. In Research in personnel and human resource management. Stamford, CT: JAI Press.

Black, W.C. (2001). Invited reaction: The influence of individual characteristics and the work environment on varying levels of training outcomes. Human Resource Development Quarterly, 12(1), 25–31. https://doi.org/10.1002/1532-1096(200101/02)12:1%3C25::AID-HRDQ3%3E3.0.CO;2-T

Blau, P.M. (1964). Justice in social exchange. Sociological Inquiry, 34(2), 193–206. https://doi.org/10.1111/j.1475-682X.1964.tb00583.x

Bollen, K.A. (1989). Structural equations with latent variables (Vol. 210). John Wiley & Sons.

Brooks, I. (2009). Organizational behavior: Individuals, groups and organization. Pearson Education.

Budhwar, P.S., & Sparrow, P.R. (1997). Evaluating levels of strategic integration and devolvement of human resource management in India. International Journal of Human Resource Management, 8(4), 476–494. https://doi.org/10.1080/095851997341568

Byrne, B.M. (2001). Structural equation modeling with AMOS: Basic concepts. Applications, and Programming, 20(01).

Campbell, J.P. (1990). Modeling the performance prediction problem in industrial and organizational psychology. In Handbook of industrial and organizational psychology. Palo Alto, CA: Consulting Psychologists Press.

Chiu, R.K., & Francesco, A.M. (2003). Dispositional traits and turnover intention: Examining the mediating role of job satisfaction and affective commitment. International Journal of Manpower, 24(3), 284–299. https://doi.org/10.1108/01437720310479741

Cosh, A., Duncan, J., Hughes, A., & Britain, G. (1998). Investment in training and small firm growth and survival: An empirical analysis for the UK 1987-95. London: Department for Education and Employment.

Deal, T.E., & Kennedy, A.A. (1983). Corporate cultures: The rites and rituals of corporate life: Addison-Wesley. Business Horizons, 26(2), 82–85. https://doi.org/10.1016/0007-6813(83)90092-7

Davidmann, M. (1995). Style of management and leadership (2nd ed). Retrieved September 09, 2022 from http://www.solbaram.org/articles/clm2.html

Dhar, B.K. (2019). The impact of intellectual capital on organizational performance in the banking sector of Bangladesh. Doctoral dissertation. Universiti Sains Islam Malaysia.

Dhar, B.K., Masruki, R., Mutalib, M., Rahouma, H.M., Sobhani, F.A., & Absar, M.M. (2018). Mediating effect of organizational commitment between Islamic human resource practices and organizational performance among Islamic banks of Bangladesh. The Journal of Muamalat and Islamic Finance Research, 15(2), 54–65. https://doi.org/10.33102/jmifr.v15i2.177

Dhar, B.K., Mutalib, M., & Sobhani, F.A. (2019). Effect of innovation capability on human capital and organizational performance. International Journal of Advanced Science and Technology, 29(4), 7074–7087.

Dhar, B.K., Mutalib, M., & Sobhani, F.A. (2017a). Investigating the impact of human resource accounting practice on organizational performance. International Islamic Social Economic Conference, Universiti Sains Islam Malaysia, Malaysia, December 12–13, 2017.

Dhar, B.K., Mutalib, M., & Sobhani, F.A. (2019). Effect of innovation capability on human capital and organizational performance. International Journal of Advanced Science and Technology, 29(4), 7074–7087.

Dhar, B.K., Rahouma, H.M., Masruki, R., & Absar, M.M. (2017b). Impact of Islamic human resource practices on organizational performance through organizational commitment in the banking sector of Bangladesh. In 7th Islamic Economic System Conference (iEcons), Muscat, Oman, December 12–13, 2017.

Degraft-Otoo, E. (2012). The effect of training and development on employee performance at Accra polytechnic. Unpublished MBA Project Accra Polytechnic.

Dhamodharan, V., Daniel, B.J.C., & Ambuli, T.V. (2010). An empirical study on assessing trainees’ expectations and their perceptions. International Business Research, 3(2), 174. https://doi.org/10.5539/ibr.v3n2p174

Diamantopoulos, A., & Siguaw, J.A. (2000). Introducing LISREL: A guide for the uninitiated. Sage.

Eisenberger, R., Cummings, J., Armeli, S., & Lynch, P. (1997). Perceived organizational support, discretionary treatment, and job satisfaction. Journal of Applied Psychology, 82(5), 812–820. https://doi.org/10.1037/0021-9010.82.5.812

Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational support. Journal of Applied Psychology, 71(3), 500–507. https://doi.org/10.1037/0021-9010.71.3.500

Elangovan, A.R. (2001). Causal ordering of stress, satisfaction and commitment, and intention to quit: A structural equations analysis. Leadership & Organization Development Journal, 22(4), 159–166. https://doi.org/10.1108/01437730110395051

Evans, W.R., & Davis, W.D. (2015). High-performance work systems and organizational performance: The mediating role of internal social structure. Journal of management, 31(5), 758–775.

Fan, H.R., Zhai, M.G., Xie, Y.H., & Yang, J.H. (2003). Ore-forming fluids associated with granite-hosted gold mineralization at the Sanshandao deposit, Jiaodong gold province, China. Mineralium Deposita, 38(6), 739–750.

Fey, C.F., Björkman, I., & Pavlovskaya, A. (2000). The effect of human resource management practices on firm performance in Russia. International Journal of Human Resource Management, 11(1), 1–18. https://doi.org/10.1080/095851900339963

George, J.M., & Brief, A.P. (1992). Feeling good-doing good: A conceptual analysis of the mood at work-organizational spontaneity relationship. Psychological Bulletin, 112(2), 310–329. https://doi.org/10.1037/0033-2909.112.2.310

Getakena, J.N. (2017). An assessment of the effects of management styles in private enterprises on customer satisfaction: A case of Scooby Enterprises Kisii County.

Gouldner, H.P. (1960). Dimensions of organizational commitment. Administrative Science Quarterly, 4(4), 468–490. https://doi.org/10.2307/2390769

Gubbins, C., Garavan, T.N., Hogan, C., & Woodlock, M. (2006). Enhancing the role of the HRD function: The case of a health services organization. Irish Journal of Management, 27(1), 171–206.

Guest, D.E. (2001). Human resource management: When research confronts theory. International Journal of Human Resource Management, 12(7), 1092–1106. https://doi.org/10.1080/09585190110067837

Hardré, P.L. (2003). Beyond two decades of motivation: A review of the research and practice in instructional design and human performance technology. Human Resource Development Review, 2(1), 54–81. https://doi.org/10.1177/1534484303251661

Holmes-Smith, P., Coote, L., & Cunningham, E. (2004). Structural equation modeling: From the fundamentals to advanced topics. Melbourne: Sreams.

Hulland, J., Chow, Y.H., & Lam, S. (1996). Use of causal models in marketing research: A review. International Journal of Research in Marketing, 13(2), 181–197. https://doi.org/10.1016/0167-8116(96)00002-X

Jeet, V., & Sayeeduzzafar, D. (2014). A study of HRM practices and its impact on employee’s job satisfaction in private sector banks: A case study of HDFC Bank. International Journal of Advance Research in Computer Science and Management Studies, 2(1), 70–75.

Kalu, N.I., & Akinyokun, V.O.C. (2005). Effects of employee development on organizational performance: A case study of Nigerian Bottling Company. Retrieved from www.daryweb.com/thesis

Katou, A.A. (2009). The impact of human resource development on organizational performance: Test of a causal model. Journal of Behavioral and Applied Management, 10(3), 335–356. https://doi.org/10.21818/001c.17264

Katou, A.A. (2013). Justice, trust, and employee reactions: An empirical examination of the HRM system. Management Research Review, 36(7), 674–699. https://doi.org/10.1108/MRR-07-2012-0160

Katou, A.A., & Budhwar, P.S. (2006). Human resource management systems and organizational performance: A test of a mediating model in the Greek manufacturing context. The International Journal of Human Resource Management, 17(7), 1223–1253. https://doi.org/10.1080/09585190600756525

Katou, A.A., & Budhwar, P.S. (2007). The effect of human resource management policies on organizational performance in Greek manufacturing firms. Thunderbird International Business Review, 49(1), 1–35. https://doi.org/10.1002/tie.20129

Kepha, O., Kagiri, A.W., & Amoke, D.O. (2014). The influence of training and development on performance of employees in research institutions in Kenya. International Journal of Science and Research, 3(5), 139–136.

Khan, M.A. (2010). Effects of human resource management practices on organizational performance – An empirical study of oil and gas industry in Pakistan. European Journal of Economics, Finance and Administrative Sciences, 24(157–174), 158–175.

Khan, S., & Abdullah, N.N. (2019). The impact of staff training and development on teachers’ productivity. Economics, Management and Sustainability, 4(1), 37–45. https://doi.org/10.14254/jems.2019.4-1.4

Kidombo, H.J., K’obonyo, P., & Gakuu, C.M. (2012). Human resource strategic orientation and organizational commitment in Kenyan manufacturing firms. International Journal of Arts and Commerce, 1(7), 7–28.

Kinicki, A., & Kreitner, R. (2006). Organizational behavior: Concepts, skills and practices (2nd ed.). New Delhi: McGraw-Hill.

Klein, S.M. (1996). A management communication strategy for change. Journal of Organizational Change Management, 9(2), 32–46. https://doi.org/10.1108/09534819610113720

Kline, R.B. (2005). Principles and practice of structural equation modeling. New York, NY: Guildford.

Knight, G.A., & Cavusgil, S.T. (2004). Innovation, organizational capabilities, and the born-global firm. Journal of International Business Studies, 35(2), 124–141. https://doi.org/10.1057/palgrave.jibs.8400071

Kuchinke, K.P. (2003). Contingent HRD: Toward a theory of variation and differentiation in formal human resource development. Human Resource Development Review, 2(3), 294–309. https://doi.org/10.1177/1534484303256885

Lee, H.C., & Chuang, T.H. (2009). The impact of leadership styles on job stress and turnover intention: Taiwan insurance industry as an example. Effects of leadership style on organizational performance: A survey of selected small-scale enterprises in Ikosi-Ketu Council Development Area of Lagos State, Nigeria. Australian Journal of Business and Management Research, 1(7), 100–111.

Lopez-Cabrales, A., & Valle-Cabrera, R. (2020). Sustainable HRM strategies and employment relationships as drivers of the triple bottom line. Human Resource Management Review, 30(3), 100689. https://doi.org/10.1016/j.hrmr.2019.100689

MacCallum, R.C., Browne, M.W., & Sugawara, H.M. (1996). Power analysis and determination of sample size for covariance structure modeling. Psychological Methods, 1(2), 130–149. https://doi.org/10.1037/1082-989X.1.2.130

McQuitty, S. (2004). Statistical power and structural equation models in business research. Journal of Business Research, 57(2), 175–183. https://doi.org/10.1016/S0148-2963(01)00301-0

Miles, R.E., & Snow, C.C. (1984). Organizational strategy, structure, and process. Tokyo: McGraw-Hill Kogahusha.

Mohamud, A.M. (2014). The effect of training on employee performance in public sector organizations in Kenya. The case of NHIF Machakos county. Doctoral dissertation. University of Nairobi.

Mueller, F. (1996). Human resources as strategic assets: An evolutionary resource-based theory. Journal of Management Studies, 33(6), 757–785. https://doi.org/10.1111/j.1467-6486.1996.tb00171.x

Mullen, P.E., Mackenzie, R., Ogloff, J.R., Pathé, M., McEwan, T., & Purcell, R. (2006). Assessing and managing the risks in the stalking situation. Journal of the American Academy of Psychiatry and the Law Online, 34(4), 439–450.

Nunnally, J.C., & Bernstein, I.H. (1994). Psychometric theory (3rd ed.). New York, NY: McGraw-Hill.

Ogilvie, J. (2000). The role of human resources management practices in predicting organizational commitment. Group and Organizational Strides, 11(4), 335–339. https://doi.org/10.1177/0364108286114003

Ogonyomi, P.O., & Ojikutu, R.K. (2014). Employee resourcing and organizational performance of small and medium Enterprises in Lagos State, Nigeria.

Ombui, K., Elegwa, M., & Gichuhi, A.W. (2014). The influence of recruitment and selection on the performance of employees research institutes in Kenya. IJSR, 3(5). 132–138.

Onyango, W.P. (2015). Effects of transformational leadership styles on talent management: A case of micro, small and medium size enterprises in Migori County, Kenya. Journal of Poverty, Investment and Development, 10, 51–60.

Pathack, S.H. (2005). Management style: Impact on subordinates’ job satisfaction. Leadership Quarterly, 11(2), 198–204.

Pritchard, R.D. (1992). Organizational productivity. In M.D. Dunnette & L.M. Hough (eds.), Handbook of industrial and organizational psychology (2nd ed.). Palo Alto, CA: Consulting Psychologists Press.

Raghuram, S. (1994). Linking staffing and training practices with business strategy: A theoretical perspective. Human Resource Development Quarterly, 5(3), 237–251. https://doi.org/10.1002/hrdq.3920050304

Rama Devi, V., & Shaik, N. (2012). Evaluating training & development effectiveness-A measurement model. Asian Journal of Management Research, 2(1), 722–735.

Rhoades, L., & Eisenberger, R. (2002). Perceived organizational support: A review of the literature. Journal of Applied Psychology, 87(4), 698–714. https://doi.org/10.1037/0021-9010.87.4.698

Robbins, S.P., & Sanghi, S. (2007). Organizational behavior. New Delhi: Pearson Education.

Saks, A.M. (2006). Antecedents and consequences of employee engagement. Journal of Managerial Psychology, 2(7), 600–619. https://doi.org/10.1108/02683940610690169

Schein, E.H. (1990). Organizational culture (Vol. 45, No. 2, p. 109). American Psychological Association.

Schuler, R.S., & Jackson, S.E. (2008). Strategic human resource management. European Journal of Business and Management, 4(3), 42–55.

Schwartz, S.H. (1994). Beyond individualism/collectivism: New cultural dimensions of values. Thousand Oaks, CA: Sage.

Shih, H.A., Chiang, Y.H., & Hsu, C.C. (2006). Can high performance work systems really lead to better performance? International Journal of Manpower, 27(8), 741–763. https://doi.org/10.1108/01437720610713530

Shore, L.M., & Shore, T.H. (1995). Perceived organizational support and organizational justice. In Organizational politics, justice, and support: Managing the social climate of the workplace (pp. 149–164). London: Westport, Connecticut.

Shore, L.M., Tetrick, L.E., Lynch, P., & Barksdale, K. (2006). Social and economic exchange: Construct development and validation. Journal of Applied Social Psychology, 36(4), 837–867. https://doi.org/10.1111/j.0021-9029.2006.00046.x

Søndergaard, M. (1994). Research note: Hofstede’s consequences: A study of reviews, citations and replications. Organization Studies, 15(3), 447–456. https://doi.org/10.1177/017084069401500307

Statista. (2021). Global workplace training: Market size by region 2008–2020. Statista. Retrieved from https://www.statista.com/statistics/1232500/size-of-the-workplace-training-market-north-america-and-rest-of-the-world/

Stewart, D. (2010). Growing the corporate culture. Retrieved from https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=ab411f07760aa110VgnVCM1000004b0d1872

Sears, G.J., & Rowe, P.M. (2003). A personality-based similar-to-me effect in the employment interview: Conscientiousness, affect-versus competencemediated interpretations, and the role of job relevance. Canadian Journal of Behavioural Science/Revue canadienne des sciences du comportement, 35(1), 13.

Stone, R.J. (2002). Human resource management (4th ed.). Milton, Qld: John Wiley & Sons.

Thang, N.N., Quang, T., & Buyens, D. (2010). The relationship between training and firm performance: A literature review. Research and Practice in Human Resource Management, 18(1), 28–45.

Trompenaars, F. (1993). Riding the waves of culture. Chicago, IL: Irwin.

Tucker, L.R., & Lewis, C. (1973). A reliability coefficient for maximum likelihood factor analysis. Psychometrika, 38(1), 1–10. https://doi.org/10.1007/BF02291170

Vikram, J., & Sayeeduzzafar, D. (2014). A study of HRM practices and its impact on employees job satisfaction in private sector banks: A case study of HDFC bank. International Journal of Adv ance Research in Computer Science and Management Studies, 7(3), 344–353.

Wang, G.G., Dou, Z., & Li, N. (2002). A systems approach to measuring return on investment for HRD interventions. Human Resource Development Quarterly, 13(2), 203–224. https://doi.org/10.1002/hrdq.1024

Wright, P.M., Gardner, T.M., & Moynihan, L.M. (2003). The impact of HR practices on the performance of business units. Human Resource Management Journal, 13(3), 21–36. https://doi.org/10.1111/j.1748-8583.2003.tb00096.x

Yoon, J., & Lim, J.C. (1999). Organizational support in the workplace: The case of Korean hospital employees. Human Relations, 52(7), 923–945. https://doi.org/10.1177/001872679905200704

Zhu, C., Liu, A., & Chen, G. (2018). High performance work systems and corporate performance: The influence of entrepreneurial orientation and organizational learning. Frontiers of Business Research in China, 12(4), 123–135. https://doi.org/10.1186/s11782-018-0025-y


 

Crossref Citations

1. The mediating role of organizational learning culture in the nexus of human resource development practices and employee competencies
Frank Nana Kweku Otoo
African Journal of Economic and Management Studies  year: 2024  
doi: 10.1108/AJEMS-10-2023-0387