The effect of Strategic Human Resources Practice on employee performance

Abstract

Investment Corporation of Bangladesh (ICB) is the leader in the country in developing capital market in Bangladesh. It is the most profitable organization under ministry of finance. So the organization’s performance is critical to the government of Bangladesh, people of Bangladesh and most of all to the organization itself. In order to enhance performance every organization needs to utilize its resources at the optimum level. Since the most valuable resource of an organization is its Human Resources or Capital, the organization needs to utilize its Human Capital through motivation, job satisfaction, job security etc. This study linked Strategic Human Resource (SHRM) practices, cultural orientations, employee motivation and firm performance in ICB. I have taken an initiative to evaluate the effect of Strategic Human Resource Management (SHRM) practice on the employee performance of ICB. The objectives were : to establish the relationship between SHRM practices and firm performance; to determine the extent to which the relationship between SHRM practices and employee motivation depends on employee cultural orientations; to establish if the relationship between SHRM practices and firm performance is mediated by motivation; to gauge the relationship between motivation and firm performance. The respondents were employees at different levels in the organization. Data were collected using questionnaires developed and modified by the researcher. The findings of the study indicate that: all the variables of SHRM practices, except recruitment and hiring and flexible work arrangement, were positively correlated with performance among which training and development and the compensation system were most significant; relationship between SHRM practices and firm motivation depended on employee cultural orientations in both the cases where cultural beliefs and cultural values were considered; motivation mediated relationship between SHRM practices and firm performance; and motivation affected organization’s performance.