The Impact Of Human Resource Management Practices On Organizational Performance

Impact of Human Resource Management practices on Organizational performance has been an extensively researched area. Many papers have been studied and written indicating that bundles of Human Resource practices have significant impact on an organization’s performance, but, here this paper is focusing on the impact of effectively implemented Human Resource Management practices on organizational performance. Human resources are considered to be the source of sustained competitive advantages for organization (Lado A. A. & Wilson, 1994).

1.1. Statement of the problem:

The need of conducting this study is to see the impact of Strategic Human Resource Management effectiveness on the performance of organizations from the IT Sector Lahore.

1.2. Literature

In addition to the theoretical case for emphasizing on these practices is an applied one, as studies reveal that each is now used by a lot of manufacturing companies which include IT sector such as the software houses as well. For instance, a survey was conducted at the manufacturing companies in the United Kingdom in 1996 which revealed that these SHRM practices were the most accepted in the recent management practitioner literature, and all of these SHRM practices were effectively implemented by more than half of the companies, ranging from 52% for empowerment and to 67% for workforce productivity and output quality, respectively (Waterson et al., 1999). So after four years, the use of all practices have increased, with empowerment implemented by 60% of companies and workforce productivity and output quality by 84% of companies(Birdi, Clegg, Patterson, Robinson, Stride, & Wall, 2008).However, there is a little convincing empirical evidence of the degree to which these SHRM practices, individually or collectively, are causally linked to the firm’s performance or of the degree to which the effects of particular practices are enhanced by the use of the other practices.

It includes variety of initiatives that include job enrichment as well (Wall, Wood & Leach, 2004). A company’s performance can be enhanced by increasing the autonomy, for instance, motivating employees to work more and flexibly (Hackman & Oldham, 1976), focusing on the concept of initiatives (Frese, Kring, Soose, & Zempel, 1996) or pro-activity Parker, Williams, & Turner, 2006), which would eventually reduce supervision cost and other related but indirect costs as well and would also provide the opportunity for the individuals to develop and utilize new skills (Batt, 2001; Parker &Wall, 1998) and enhance their intellect as well (Leach, Wall, & Jackson, 2003). From McGregor (1960), lot of pragmatic investigation on the effect of empowerment on performance has been at the job level, but has been done within the management theory, whereas early work on contemporary approaches has been mostly discussed by Likert (1961) and (e.g., Appelbaum et al., 2000; Pfeiffer, 1994, 1998) from these approaches to SHRM has been under the discussion of by authors such as Appelbaum et al (2000) and Pfeiffer (1994, 1998).Likewise, investing in the training and development of employees would noticeably improve firm’s particular knowledge, mainly where this has a broad viewpoint which involves helping employees