The Relationship of Perceived Human Resource Management Practices on Employees' Performance

Iamratanakul, Supachart, Sorakraikitikul, Monthon, Siengthai, Sununta, Dimmitt, Nicholas J., International Journal of Business Strategy

1. INTRODUCTION

The area of human resource practices has been historically critical to organizations' success. There are studies such as (Beauregard and Henry, 2009; Michie and West, 2004; Vlachos, 2008) which have investigated the practices of human resource management. However, the study of human resource practices impacting on employees' performance in an Asian's health care sector is limited. This study is conducted to fulfill the need from this gap.

For that reason, the study is designed to examine the influence of human resource management practices on employee's performance, as human resource management practices have a major influence on firm performance more than other factors likes board of directors or CEO compensation (Liu et al., 2007). The organization chosen in this study is in the health care sector. The question to be answered in this research is to what extent, does human resource management practices influence the performance of workers in Thai's hospitals.

The paper starts with the explanation of a conceptual framework pertaining to measurable variables used for HRM practices and employees' performance. The data collection is discussed in the subsequent section. Three methods of analysis are clarified with a certain level of details. The results are shown in the next section. The implication and conclusion are presented in the last sections of the paper.

1.1 Conceptual Framework

The conceptual framework includes two main variables: 1) human resource management practices, and 2) employees' performance. The human resource management practices are operational in four categories: IV1) human resource planning, IV2) training and development, IV3) performance evaluation and IV4) motivation and compensation, which are independent variables in the analysis.

To measure human resource management performance, firms may need to wait years for results that would materialize into organizational performance. Moreover many research surveys confirm that human resource management has significant value for organizational performance (Liu et al., 2007). Management perceptions about concepts on effectiveness and performance may actually be more valid indicators than objective data such as profitability, market share , and sales since these measures are directly related to a vast number of factors like economic trends, industry factors, and other environment factors (Vlachos, 2008). As a result, the dependent variable in this study is the employees' performance, which is consisted of four self-assessments: cost, customer, internal process, and learning and growth. The conceptual framework of the study can be presented as follows:

[FIGURE 1.1 OMITTED]

2. DATA COLLECTION

Data collection was collected by a survey questionnaire on employees in Thailand hospitals. Most of the responds are female, 21-30 years old. Around 80 percent of responds hold bachelor degrees. They work with the organization around 1-4 years as officer and staff with salary less than 10,000 THB per month. A total of 205 questionnaires were used in this study. The demographic of respondents is shown in Table 2.1.

The independent variables in the questionnaires were developed to measure the human resource management practice in the hospitals. The respondents were asked to indicate the extent to which they rate the questions from strongly agree (5) to strongly disagree (1) with each statement on five-point Likert scale. The descriptive statistics for each item of independent variables in the questionnaires is shown in

Table 2.2 indicates that the highest mean score among all items in human resource practice is 3.89 in item corrected underperformance (HR_E4) under the performance evaluation variable. The mean scores in most items are higher than 3.0. For example, on human resource planning, the mean score of job based competencies planning is 3.58. In training and development practice, the mean score of training need survey (HR_D1) is 3.39. However, 4 out of 25 items present the mean score lower than 3.0 in between 2.86 and 2.99, which effective recruitment has the lowest mean at 2.86.

The dependent variable was developed to measure employee performance. The questionnaire employed self assessment to evaluate work performance in four perspectives according to the Balanced Scorecard concept (Kaplan and Norton, 1996). The respondents were asked to indicate their performances on each item ranking from strongly disagree (1) to strongly agree (5). The descriptive statistics of each perspective in the dependent variable, employee performance, is shown in Table 2.3 on next page.

The highest mean score in all four perspectives of employee performance is 4.18, which is the item intention to service (PM_CS1). The preparing to serve customer (PM_CS3) is the second highest mean with the score of 4.02. The effective material usage (PM_CT2) and preparing equipment (PM_PC1) have the same mean score at 3.91.

3. METHODOLOGY

The multivariate techniques selected to be used in the study are factor analysis, reliability analysis, and multiple regression analysis.

3.1. Factor Analysis

Factor analysis is employed to assess 40 items, which are indicators of a factor (construct) for a dependent variable and 4 factors for independent variables. The results of factor analyses are controlled through our choice of measured variables and hospital employees, which are the research participants in this study. Generally, factor analysis requires two stages, …

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Publication information: Article title: The Relationship of Perceived Human Resource Management Practices on Employees' Performance. Contributors: Iamratanakul, Supachart - Author, Sorakraikitikul, Monthon - Author, Siengthai, Sununta - Author, Dimmitt, Nicholas J. - Author. Journal title: International Journal of Business Strategy. Volume: 10. Issue: 2 Publication date: May 2010. Page number: 44+. © 2008 International Academy of Business and Economics. COPYRIGHT 2010 Gale Group.

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