Academic journal article Journal of Organizational Culture, Communications and Conflict

Level of Effectiveness of Human Resource Management Practices and Its Impact on Employees' Satisfaction in the Banking Sector of Jordan

Academic journal article Journal of Organizational Culture, Communications and Conflict

Level of Effectiveness of Human Resource Management Practices and Its Impact on Employees' Satisfaction in the Banking Sector of Jordan

Article excerpt

INTRODUCTION

The banking sector in Jordan plays an important role in the country's movement toward free market trade due to country's large economic liberalization. Therefore, this sector is considered as one of the core pillars of Jordanian economy. According to Al-Shobaki et al. (2010); the banking sector shows amazing prospects for expansion and diversification. It accounted for 44.6% of total stock market capitalization and contributed 18.7% to GDP in 2004. Therefore, the Jordanian government has been giving great attention on the development of banking organizations. This effort is mainly aimed to improve the quality of bank services, increase competitive advantages of this sector and encourage investment in the country. At the end of 1999, twenty-two national and five international commercial banks were operating in the country with a structural network of 466 branches that play significant role in the revival of the Jordanian economy and country's future. Al-Jarrah (2012) mentioned that banking sector in Jordan plays a crucial role in the economic development and growth. Since last decade, this sector has undertaken various reforms aiming to enhance its dependability and increase its competitiveness. Khammash (2012) has asserted that banking sector of Jordan is comprised of 26 banks with a combined total of 695 branches spread across the country at the end of 2011. The Central Bank of Jordan classified the banks into two main groups; national banks and branches of foreign banks. Each of these groups is further divided into commercial banks and Islamic banks.

Nowadays, majority of the organizations are seeking the best way to improve their business performance and achievements by developing and adopting new workplace practices that enhance sustained level of high performance and job satisfaction. Human Resource Management (HRM) is a widely known management philosophy that has become a key factor for enhancing organizations' competitive advantage. Furthermore, it is recognized as an important tool to enhance customer satisfaction, loyalty and retention that positively affect organizational performance. On the other hand, HRM is the strategic and coherent approach to the management of organization's most valued assets and matches them to the strategic requirements of business. It is being recognized that competitive advantage can be obtained with a qualified workforce that enables organizations to compete and succeed in business (Al-Daibat & Irtaimeh, 2012).

The declining foreign financial aid and assistance, particularly from Arab gulf countries, have aggravated economic and financial hardships in the last few years. This has made local funding of small and medium size development projects essential for Jordan development. Therefore, the banking sector of country is increasingly becoming an important player in country's development. However, published studies investigating the impact of HRM practices on employees' satisfaction in Jordanian organizations are scarce and very limited. Therefore, the findings of this study are expected to enrich the knowledge and fill-in the gap of literature. Thirdly on the practical side, the anticipated outcomes would help decision makers in Jordanian banking sector to recognize the potential of HRM effectiveness and assist them in developing employee satisfaction to gain superior performance.

Human resource management has become more important to general management because of its role in enhancing performance, securing and developing the talents of employees and enhancing cooperation between them to support organizational development (Elarabi & Johari, 2014). Employee satisfaction has always been an important issue and top priority for all type of organizations. Therefore, it is essential to investigate the potential impact of human resource management practices on employees' satisfaction. The study aims to explore the level of effectiveness of HRM practices and employees' satisfaction in the banking sector of Jordan. …

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