The relationship between HR practices and the employee perceived performance in various
organizations across the globe
Effects of Human Resource practices on employee performance
The relationship between HR practices and the employee perceived performance in
various organizations across the globe
Even though previous research in strategic human resource management has
determined a significant association between high-performance HR practices and company-
level market and fiscal outcomes, limited research has been carried out delving the vital role
of various HR practices on the perceived performance of staffs. In essence, few studies have
looked into the effects of high-performance human resource practices on the employee
performance and productivity or how these two correlate (Dessler, 2013). To address this gap
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 2
in the existing literature, the main aim of the current research is to examine the relationship
between various HR practices such as performance evaluation practices, involvement
practices, and compensation practices and the worker’s perceived performance in a wide
range of companies globally. The problem statement is as follows: to what degree are HR
practices affecting employees’ performance level within a company.
Human resource management is understood as the practices and policies that are
involved in carrying out the HR facets of a management position (Khan, 2010). HR
management includes the systems, practices and policies which influence the performance,
attitude and behaviour of staff members. An organization’s performance is very much
contingent on the performance and productivity of its staff member. Wood (2011) reported
that the performance of employees is an essential factor that affects the performance of the
organization. Successful companies have come to realize that there are quite a few factors
that could actually affect their performance and one of the most crucial factors is certainly the
human resource (HR) practices (Shields et al., 2015). A noteworthy goal of espousing HR
practices is basically to evaluate the performance of staff members within the company
( Chukwuka , 2016; Noe, 2013). In today’s highly competitive environment, a lot of
companies have endeavoured to constantly enhance their workers’ performance level by
improving the practices of their HR departments. According to Alfes et al. (2013), human
resources practices are a significant and vital source of competitive advantage for a business
organization. A number of academics such as Caliskan (2010) and Kehoe and Wright (2013)
assert that good human resources practices foster the performance of a company and actually
bring about higher profitability.
Recruitment and selection practices have been demonstrated to have an effect on the
employee perceived performance. However, this effect is not very significant. Recruitment is
understood as the process that is used to fill the vacant job posts fully with the right people,
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and to meet the organization’s requirements and expectations. In essence, recruitment is any
process for which a company seeks candidates and attracts prospective workers, whereas
selection is understood as the process through which a company identifies those candidates
with the abilities, skills, knowledge and other attributes which would help the company to
attain its goals (Noe, 2013). On the overall, the recruitment and selection process is aimed at
obtaining a minimum cost the quality and number of workers who are needed to satisfy the
organization’s HR needs.
Recruitment and selection are integrated factors which impact the perceived
performance of workers in an organization. Recruitment of employees entails the use of job
analysis in selecting and identifying the organization’s requirements and needs. Selection is a
crucial HR function given that selection of employees is closely related with the development
of the organization (Savaneviciene & Stankeviciute, 2011). In a study of how the
performance of employees is linked to the human resource policies, Guest (2011) learned that
HR professionals in the organizations should be able to select the right people and place them
in appropriate work positions. In essence, during selection, the HR professional collects
information regarding the jobseekers and uses it to decide who is fit for each available job
position and should therefore be hired in the organization (Guest, 2011).
In another study, Noe (2013) noted that when the HR department adopts best practices
in employee recruitment and selection, they would be able to get the top talent and people
with excellent skills and competencies into the organization. When the recruited and selected
employees are very skilled for the job, their perceived performance in their work tasks in the
organization would definitely be higher than the perceived job performance of employees
who do not possess the right skills and competencies for the job (Savaneviciene &
Stankeviciute, 2011). For this reason, there is an association between HR practices and the
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 4
employee perceived job performance: the highly skilled and competent the recruited and
selected employees are, the higher their perceived job performance would be.
The other HR practice that was examined for its association with employee perceived
performance is employee training. Training of employees is a vital aspect in producing the
human capital required by the organization. Training is a methodical approach which allows
staff members to acquire the necessary skills and knowledge so as to perform their work tasks
in an effective manner with the resulting improvement in the behaviour (Boxall & Purcell,
2011). Formal employee training is largely carried out by the organization for the purpose of
improving the employee’s abilities and skills. It is also done to exhibit the organization’s
commitment to its workers. Through training, skills in the workers necessary to carry out the
job are developed. According to Wood (2011), training is not just a way of arming staff
members with the skills needed to carry out their job tasks: training actually represents the
commitment of the employer to its workers.
In his study, Chukwuka (2016) learned that when the human resource department
invests in training programs, employees would be able to feel indebted to the organization. In
essence, training is required for staff members to carry out certain jobs. According to
Chukwuka (2016), performing a certain job well may require the worker to possess specific
knowledge and skills, which the employee would be able to acquire through training. As a
human resource practice, training has a highly positive impact on the employees’
performance. Shields et al. (2015) reported that training allows workers to obtain the
knowledge, abilities as well as skills needed by the job position.
Guest (2011) in his study discovered that when any organization across the globe
provides training to its workers, the workers would realize that the company has the intention
of counting on them in future and they would be more confident. Consequently, these
employees would put in more effort in their work and in fact give their best at the workplace
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 5
resulting in increased employee perceived performance (Guest, 2011). All in all, training is a
crucial endeavour that helps to develop extra competencies required these days or in the
future so as to increase the performance level of the employee. Extensive training programs
are carried out to improve the job performance of workers so as to attain strategic position.
Training programs are crucial to attaining goals of the organization. A desired change could
be achieved in the perceived performance of staff members through offering them proper
training (Wood, 2011). Training is therefore positively and strongly correlated to employee
perceived performance.
HR personnel in successful organizations across the globe understand that the
provisions which they make for employee trainings in fact lie at the core of their capacity to
draw and keep the most excellent and finest talent for their company (Chukwuka, 2016). As
such, HR professionals need to provide an opportunity for their organization’s staff members
to learn, given that proactive development schemes would improve the capabilities of their
employees, motivate employees and in turn engender a more loyal employee set (Alfes et al.,
2013). It is notable that employees who are loyal are predisposed to have high job
performance.
Investments in employee training and the execution of development schemes are
becoming recognized growingly by organizations across the globe as crucial aspects of
human resource management. Researchers who have studied various sectors and industries
throughout the globe have learned that there is a positive association between investment in
training and the performance of employees considering that training and development
activities lead to employee commitment that consequently brings about higher employee
perceived performance (Caliskan, 2010). For instance, Brown, Hyatt and Benson (2010) and
Guest (2011) in their studies found that workers were more committed to their job tasks and
attainment of the organization’s goals whenever they felt that their organization actually cares
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 6
about their development and training requirements. Brown, Hyatt and Benson (2010) found
that suitable training positively contributed to the retention of employees as it made the
workers to feel acknowledged as well as recognized by the company for their strengths.
Workers who feel recognized by their company will generally have a high perceived
performance. As such, there is a significant correlation between training and employee
perceived performance.
The HR practice of compensation is also of great importance in influencing employee
perceived performance. Compensation refers to the process that is used to provide financial
value to staff members for the work which they have carried out in the organization.
Compensation generally includes more than just the pay and bonuses that are submitted to the
staff member because of the services they offer to the organization (Khatibi et al., 2012).
Compensation could be utilized in rewarding the performance of staffs, in hiring skilled
personnel, and in encouraging company loyalty by reducing employee turnover. It is worth
mentioning that compensation includes bonuses, overtime, the basic pay, medical allowance,
accommodation/travel allowance, profit sharing and even commission. The compensation
policy of an organization has a major effect on whether the employer can attract new people
into the organization as well as the loyalty of employees. It also helps in ensuring the
maximum performance level of employees to meet the company’s goals and objectives
(Wood, 2011).
In his study of various HR policies in different organizations, Chukwuka (2016)
learned that performance-based rewards offered by the company’s human resource
department helped in increasing the motivation of employees to work and perform their jobs
satisfactorily, which in turn resulted in high employee performance. The HR department’s
compensation practice may entail giving workers pay raises based on their job performance;
that is, when the job performance of the employee improves, he or she would get a pay rise.
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This HR compensation practice has been found by Khan (2010) to greatly help to increase the
perceived performance of employees in a number of organizations considering that most
employees in the studied organizations wanted a pay rise and for them to get it, they had to
work hard and improve their performance. After improving their performance levels, their
pays were increased (Khan, 2010). Therefore, the HR compensation practice of performance-
based pay raises is significantly related to employee perceived job performance: there is a
strong positive correlation (Caliskan, 2010).
In general, employees who feel that they are compensated well by their organization
tend to be highly committed to their organizations. Staff members who are committed to a
company are by and large motivated to demonstrate high job performance. Kehoe and Wright
(2013) reported that employees who are committed usually experience higher job
productivity given that such staff members seek to better perform the behaviour expected of
them. They also go beyond their jobs and develop more efficient methods of working and
they are less likely to free-ride/shirk or to become counter-productive (Caliskan, 2010). All in
all, committed workers are more likely to perform their jobs very well leading to high
employee perceived job performance.
The HR practice of performance evaluation is also explored to determine its
relationship with employee perceived performance. Formal employee performance appraisals
are usually conducted for the purpose of increasing motivation and actually help in
development. Performance evaluation is understood as a methodical appraisal of the
performance of a worker in the worker’s assigned work tasks. Performance appraisal is
generally aimed at increasing employee’s motivation as well as self-worth (Khatibi et al.,
2012). Performance evaluations could be utilized as feedback to employees for the purpose of
influencing and enhancing subsequent employee performance. The findings of employee
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 8
performance evaluations provide insight into the efficacy of the company’s human resource
system, the training and development requirements for the entire company, as well as the
setting and articulating of company objectives for employees. All things considered,
performance evaluations cannot be carried out in an effective manner unless the HR
personnel who conducts the appraisals possesses the interpersonal interviewing skills needed
for providing the feedback to employees being evaluated (Alfes et al., 2013).
There is a positive albeit insignificant or weak correlation between performance
appraisal and the performance of employees. In a study by Dessler (2013), performance
appraisal was found to increase the productivity of a worker which consequently served to
increase the performance of the organization. Performance evaluation helps to enhance
professional growth since it points out the areas of performance improvement. It is worth
mentioning that transparent performance appraisal will motivate workers to work more so as
to attain the goals and objectives of the organization; hence their perceived performance will
increase (Boxall & Purcell, 2011). In his study of HR policies in various organizations, Wood
(2011) found that merit-based performance evaluation increased the worker’s commitment
and motivation, and actually had an effect not just on their perceived job performance, but
also on the performance of the company overall. Satisfied workers lead toward decreased
absenteeism and turnover and higher productivity and job performance (Wood, 2011).
If skilled employees are not motivated to perform their jobs, their effectiveness would
be restricted. As such, to motivate staff members, the HR personnel can encourage efficiency
by means of performance evaluations basing upon group or individual performance. Relating
these employee evaluations to internal promotion systems basing upon employee merit and
other sorts of incentives would support the interest of workers with those of shareholders
(Alfes et al., 2013). Researchers have discovered that staff members generally develop more
positive attitudes whenever they get favourable performance appraisal outcomes (Shields et
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 9
al., 2015). Thus there is a weak relationship between the HR practice of performance
appraisal and employee perceived performance.
Career planning is also a crucial HR practice which could be connected to employee
perceived performance. Career planning is understood as the process that is used to set career
objectives and goals and specifies the ways of attaining those career goals. This HR practice
is an essential tool used in motivating workers to work for the development of the company
(Khatibi et al., 2012). Career planning focuses on motivating staff members to attain the
desired match between the goals of the organization and their personal goals. Career planning
helps to develop the company’s human resources which will in turn enable them to improve
their job performance in the workplace. The process of career development helps to identify
the experience and skills of workers and allocating them work tasks accordingly
(Savaneviciene & Stankeviciute, 2011).
People generally prefer joining the companies in which they can get sufficient
opportunities to pursue their career goals and fully make use of their potential. Career
planning is an essential tool which the human resources department can use to motivate staff
members to work in an efficient and effective manner to accomplish the organization’s goals
and objectives. Employees who are motivated are inclined to exhibit high job performance
(Dessler, 2013). As such, there is a positive though not significant relationship between the
HR practice of career planning and employee perceived job performance.
Furthermore, employee involvement is a vital HR practice that could be correlated to
employee perceived performance. Employee involvement, as Caliskan (2010) pointed out,
occurs when the organization’s HR department creates an environment where workers are
empowered to make their own decisions and take necessary actions that are pertinent to their
job tasks. In their study, Boxall and Purcell (2011) learned that employee involvement
allowed the company to retain its workers because involvement increased commitment and
RELATIONSHIP BETWEEN HR PRACTICES AND EMPLOYEE PERFORMANCE 10
ownership and fostered an environment that made the workers contributing and motivated.
Employee contribution positively influences the performance of workers in organizations. It
is notable that employee involvement helps to increase motivation, job satisfaction, as well as
employees’ commitment given that workers feel themselves more involved in the
organization’s success (Boxall & Purcell, 2011).
When workers are empowered through involving them in decision-making, it helps to
increase their productivity, reduces the gap between subordinates and supervisor, saves time
for decision-making, and fosters a strong sense of teamwork amongst employees (Guest,
2011). Employee involvement also empowers workers so as to release their potential.
Furthermore, empowering workers helps to decrease conflict amongst workers ( Chukwuka ,
2016). All these help to improve the perceived job performance of workers. Noe (2013)
reported that employees need to feel that their company cares about their well-being and
values their contribution. The support which the organization provides is related directly to
the performance of employees. Workers exchange their genuine effort for greater care,
support and concern which they received from the company. Whenever workers are treated
with consideration by involving them in decision-making processes, they are inclined to
display greater commitment levels, which in turn results in higher employee perceived job
performance (Boxall & Purcell, 2011).
Other individual human resources practices like bonuses for work attendance help in
reducing the rates of absenteeism of staff members. Employees who are never absent and
always come to work on time are inclined to being more productive and perform better in
their jobs in comparison to employees with high absenteeism levels (Brown, Hyatt & Benson,
2010). Employees can only perform their job tasks if they are present in the workplace. As
such, a high-performance human resources system that offers bonuses for perfect employee
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attendance is directly related to reductions in employee absenteeism which in turn results in
increased employee perceived job performance (Brown, Hyatt & Benson, 2010).
Recommendations
From the findings, it is clear that HR practices including employee involvement,
training, bonuses and compensation have a significant and positive relationship with job
performance of workers. The HR practices of career planning and performance evaluation are
also positively correlated to employee perceived performance in organizations across the
globe, but their correlation is rather weak and not very significant compared to employee
involvement, training, bonuses and compensation.
It is recommended that organizations have to apply the human resource practices in
order to attain the desired objectives and goals. Various reward and recognition programs
should be used by HR professionals in organizations across the globe in order to drive
behaviour which fosters high employee perceived performance (Alfes et al., 2013). It is also
recommended that organizations adopt performance-based compensation to reward staff
members as this has been shown to have a great impact on the perceived performance of
employees. Noe (2013) reported that performance-based compensation influences the
performance of an employee positively. On the whole, employers should view the HR
practice of compensation in a favourable light given that this HR practice significantly
influences employee perceived performance and productivity. HR professionals should
consider job performance a vital factor in determining the compensation of the performance
of workers.
Moreover, it is recommended that organizations should consider providing training
and development to their workers. The HR department in organizations should use training as
a tool for increasing effectiveness as well as efficiency of workers which will in turn help to
increase the performance of the organization (Khatibi et al., 2012). HR professionals in
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organizations globally should conduct extensive training programs for their staff members
pertinent to the changing requirements of business and jobs. Top executives should value the
ideas and contribution shared by staff members. They should also empower workers to
capitalize on their individual talent so as to make decisions that are effective (Dessler, 2013).
HR practices are of great importance in increasing the performance of employees and
therefore, it is recommended that companies should revise their human resource policies by
keeping in view the aforementioned factors so as to achieve the targeted objectives and goals.
Conclusion
In conclusion, this study sought to delve the relationship between HR practices and
the employee perceived performance in different organizations globally. The results suggest
that there is a strong, positive and significant relationship between the human resources
practices of employee involvement, training, bonuses and compensation and perceived
performance level of staff members in organizations globally. Career planning and
performance appraisals are not strongly related to employee perceived performance. Future
research should examine the other human resource management practices like job
description, supervision, promotion practices, and employee relations as vital factors in
relation to employee perceived job performance.
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