An Empirical Assessment of Human Resource Practices to Determine Employees’ Performance
Dr. Shiv Kant Tiwari
Assistant Professor
Institute of Business Management
GLA University, Mathura
Uttar Pradesh, INDIA
Prashant Tiwari
Assistant Professor
Institute of Business Management
GLA University, Mathura
Uttar Pradesh, INDIA
Abstract
This study empirically examined the Impact of Selected HR Practices Recruitment & Selection, Training & Development, Performance Appraisal, Compensation & Rewards and Employee Involvement) on Employees Performance of Private Educational Institutions in Agra (U.P) and NCR (North Central Region) of Northern India. This study was causal in nature and standardize questionnaire was adopted and modified as a tool for primary data collection. Purposive Sampling (Non-probability) technique was used to identify the respondents for the study. In present study we considered six variables and sample size of 578 respondents are taken into consideration. Statistical tools like Factor Analysis and Multiple Regression were applied on independent variables and dependent variable of the study. Results of the study revealed that for the employees’ (Faculty members) of private educational institutions, HR Practices such as, Recruitment & Selection, Training & Development, Compensation & Rewards and Employee Involvement have a significant cause and effect relationship with Employees Performance while Performance Appraisal has an insignificant impact on Employees Performance.Therefore, Researcher have suggested to the private educational institutions to update their Human Resource Policies and Practices, so that employees’ will be improve their performance.
Keywords- HR Practices, Employees Performance, KMO, FactorAnalysis, Multiple Regression, Private Educational Institutions
Introduction
To manage human resource in any organization is the most important task which can be performed by managers in today’s dynamic organizational environment, managing human resource is a continuous and pervasive process which needs continuous improvement and feedback in the present practices which organizations are using to manage human resource. Nowadays, organizations are using various tools and techniques including Statistical Tools and Manual Tools in the field of Human Resource Management with the major objective to increase the performance of the employees. In today’s Competitive era Educational Institutions cannot be considered out of this, therefore Educational Institutions also, need to change their HR Practices very often so, that the major objective i.e. increase Employees Performance can be attained by the Institutions.
Kooij et al. (2010) recognized various HR Practices such as: “Rewards and benefits (perception of equal opportunities in the workplace), information sharing (communication from management), working in teams (perception of teamwork as priority), work-life policies (ability to balance work and life), performance management (feelings of personal accomplishment; recognition for good performance) and training and development (level of training received).” Combs et al. (2006) recognized HR practices for the first time that investigators’ elaborate as high valuable commitment practices, thus leading to human resource which are Job Security, Staffing and Selection, Rewards and Benefits, Information sharing (including communication), Performance Management (performance appraisal and pay), Working in teams (cooperation), Participation (including empowerment and grievance / suggestion schemes), Work / life policies, Flexible work schemes, Training and development, Internal promotion and career development, Job enrichment.
Some HR Practices in relation with employees’ performance such as- recruitment & selection, placement, promotion, training, compensation, performance evaluation, grievance procedure and pension or social security practices identified by (Teseema and Soeters, 2006),Although significant numbers of studies (Delery and Doty, 1996;Seidu, 2011; Sivapragasam and Raya, 2018) have identified the relationship between HR practices, employee performance, some studies have argued (Wall & Wood, 2005; Guest, Michie, Conway, & Sheehan, 2003; Wright & Gardner; 2003). The role of Guest et al. (2003)suggests that tougher tests taken to investigate the performance nexus of HR activities mean little or relationship between performance and human resource management (HRM).
The means and methods to measure the effectiveness of major HR Practices like Recruitment & Selection, Training &Development, Performance Appraisal, Compensation and Rewards, Employee Involvement on Employees Performance in case of Private Educational Institutions located in Agra (U.P) and NCR (North Central Region) of Northern India. While conducting the Review of Literature of the study variable we found that there were several studies with the variables have been conducted by the different authors but still there was no work in the area of Educational Sector that shows the relationship among the study variables. Therefore,the basic purpose of the study is to identify underlying factors of Selected HR Practices (Recruitment & Selection, Training & Development, Performance Appraisal, Compensation and Rewards, Employee Involvement and Employees Performance. Secondly, to study the impact of Selected HR Practices on Employees Performance and lastly, to open new vista for the further researcher.
Review of Literature and Hypothesis Development
Human Resource Practices
Huselid (1995) in his study identified various HR practices like; recruitment efforts, selection, training and promotion criteria, performance appraisal, job design, incentive compensation, grievance procedures, information sharing, attitude assessment, labor management participation. This study deals with the relationship, as it exists, between these three HR practices, that is, compensation, promotion and performance evaluation and perceived employee performance. Human resource planning, training & development, team work, performance evaluation, compensation / incentives, security help increase performance, including improved efficiency of staff, product quality and flexibility of the firm’s (Lee and Lee, 2007). Pfeffer (1998) have also identified HRM practices different from others these were comprises of job security, Autonomous Teams, extensive training, Rewards and recognition on Higher performance, Conservative or Selective hiring practices, employee’s involvement and differences in Employee’s status. Delery and Doty (1996) stated that Formal Training systems, appraisal measures, employment security, internal career opportunities, voice mechanism, profit sharing, employment security and job definition. In Continuation to the same Strategic approach of HRM came into existence for developing, managing, acquiring, motivating, and dedicated employee’s proves as key resources of organizations (Ahmed, 1999).
Employees’ Performance
Sinha (2001) stated that performance of the employees is depending on the “willingness and openness of the employees itself on doing their job. He also stated that by having willingness and openness of the employees in doing their job, it could enhance the employees’ productivity which also leads to the performance” of the employees. Eysenck (1998) found that an employees’ performance can also be determined as an ability of a persons’ that perform the task, this is also consists of the “opportunity and willingness to perform as well. The sense of willingness to perform means that the desire of the employees in putting as much effort towards” their task Employee performance is one of the main factors contributing directly to the organization’s performance.
Relationship between Selected HR Practices and Employees’ Performance
The experimental studies have extended to investigate the effects of a few HR Practices on employees’ performance (Bowen & Ostroff, 2004; Becker & Huselid, 2006).Qureshi et al.(2006) claimed that very few HR practices are relevant and positively correlated with the performance and training & selection of employees is one of the key element that effect the performance of employees among all other practices and in other studied they concluded that HR activities are directly associated with the success of workers in the organisation studied (Qureshi et al. 2007). Savaneviciene and Stankeviciute (2011) found that there is a significant relationship exists between practices which organization is using for managing the human resource and Employee’s performance.Their study also discloses with the help of result outcomes that skill development, motivational development and development of skill enhancement and Positive significant relationship was found in between HRM practices and Employee’s Performance.
Recruitment & Selection and Employees’ Performance
Huselid (1995) identified various HR practices such as- recruitment & selection, which gives the company a higher quality of skills; he also emphasized the value of “training as a compliment to selection practices. The key step in the process of employee appraisal is recruitment & selection and it is concerned with recognizing, recruiting and choosing the best applicant to fulfill the organization’s job requirements (Cunningham, I, 1999 and Lynch & Smith; 2010). Recruitment & selection helps the organisational managers in selecting and recruiting potential applicants, which, in turn, contributes to improved job performance and organisational performance (Rehman (2012). On this point, several scholars agreed that an efficient recruitment & selection process improve the job performance of the employees’ (Amin et al., 2014). Many authors believed that recruitment & selection is substantially and positively affected by the performance of employees (Alsabbah & Ibrahim, 2014; Khan, 2012; Gamage, 2014).
Training & Development and Employees’ Performance
Cardon & Stevens (2004) found that training is one of the core elements of HR Practice that helps the employees sustain the organization’s successful atmosphere and also be efficient, it also helps employees improve productivity. Mahadevan, A. &Mohamed, F.A. (2014) revealed that employee training plays an essential role that helps to develop the performance of the organization. Jayawarna et al. (2007) revealed that is more productive and significantly correlated with employee productivity. Similarly, development includes growing the KSAs of employees (Truss, Mankin, & Kellither, 2012). Researchers such as (Afsana, Afrin & Tarannum, 2016; Singh, 2016) have identified a positive relationship between training &development and job performance for employees. Many authors have included Training and development as high-performance HRM practices (Huselid, 1995; Koch and McGrath, 1996).
Performance Appraisal and Employees’ Performance
Brown & Hewood, (2005) stated that the performance appraisal can be further improved by HRM activities such as formal training for other HR practices and financial incentives leading to increased productivity of the organisation. Darehzereshki (2013) revealed that Performance appraisal system has a strong effect on employee performance. They have concluded on the basis of their findings that employee with higher appraisal were found more satisfied in the organization.Literature shows that performance appraisal has a strong positive correlation with the performance of employees (Ahmad & Shahzad, 2011; Khan, 2010; Khan, Khan, & Khan, 2017).
Compensation and Rewards and Employees’ Performance
Chin (2010) revealed that there is significant impact of Profit related payment schemes, and better linkages between compensation and rewards techniques with the employee’s performance appraisal with employee’s performance. Compensation is the reward given to its workforce by the organisation in exchange for showing willingness to perform different jobs in the organisation (Rana & Malik, 2017).Teseema and Soeters (2006) found that job performance is positively correlated to compensation practices and these results have been confirmed by other researchers in other conditions (Bashir & Khattak, 2008; Nzyoka & Orwa, 2016; Frye, 2004).
Employee Involvement and Employees’ Performance
Locke et al., (1997) revealed that employee involvement is making an atmosphere in which employees are empowered to make their decisions and take actions relevant to their jobs and the employee contribution influence employee’s performance in a positive manner.Chughtai (2008) revealed that Employee’s involvement plays a significant role in increasing employee’s performance. Employee involvement is used as an important factors influencing on organization performance (Pambreni et al. 2019). But some researchers argued that job involvement improves performance to a little extent (Cron 1984; Dubinsky& Hartley, 1986; Brown & Leigh, 1996). Several researchers have shown that job performance contributes significantly to improving employee job performance (Lassk, Marshall, Cravens & Moncrief, 2001; Diefendorff, Richard & Gosserand, 2006; Johari & Yahya, 2016).
Conceptual Framework
As per literature review, following theoretical framework has been suggested. The figure below conceptualizes the different relationships that the researcher would like to explore in this research.
“Figure: 1- Model of the Study”
H1
H2
H3
H4
H5
Research Methodology
This study was causal in nature and standardize questionnaire was adopted and modified as a tool for primary data collection, the scale of the study were adopted from the previous literature and published studies (Table: 3). Questionnaire was used to collect the data for all the variables on Five Point “Likert Type Scale” where 1 indicates the minimum agreement and 5 shows the maximum agreement.This study was conducted through personal contact and via online (Google docs. form) by the researcher with the respondents; therefore, the sample frame was the faculty members of private educational institutions at Agra Region (U.P) and NCR (National Capital Region) of Northern India during the data collection phase of the study. Purposive Sampling (Non-probability) technique was used to identify the respondents for the study.In present study we considered six variables and sample size of 578 respondents are taken into consideration.Initially about 700 questionnaires were distributed and of which 618 were returned back. But after rejecting 40 questionnaires because they were incomplete, 578 were taken into consideration for further processing and analysis.
To check the impact of Independent variables on Dependent variables we have used SPSS 20 as a statistical tool and test such as;Cronbach Alpha (a) Reliability Test was applied to check thereliability of the questionnaire.Factor Analysis was applied to identify underlying factors of all studied variables i.e. Recruitment & Selection, Training & Development, Performance Appraisal, Compensation & Rewards, Employee Involvement and Employees’ Performance. Regression Analysis was applied to evaluate the impact of independent variables i.e. Recruitment & Selection, Training & Development, Performance Appraisal, Compensation and Rewards, Employee Involvement on dependent variable i.e. Employees’ Performance.
Results and Discussion
For better understanding of our sample first demographic analysis have been done. Detailed investigation of demographics which comprised of gender and age has precisely shown in table: 1.
Table- 1: “Demographic Profile of Respondents”
|
Demographic Variable |
Category |
Frequency |
Percent (%) |
|
Gender |
Male |
336 |
58.13 |
|
Female |
242 |
41.87 |
|
|
Age (Years) |
Up to 25 |
99 |
17.15 |
|
25 to 30 |
155 |
26.81 |
|
|
30 to 35 |
192 |
33.21 |
|
|
35 to 40 |
97 |
16.78 |
|
|
Above 40 |
35 |
6.05 |
Gender profile of our sample shows the fair distribution with 58.13 % of Male respondents and 41.87 % of Female respondents. In terms of age distribution of the sample, highest number of respondents belongs to 30 to 35 years with 33.21 %, followed by 25 to 30 years with 26.81 %, Up to 25 years with 17.15 %, 35 to 40 years 16.78 % and last Above 40 years of age with 6.05 %.
Reliability Test
The higher Cronbach alpha value indicates high reliability, but a Cronbach alpha of 0.7 and above is appropriate (Nunnally & Bernstein, 1994). In the present study reliability test indicated in table- 3, where Recruitment & Selection Cronbach's alpha value is .806, Training & Development value is .853, Performance Appraisal value is .843, Compensation and Rewards value is .862, Employee Involvement value is .901and Employees’ Performance value is .826 which was more than 0.7, thus we can conclude that all the studied variables are reliable and suitable for analysis.
Kaiser Meyer Olkin and Bartlett’s Test of Sphericity
KMO and Bartlett’s Test of Sphericity was calculated using SPSS Software i.e. help to identify sampling adequacy.
|
Table- 2: “KMO and Bartlett's Test” |
||
|
Kaiser-Meyer-Olkin Measure of Sampling Adequacy |
.954 |
|
|
Bartlett's Test of Sphericity |
Approx. Chi-Square |
11886.534 |
|
df |
780 |
|
|
Sig. |
.000 |
|
The high value between (0.5 and 1.0) indicates that it is acceptable to examine the factor analysis. Here the value of KMO is .954, so it is appropriate for an analysis of factor analysis. Thus the sample is adequate for the study.
Bartlett s Test of Sphericity
Bartlett's Test of Sphericity is used to verify the hypotheses of the variables in the population that are uncorrected. It was measured by Chi-square with a value of 11886.534, which was important at a 1 percent significance level. The above hypothesis is therefore rejected, and it means that the data for the study are sufficient for factor analysis.
Total Variance Explained
Factor Analysis was applied on the 35 items. Principle Component Analysis (PCA) was used by applying varimax rotation for the factor extraction. The factor analysis converged on 6 factors which explained 56.726 of total variance.
Table- 3: “Result of Factor Analysis”
|
No. of |
Construct / Sources |
Items |
Item |
No. of |
Cronbach's |
|
1 |
Recruitment & Selection |
“My organization widely circulates information about both external and internal recruitment processes.” |
0.758 |
5 |
0.806 |
|
“My organization discloses information to applicants regarding the steps and criteria of the selection process.” |
0.736 |
||||
|
“My organization has competitive selection processes that attract competent people.” |
0.730 |
||||
|
“Selection tests of the organization, where I work are conducted by trained and impartial people.” |
0.713 |
||||
|
“My organization uses various selection instruments (e.g. interviews, tests, etc.).” |
0.663 |
||||
|
2 |
Training & Development |
“My organization helps me to develop the skills I need for the successful accomplishment of my duties (e.g., training, conferences, etc.).” |
0.810 |
5 |
0.853 |
|
“My organization invests in my development and education promoting my personal and professional growth in a broad manner (e.g., sponsorship of learning programs, language courses, etc.).” |
0.782 |
||||
|
“My organization stimulates learning and application of knowledge.” |
0.770 |
||||
|
“In the organization where I work, training needs are identified periodically.” |
0.750 |
||||
|
“I can use knowledge and behaviors learned in training at work.” |
0.684 |
||||
|
3 |
Performance Appraisal |
“My organization periodically conducts performance appraisals.” |
0.797 |
5 |
0.843 |
|
“In the organization where I work, performance appraisal is the basis for decisions about promotions and salary increment.” |
0.795 |
||||
|
“In the organization where I work, performance appraisal provides the basis for an employee development plan.” |
0.794 |
||||
|
“My organization circulates performance appraisal criteria and results to its employees.” |
0.788 |
||||
|
“My organization discusses performance appraisal criteria and results with its employees.” |
0.751 |
||||
|
4 |
Compensation and Rewards |
“My organization remunerates me according to the remuneration offered at either the public or private marketplace levels.” |
0.821 |
5 |
0.862 |
|
“In the organization where I work, I get incentives such as promotions, awards, bonuses, etc.” |
0.813 |
||||
|
“My organization offers me a salary i.e. compatible with my skills, training, and education.” |
0.802 |
||||
|
“In the organization where I work, my salary is influenced by my results.” |
0.795 |
||||
|
“My organization considers the expectations and suggestions of its employees when designing a system of employee rewards.” |
0.786 |
||||
|
5 |
Employee Involvement Ulrich et al. (1991) Dietz et al. (2010). ” |
“My organization recognizes the work I do and the results I achieve.” |
0.743 |
9 |
0.901 |
|
“My organization encourages my participation in decision- making and problem- solving.” |
0.737 |
||||
|
“My organization seeks to meet my needs and professional expectations.” |
0.736 |
||||
|
“My organization favors autonomy in doing tasks and making decisions.” |
0.721 |
||||
|
“My organization is concerned with my well-being.” |
0.716 |
||||
|
“In the organization where I work, employees and their superiors enjoy constant exchange of information in order to perform their duties.” |
0.707 |
||||
|
“In the organization where I work, there is an environment of trust and cooperation among colleagues.” |
0.691 |
||||
|
“My organization treats me with respect and attention.” |
0.681 |
||||
|
“My organization follows up on the adaptation of employees to their functions.” |
0.678 |
||||
|
6 |
Employees Performance |
“Flexibility and openness to new ideas & handles change well.” |
0.771 |
6 |
0.825 |
|
“Promotes team work.” |
0.757 |
||||
|
“Breadth of knowledge and skills to do tasks outside work team.” |
0.752 |
||||
|
“Goes extra mile, tries to remove barriers to team work.” |
0.723 |
||||
|
“Ability to learn new skills well.” |
0.718 |
||||
|
“Minimal degree of supervisory support required.” |
0.664 |
Multiple Regression Test
This test was applied to identify the impact between (RS, TD, PA, CR and EI) as Independent Variable and EP as Dependent Variable of the Study by using SPSS 20.
Table- 4: “Results of Multiple Regression Analysis”
|
“Results of Multiple Regression Analysis” |
|||||
|
Independent Variables |
Dependent Variable |
||||
|
β value |
t- Statistics |
p-value |
|||
|
RS |
.138 |
3.067 |
.002 |
||
|
TD |
.134 |
2.705 |
.007 |
||
|
PA |
.068 |
1.425 |
.155 |
||
|
CR |
.221 |
4.863 |
.000 |
||
|
EI |
.260 |
5.348 |
.000 |
||
|
R-Square (R2) |
.491 |
||||
|
Adjusted R2 |
.486 |
||||
|
F-value |
110.150 |
||||
|
Durbin-Watson Statistics |
1.574 |
||||
|
|
|
||||
The value of R2is.491 that indicates independent variable explain 49.1% variance in Employees Performance, in other words Independent Variable contribute 49.1% to Dependent Variable. The ANOVA table assumes, the null hypotheses that Independent Variable and to Dependent Variable are unrelated. The model used for regression has good fit as indicated by F value 110.150 which is significant at 5 percent level of significance. So null hypothesis is rejected and further analysis can be done as both variables were found to be related, in other words a high predictability of model.
Regression equation
Y=a+bx1+bx2+bx3+bx4+bx5+e
Where Y= Dependent variable Employees Performance(EP), a= The “Y intercept”, x= an x score on independent variables Recruitment & Selection (RS), Training and Development (TD), Performance Appraisal(PA), Compensation and Rewards (CR),Employee Involvement(EI) for which we tried to predict a value of Y and e= error term.
EP=0.746+0.142(RS)+0.133(TD)+0.063(PA)+0.188(CR) + 0.290(EI)+e
Model summary indicating that Model having RS, TD, PA, CR and EI as Independent Variable and EP as Dependent Variable having a cause and effect relationship checked with value of Adjusted R-square which was .486.Model having RS, TD, PA, CR and EI as Independent Variable and EPas Dependent Variable has a good fit as indicated by F-test value from ANOVA table 110.150 which is significant at 5percent level of significance.
RS, TD, CR and EI as Independent Variables have a significant cause and effect relationship with EP as Dependent Variable having β value of .138, .134, .221 and .260 tested through t-test value 3.067, 2.705, 4.863 and 5.348. Significance of the relationships is tested through P values of RS, TD, CR and EI is .002, .007, .000 and .000. All values are significant excepting PA at 5 percent level of significance. As these findings were consistent with the studies of (Sutanto, 2016; Huselid, 1995; Amin et al. 2014) on Recruitment & Selection has a significant impact on Employees Performance, Training & Development has a significant impact on Employees Performance and the findings of the study were consistent with the studies of (Platis et al. 2015; Falola et al. 2014). Compensation & Rewards has a significant impact on Employees Performance and the findings of the study were consistent with the studies of (Chin, 2010; Tasema & Soeter, 2006; Platis et.al, 2015; Ehsan, 2018). Employee Involvement has a significant impact on Employees Performance and the findings of the study were consistent with the studies of (Locke et al., 1997; Brown & Leigh, 1996; Platis et.al, 2015; Chughtai, 2008). Performance Appraisal as an Independent Variable does not have cause and effect relationship with Employees Performance as Dependent Variable indicated by β value of .068 tested through t-test value 1.425 and P value is .155 which is not significant. Mostly studies have a significant impact of Performance Appraisal on Employees Performance (Ehsan, 2018; Wahjono, 2016; Darehzereshki, 2013) but in the current study the result shows that Performance Appraisal has an insignificant impact on Employees Performance and the findings of the study were consistent with the study of (Ahmad and Shahzad, 2011).
Table- 5:“Result of Hypotheses Testing of RS, TD, PA, CR and EI on EP”
|
S. No. |
Hypothesis No. |
Hypothesized Path |
Beta value |
P value |
Result |
|
1 |
H1 |
RS --> EP |
.138 |
.002 |
Accepted |
|
2 |
H2 |
TD --> EP |
.134 |
.007 |
Accepted |
|
3 |
H3 |
PA --> EP |
.068 |
.155 |
Not Accepted |
|
4 |
H4 |
CR --> EP |
.221 |
.000 |
Accepted |
|
5 |
H5 |
EI --> EP |
.260 |
.000 |
Accepted |
Conclusion and Implication of the study
The present study aims to attempt establish relationship between Selected HR Practices (RS, TD, PA, CR and EI) have a significant cause and effect relationship with EP. Analysis of the data revealed that Better Recruitment and Selection process in the organization directly influences the performance of the employee’s one major reason for the same could be the Selection of best talent through fair and unbiased techniques of recruitment and selection process. If employee gets the opportunity of enhancing the skills and knowledge through Training and Development this contribute positively in his / her performance in the organization. Employee Involvement and Compensation and Reward practices have significant effect on Employees Performance of the employees, therefore Private Institutions in the Northern India are advised to adopt better compensation and rewards policies and more participation in decision making process in an organization when it is needed, so that they can segregate the best talent from the other ones so, that employees felt their value in the organization which will ultimately result in the higher employee Performance. As well as the present study result shows that Performance Appraisal has an insignificant impact on Employees Performance. The justification of insignificant in the present study are- First, In Private Educational Institution in Agra (U.P) and NCR (North Central Region) it is generally observed that the Performance Appraisal policy is effected by several reasons such as- Favoritisms of employee in the eyes of Management / Superior. Secondly, there is biasness in the Performance Appraisal of Faculty members, in which they not treated equally and the performance parameters are also different from one employee to another employee because the superior have some preferences and perception towards some employees. Society can also benefited from the outcomes of the study as it was found in the study that, if an organization develops a model of human resource management practices according to the study then they will be able to convert their employees more committed towards the organization and loyalty among the employees will also raise.
Limitations and Future scope of the study
This study has been done by getting response only from Agra (U.P) and NCR Region, may not be represent the whole country academic employees perception, in India, because India is country which has different Culture and Tradition with very vast difference among the employees living cost. So it is essential to generalize the results of study across different contexts sample must be collected from other cities also.This study is mainly focus on Selected HR Practices of Private Educational Institutions, that’s why we are unable to generalise the studied results on other organizations i.e. Public Educational Institutions, it is suggested that before implementing the conclusion among Public Institutions, respondents must be taken from Public Institutions also.In the present study we are using only five HR Practices as shown important in previous researches, but there are other HR Practices like Knowledge Sharing, Employee Engagement, Job Security, Working Environment, Grievance Redressal, etc. can also be considered for getting the better understanding of Employees Performance in Educational Institutions.
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