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Strategic HR Practices, Employee Empowerment and Organizational Performance: Empirical findings from small and medium enterprises of Karachi Presenter Saba Mateen-Iqra University Co-Author Dr. Naveed R. Khan- Iqra University INTRODUCTION • The business risk and its uncertainty are increasing day by day. • According to the World Bank (2011), total number of population is around 176 million in which the majority of the people are youngsters. • As far as the GDP of Pakistan is concerned, this commodity sector provides contribution of 46.5 % towards the GDP (Economic Survey of Pakistan, 2011). • According to SMEDA (2006), Pakistan 90% of the firms came under the classification of Small and Medium sized enterprises INTRODUCTION • Federal Board of Statistics demonstrates that 65% of enterprises are located in Punjab, 18% of enterprises are in Sindh and 14% of enterprises are in KPK whereas 3% of enterprises are located in Baluchistan and Islamabad respectively. • Three classes were defined for the SME’s that includes the size of the employment, the annual sales and lastly the paid up capital. PROBLEM STATEMENT • “The SME’s in Pakistan lacks in practicing the Human resource practices .” • According to (Cassell et al., 2002) that employment practices are found to be very diminutive in the measure tasks list of the Smaller or medium sized firms. • Due to financial restraints & growth constraint, smaller firms focus more on utilizing the existing resource effectively and efficiently (Gallego et al., 2012). Cont. • In Pakistan, SMEs are not properly utilizing their work force therefore the organization’s most treasured resources are ignored, i.e. Human resource. (Khan et al., 2013). RESEARCH OBJECTIVE • RO: To examine the impact of strategic HR practices and employee empowerment on organizational performance in small and medium enterprises of Karachi. LITERATURE REVIEW • According to Moideenkutty et al (2011) the best human resource management practices implemented in the Oman Sultanate i.e. staffing, performance management and empowerment are positively associated with the performance of the organization. • Yang (2011) conducted a study and identified the bond between performance of the Taiwan manufacturing firms and the practices of Human resource management. The author used conceptual framework for his discussion on the practices and the performances. Cont. • Muhammad Abdul Rauf (2007) in Lahore, Pakistan is based on the HRM practices and SME’s performance in garment manufacturers which explains that the formal HRM Practices have a significant and a positive effect on the performance of the firm. • Another research conducted by Abdul Raziq (2011) on SME’s is related to the comparative analysis of Human resource management practices between manufacturing and service sectors in Karachi, Pakistan. Theoretical Framework • Resource Based View (RBV) • RBV focuses on intra-organizational perspective and argues that performance of the firm is due to their specific resources and capabilities (Barney, 1997). Proposed framework Hypotheses • Ha1: There is a significant relationship between selective staffing and organizational performance • Ha2: There is a significant relationship between employee empowerment and organizational performance • Ha3: There is a significant relationship between performance management and organizational performance • Ha4: There is a significant impact of selective staffing, employee empowerment and performance management on organizational performance. Methodology Research Approach Research Purpose Quantitative Approach Explanatory Data Source Data Collection Instrument Primary data Survey Questionnaire ( Likert scale) Sampling Technique Target Population Sample Size Statistical technique Convenience Sampling SME’s from Karachi. 215 respondents Correlation and Multiple Regression Analysis 12 Results Table 4.1: Correlations Selective Staffing Employee Empowerment Performance Management Organizational Performance 1 Pearson Correlation Selective Staffing Sig. (2-tailed) .740** Employee Empowerment 1 Pearson Correlation Sig. (2-tailed) .000 .803** Performance Management .772** Pearson Correlation Sig. (2-tailed) .000 .000 .585** Organizational Performance 1 .484** .601** Pearson Correlation Sig. (2-tailed) .000 .000 .000 1 Regression Table 4.2: Model Summary Model 1 R .626a R Square .391 Adjusted R Square .383 Std. Error of the Estimate 5.00956 d i m e n s i o n 0 a. Predictors: (Constant), Performance Management, Employee Empowerment, Selective Staffing b. Dependent Variable: Organizational performance df F Sig. 3 211 215 45.216 .000 b Cont. Table 4.2a Coefficientsa Unstandardized Coefficients B 2.503 Std. Error .219 .321 .101 Employee -.036 empowerment Performance management (Constant) Selective staffing .448 Standardized Coefficients T 11.406 Sig. .000 .303 3.195 .002 .079 -.041 -.456 .649 .116 .388 3.865 .000 a. Dependent Variable: Organizational performance Beta Conclusion • This study provides a better understanding about the utilization of specific HR practices in order to obtain high organizational performance of SME’s functioning in Karachi, Pakistan. • The findings of this research statistically examined and conclude that the relationship among st the selective staffing and performance management practices has a positive impact on the Organizational performance of SME’s whereas the empowerment did not have a positive impact on the organizational performance. Conclusion • Empirically and theoretically, organizational performance can be increased by the adaption of Specific HR Practices such as Selective Staffing & Performance Management. • The suggestions for SME’s of Karachi is that the SME’s needs to work hard on implementing the Selective Staffing and Performance Management Practices and owners or managers of the SMEs needs to increase the scope of HR Practices, which will help in getting the high level of productivity, employee satisfaction, customer satisfaction which ultimately results in high organizational performance. Thank You