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ISSN 2309-0081 Akhtar, Hassan, Sarmad, Ali & Javed (2016) 260 I www.irss.academyirmbr.com July 2016 International Review of Social Sciences Vol. 4 Issue.7 R S S Impact of Human Resource Management Practices on Employee performance: An Empirical Study of Public Organizations (Universities and Colleges) in Okara, Punjab, Pakistan. NAEEM AKHTAR Lecturer; Department of Management Sciences University of Okara, Pakistan E-mail: [email protected] MUHAMMAD HASSAN MBA; Department of Management Sciences University of Okara (Punjab), Pakistan. E-mail: [email protected] SALEH MUHAMMAD SARMAD Lecturer; Department of Management Sciences University of Okara (Punjab), Pakistan. E-mail: [email protected] SAJID ALI MBA; Department of Management Sciences University of Okara (Punjab), Pakistan. E-mail: [email protected] ZUNAIR JAVED MBA; Department of Management Sciences University of Okara (Punjab), Pakistan. E-mail: [email protected] Abstract The purpose of this study is to find out the relationship between HRM practices and Employee performance. In this research Employee Performance taken as dependent variable and training, compensation, career planning, and performance appraisal system taken as dependent variable. To check factors that declining the employee performance in public organization (university and colleges) in Okara, Pakistan. Research questionnaire was development to collect data. Population was staff of public organization. Sample size selected 200 respondents by convenience sampling techniques. The research has a limited Area (Context) because it is implicated in Okara, Punjab, Pakistan. It may be generalized in whole country with maximum care. The results shows that there is a positive relationship of Training, Performance appraisal system, Career planning and Compensation on Employee performance. Key Words: Public organizations, Okara, HRM Practices, Compensation, Training, Career Planning, Performance Appraisal System, Employee Performance.

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ISSN 2309-0081 Akhtar, Hassan, Sarmad, Ali & Javed (2016)

260

I

www.irss.academyirmbr.com July 2016

International Review of Social Sciences Vol. 4 Issue.7

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Impact of Human Resource Management Practices on

Employee performance: An Empirical Study of Public

Organizations (Universities and Colleges) in Okara, Punjab,

Pakistan.

NAEEM AKHTAR Lecturer; Department of Management Sciences

University of Okara, Pakistan

E-mail: [email protected]

MUHAMMAD HASSAN MBA; Department of Management Sciences

University of Okara (Punjab), Pakistan.

E-mail: [email protected]

SALEH MUHAMMAD SARMAD Lecturer; Department of Management Sciences

University of Okara (Punjab), Pakistan.

E-mail: [email protected]

SAJID ALI MBA; Department of Management Sciences

University of Okara (Punjab), Pakistan.

E-mail: [email protected]

ZUNAIR JAVED MBA; Department of Management Sciences

University of Okara (Punjab), Pakistan.

E-mail: [email protected]

Abstract

The purpose of this study is to find out the relationship between HRM practices and Employee

performance. In this research Employee Performance taken as dependent variable and training,

compensation, career planning, and performance appraisal system taken as dependent variable. To check

factors that declining the employee performance in public organization (university and colleges) in Okara,

Pakistan. Research questionnaire was development to collect data. Population was staff of public

organization. Sample size selected 200 respondents by convenience sampling techniques. The research has

a limited Area (Context) because it is implicated in Okara, Punjab, Pakistan. It may be generalized in

whole country with maximum care. The results shows that there is a positive relationship of Training,

Performance appraisal system, Career planning and Compensation on Employee performance.

Key Words: Public organizations, Okara, HRM Practices, Compensation, Training, Career Planning,

Performance Appraisal System, Employee Performance.

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Introduction

Today the world is a global village. Therefor competition is very high and the organizations are developing

their human resource management to make the organization effective and efficient. Career planning is the

most important part of the human resource management. All over the world organizations are fully

concentrated on the human resource development because there is a huge competition between

organizations. Career development have many activities i.e. relationships and responsibility. Every

employee of an organization wants a responsibility to show his worth for the organization. There are four

stages for career planning exploration, establishment, maintenance, and disengagement (Dr. Sharjeel

Saleem, 2013).

Day by day technology is rapidly changes. Managers are wanted to achieve organizational goals

effectively. Most of the organizations developed their both personal career management and organizational

career management (Çiğdem Kaya, 2014). Human resource management is the long term asset of the

organization. If HRM department working good and hired the right people for right job and develop their

abilities and as well as skills then surely company compete (Dr. Harold Andrew Patrick, 2011).

Training is the most important factor in employee development but some researchers are not include

training as important element, their believe that this is a long term and costly procedure. After Second

World War Organizations know the need of training because without training employees does not perform

their responsibilities (Naveed Ahmad Nadeem Iqbal, 2014). This study explain the effect that how the

service delivery is going to decline due to insufficient of human resource development in south African

public sector as well as private sector (Franklin Dang Kum, 2014).

Training is very important in all sector in this study determine the impact of training in education sector.

Training in education sector in Pakistan is very low so there for education level is also not good. Training

improves the teacher personal and interpersonal as well as intellectual abilities. (Anam Amin, 2013). If any

organization is want compete and survive in market then it is very important to this organization to improve

and develop their human resource management department. If a company train their employees it will

create competitive advantage on his competitors (H. O. FALOLA, 2014). Training is critical and necessary

activity process that increases the knowledge, abilities as well as capabilities of employees (Dr . Amir

Elnaga, 2013).

Organizations have many skilled employees but some skills are only polished by training programs. But in

Pakistan organization heavy invested on human resource development without knowing about the problem

and why this happen due to lack of motivation & low level of employee satisfaction (Azara Shaheen, 2013).

Performance appraisal system is also a very important factor in organization. 90% organization are used

this system. Employee gives better performance if he have good environment and he is satisfied with his

job (Rabia Karimi, 2011).

HRM is basically playing a vital role in any organization. If organization give happiness to their employees

by with motivation, compensation or training and vice versa, the performance must be best. Appraisal

system is the very important function in HRM. (Asad ur Rehman, 2013). Performance appraisal system

have a two main parts i.e. first is evaluation of employees on the basis of performance and second is

assessment on the basis of opinion, experience. Mostly organization implements Performance appraisal

system to increase the productivity of the organization by giving rewards to employees based on

performance (Kumbhar, 2011).

Performance appraisal system is a very important and essential instrument that tells about the weaknesses

and the strengths of the employees. If any employees have a any weakness e.g. skill, experience the

organization must eliminate this by motivation or training and vice versa (Onyije, 2015). Performance

evaluation system is an issue todays in organizations because if an organization have bad performance

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evaluation system then it should not compete in market. Why because their employees demotivates and

their skills not polished (Shaemi Barzoki Ali, 2012).

Compensation is also a very important aspect in an organization. In organization if managers does not

compensate their employees then employees does not feel happy. Organization must keep their employee

loyal and motivates by giving some rewards. They feel that they are also productive and responsible

(Yamoah, 2013). In organization employee is satisfy their job then definitely his performance must be best.

In education sector the main role has teachers or professors. If they are more talented, skilled persons,

experienced persons then the quality of education is good. The best to motivate them is salary; teaching is

an most honorable profession (Tahira Nazi Saif-Ur-Rehman Khan, 2013).

HRM is the management of the organization. If organization is want that operations are smoothly run

without any restriction it train their employees to create more skills an experienced to increase the

productivity of the company. Businesses have huge competition and technology have great variation time to

time. Company must proactive about this if it wants to compete in national and international market (Bilal

Jamil, 2011).

Problem Statement/Background of Problem

The aim of this study to the importance of HRM practices in organization and how they impact the

organization productivity and employee performance. In this research we are explore the impact of human

resource management practices (Training, compensation, Career planning, performance appraisal and so

on) on the employee performance. Research is always started with the problem and to find the solution of

the problems. In service sector especially government sector government try to eliminate human resource

management problems and also to improve the performance appraisal system in all organization (Saudi,

2014).

There is strong and honorable relationship between employers and their employees. Employees try to

satisfy their employer to increase productivity and employer always try to satisfy their employees by giving

some rewards or by motivation. Employer also tries to give all the necessary tools to the employee to

increase efficiency in their work and productivity. But in these two processes some hurdles are taken place

due some environmental or economic problems and vice versa (Larbi, 2014).

A practical example is given here i.e. ESCON is a company that provide services efficient, reliable and

quality consulting and training services to both the public and private sector. ESCONE is started a project.

At the starting the performance of employees does not good. Then HRM department take action and they

find that employees need training. This study intends to examine whether there is a link between training

and employee performance in ESCON Pty Ltd. (Franklin Dang Kum, 2014).

Objectives of Research

To find out the relationship between Career planning and Employee performance

To find out the relationship between training and employee performance

To find out the relationship between performance appraisal system and employee performance

To find out the relationship between compensation and employee performance

Research Questions

What is the relationship between Career planning and Employee performance?

What is the relationship between training and employee performance?

What is the relationship between performance appraisal system and employee performance?

What is the relationship between compensation and employee performance?

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Significance/Scope of the Study

In this study the knowledge and information is very important for the service sector. All important and

necessary aspects are discussed about the human resource management Practices. My focus in this study

how to increase productivity (services) by to improve HRM department. In this research focus on that HRM

department is skilled in profession then it would be hire experienced, and skilled person. Training,

compensation, career planning, and performance appraisal system all the dimension are discussed in this

study that why organization need training? How career planning works to improve employee satisfaction?

Literature Review

Training and Employee Performance

In this paper the researcher determine the relationship between training and the employee performance in

telecommunication sector in Pakistan. Data was collected by the questionnaires survey which shows that if

an organization wants to achieve their objectives and goals then it develop skills in employees by training.

The sample size for this study was 360. 360 questionnaires were distributed to the respondents. There are

five telecom companies are selected for this research. Findings show that there is significant relationship

between training and employee performance (Afshan Sultana, 2012).

Training is basic function of HR. Training develop skills in employees. Organization generates maximum

output. This study is conducted HR department of Lahore hotels in Pakistan (Ameeq-ul-Ameeq, 2013).

Basic aim of this research is to determine the relationship between training and performance of the

employees. This study is taken in a Medical Hospital Jordanian. The sample size is used 380 employees.

The tool for data collection method is used was questionnaire. The analysis is used was multiple regression.

The results of this study show that, there is durable relationship between these two variables. The need of

training is due the modern influence of technology. Day by day technology changes rapidly (Salah M. Diab,

2015).

The basic purpose of this research was to check the impact of training on the worker performance. This

research was conducted in a courier organization (DHL and FedEx) located in Dar es Salam Tanzania. The

methodology was used for this study is Questionnaire. Correlation test was used for this study. The sample

size for population was 150 employees chosen by random sampling. All the regular and key performance

signs were used in this research. Findings are there is a significant relationship between training and

member of staff performance (Dr. Nelson Jagero, 2012).

Any organization successfully achieved their goals by good employee’s performance. The basic

perseverance of this study is to explore the effect of training on organization performance. Employees are

the potential properties of any business. Tis research was conducted in ( Mutare City Council, Zimbabwe.

Correlation analysis was used to pronounce the degree of suggestion between these variables. The

respondent was 132 selected for this. In which 91 were males and 41 were females. For data collection the

questionnaire was used and analyzed data by quantitative techniques (Wehnam Peter Dabale, 2014).

Top level management is known that training of the employee is very necessary to take advantage on

competitors. This study was taken in pharmaceutical industry Karachi, Pakistan. The questionnaire is

developed and distributed 356 respondents with the aid of random sampling. The response rate was 96%.

The finding shows that there is strong positive relationship (Uzma Hafeez, 2015). Lack of motivation and

satisfaction does not decrease the only employee performance it also effect the environment of the

organization. This study is collected in health sector of Kenya. The respondents for this research are

physician nurses and serving department. The information was collected through questionnaire. SPSS was

to analyze the data. There is strong significant between training and performance (James Watta Onyango,

2014).

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The basic attention of this research is to define the impact of training and improvement on performance of

the employees. In this research the quantitative method was used. The sample frame was used 100

respondents and likert’s scale technique was used to collect data. Findings described that there is a strong

correlation between development and performance (Abeba Mitiku Asfaw, 2015). The basic focus of this

research is to examine relationship of training and performance. The aim of training is that to create

confidence and skills in workers. This study explains the relationship between training dimensions and

member of staff presentation. This study was conducted in Kenya. The sample size of this research was

taken 150 employees of six branches. The employees are selected by the method of simple random

sampling. The regression exploration was to interpret the data (Ashikhube Humphrey Otuko, 2013).

Compensation and Employee Performance

Every employee wants earn money for his development of life. The basic purpose of this is to determine the

relationship between compensation and performance of employee. Question paper is used to collect the data

from the respondents. This research shows that there is good impact of compensation on employee

performance (Mr. Abdul Hameed, 2014).

There are many types of the reward system. In this research the sample size is used 77 employees of two

companies. Huge studies are conducted on this topic but all reward variables are not included. Correlation

test is used and this study find that compensation have a optimistic effect on employee performance.

(Payam Gohari, 2013).

Compensation is the basic element in HR practices. Compensation system is a most important for both

service sector and manufacturing sector. This study is conducted in Indonesia. The study shows that there is

a strong positive correlation between nonfinancial rewards and as well as financial rewards with employee

performance (Sopiah, 2013). Every organization pays to their employees/workers. According to this

research paper workforces do not have strong relationship between pay and performance and as well as

workers performance. For the data collection method questionnaire was used. The respondents of 46% are

the 1-3 year experience and 56% are the respondents are 1-2 year experience in sales representative. There

is a significant influence on performance by pay (Umar, 2010).

Reward system have important place in any organization. Many empirical studies are examined in public

sector organization. This study was also conducted in Ghana. The sample size in this study was taken 200

police worker from the Ghana Police Service. Multi-linear regression technique was used to analyze the

data. The result of this study shows that many personnel are satisfied with good compensation packages

(Samuel Howard Quartey, 2013). Reward philosophy is very important aspect of an organization. It will

create motivation in employees. This study was explaining the reward system of production industry in

Nigeria. The population for this study was staff of food and beverage industry in Nigeria. Questionnaire

was distributed for collection of data. SPSS was selected to analyze the data (Oladejo M.O, 2014). Human

resource management is the most important asset of an organization. Total performance of the institute is

depends on employees. This study was taken in banking sector of Faisalabad, Pakistan. The purpose of this

study was to find out the relationship between extrinsic reward and performance (Ayesha Aslam, 2015).

Performance Appraisal System and Employee Performance

PTCL is a very biggest company in Pakistan. There are many offices all over in Pakistan. This study is

explaining the appraisal system in Pakistan telecommunication company limited.in 2006 PTCL sales their

shares to Etisalat. The sample size for this study was taken 96 employees working as permanent and

contract base. It is found that there is a strong and positive link between performance appraisal system and

employee performance (Kamran Ahmed Malik, 2014). This research was conducted in Nigerian banking

sector. The aim of this explanation is to check the role of member sharing and appraisal system in banking

sector. There are 64 banks are selected as sample and correlation test was adapted to analyze the data.it was

found there is low managerial obligation in Nigerian banking sector (Danlami Sani Abdulkadir, 2012).

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Skills and performance evaluation is very difficult and long term procedure. This study is focus on the

attitudinal results and its impact on organizational performance. This study explains the relationship

between Performance appraisal system and business objectives. There are 133 respondents are selected

from semi-government organization. It was found that there is significant relation. (Adnan Ahmed, 2010)

Career Planning and Employee Performance

Basic purpose of this research is to explore the relationship between career improvement and organization

performance. This research was practically implemented in Malaysian concentrated business (e.g.)

software’s and Education etc. there are 357 employees are selected as sample. It also mentioned in this

study that there is an influence of career direction and cultural values on Malaysian knowledge workers

(Foong-ming, 2008).

The aim of this research was to check the relationship of career planning and employee performance. It is

important part of HRM practices. Questionnaire was developed to collect data. Main two types of questions

first focus on HR system and the second on was job planning. Regression analysis was used to

interpretation of data. It was found that positive significant relation (Rawashdeh, 2013). Every organization

wants to save future. Separate (Person to Person) career planning is an important issue in all organization.

Career is always directly hit the employee job satisfaction. The population was academic and

administration staff for this study. It is also explain that is there relationship between individual career

development and motivation, loyalty etc (Yrd.Doç.Dr.Murat Kayalar, 2009).

Theoretical Model

Independent Variables Dependent Variable

HRM Practices

Research Hypothesis

H1: Compensation is Positively Correlate with Employee Performance. (Miss Hafsa Shaukat, 2015).

H2: Training is Positively Correlate with Employee Performance. (Muhammad Maqsood Khalid, 2013).

H3: Career Planning is Positively Correlate with Employee Performance. (Muslim Amin, 2014).

H4: Performance Appraisal System is Positively Correlate with Employee Performance. (Miss Hafsa

Shaukat, 2015).

Training

Career Planning

Compensation

Performance

Appraisal System

Employee

Performance

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Research Methodology

Research Design

The basic aim of this research is to find out the relationship between human resource management practices

and the employee performance. This research is descriptive in nature. For this study questionnaire is

developed so therefor this is a qualitative research.

Population

The population for this study is the staff of public universities and colleges in Okara Punjab, Pakistan.

Because as my base paper future recommendation which was conducted in Lahore, Pakistan.

Sampling Technique and Sample size

There are many sampling techniques in research. But this study the population is unknown there Non-

Probability sampling technique selected. Furthermore convenience sampling is used to collect data from

respondents. The sample size for this study was taken 200.

Research Instrument

For this study the questionnaire is used as research instrument. The questionnaire is adopted from past

Ph.D. thesis and changes as per the current studies and adapted. There are four parts of questionnaire. First

part is based on employee training and employee performance. Second describe the compensation is

defining the performance appraisal system and employee performance.

Data collection

Survey method is used in this research to gathering of data. Questionnaire is use as an instrument to find

out the results of this research. Five-point likert Scale is used.

1 for Strongly Disagree

2 for Disagree

3 for Neutral

4 for Agree

5 for Strongly Agree

Data Analysis Method/Results

There are many types of software’s to analyze the data. But this study SPSS is used to analyze the data.

Also find out the regression analysis.

Reliability

Before study results analysis the reliability of the questions of independent variable and dependent variable

was calculated. The reliability of an amount shows that the degree to which it is without error and also

guarantee consistent measurements across time and various items in the instrument. For all questions

Cronbach`s Alpha coefficient of .807 was calculated.

Reliability Statistics

Cronbach's Alpha N of Items

.807 25

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Demographic Statistics

There are three demographic aspects are discussed in this study the first is gender and the second is age and

the third is Occupation. Two values are given to gender 1 is for male and 2 is for female. In age factor two

values are given 1 is given to 18-30, 2 is given to 31-60. In occupation also two values are given 1 is for

teacher and second is employee.

Gender

Male, Female

Frequency Percent

Male 178 89

Female 22 11

Total 200 100.0

According to above results 89% male and 11% female that are respond of questionnaire.

Age

Younger, Teenage ,Older

Frequency Percent Valid Percent

Cumulative

Percent

Valid 18-30 71 35.5 35.5 35.5

31-60 129 64.5 64.5 100.0

Total 200 100.0 100.0

The above table shows that 35% respondent’s age are between 18-30 and 65% respondents’ age is

between 31-60.

Occupation

Profession

Frequency Percent Valid Percent

Cumulative

Percent

Valid Teacher 102 51.0 51.0 51.0

Employee 98 49.0 49.0 100.0

Total 200 100.0 100.0

The above table results show that 51% respondents’ are teachers in public universities and colleges

furthermore 49% respondents are employee in public organizations.

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Correlations Statistics

Correlations

Employee

Performance Training

Compensatio

n

Career

Planning

Performance

Appraisal

Employee

Performance

Pearson

Correlation 1 .323

** .434

** .573

** .331

**

Sig. (2-tailed) .000 .000 .000 .000

N 200 200 200 200 200

Training Pearson

Correlation .323

** 1 .442

** .341

** .297

**

Sig. (2-tailed) .000 .000 .000 .000

N 200 200 200 200 200

Compensation Pearson

Correlation .434

** .442

** 1 .398

** .396

**

Sig. (2-tailed) .000 .000 .000 .000

N 200 200 200 200 200

Career

Planning

Pearson

Correlation .573

** .341

** .398

** 1 .295

**

Sig. (2-tailed) .000 .000 .000 .000

N 200 200 200 200 200

Performance

Appraisal

Pearson

Correlation .331

** .297

** .396

** .295

** 1

Sig. (2-tailed) .000 .000 .000 .000

N 200 200 200 200 200

**. Correlation is significant at the 0.01 level (2-tailed).

The above Table showed the results of Pearson Correlation. The results indicates that overall relationship

between training, compensation, career planning, performance appraisal system and employee

performance

The results shows that training have positive correlation with employee performance (r=.323, p<0.01). So,

H1 shows that there is a positive relationship between training and employee performance .Result also

show that compensation has strong positive correlation with employee performance (r=.434, p<0.01).H2

there is positive relationship between compensation and employee performance.

Career planning has a strong positive correlation with employee performance (r=.573, p<0.01).H3 shows

there is a positive relationship between career planning and employee performance. Performance appraisal

system has a positive correlation with employee performance (r=.331, p<0.01). H4: there is positive

relationship between performance appraisal system and employee performance.

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Analysis of Hypothesis through Regression

Model Summary

Model R R Square

Adjusted R

Square Std. Error of the Estimate

1 .626

a .392 .379 .33034

a. Predictors: (Constant), Performance Appraisal, Career Planning,

Training, Compensation

Coefficients

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig. B Std. Error Beta

1 (Constant) .906 .289 3.135 .002

Training .048 .055 .056 .868 .386

Compensation .160 .057 .188 2.788 .006

Career Planning .462 .065 .448 7.136 .000

Performance Appraisal .099 .057 .107 1.730 .085

a. Dependent Variable: Employee Performance

H1: shows the insignificance results because p>0.01 so it is rejected

H2: shows the significance results because p<0.01 so it is accepted

H3: shows the significance results because p<0.01 so it is accepted

H4: shows the insignificance results because p>0.01 so it is rejected

The results of the above table shows the combination of Training, Compensation, Career Planning and

performance appraisal system together contributed 62.6% effect on employee performance. It shows that

model good fitted.

Limitations and Future Research Directions

This research has a limited context. Thirteen Public universities and colleges are includes for Research.

This research is taken in Okara, Punjab Pakistan. For future researcher it is recommended that this research

was taken in Okara so it may be extend to other cities. Also recommended that this research not included all

variables are not included. Like environment effect employee performance and also supervisor behavior.

Also the two variables shows insignificant result in future researcher makes it significant in other Areas.

Conclusion

It is concluded that this study show the relationship between dependent variable (Employee Performance)

and independent variables (Career Planning, Training, Compensation, and Performance appraisal system).

The questionnaire is used to collect data from population. Sample size 200 is selected. Furthermore five-

point likert scale is used. The two variables (Compensation, CP) show the significant results and two

(Training, PAS) variables show insignificant results with Employee performance.

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