Instrument

THE IMPACT OF HUMAN RESOURCE MANAGEMENT ON FIRMS
PERFORMANCE
SUBMITED TO:
DR: ZAIRA WAHAB
SUBMITED BY:
LIAQUAT ALI MALIK 6688
DEDICATED TO:
IQRA UNIVERSITY
DATE OF SUBMISSION:
10/04/2009 FRIDAY
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This research is my first effort towards the business research field, therefore this first step
towards success, I would like to dedicate to my University where I learn to go beyond the
boundaries of success.
Liaquat Ali Malik
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This research study would not have been possible without the commitment and efforts of Dr.
Zaira Wahab. I would like to extend my acknowledgement to all people, for their support and
help rendered during the entire phase of data collection. Without their help it would not have been
possible to conduct such a comprehensive research.
Liaquat Ali Malik
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S.No. TOPICS Page no.

1.1 Introduction 5
1.2 Background 5
1.3 Statement of problem 5
1.4 Research objectives 6
1.5 Research Question 6
1.6 Hypothesis 6
1.7 Major variables 6
2.0 Methodology 7
2.1 Population and sample 7
2.2 Instruments 8-9
2.3 Data analysis method 10
2.4 Limitations 10
3.0 Data analysis 11-22
3.1 Summary 23
3.1 Recommendation 24
3.2 Conclusion 24
• Reference 25
• Appendices 26
TABLE OF CONTENTS
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1.1 INTRODUCTION
In recent years, multinational companies have been urged to adopt a variety of performance-
enhancing human resource management (HRM) practices to improve their competitiveness in the
global marketplace. The past decade has produced many testimonials to the value of HRM
practices and systems of such practices. In particular, employee participation and empowerment
and job redesign, including team based production systems, extensive employee training, and
performance-contingent incentive compensation, are widely believed to improve the
performance of individual firms. My hope is that this research will help to improve human
resource management practices in Pakistan.
1.2 BACKGROUND
The background of this research considers the HRM importance and its impact on firm therefore;
the approach I take here is to consider how the implications of the HRM’s system framework
might play an important role to produce valuable work force in economy, which is a significant
issue in Pakistani economy, this research consider how Pakistani cultural circumstances might
impact the workability of such a system.
1.3 STATEMENT OF PROBLEM
The increasing trend of the productive workforce in this era, the human resource management’s
practices influence the whole structure of a firm. Pakistani organizational culture lacks the
knowledge about the relation of Human resource management with a firm performance. And
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therefore many local companies in Pakistan lack employees’ motivation. I want to see what is the
problem in context of Pakistan.
1.4 RESEARCH OBJECTIVE
The objective of this research is to identify the relationship between human resource
management (HRM) practices and firm performance and the different ways to identify
productive, efficient and the motivated work force.
1.5 RESEARCH QUESTIONS
• Why HRM decisions have an important influence on firm performance?

• What are those Issues for consideration in examinations of the relationship between HRM
systems and firm performance?
• Is there any positive relation between the high involvement of human resource
management’s strategies and firm performance?
1.6 HYPOTHESIS
The presence of a high-involvement HRM strategy is positively related to firm performance.
1.7 MAJOR VARIABLES

In this research there are two major variables one is independent variable which is “Human
Resource Management” and the other is dependent variable which is “Firm performance”. The
firm performance is dependent on the human resource management, in this research I have tried
to get positive relationship and other factors between both the variables.
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2.0 METHODOLOGY
The study adopts survey design.
2.1
Sample and population:
There were total 20 people selected for the purpose of study in which 10 were managerial
workers and the other 10 were non-managerial workers.
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2.2
1 4 5
Name___________________ Designation___________________
To fill this questionnaire first select your response in form of “yes” or “no” and also tick on the
level of agreement to provide an appropriate answer, as the level shown below.
31
2
2 2 2
1. HRM affects on the firm value by attracting, retaining, and motivating employees.
Yes. No.
Level of agreement () 2 3 4 5

1
2
2. There is negative impact of HRM on the firm performance because of management
behavior with employees.
Yes. No.
Level of agreement () 1 2 3 4 5
2
3. HRM plays a significant role to improve firm performance.
Yes. No.
2
4. Hiring and firing is an area of HRM, which directly affects the firm performance and
value.
Yes. No.
2
5. Firm can face the unexpected crises because of HRM’s poor performance.
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Yes. No.
Level of agreement ()

1 2 3 4 5
6. HRM’s decisions influence firm2performance by improving efficiency and contributing to

revenues.
Yes. No.
2
7. HRM plays significant role to motivate employees as a source of competitive advantage.
Yes. No.
2
8. A firm always gains advantage because of the high involvement of HRM’s strategies.
Yes. No.
Level of agreement () 1

2 3 4 5
2
9. HRM provides better communication among all other departments.
Yes. No.
2
10. Motivation, productivity and effectiveness is introduced by HRM.
Yes. No.
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2.3 DATA ANALYSIS METHOD
The responses and the level of agreements of the participants are measured in form of
percentage.
2.4 LIMITATION
This research only applicable in Pakistani organizational culture related to human resource
management practices and system. The authenticity of the research can not be applicable surely
because of the small numbers of respondent which were tested to get results. This research is
only a practice for me authorized by my teacher of writing research report.
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3.0 DATA ANALYSIS
Frequency 1: HRM affects on the firm value by attracting, retaining, and motivating
employees.
Yes No
70% 30%
Strongly Partially Disagr Strongly
Agree agree agree ee disagree
15% 50% 5% 20% 10%
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The bar chart is showing the responses that 70% said “yes” and 30% said “No” where as in the
pie chart the level of agreement is mentioned in which 50% strongly agree, 15% just agree, 10%
strongly disagree, 20% disagree and the 5% people partially agree with the statement.
Frequency 2: There is negative impact of HRM on the firm performance because of

management’s bad behavior with employees.
Yes No
80% 20%
20% 50% 15% 15% 5%
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Frequency 3: HRM plays a significant role to improve firm performance.
Yes No
90% 10%
20% 60% 10% 05% 05%
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PERFORMANCE
Frequency 4: Hiring and firing is an area of HRM, which directly affects the firm
performance and value.
Yes No
60% 40%
10% 40% 10% 25% 15%
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Frequency 5: Firm can face the unexpected crises because of HRM’s poor performance.
Yes No
75% 25%
45% 15% 15% 15% 10%
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Frequency 6: HRM’s decisions influence firm performance by improving efficiency and

contributing to revenues.
Yes No
85% 15%
55% 25% 05% 10% 05%
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Frequency 7: HRM plays significant role to motivate employees as a source of competitive
advantage.
Yes No
70% 30%
35% 30% 05% 20% 10%
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Frequency 8: A firm always gains advantage because of the high involvement of HRM’s
strategies.
Yes No
60% 40%
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25% 20% 15% 20% 20%
PERFORMANCE
Frequency 9: HRM provides better communication among all other departments.
Yes No
90% 10%
25% 60% 5% 5% 5%
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Frequency 10: Motivation, productivity and effectiveness is introduced by HRM.
Yes No
80% 20%
55% 15% 10% 15% 5% 20 | P a g e
PERFORMANCE
RESULTS
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FREQ:1 FREQ:2 FREQ:3 FREQ:4 FREQ:5 FREQ:6 FREQ:7 FREQ:8 FREQ:9 FRE:10
Y N Y N Y N Y N Y N Y N Y N Y N Y N Y N
70 30 80 20 90 10 60 40 75 25 85 15 70 30 60 40 90 10 80 20
% % % % % % % % % % % % % % % % % % % %
The over all responses significantly shows the positive relation between HRM and Firm
performance.
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OVERVIEW OF AGREEMENT LEVEL
Frequen Strongly Partially Strongly

cies Agree agree agree Disagree disagree
1 15% 50% 5% 20% 10%
2 20% 50% 15% 15% 5%
3 20% 60% 10% 5% 5%
4 10% 40% 10% 25% 15%
5 45% 15% 15% 15% 10%
6 55% 25% 5% 10% 5%
7 35% 30% 5% 20% 10%
8 30% 20% 15% 20% 20%
9 25% 60% 5% 5% 5%
10 55% 15% 10% 15% 5%
The above table shows an overview of respondents’ level of agreement.
3.1 SUMMARY
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The first results include all three variables specifically hypothesized to impact firm use of HRM high-
involvement work systems. The level of agreement estimate for management HRM values is positive and
significant, although the level of agreement estimates for the differentiation. And since High involvement
of the HRM strategies and HRM values are highly correlated. Therefore the hypothesis has and positive
relation with the firm performance and proved.
3.1 RECOMMENDATIONS
If my findings are dramatically correct, my following recommendations are straightforward.
1. Senior managers should regularly review objectives, strategies and processes

associated with HR management practices in their firm and make changes or introduce
innovations accordingly.
2. Senior managers should monitor the satisfaction and commitment of employees on a regular
basis using standardized surveys or research.
3. Senior managers need to monitor employee perceptions of the culture of their firm, examining
areas which contribute towards a people-orientated culture (e.g. the extent, to which employees
are enabled, supported and equipped to do their work).
4. Organizational changes are made, as necessary, to promote job satisfaction and employee
commitment.
5. HRM practices are reviewed across the firm in the following areas:
• Recruitment and selection
• Appraisal
• Training
• reward systems
• Communication.
6. The central element firm philosophy and mission should be a commitment to the skill
development and effectiveness of all employees.
3.4 CONCLUSION
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In conclusion, my over all analysis strongly supports the hypothesis. Because Human
Recourse Managers know that people make the critical difference between success and
failure. The effectiveness, with which firm manage, develop, motivate, involve and engage
the willing contribution of the people who work in them is a key determinant of how well
those firms perform.
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www.igda.org/hr/IGDA_Best_Practices_HR.pdf
managementhelp.org/hr_mgmnt/hr_mgmnt.htm
www.elinfonet.com/blog/index/wiki/Category:Best_Human_Resources_Practices
www.skillsportal.co.za/pls/cms/skill_portal.provider_detail?pid=4038 - 30k
humanresources.about.com/.../humanresourcesmanagement/Human
business.bournemouth.ac.uk/postgraduate/PG
%20Units/HUMAN_RESOURCE_PRACTICE_AND_THEORY.pdf
swoba.hhs.se/hastba/papers/hastba2000_006.pdf
digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi
http://www.jstor.org
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Definitions and examples
Reward System: A formal or informal program used to recognize individual employee

achievements.
e.g.’ Accomplishment of goals or projects or submission of creative ideas.
Communication: the openness and effectiveness of communication systems

Within and between levels
e.g. ‘Important information is often not communicated to people’.
Appraisal: The classification of someone or something with respect to its worth

e.g. ‘People usually receive feedback on the quality of work they have done’.
Concern for employee welfare: the extent to which employees feel valued and trusted.
e.g. ‘This Company is considerate towards its employees’.
Supervisory monitor: the extent to which employees experience support and understanding from their
immediate supervisor or manager
e.g. ‘Supervisors show an understanding of the people who work for them’.
Effort: the degree of effort and enthusiasm employees put into their work
e.g. ‘People are prepared to make a special effort to do a good job’.
Pressure: the extent to which there is pressure on employees to produce

e.g. ‘People here are under pressure to meet targets’.
Vision: the extent to which employees understand the company vision and long-term aims
e.g. ‘People have a good understanding of what the organization is trying to do’.
Efficiency: the degree of importance placed on efficiency and productivity at work

e.g. ‘Poor scheduling and planning often results in targets not being met’.
27 | P a g e

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THE IMPACT OF HUMAN RESOURCE MANAGEMENT ON FIRMS

Liaquat Ali Malik

Liaquat Ali Malik

S.No. TOPICS Page no.

1.3 STATEMENT OF PROBLEM

1.4 RESEARCH OBJECTIVE

1.5 RESEARCH QUESTIONS

• Why HRM decisions have an important influence on firm performance?

The presence of a high-involvement HRM strategy is positively related to firm performance.

1.7 MAJOR VARIABLES

The study adopts survey design.

Level of agreement () 2 3 4 5

Level of agreement () 1 2 3 4 5

Level of agreement () 1 2 3 4 5

Level of agreement () 2 3 4 5

Level of agreement ()

6. HRM’s decisions influence firm2performance by improving efficiency and contributing to

Level of agreement () 1 2 3 4 5

Level of agreement () 1 2 3 4 5

Level of agreement () 1

Level of agreement () 1 2 3 4 5

Level of agreement () 2 3 4 5

2.3 DATA ANALYSIS METHOD

3.0 DATA ANALYSIS

Frequency 2: There is negative impact of HRM on the firm performance because of

Frequency 3: HRM plays a significant role to improve firm performance.

Frequency 6: HRM’s decisions influence firm performance by improving efficiency and

Frequency 9: HRM provides better communication among all other departments.

Frequency 10: Motivation, productivity and effectiveness is introduced by HRM.

OVERVIEW OF AGREEMENT LEVEL

Frequen Strongly Partially Strongly

The above table shows an overview of respondents’ level of agreement.

If my findings are dramatically correct, my following recommendations are straightforward.

1. Senior managers should regularly review objectives, strategies and processes

Definitions and examples

Reward System: A formal or informal program used to recognize individual employee

Communication: the openness and effectiveness of communication systems

Appraisal: The classification of someone or something with respect to its worth

Pressure: the extent to which there is pressure on employees to produce

Efficiency: the degree of importance placed on efficiency and productivity at work

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