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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: naeem_akhtar46@hotmail.com
MUHAMMAD HASSAN MBA; Department of Management Sciences
University of Okara (Punjab), Pakistan.
E-mail: h.rajpoot888@gmail.com
SALEH MUHAMMAD SARMAD Lecturer; Department of Management Sciences
University of Okara (Punjab), Pakistan.
E-mail: ranasaleh268@gmail.com
SAJID ALI MBA; Department of Management Sciences
University of Okara (Punjab), Pakistan.
E-mail: sajidalisajid400@gmail.com
ZUNAIR JAVED MBA; Department of Management Sciences
University of Okara (Punjab), Pakistan.
E-mail: zunairjaved20@gmail.com
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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