International Journal of Economics, Finance and Management Sciences

| Peer-Reviewed |

Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh

Received: 19 June 2013    Accepted:     Published: 10 July 2013
Views:       Downloads:

Share This Article

Abstract

Formulation and execution of Strategic Human Resource Management (SHRM) practices and its effect on perceived financial performance of any organization is a burning issue in the globalized competitive business era. This study aims to find out the relationship between SHRM and financial performance to ensure the sustainability and competitive advantage of the selected scheduled private commercial banks in Bangladesh. The research has been conducted on managers as sample of some private commercial banks during the period of January to November 2012 to collect the primary data. To evaluate the financial performance researchers have used annual reports of 2011 and 2012, journals, web sites etc. as secondary source. Survey research findings indicate that strategic integration and development of HRM were practiced to a full extent in the sampled firms. From the cross sectional analysis, the financial performance indicators show that the capital adequacy was mostly at satisfactory level compared with eh industry average. The quality of assets loan varies from bank to bank but most of them are performing at the desired level. Management efficiency was out-performing the standard in most of the cases. The profitability indicators ratio was also better than the average of private commercial banks. The result presented in this study suggests practicing intensive SHRM so that improved financial performance can be asserted to sustain in the competitive environment.

DOI 10.11648/j.ijefm.20130103.14
Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 3, June 2013)
Page(s) 151-158
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

SHRM, Financial Performance, Private Commercial Banks, Bangladesh

References
[1] Ahmad, S and Shroeder, R. G., "The Impact of Human Resource Management Practices on Operational Performance: Recognizing Country and Industry Differences," Journal of Operations Management, Vol. 21, 2003, pp. 19-43.
[2] Andersen, Kai K., Cooper, K. Brian and Cherrie Jiuhua Zhu., "The effect of SHRM practices on perc0eived firm financial performance: Some initial evidence from Australia," Asia Pacific Journal of Human Resources, Vol. 45, No. 2, 2007, pp. 168-179.
[3] Bae, J and Lawler, J. J., ‟Organizational and HRM strategies in Korea: Impact on Firm Performance in an Emerging Economy," Academy of management journal, Vol. 43, 2000, pp. 502-517.
[4] Batt, R, "Managing Customer Services: Human Resource Practices, Quit Rates and Sales Growth," The Academy of Management Journal, Vol. 45, No. 3, 2002, pp. 587-597.
[5] Beer, M., Spector, B., Lawrence, P., Mills, D.Q. and Walton, R., "Human Resource Management: A General Managers Perspective," New York: Free Press, 1985.
[6] Bhatti, K. K., and Qureshi, T. M., "Impact of Employee Participation on Job Satisfaction, Employee Commitment and Employee Productivity," International Review of Business Research Papers, Vol. 3, No. 2, 2007, pp. 54-68.
[7] Bowen, D. E., and C. Ostroff, "Understanding HRM-firm performance linkages: The role of the ‘strength’ of the HRM system;" Academy of Management Review, Vol. 29, No. 2, 2004, pp. 203–221.
[8] Bowen, D., C. Galang, and R. Pillai., "The role of human resource management: An exploratory study of cross-country variance," Asia Pacific Journal of Human Resources, Vol. 40, No. 1, 2002, pp. 123–145.
[9] Butler, J.E., G.R. Ferris and N. K. Napier, "Strategy and human resources management," Cincinnati, OH.: South-Western, 1991.
[10] Budhwar, P., "A reappraisal of HRM models in Britain," Journal of General Management, Vol. 26, No. 2, 2000, pp. 72–91.
[11] Buyens, D., and A. De Vos., "The added value of the HR department" in International HRM: Contemporary issues in Europe, eds Chris Brewster and Hilary Harris, pp. 31–47. London and New York: Routledge, 1999.
[12] Chang, P. L and Chen, W. L., "The effect of Human Resource Management Practices on firm performance: Empirical evidence from high-tech firms in Taiwan," International Journal of Management, Vol. 19, No. 4, 2002, pp. 622 - 631.
[13] Chew, I., and P. Chong, "Effects of strategic human resource management on strategic vision," International Journal of Human Resource Management, Vol. 10, No. 6, 1999, pp. 1031–45.
[14] Collins, C and Smith, K. G., "Knowledge Exchange and Combination: The Role of Human Resource Practices in the Performance of High-Technology Firms," Academy of Management Journal, Vol. 49, 2006, pp. 544-560.
[15] Delery, J. E. and Doty D. H., ‟Modes of theorizing in strategic human resource management: Tests of universalistic, contingency and configurational performance predictions," Academy of Management Journal, Vol. 39, No. 4, 1996, pp. 802-835.
[16] Dimba B., and K’Obonyo P., "The Effect of Strategic Human Resource Management Practices on Performance of Manufacturing Multinational Companies in Kenya: Moderating Role of Employee Cultural Orientations and Mediating Role of Employee Motivation," Proceedings of the International Conference on Human Capital Management in University of Nairobi, July, 2009, pp. 22 – 24.
[17] Ghebregiogis, F and Karsten, L, "Human Resource Management Practices in Eritrea: Challenges and Prospects," Employee Relations, Vol. 28, No. 2, 2006, pp. 144-163.
[18] Guest, D. E., Michie, J, Conway, N. and Sheehan, M., "Human Resource Management and Corporate Performance in the UK," British Journal of Industrial Relations, Vol. 41, No. 2, 2003, pp. 291-314.
[19] Guthrie, J. P., "High-involvement work practices, turnover and productivity: evidence from New Zealand," Academy of Management Journal, Vol. 44, No. 1, 2001, pp. 180 - 190.
[20] Hutchinson, S., Kinnie, N. and Purcell, J., "HR Practices and Business Performance: What Makes a Difference?," Conference Paper, Netherlands: Nijmegen School of Management, 2001.
[21] Hope-Hailey, V., L. Gratton, P. McGovern, P. Stiles, and C. Truss., "A chameleon function? HRM in the ’90s," Human Resource Management Journal, Vol. 7, No. 3, 1997, pp. 5–19.
[22] Hoque, K. "Human Resource Management and Performance in the UK Hotel Industry," British Journal of Industrial Relations, Vol. 37, No. 3, 1999, pp. 419-443.
[23] Huang, T. C., "The Effect of Linkage between Business and Human Resource Management Strategies," Personnel Review, Vol. 30, No. 2, 1999, pp. 132-151.
[24] Huang, E. Y. and Lin, S. C., "How R&D Management Practice Affects Innovation Performance. An Investigation of High-Tech Industry in Taiwan," Industrial Management and Data Systems, Vol. 106, No. 7, 2006, pp. 966-996.
[25] Katou, A. A. and Budhar, P. S., "Causal Relationship between HRM Policies and HRM Performance: Evidence from the Greek Manufacturing Sector," European Management Journal, 2009, doi:10.1016/j.emj.2009.06.001
[26] Khatri, N., "Managing human resource competitive advantage: a study of companies in Singapore," International Journal of Human Resource Management, Vol. 11, No. 2, 1999, pp. 336 - 365.
[27] Liao, Y. S., "Business Strategy and Performance: the role of human resource management control," Personnel Review, Vol. 34, No. 3, 2005, pp. 294-309.
[28] Martell, K., and S. J. Carroll., "How strategic is HRM?," Human Resource Management, Vol. 34, No. 2, 1995, pp. 253–67.
[29] Metcalf, R. W. and P. L. Titard, "Principles of Accounting," W. B. Saunders, (Philadelphia), 1976.
[30] Pfeffer, J., "Competitive advantage through people," Boston: Harvard Business School Press, 1994.
[31] Purcell, J., "The HRM-Performance Link: Why, How and When Does People Management Impact on Organisational Performance?," John Lovett Memorial Lecture, University of Limerick, 2004.
[32] Richard, O. C., and Johnson, N. B., "Strategic Human Resource Management Effectiveness and Firm Performance," International Journal of Human Resource Management, Vol. 12, No. 2, 2001, pp. 299-310.
[33] Royal, C. and O’Donnell, L., "Small Firms, Big Ideas: The Adoption of Human Resources Management in Australian Small Firms," Asia Pacific Journal of Human Resources, Vol. 43, No. 1, 2005, pp. 117-136.
[34] Schuler, R. S., "Linking the people with the strategic needs of the business," Organizational Dynamics, Summer, 1992, pp. 18–32.
[35] Sullivan, J., "Knocking down the silos," Human Resources, March, 2003, pp. 16–18.
[36] Tzafrir, S. S., "A universalistic perspective for explaining the relationship between HRM practices and firm performance at different points in time," Journal of Managerial Psychology, Vol. 21, No. 2, 2006, pp. 109 - 130.
[37] Ulrich, D., "Delivering results: A new mandate for human resource professionals," Boston: Harvard Business Review, 1998.
[38] Wang, C. W., and Horng, R. Y., "The Effects of Creative Problem Solving Training on Creativity, Cognitive Type and R&D Performance," R & D Management," Vol. 32, No. 1, 2002, pp. 35 - 45.
[39] Wright, P. M., Gardner, T. M., and Moynihan, L. M., "The impact of HR Practices on the Performance of Business Units," Human Resource Management Journal, Vol. 13, No. 3, 2003, pp. 21-36.
Author Information
  • Department of Finance, Faculty of Business, BUBT, Dhaka, Bangladesh

  • Department of Management, Faculty of Business, BUBT, Dhaka, Bangladesh

  • Department of Statistics, Islamic University, Kushtia, Bangladesh

Cite This Article
  • APA Style

    Tawhida Khatoon, Muhammad Ruhul Amin, Md. Moyazzem Hossain. (2013). Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh. International Journal of Economics, Finance and Management Sciences, 1(3), 151-158. https://doi.org/10.11648/j.ijefm.20130103.14

    Copy | Download

    ACS Style

    Tawhida Khatoon; Muhammad Ruhul Amin; Md. Moyazzem Hossain. Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh. Int. J. Econ. Finance Manag. Sci. 2013, 1(3), 151-158. doi: 10.11648/j.ijefm.20130103.14

    Copy | Download

    AMA Style

    Tawhida Khatoon, Muhammad Ruhul Amin, Md. Moyazzem Hossain. Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh. Int J Econ Finance Manag Sci. 2013;1(3):151-158. doi: 10.11648/j.ijefm.20130103.14

    Copy | Download

  • @article{10.11648/j.ijefm.20130103.14,
      author = {Tawhida Khatoon and Muhammad Ruhul Amin and Md. Moyazzem Hossain},
      title = {Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {1},
      number = {3},
      pages = {151-158},
      doi = {10.11648/j.ijefm.20130103.14},
      url = {https://doi.org/10.11648/j.ijefm.20130103.14},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.ijefm.20130103.14},
      abstract = {Formulation and execution of Strategic Human Resource Management (SHRM) practices and its effect on perceived financial performance of any organization is a burning issue in the globalized competitive business era. This study aims to find out the relationship between SHRM and financial performance to ensure the sustainability and competitive advantage of the selected scheduled private commercial banks in Bangladesh. The research has been conducted on managers as sample of some private commercial banks during the period of January to November 2012 to collect the primary data. To evaluate the financial performance researchers have used annual reports of 2011 and 2012, journals, web sites etc. as secondary source. Survey research findings indicate that strategic integration and development of HRM were practiced to a full extent in the sampled firms. From the cross sectional analysis, the financial performance indicators show that the capital adequacy was mostly at satisfactory level compared with eh industry average. The quality of assets loan varies from bank to bank but most of them are performing at the desired level. Management efficiency was out-performing the standard in most of the cases. The profitability indicators ratio was also better than the average of private commercial banks. The result presented in this study suggests practicing intensive SHRM so that improved financial performance can be asserted to sustain in the competitive environment.},
     year = {2013}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - Strategic Human Resource Management (SHRM) Practices and Its Effect on Financial Performance: Evidence from Some Selected Scheduled Private Commercial Banks in Bangladesh
    AU  - Tawhida Khatoon
    AU  - Muhammad Ruhul Amin
    AU  - Md. Moyazzem Hossain
    Y1  - 2013/07/10
    PY  - 2013
    N1  - https://doi.org/10.11648/j.ijefm.20130103.14
    DO  - 10.11648/j.ijefm.20130103.14
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 151
    EP  - 158
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20130103.14
    AB  - Formulation and execution of Strategic Human Resource Management (SHRM) practices and its effect on perceived financial performance of any organization is a burning issue in the globalized competitive business era. This study aims to find out the relationship between SHRM and financial performance to ensure the sustainability and competitive advantage of the selected scheduled private commercial banks in Bangladesh. The research has been conducted on managers as sample of some private commercial banks during the period of January to November 2012 to collect the primary data. To evaluate the financial performance researchers have used annual reports of 2011 and 2012, journals, web sites etc. as secondary source. Survey research findings indicate that strategic integration and development of HRM were practiced to a full extent in the sampled firms. From the cross sectional analysis, the financial performance indicators show that the capital adequacy was mostly at satisfactory level compared with eh industry average. The quality of assets loan varies from bank to bank but most of them are performing at the desired level. Management efficiency was out-performing the standard in most of the cases. The profitability indicators ratio was also better than the average of private commercial banks. The result presented in this study suggests practicing intensive SHRM so that improved financial performance can be asserted to sustain in the competitive environment.
    VL  - 1
    IS  - 3
    ER  - 

    Copy | Download

  • Sections