The Impact Of Human Resource Management Practices

The Impact Of Human Resource Management Practices On Turnover, Productivity, And Corporate Financial Performance


The research topic selected for literature review has been an area of discussion in the field of HRM practices. The topic is “The Impact Of Human Resource Management Practices On Turnover, Productivity, And Corporate Financial Performance”. Using high performance work practices in a workplace can result in significant improvement in the productivity and financials of a company. Focus of the literature review is to assess the impact of employee recruitment, training process on the personal development and consequently on the firm’s productivity. Topic is also concerned with motivation of employees and reducing the shrinking of the workforce. 

Importance of Topic to me

I have been working as an HR professional in a leading firm. The performance of the organization is highly dependent on the quality of employees. Hence, it becomes imperative for me to help in improving the HR process for hiring and retaining employees. The chosen topic is directly related to the corporate performance and turnover. With the help of this literature review, I will be able to find the most important parameters that can help improving the overall quality of the firm. Total human resource investment that the employee represent cannot be imitated by others and it is a differentiating factor.  I would like to introduce some of these practices and the changes in my company. 
Currently, the firm is focused on a structured job role where people have an assigned work and they only work towards meeting expectations. I am planning to introduce a non-structured approach where people can utilize their skills in different domain. People will have freedom to take initiatives on their own that will be aligned towards the goal of the organization. 

Theoretical Background and Prior Work

Human resource practices is an area that is driven by the belief that individual performance have implications on the firm productivity. Resource based theory from Wright and McMahan suggested that a firm must target rare skills that will provide the competitive edge to the company (Wright & McMahan, 1992). Also, the technological advancements should not be able to replace the human resource capability of the firm. Furthermore, research from Bailey suggested that structured job can restrict employees with higher capability and a firm will have a limited output from them (Bailey, 1993). 
There has already been some work done in the area of productivity and turnover in relation to the corporate performance. It has already been established that culture of the organization has a significant influence on the employee perception and it can be a deciding parameter either to leave the job or stick with it. Previous research about the intensive training program established a relationship between the productivity and company performance. Moreover, the relation between incentives compensation and corporate performance has been established by a study conducted by Gehrat and Milkovich in the year 1992. 
The research conducted in past provided a good amount of information and empirical results related to turnover, productivity and corporate performance. However, these studies failed to address the personal behavior of employees. Moreover, the working of employee in private firms and state owned body varies a lot. Hence, these two areas also need attention.
The first study selected for the literature review is a study from Ghana that is focused on one element of corporate performance, i.e. recruitment and selection on organizational performance. The paper consider two main aspects. The first one is the impact of the poor selection process on the business. It includes the negative effect of appointment that are not timely. The second point is the rise in expense due to additional training. Moreover, remedial cost will add to the total cost of the company. These inputs from the paper are helpful in evaluating the general impact of the recruitment and selection process. The limitation of the paper is the type of questionnaire selected for the data gathering. Questionnaire was based on 5 point scale rating where participants were allowed to provide inputs limited to agree, strongly agree, disagree, strongly disagree and undecided. The results can be influenced by the individual perception rather than the true reflection of the intended study. The research gap addressed by the paper is the study of impact of HRM practices on the countries witnessing new scale of development (Anthony, S., Brako E. N, Abrokwah E., Beatrice O., 2014).
The second chosen study is the impact of well planned recruitment and selection process on corporate performance in Nigerian bank industry. This study is focused on filling vacancies internally rather than external. The study points out the current employees are more reliable to stay with organization as compared to the external ones. Moreover, the employees already engaged in the activities are more informed about the processed and nature of the job. If there is any possibility, then organization should use the skills of the already existing employees effectively. This study also points out the reasons for hiring an external candidate for the job. This study gives a new outlook to my research which was limited to the external recruitment process. Moreover, it also points out that it is not possible to find the suitable candidates in all the cases. Hence, various factors need to be considered before hiring an external candidate. Few of the parameters are salary, availability to join etc (Mudashiru, O.A. and M., 2013). 


The studies picked for the review pointed out the importance of recruitment and selection process on the performance of an organization. Recruitment and selection process can be external of internal and it depends on the current state and human resource available to the company. There are both advantages and disadvantages of internal vacancy filling. The studies conducted in the past provided a significant information about the role of HRM practices on the turnover, productivity and corporate performance. However, the studies did not focus on the type of organization selected and the personal choice and behaviour of the selected candidates for the interview to gather data.


Wright, P.M. & McMahan, G.C. 1992. Theoretical Perspective for Strategic Human Resource Management. Journal of management, 18(2): 301-310
Bailey, T. 1993. Discretionary Effort and the Organization of Work: Employee Participation and Work Reform Since Hawthorne. Working paper, Columbia University, New York.
Mudashiru, M., O.A., I. and M., A. (2013). The Impacts of well Planned Recruitment and Selection Process on Corporate Performance in Nigerian Banking Industry (A Case Study of First Bank Plc 2004-2011). IJARBSS, 3(9).

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