Hypothesis Development, Research Hypotheses Codes And Descriptions

Hypothesis Development

As per the study (Albahussain, ElYgaraihy, & Mobarak, 2016)

A number of studies have shown link between HRMP and the organizations performance. For Example, (Ahmad & Schroeder, 2002) tried to generalize seven effective HRMP proposed by (Pfeffer, 1998) in the field of industry. The seven HRM practices include; job security, selective employment, decentralization, workgroups, compensation/incentives based on performance, intensive training, and information sharing. While operational performance included cost elements, quality, delivery, flexibility, and organizational commitment. The results offered by both researchers presented comprehensive support for the relationship between the seven HRM practices and performance. (Chang & Chen, 2002) conducted a comprehensive study to assess the relationship between HRM practices and performance in Taiwanese technology companies. Both researchers indicated that HRM practices such as training and development, teamwork, benefits, human resources planning, and performance evaluation have a significant impact on employees’ productivity.

(Kuo, 2004) conducted a study about the relationship between HRM practices, staff commitment, and performance in health care institutions in Taiwan. The study relied on a group of eleven HRM practices, including selective recruitment, interior job opportunities, human resources planning, training, job security, job descriptions, and workgroups, incentive compensation, performance evaluation, staff participation, and staff communications. The researcher concluded that every practice of HRM practices has different degree of impact on operational performance.

(Sang, 2005) conducted a study in an attempt to figure out the implications of HRM practices on business performance (operational performance and organization performance in general) in Cambodia and Taiwan. (Sang, 2005) selected nine practices of HRM, which are: (Human resource planning, recruitment, incentives, evaluation, training, teamwork, and staff participation, individual differences, job security), so as to explore the relationships with the perception of the company’s performance (financial and non-financial performance). At the same time, the researcher also tested the nine HRM practices to monitor their effects on four performance criteria: Product quality, product cost, products delivery, and production flexibility. The study results indicated that human resource planning, recruitment; incentives, evaluation, training, teamwork, and staff participation have a positive impact on employee productivity, and organization performance in general.

Based on the review of previous studies and what has been presented above, the proposed model for this study, Figure (2.4), indicates that HRM variables have been used as an external variable (independent), while the Organizational Performance variable has been used as a final variable (final dependent variable). The variable of Job Satisfaction has been used as internal variable of HRM practices, while it is considered in the same time as the external variable of Organizational Performance (mediator).

As per study (AL JOUNAIDI, 2018)

A hypothesis is a proposed explanation or solution to the research question or statement it predicts the end result of the relationship of the variables defined in the research question. A good hypothesis should be logical and concise and should be perceived in such a way that it can be naturally derived from the research process. Usually the researcher can use two types of hypothesis, namely, null hypothesis and alternative hypothesis after statistical analysis, if the null hypothesis is rejected we can say typically that the alternative hypothesis is accepted and vice-versa. (Simone, 2014).

Based on the previous presentation and what was supposed to be drawn in the conceptual model of the study (Figure 2.4): The following hypotheses could be concluded:

• H1:H6: HRM practices positively affect the Organizational Performance.
• H7:H12: HRM practices positively affect the Job Satisfaction.
• H13: Job Satisfaction has a positive impact on the Organizational Performance.
• H14:H19: Job Satisfaction plays the mediating role between HRM practices and Organizational Performance.

Indicated that the codes and description of the research hypotheses are represented in Table (2.3a) and Table (2.3b):

Hypotheses Codes and Descriptions:

a) Table: (2.3a) : Direct Effect

Code / Description / Path

• H1 / Job Security (JS) significantly affects Organizational Performance (OP) / JSOP
• H2 / Selectin Hiring (SH) significantly affects Organizational Performance (OP) / SHOP
• H3 / Compensation System (CS) significantly affects Organizational Performance (OP) / CSOP
• H4 / raining and Development (TD) significantly affects Organizational Performance (OP) / TDOP
• H5 / Decision Making (DM) significantly affects Organizational Performance (OP) / DMOP
• H6 / Performance Evaluation (PE) significantly affects Organizational Performance (OP) / PEOP
• H7 / Job Security (JS) significantly affects Job Satisfaction (JS) / JSJS
• H8 / Selectin Hiring (SH) significantly affects Job Satisfaction (JS) / SHJS
• H9 / Compensation System (CS) significantly affects Job Satisfaction (JS) / CSJS
• H10 / Training and Development (TD) significantly affects Job Satisfaction (JS) / TDJS
• H11 / Decision Making (DM) significantly affects Job Satisfaction (JS) / DMJS
• H12 / Performance Evaluation (PE) significantly affects Job Satisfaction (JS) / PEJS
• H13 / Job Satisfaction (JS) significantly affects Organizational Performance (OP) / JSOP

b) Table: (2.3b ) Mediation Effects of Job Satisfaction (JS)

Code / Description / Path

• H14 / Job Satisfaction (JS) mediates the relationship between Job Security (JS) and Organizational Performance (OP) / JSJSOP
• H15 / Job Satisfaction (JS) mediates the relationship between Selectin Hiring (SH) and Organizational Performance (OP) / SHJSOP
• H16 / Job Satisfaction (JS) mediates the relationship between Compensation System (CS) and Organizational Performance (OP) / CSJSOP
• H17 / Job Satisfaction (JS) mediates the relationship between Training and Development (TD) and Organizational Performance (OP) / TDJSOP
• H18 / Job Satisfaction (JS) mediates the relationship between Decision Making (DM) and Organizational Performance (OP) / DMJSOP
• H19 / Job Satisfaction (JS) mediates the relationship between Performance Evaluation (PE) and Organizational Performance (OP) / PEJSOP

Job security

As per study (Krishnan, Liew, & Koon, 2016)

Job security is the degree of an employee expects to stay or work in the organization for a longer period of time (Delery & Doty, 1996). Besides that, (Simon, 2011) stated that job security influences the probability of employee keeping his or her job without the risk of becoming unemployed. Furthermore, necessary or essential skills, job knowledge, and past working experience needed by the organizations; and subject to the current business environment and current economic condition also secure employee’s job security (Pfeffer, 1998).

Employees have time to focus on the tasks at hand and getting their job done perfectly when employees feel their jobs are secure. Job security has a positive influence with employee performance in an organization (James, 2012). According to (James, 2012), employees with low job security are losing faith with their organization, which consequently affects their performance in an organization. Thus, employees with high job security are highly contribute themselves in the job to perform their task effectively. Job security reduces employees’ risk of job sacking during an economic crisis and creates a good relationship of trust between employees and the organization.

Several past studies have been conducted on determining the relationship between job security and OCB (Eatough, Chang, Miloslavic, & Johnson, 2011); (Feather & Rauter, 2004); (Gong & Chang, 2008); (König, Debus, Häusler, Lendenmann, & Kleinmann, 2010); (Reisel, Probst, Chia, Maloles, & König, 2010) ; (Staufenbiel & König, 2010); (Wong, Wong, Ngo, & Lui, 2005). The previous studies show that low job security was impact employee’s mental and physical health and employee’s attitude and behaviour negatively such as lowered OCB (Ashford, Lee, & Bobko, 1989); (Kopp, Stauder, Purebl, Janszky, & Skrabski, 2007); (László, et al., 2010). Besides that, a past study results shows that high job security significantly affects employee’s performance of OCB (De Witte, 1999).

Furthermore, (Reisel, Probst, Chia, Maloles, & König, 2010) showed job security build a positive relationship between employee and employer. Thus, job stability ensures employees’ sense of responsibility and attachment to the employer, which is critical for the showing of Service-Oriented OCB (Sun & Pan, 2008).

Based on the literature review, this study will test the following hypotheses:

Hypothesis 1: Job Security (JS) significantly affects Organizational Performance (OP)

Selective Hiring

As per study Miah, Islam, 2017

They discussed that the Fair recruitment involves an essential basis for the employment tests (Huselid, 1995). The performance of human resource management needs a fair recruitment system (Bellingham, Cohen,, Edwards, & Allen, 1990); (Huselid, Jackson, & Schuler, 1997). It is a most important way of which a company can ensure that it has the right types of people are by hiring the right types of individuals in the right place (Opatha, 2010, acc. To (Ekwoaba, Ikeije, & Ufoma, 2015). On the other hand, if the company practices a standard recruitment and selection process, it increases employees positive work environment as they feel that employees judge by them, and finally, better organizational performance can be achieved (Ezeali & Esiagu, 2009); (Huselid M. , 1995).

As per study (Ogunyomia & Bruning, 2015)

As per AMO theory, the attraction and retention of employees is a major source of organizational performance. (Way, 2002) observed that extensiveness of staffing and pay level may be the most important components of the use of HPWS among US small firms. Positive recruitment and selection practices generally include various sources of applicants, realistic job previews (Wanous & Colella, 1989), reliable and valid selection criteria, and effective human resource planning. Though ER is defined in various ways and different writers draw different boundaries around it, the core areas concern getting the right people (with appropriate experience, skills, knowledge and other attributes) in the right place at the right time.

Based on the literature review, this study will test the following hypotheses:

Hypothesis 2: Selective Hiring (SH) significantly affects Organizational Performance (OP)

Compensation

As per study (Ogunyomia & Bruning, 2015)

Compensation is the totality of financial and non-financial rewards that an employee receives in return for providing labor services for the organization (Fajana, 2002), whereas compensation management is the design and implementation of a pay system that ensures that an organization attracts, retains and maintains capable and willing employees needed to accomplish organizational goals and objectives. The objective of compensation management applies to all enterprises both in SMEs and large enterprises, goals consistent with AMO predictions of HRM practices are expected to be related to employee motivation. Reward systems should relate individual objectives with the organizational strategic goals (Fisher, Schoenfeldt, & Shaw, 2007). In motivating workers through compensation management, the importance of job evaluation, analysis, description, specification, enlargement, enrichment and rotation should be emphasized (Delaney & Huselid, 1996); (Hornsby & Kuratko, 2003). (King-Kauanui, Ngoc, & Ashley-Cotleur, 2006) found support in their study on HRM in SME’s in Vietnam for the importance of incentive compensation, among other HRM practices, on the overall performance of SMEs. (Georgiadis & Pitelis, 2012) found in their study of UK SMEs that having a generous compensation policy is positively related with profits when combined with product differentiation strategy.

As per (Sarker, 2017)

(Dessler2, 2007) defined employee compensation as “all forms of pay or rewards going to employees and arising from their employment”. In other word, compensation is a reward system that a company provide to individuals in turn for their willingness to perform various jobs and tasks within organizations (DeNisi & Griffin, 2001). A reward and compensation system is based on the expectancy theory, which suggests that employees are more likely to be motivated to perform when they perceive that there is a strong link between their performance and the reward they receive (Guest3, 2002). (Balochi, Ali, Kiani, Ahsan, & Mufty, 2010) did a study about the HRM practices in order to examine their relationship with the perceived performance of employees in private and public sector banks of North-West Frontier Province (NWfP), and found compensation along with two other variables significantly correlated with employee performance. Good compensation and benefit package can motivate employees. Motivated employees can make the bank more profitable. (Zahra, Xia, Khuram, Liu, & Amna, 2015) found that salary had a stronger relationship with job performance. Job performance of employees can be increased to a sufficient level by bringing a small increase in salary. In Bangladesh context, employees are heavily prioritizing salary more than something else. Other rewards and benefits attached to the salary can also result in greater change in job performance. Particularly in services firms like banks, financial strengthening has a tendency to produce a stronger impact on job performance. On the basis of the discussion the following hypothesis is proposed:

Hypothesis H3. Compensation System (CS) significantly affects Organizational Performance (OP)

Training and development

As per study (Miah & Islam, 2017),

They explained that the researchers have confirmed that there is strong support for the impact of training on productivity and where employees and employers are both beneficial (Ballot, Fakhfakh, & Taymaz, 2006); (Conti, 2005); (Dearden, Reed, & Van Reenen, 2006).moreover, Lynch and Black (1995) suggested that training improves employees’ work commitment and organizational performance. Further established by (Barrett & O’Connell, 2001) extensive training is more effective than organizational specific training to the employee. (Nankervis, Compton, & McCarthy, 1999) showed that effective training not only improves employees’ knowledge and skills to accomplish their job but also it increases employees’ satisfaction level, which leads final organizational performance.

As per study (Sarker, 2017)

They explained that the “Training and development” is defined as any effort to improve current of future employees’ skills, abilities, and knowledge (Aswathappa, 2008). Training is intended to modify individuals’ skills or attitudes (Herold & Fedor, 2003).

Thus, basic purpose of training is to help employees build their skills, which will increase their performance and ultimately it will lead towards greater organizational productivity. Training & development is a systematic approach where individual can improve him/herself for the assigned job which ultimately create a good team building habits which is one of the most extensive human resources practice for any organization (Kraiger & Ford, 2007). (Hoque, 1994) unearthed that training and development had positive impact on organizational effectiveness in Bangladeshi context. Thang and (Thang & Buyens, 2008) through reviewing 66 studies conducted in different parts of the world opined that training and development leads to superior knowledge, skills, abilities, attitudes, and behavior of employees that eventually enhance organizational performance. In another study, (Millar & Stevens, 2012) mentioned that training enhances employees’ capabilities, which are instrumental in improving overall organizational performance.

Based on the literature review, this study will test the following hypotheses:

Hypothesis 4: Training and Development (TD) significantly affects Organizational Performance (OP)

Decision-Making

As per study (Miah & Islam, 2017),

They explained that the appropriate or systematic approach of decision rights within an organization has been widely accepted because it increases employees’ healthy working environment and better organizational performance (Friebel & Raith, 2004). Also, they explained that the designation without authority is like forming many rules but no application of those standards. ِAlso the level of trust of employee’s increases as they get empowered (Moye & Henkin, 2006). According to (Jarrar & Zairi, 2002) when employers give power to employees in decision, making that will increase their responsibility in an achievement of job satisfaction. The loyalty of employees towards organization is based on empowerment (Lee, Nam, Park, & Lee, 2006). Empowerment is one of powerful technique that effects employee’s commitment and better organizational performance.