HRM Practices in Banking Sector of Pakistan: Case of National Bank of Pakistan

HRM Practices in Banking Sector of Pakistan: Case of National Bank of Pakistan

Roya Rahimi (Department of Marketing, Innovation, Leisure and Enterprise (MILE), University of Wolverhampton, Wolverhampton, UK), Vipin Nadda (Department of Business and Law, University of Sunderland, Sunderland, UK) and Muhammad Hamid (University of Sunderland London Campus, London, UK)
DOI: 10.4018/IJABIM.2016040103
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Abstract

Current study aims to critically investigate the impact of HR practices on organizational commitment of employees in the Banking Sector of Pakistan. The impact of training, compensation, performance evaluation, and promotion practices have been assessed on affective, normative and continuance commitment of employees via 12 hypotheses. Survey methodology was adopted via using structured questionnaire. A sample of 100 respondents was drawn from the employees working with various branches of the National Bank of Pakistan (NBP) located in Lahore, Pakistan. Collected data was subjected to Pearson Correlation and Regression analysis. The results of Pearson Correlation matrix demonstrated a positive correlation between HR practices and organizational commitment of employees which confirms all proposed hypotheses. Regression results showed a significant positive impact of training and performance evaluation on organizational commitment of employees. However, the significance of compensation and promotional practices could not be proved.
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Literature Review

Human Resource Management and Its System

Though previous studies have reported increased importance of HRM, still there seems to exist a wide research and practice gap in HR which may be a result of difference in interest or due to the fragmented nature of the field of HRM (Deadrick and Gibson, 2007, p. 131). Armstrong (2009) defines HRM as “a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations”. It aims at achieving organizational success through an efficient management of individuals employed in an organization. According to Fey et al (2009, p. 690), human capital is an indispensable input and can serve as the most important source of competitive advantage for an organization. Thus, optimal utilization of human resources can help fulfill organizational goals. The domain of HRM involves practices and managerial decisions that have a direct impact on the employees of that organization and hence could be considered as a system of practices that provides employees with expertise, information, and enthusiasm to be involved in decision making, which when used as a fundamental part of business strategy can help utilize competent workforce to ensure sustainable competitive advantage (Luque et al., 2012, p. 4).A number of researchers have emphasized that it is the complete system of HRM and not just any one individual practice which serves as a potential source of success.

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