Research Project M.bilal
Research Project M.bilal
R esearch Report
MUHAMMAD BILAL
S2022392015
Title:
Relationship between human resource management practices, ethical climates
and organizational performance, the missing link: An empirical analysis
https://www.emerald.com/insight/content/doi/10.1108/PRR-12-2016-0022/full/html
Introduction:
The success of any organization hinges on its human resource management (HRM) practices,
which mold and influence employee behavior and motivation, shaping them into the high-
performing individuals and teams that collectively ensure a company's success. HRM practices
range from the selection and training of employees to the design of their work and rewards
systems. The practices impact directly and powerfully on the performance of employees and on
their lives as well. The influence of HRM—isn't that what is largely and primarily good about
when people within organizations treat each other well and bad when they don't?
Research Problem:
Although separate studies have looked into the associations of HRM practices and ethical
climates with organizational performance, there is little research connecting all three.
Furthermore, the studies that do exist have not sufficiently detailed the factors that might
explain how HRM practices and ethical climates work together to influence organizational
performance. Consequently, this research gap makes it harder for managers and leaders to
achieve optimal HRM practice performance and create work environments that are both ethical
and high-performing.
Problem statement:
At present there is little extant literature, which provides insights on the links between HRM
practices and ethical climates and organizational performance. This study proposes, therefore,
to complement such literature by exploring these variables’ direct and indirect effects and by
investigating possible mediators and moderators that could construe the dynamics of such
effects. Therefore, if these relationships are not well understood, organizations would find it
difficult to design and implement HRM strategies that foster ethical environment that could help
enhance performance.
Significance of the Study
The research findings of the study bear theoretical and practical implications. At the theoretical
level, it will add to the existing body knowledge by connecting CSR, HRM practices, ethical
climates and organizational performance. In a practical sense, the results of this research will be
handy for managers, HR practitioners/technicians, and organizational directors on how to
develop and proactively implement HRM practices that would promote good ethical culture that
translates to organizational performance. The findings of the study could be also useful for
policymakers and regulators that are concerned with increasing the quality of corporate
governance and ethical culture in enterprises.
Abstract
This empirical experiment is to understand the nexus that exists between HRM practices, ethical
climate and organizational performance. It looks at the way that HRM strategies impact on the
ethical climate of an organization and at how these factors mitigate or enhance performance. In
this cross sectional survey with a sample of organizations with a diversity in their industries, the
quantitative method is used to measure the meditating and moderating factors that can act as
“missing links” in this association. The present evidence shows that some of the HRM practices
have a strong influence on the ethical environment, which becomes the mediator of the
relationship between HRM and the organizational performance. Based on the analysis, the
following conclusions are drawn and recommendations made in enhancing the management of
HRM for ethical climates for enhanced performance.
Limitations
The present research has a set of limitations that arise and must be recognized.
This line of research is cross-sectional, and that implies that only a one-time point in time
was compared.
The data is collected from a limited number of industries and as such the findings may not
be wholly generalizable to other industries.
Using self-responded questionnaires meant that some questions could attract biased
answers such as social desirability bias.
The study is confined to an organization in a particular geographical or cultural location
and thus perhaps not replicable in other contexts.
FRAMEWORK
Mediator
Ethical Climate
Independent
Dependent Variable
Variable
Organizational
Organizational
HRM Practices Performance
Moderator
Organizational
Culture
Independent Variable
Organizational HRM Prsctices
Article no: 1
Reference: Otoo, F.N.K. (2019). Human resource management (HRM) practices and
organizational performance: The mediating role of employee competencies. Employee Relations,
41(5), 949-970.
Article no: 2
Reference: Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H., & Saks, A.M. (2015).
Employee engagement, human resource management practices and competitive advantage: An
integrated approach. Journal of Organizational Effectiveness: People and Performance, 2(1), 7-
35.
Authors: Simon L. Albrecht, Arnold B. Bakker, Jamie A. Gruman, William H. Macey, Alan M.
Saks
Article no: 3
Human resource management practices in the service sector: Evidence from India
Summary:
This research explores HRM practices within India's service sector, highlighting the role of these
practices in enhancing employee performance and satisfaction. It provides insights into how
service-oriented organizations can leverage HRM to achieve better outcomes.
Reference: Wadhwa, K.S., & Sharma, P. (2020). Human resource management practices in the
service sector: Evidence from India. International Journal of Organizational Analysis, 28(4), 739-
756.
[Link to Article](https://doi.org/10.1108/IJOA-06-2019-1873)
Article no: 4
Reference: Ben Abbes, F.A., & Mzoughi, A.M. (2019). The impact of human resource
management practices on organizational commitment: A study in the manufacturing sector.
Journal of Workplace Learning, 31(2), 151-164.
Article no: 5
Summary:
This study examines the relationship between innovative HRM practices and organizational
performance, proposing that employee creativity mediates this relationship. It underscores the
significance of fostering creativity through HRM to drive organizational success.
Reference: Lee, S.J., & Kim, S.H. (2020). Innovative HRM practices and organizational
performance: The mediating role of employee creativity. Journal of Organizational Change
Management, 33(2), 313-329.
Dependent Variable
Organizational Performance
Article no: 1
Article no: 2
Summary:
This study examines the relationship between HRM systems and organizational
performance, highlighting HR practices that significantly impact employee
satisfaction and overall performance outcomes.
Reference: Katou, A.A. (2017). How does human resource management influence
organizational performance? An integrative approach-based analysis.
International Journal of Productivity and Performance Management, 66(6), 797-
821.
Article no: 3
Summary:
This research explores how strategic thinking and high-performance work practices influence
organizational performance, particularly in the banking sector.
Reference: Alatailat, M., Elrehail, H., & Emeagwali, O.L. (2019). High performance work
practices, organizational performance and strategic thinking: A moderation perspective.
International Journal of Organizational Analysis, 27(3), 370-395.
Author: Maher Alatailat, Hamzah Elrehail, Okechukwu Lawrence Emeagwali
Publisher: Emerald Publishing Limited
Publication Date: January 24, 2019
Article no: 4
Summary:
This article investigates how organizational culture impacts performance in higher education,
showing that a strong culture can lead to enhanced effectiveness and outcomes.
Reference: Alsharif, S., & Alhussein, Z.A. (2022). The role of organizational culture in enhancing
organizational performance: A study of higher education institutions. Journal of Educational
Administration, 60(2), 263-277.
Author: Saeed Alsharif, Zaid A. Alhussein
Article no: 5
Summary:
This study analyzes the effects of different leadership styles on organizational performance,
highlighting how transformational leadership fosters a supportive environment that enhances
performance.
Reference: Badran, F.A. (2023). Exploring the impact of leadership styles on organizational
performance: A case study of the manufacturing sector. Leadership & Organization
Development Journal, 44(1), 24-40.
Author: Farhad A. Badran
Publisher: Emerald Publishing Limited
Publication Date: January 18, 2023
Moderator
Organizational Culture
Article no: 1
Summary:
This paper examines how different types of organizational culture (clan, adhocracy,
hierarchical, market) moderate the relationship between organizational rewards and
knowledge sharing. It finds that clan and hierarchical cultures significantly moderate this
relationship, impacting employee performance. The study also highlights the negative
role of hierarchical culture on knowledge sharing.
Reference: Rohim, A., & Budhiasa, I.G.S. (2019). Journal of Management Development,
38(7), 538-560.
Article no: 2
Summary:
This study explores how organizational culture moderates the relationship between the
personality traits of managers and their managerial competencies in Thailand’s
healthcare system. A humanistic and leadership-driven culture strengthens the impact
of personality traits like conscientiousness on managerial performance.
Authors: Nirachon Chuttipattana, Faridahwati Mohd. Shamsudin
Publisher: Emerald Group Publishing Limited
Publication Date: May 2, 2011
Reference: Chuttipattana, N., & Shamsudin, F.M. (2011). Leadership in Health Services,
24(2), 118-134.
Article no: 3
Summary:
This article investigates how organizational culture types affect the relationship
between cultural satisfaction and employee referral intention based on Glassdoor
reviews. The study finds that cultural satisfaction, rather than specific culture types,
plays a crucial role in encouraging employee referrals.
Article no: 4
Summary:
This research examines how organizational culture moderates the impact of emotional
intelligence on job performance. It concludes that emotional intelligence has a more
substantial effect on job performance when combined with a supportive organizational
culture.
Article no: 5
Summary:
Mediator
Ethical Climate
Article no: 1
Summary:
This study examines the mediating role of meaningful work between the ethical
climate of organizations and employees' affective well-being. It highlights the
importance of organizational values and ethics in promoting meaningful work and
a positive organizational environment.
Article no: 2
Summary:
Summary:
Authors: Sen Sendjaya, Nathan Eva, Mulyadi Robin, Lyfie Sugianto, Ivan
ButarButar, Charmine Hartel
Publisher: Emerald Publishing Limited
Publication Date: November 2019
Reference: Sendjaya, S., Eva, N., Robin, M., Sugianto, L., ButarButar, I., &
Hartel, C. (2020). Leading others to go beyond the call of duty: A dyadic study
of servant leadership and psychological ethical climate. Personnel Review,
49(2), 620-635.
Article no: 4
Summary:
Article no: 5
Summary:
This article examines the relationship between ethical climate and employee
engagement, with ethical leadership playing a mediating role. The findings
suggest that a strong ethical climate, promoted by ethical leadership,
enhances employee engagement.
Literature review
Independent Variable
Literature Review:
About the relationship between HRM practices and employee creativity for innovation.
From their study, they learn that, HRM practices increase organizational performance
especially in organizations that are in constantly in the process of evolving and
developing new ideas.
Dependent Variable
Organizational Performance
Literature Review:
The dependent variable in this study is organizational performance. Pavlov and Michele
(2023) examine why conventional trade management systems and practices fail to meet
the complexity of today’s management environment. They suggest that using
organizations as systems increases effectiveness of performance by incorporating
flexibility and sensitivity to context. This is quite a reasonable approach differentiating
from the successive annual models of performance management and demanding more
systematical insights on organizational improvements.
How Does Human Resource Management Influence Organizational Performance?
Literature Review:
Moderator
Organizational Culture
It has been established that organizational culture types moderate the relationship
between cultural satisfaction and employee referral intentions. Therefore, the authors
infer that cultural satisfaction is a stronger predictor as compared to the nature of
culture; the authors suggest that to achieve enhanced organizational results, employees’
satisfaction should be enhanced, in lieu of focusing on the culture type.
Hypothesis
Independent Variable
Organization HRM practices
Hypothesis
Organizational HRM practices refer to the systematic process, procedures, and measures
that can be adopted by organizational management for handling workforce, including
selection, development and appraisal. These practices are believed to have a large
impact on the level of satisfaction, commitment and work productivity of the employees
as well as overall organizational effectiveness.
Dependent Variable
Organizational Performance
Hypothesis
Organizational performance is the ability of an organization to meet the laid down goals
and objectives within its shortest time. It includes all the diverse measures that within
productivity, profitability, personnel satisfaction, and organizational effectiveness levels.
In the line of the hypothesis, aspects like ethical climate, and human resource
management, implied that good ethical circumstance may improve organizational
outcomes.
Methodology
The methodology employed in the articles regarding ethical climate and organizational performance
typically follows a structured approach that includes several key components. Here’s a synthesis of the
methodologies used in these studies:
Research Design
Most articles utilize a quantitative research design, which allows for statistical analysis of data to
explore relationships between variables. Some may also employ qualitative methods to gain deeper
insights into specific phenomena, such as employee perceptions of ethical climates.
Sampling: A variety of sampling techniques are employed, with many studies using stratified or
convenience sampling to gather participants from specific sectors or industries. This ensures that the
sample is representative of the population being studied, allowing for more generalizable results.
Data Collection:
Data collection methods commonly include surveys and questionnaires designed to measure
constructs such as ethical climate, employee engagement, and organizational performance. These
instruments often use established scales to ensure validity and reliability.
Data Sources:
The studies primarily rely on primary data collected directly from employees through surveys, though
some may also use secondary data from organizational reports or existing databases to supplement
their findings. This mixed approach helps to triangulate results and enhance the credibility of the
research.
Performance Measures:
Performance measures in these studies often include both quantitative metrics (such as financial
performance indicators) and qualitative assessments (like employee satisfaction and engagement
levels). These metrics provide a comprehensive view of organizational performance and its correlation
with ethical climate and HR practices.
On a scale of 1 to 5, how aware do you feel your organization is of ethical issues in the
workplace? (1 = Not at all aware, 5 = Very aware)
Ethical Climate:
How would you describe the ethical climate of your organization? (1 = Very Poor, 5 =
Excellent)
Management Support:
To what extent do you feel that management supports ethical behavior within the
organization? (1 = Not at all, 5 = Very Much)
Employee Training:
How often does your organization provide training on ethical behavior and decision-
making?
o a) Never
o b) Occasionally
o c) Regularly
Reporting Mechanisms:
How comfortable do you feel reporting unethical behavior in your organization? (1 = Not
comfortable at all, 5 = Very comfortable)
Impact on Engagement:
In your opinion, how does the ethical climate of your organization affect employee
engagement? (1 = Very Negatively, 5 = Very Positively)
How effective are the HR practices in promoting a positive ethical climate? (1 = Not
effective, 5 = Very effective)
Organizational Commitment:
How committed do you feel to your organization due to its ethical practices? (1 = Not
committed at all, 5 = Very committed)
Performance Metrics:
To what extent do you believe that ethical behavior impacts overall organizational
performance? (1 = Not at all, 5 = Very much)
What suggestions do you have for improving the ethical climate in your organization?
(Open-ended response)
-----------------------------------------------------------------------------------------