The Relationship between HR Practices and Employee Performance

In the strength of HRM systems, individuals share a common interpretation of accepted or rewarded behaviours. The HR system can help an organisation gain a competitive advantage over its competitors and become more effective (Sabeen, Zakariya, Vrontis, Santoro, & Christofi, 2020). HR Practices affect organisational performance by shaping employees attitudes and behaviours. Employees are the assets of any organisation. By influencing individual perspectives, the high commitment to HRM increases organisational effectiveness. Prior studies proposed the relation of the organization performance and the employees task doing organism (Clercq, Kundi, Sardar, & Shahid, 2021). To the best of our knowledge, in the prior literature on HRM, no study has been conducted by adding the training session’s mediating role between HR practices and worker performance. The study also adds the role of work engagement as a mediator to get fruitful results because it has already been used in some studies (Guan et al., 2018; Hamadamin & Atan, 2019).

HR practices refer to all the company management rules and the regulation decision that impact the employees and organisation. It is argued that HR practice and employee performance are closely related. Because several researchers and investigators have studied better HR practices, it ultimately enhanced an employee performance, improving the organisation performance (Mahmood, Muhammad, Talat, Shuai, & James, 2019). HRM practices and policies best fit with business strategies will enlighten the organisation and employees performance. It means that HR practices and procedures are needed, notable support to the employees and motivates them to work hard, and they are also valuable for the organisation it will ultimately increase the performance of the organisation (Clercq et al., 2021; Jabbar, Hussin, Hashmi, & Jafri, 2020; Jarrar, 2022). This study is concerned with HR practices to assess employee performance individually with the mediating role of training and work engagement. Training sessions motivate the employees to work with the delegation as they feel happy to do their work in a good, engaging environment that provides dedication and empowerment to them. This discussion will lead to the following hypothesis:

H1: Human Resource practices have a positive and significant impact on employee performance.

Mediating Role of Training Sessions

In HRM practices, training remains instrumental to organisational success. It is conducted to train employees and make them acclimate to the fast-changing working apparatus in the business world. The success in achieving the company strategic goals mostly depends upon its employees, and if they are trained well, they will be able to perform well (Jabeen & Rahim, 2020; Liao, Toya, Lepak, & Hong, 2009). Training is a company’s planned effort to enhance its employees’ skills and knowledge and modify their attitudes. Training means a planned process that is executed to guide existing or new employees in such a manner that they can perform their jobs effectively. An organisation performance depends on its workforce quality, so the improvement of hirelings’ performance can be considered significant. Training positively affects employee performance because it contributes more than other factors like motivation, working environment, management attitudes, and technology (Jawaad, Amir, Bashir, & Hasan, 2019). Those organisations with good training plans for their employees have an excellent capacity to increase their employees’ performance.

In the world, employee training is not a new thing or idea for business organisations; it also has equal importance for the public and private sectors. Accordingly, many organisations, whether private or public, make strategies for their employees’ development, prioritise their human resource development and resolve their issues quickly as soon as possible (Adelere, 2017; Karim, Choudhury, & Latif, 2019). Training is considered a process to change skills, attitudes, and knowledge behaviour through experiential learning that will improve the performance of the employees in their current job. Learning application and theory, training programs, instructional design systems, and strategies are the tools used by the organisation to train their employee. Employees with good training and skills can contribute much effort to the organisation success (Adelere, 2017; Khan, Yusoff, Hussain, & Ismail, 2019). Therefore, we intend the following hypothesis:

H2: Training sessions significantly and positively mediates between the HR practices and employees performance.

Mediating Role of Work Engagement

Work engagement provides a competitive advantage, and it is all about attachment and dedication toward the employee performance in their job (Boon et al., 2014). There is a positive impact on the workforce performance of HRM practices like compensation, performance appraisal, career planning, training, and employee involvement (Hassan, 2016; Khan, Khan, Mohmand, & Misbah, 2020). In between the employee work engagement and objective task performance, perceived organisational support (POS) is hypothesised to strengthen the positive relationship. HR practices play a more significant role in work engagement. In a strong climate, employees become more motivated about their work (Yongxing, Hongfei, Baoguo, & Lei, 2017). This study includes HR practice as a predictor for increasing performance by facilitating employee work like organisational resources and employee motivation, which becomes conducive to work engagement. There are many problems why workers engaged with their jobs perform better than non-engaged workers. Khan et al. (2019) stated that employees who get engaged with their work have many positive emotions towards work, have more opportunities, are helpful to their co-workers, and are more optimistic and confident. Many studies showed a positive relationship between performance and work engagement with the role of HR practice. When the HRM system is considered positive by employees, this will motivate the adoption of behaviours and attitudes stable with organisational goals and management values as a form of investment for organisational sustenance. According to Rich, Lepine, and Crawford (2010) and Khushk (2019), engaged employees’ experience is considered a high level of motivation and connectivity with work responsibilities, along with doing their best toward task-related goals.

Furthermore, people who do their best for their work put themselves in a role to do their job best for the organisation and their co-workers behind the boundaries. Work engagement is critically important if the employees have a psychological connection or affiliation with their work in this modern world (Guan et al., 2018; Mahmood et al., 2019). Organisations need such employees who are willing to invest themselves in their employment. Work engagement is relevant to pivotal outcomes such as the job’s performance, the clients’ satisfaction, and financial returns (Bakker, Albrecht, & Leiter, 2011). Hence the hypothesis is:

H3: Work engagement significantly and positively mediates between the HR practices and employee performance.

Sample and Procedure

This study followes a quantitative approach as a research methodology. The study population includes all those working in manufacturing and service companies in Pakistan. The convenient sampling technique approached the respondents to collect the desired data. The convenience sampling technique is a type of non-probability sampling technique. The researchers used this sampling technique to contact the population participants quickly or reach them easily. A self-administrative research instrument compiled by (Amir, Rehman, & Khan, 2020) was used to collect the data. We used a five-point Likert scale from “strongly disagree” to “strongly agree” to measure the responses provided by the respondents (Iyer & Kashyap, 2009), and the items of the questionnaire were adapted from prior studies (Hashim, Rafi, Kazmi, Ullah, & Kee, 2017). This study is non-contrived as the research instrument was distributed in a natural setting. No manipulation was made in the respondents’ environment and followed a cross-sectional research design (Bell, Bryman, & Harley, 2018). The required respondents were contacted through personal emails and social accounts by getting advance approval from each company’s HR department. The data was collected from both employees and those managers who deal with the practices of HR. Respondents were guaranteed to keep their responses confidential and not be misused. They were confident that the investigation would take place at the summative level.

According to (Kline, 2011) formula [number of questions in the instrument * 10], at minimum, about 240 respondents were required to satisfy the generalizability of this study’s results. About 270 questionnaires were sent through emails and social accounts (Chaudhry, Asad, & Hussain, 2020; Iqbal & Hashmi, 2015). 267 responses were returned, and 259 were complete and usable. Therefore, this study retained 259 responses, and the response rate for this study is almost 93%. Based on demographics, both males and females participated in this study. The males accounted for 67.6%, and females accounted for 32.4%. Similarly, based on age, all the respondents were above 21 years. Most of the respondents had graduation and post-graduation degrees. Some respondents had a high school, and some had inter-level degrees. Experience-wise, most respondents have 3 to 10 years’ experience.

Measures

This investigation first projected factor loadings for each item, and only those items were retained, with a factor load more than 0.5 to confirm the standard (Hulland, 1999). The construct reliability was also established by determining alpha values. The range of Cronbach’s alpha was from 0.80 to 0.88. This indicated that all the measures are highly reliable with an alpha of Cronbach’s higher than 0.7 and conform to the standard specified by (Jaff et al., 2011). The same scales have been adopted in this study (Akhtar, Nawaz, Mahmood, & Shahid, 2016; Mahmood et al., 2019). This study used three items to measure employees’ performance (α=0.878) adapted from (Guan et al., 2018). A sample item for employee performance is “I adequately complete the assigned duties,”. Eight items to measure work engagement (α=0.888), a sample item is “At my work, I feel bursting with energy” and this scale was adapted from the study of (Guan et al., 2018). Three items to measure training sessions are used in this study, and validity is confirmed by CFA analysis for this construct(α=0.851). A sample item is “Training sessions improve my job performance”. From the study of (Guan et al., 2018) twelve items were used to measure HR practices (α=0.809); a sample item is “Company’s HR practices contribute to my work satisfaction.”. All these items were subject to reliability and validity tests, and only those scale items were retained, with a high item-to-total correlation. Scale items with low item-to-total correlation were dropped. The one item of work engagement was dropped because of the low item-to-total correlation. The elements of the demographic section (age, education, and income) were measured based on self-selected categories (Mclachlan & Gardner, 2004). See the appendix for more details.

Measurement Model

According to Manalo, Castro, and Uy (2020), the value of Normed Chi-Square and RMSEA should be less than 3 and 0.08, respectively, the values of GFI should be greater than 0.90, and the value of IFI, TLI, and CFI should be greater than 0.9. These figures for this study were Chi-Square (340.518), DF (226), P-Value (0.0000), Normed Chi-Square (1.507), RMSEA (0.044), GFI (0.907), IFI (0.968), TLI (0.960), NFI (0.910) and CFI (0.967). These values are produced with the help of fit indices (Mazzetti, Vignoli, Petruzziello, & Palareti, 2019). Mazzetti et al. (2019) explained that CFA is used to determine Convergent and Discriminant Validity scales.

Discriminant Validity

Another form of validity is verified through the analysis's results. A discriminant form of validity assures that the variable is valid and strong enough (Mumtaz et al., 2019). For this aim square root of AVE values is used to analyse. The set rule is that all the square root AVE values should be greater than the correlation values (Mira, Choong, & Thim, 2019). Consequently, Table 2 ensures that all the indices are fit and ready for a sophisticated analysis type. As per the bolded figures from the resulting table, it is revealed that the set standard is met, and the discriminant validity is found.

In confirmatory factor analysis (CFA), the indices' fitness is determined appropriately. In the primary step, hypotheses are proposed, and their analysis is run through AMOS software. The unfit model may create data analysis issues and reliability, so CFA becomes useful in that case. Moreover, the model reliability is linked by the author to its theoretical base. Thus, this has become a procedure to testify the theories. Therefore, all the factors are loaded on the model, see Figure 1. That is how the observed, latent and observable variables. Furthermore, this information is regurgitated in the form of quantitative analysis and used for the subsequent up analysis. Hence, the analysis shows that all the indices’ values are fir and follow the set standard in the research values. The indicators include GFI, AGFI and RMSEA values, etc.

Structural Equation Modelling (SEM)

Structural equation modelling (SEM) is a sophisticated analysis that is run to codify and determine the association amongst the variables in the analysis (Mira, Choon, Voon, Thim, & Kok, 2020). SEM is an instrument that helps determine the relationship between the observable, observed and latent variables by running the tests of regressions and multivariate factors.

The test is selected for the multivariate and statically empirical and regression analysis. In the path model, two forms of variables are endorsed, the dependent and the independent variables. Table 3 shows the SEM analysis and enumerates the direct influence of the variable HR practices on the employee performance. The table highlights that HR practice effect on employee performance was positive and significant (HR → EP, β = 0.182, P=.018, Model 1). This outcome represents that Hypothesis 1 is accepted. HR practices and EP are directly related, which means that an increase in HR will increase the value of EP. Model 2 signifies the mediation effect. We conclude the separate indicate effect through both mediator by multiply both paths. It can be seen from Table 2 above that the positive value represents that work engagement (WE) does mediate the relationship between HR and EP (HR → WE → EP, β=.057 and P=.010) so, Hypothesis 2 is accepted. Furthermore, training sessions (TS) also mediate the relationship between HR and EP (HR → TS → EP, β=0.041, p=.010), which implies that Hypothesis 3 is accepted. Following the diagram, b shows the variables' structural equation modelling (SEM).