Links between HRM and organizational performance 69Abdussalam Ashour KHALIF Mohamed Itimad S. IBRAHIM Zoltán László SZABÓ LINKS BETWEEN HUMAN RESOURCE MANAGEMENT AND ORGANIZATIONAL PERFORMANCE SummaryThe research carried out to establish the link between HR and Organizational performance. The financial results are measured; a failure to measure HR policy and practice implementation dooms this to second-class status, oversight, neglect, and potential failure. HRM affects firm performance positively. Moreover, it is inferred that when HR managers implement HR practices aligned with firm's strategy (SHRM practices) contribute to better performance of organizations. SHRM increases efficiency and effectiveness of organizations, which leads to productivity of organizations. Further, SHRM practices increase employee's productivity and the ability of organizations to achieve their goals. Integrating the use of personnel practices into the strategic planning process enables organizations to better achieve their missions and objectives. Human capital theory suggests that HR practices can directly influence firm performance. Financial performance of an organization depends largely on effective operational performance. The operational performance of an organization is a function of people, process and technology. For effective interaction of people with technology and process, the people in the organization have to be competent enough, with the required knowledge, skill and abilities. The causal linkage between HR and organizational performance will enable the HR managers to design programmes that will bring forth better operational results to attain higher organizational performance.
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