Human Resource Practices and Financial Performance through Organizational Commitment: A Moderation case of Corporate Governance

Abstract

The study explores the impact of HR policies on financial outcomes of financial organizations and examines the impacts that corporate governance and organizational commitment have on the relationship. The researchers have come up with a total scheme that connects strategic HR practices with the real organizational performance with the use of employee training and workplace culture and compensation practices. The three theories which they use for their research are Resource-Based View (RBV) and Social Exchange Theory (SET) and agency theory. The researchers have used structured survey of financial industry professionals to collect information and they used structural equation modeling (SEM) to analyze the data. The results of the research indicate that effective HR strategies can be viewed as a twofold purpose instrument that contributes to financial performance by directly improving it and creating greater commitment of employees to their duties. The research discovered that good governance practices contribute to corporate governance effectiveness that results in increased employee commitment and effectiveness of human resources management processes. The study will offer a fresh way of conceptualizing the links between HR performance using behavioral insights and governance solutions that will be illustrated using real data on an emerging market. The research results indicate that financial institutions are supposed to put in place robust HR practices and governance systems since they are core success factors of the organization.