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HRM practices and organizational performance in the UAE banking sector

Author

Listed:
  • Sherine Farouk
  • Hossam M. Abu Elanain
  • Shatha M. Obeidat
  • Moza Al-Nahyan

Abstract

Purpose - – The purpose of this paper is to examine the impact of human resource management (HRM) practices on organizational performance in the banking sector in the United Arab Emirates (UAE), to test the mediating impact of organizational innovation on the HRM-organizational performance relationship, and to test HRM practices as mediator of the relationship between innovation strategy and organizational innovation. Design/methodology/approach - – Data were collected from 168 managers working in UAE banks. A structured questionnaire containing standard scales of HRM practices, innovation strategy, organizational innovation, organizational performance, and some demographic variables was used. The analytical method used to empirically test the hypotheses proposed is the structural equation modeling technique using PLS. The two steps are: the assessment of the outer model and the assessment of the inner model. Moreover, a bootstrapping method is employed in order to test indirect effects. Findings - – Results found that organizational innovation fully mediates HRM-organizational performance link. Moreover, with the existence of innovation strategy, HRM mediates the relationship between innovation strategy and organizational innovation. Research limitations/implications - – The limitations of common method bias and cross-sectional data are discussed in light of implications for future research. Nevertheless, the results provide new insights on the influence of HRM on organization innovation and performance in a non-Western context of the UAE by testing the role of some mediators in influencing the relationship between HRM and performance. Practical implications - – In general, enhancing the effectiveness of HRM can result in higher level of performance and innovation. In particular, the choice of an innovation strategy implies the use of an effective incentive-based compensation, training and development, recruitment and selection and performance appraisal. Originality/value - – This study is considered the first study to examine the mediating role of organizational innovation on the relationship between HRM and organizational performance in the Middle East. Also, the study is the first study to test the role of HRM as a mediator for the innovation strategy-innovation performance relationship in a non-Western context.

Suggested Citation

  • Sherine Farouk & Hossam M. Abu Elanain & Shatha M. Obeidat & Moza Al-Nahyan, 2016. "HRM practices and organizational performance in the UAE banking sector," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 65(6), pages 773-791, July.
    • Handle: RePEc:eme:ijppmp:v:65:y:2016:i:6:p:773-791
    DOI: 10.1108/IJPPM-01-2016-0010
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    Citations

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    Cited by:

    1. Muafi & Uyun Qurotul, 2019. "Imitation vs Innovation: Is there an alignment between supply chain organizational learning and Islamic HRM practices?," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 10(3), pages 143-156, December.
    2. Olawumi Dele Awolusi & Shirley Shamen Jayakody, 2022. "Exploring the Impact of Human Resource Management Practices on Employee's Retention: Evidence from the Food and Beverage Industry in the State of Qatar," Journal of Social and Development Sciences, AMH International, vol. 12(4), pages 39-58.
    3. repec:eur:ejesjr:339 is not listed on IDEAS

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