High performance HRM and establishment performance in Pakistan: an empirical analysis
| Published date | 03 August 2015 |
| Pages | 506-524 |
| Date | 03 August 2015 |
| DOI | https://doi.org/10.1108/ER-05-2014-0044 |
| Author | Mansoor Ahmad,Matthew Allen |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations |
High performance HRM
and establishment performance
in Pakistan: an empirical analysis
Mansoor Ahmad
Department of Management Science,
COMSATS Institute of Information Technology, Islamabad, Pakistan, and
Matthew Allen
Manchester Business School, The University of Manchester, Manchester, UK
Abstract
Purpose –Despite a growing literature on human resource management (HRM) in emerging economies,
evidence fromPakistan is limited. There is scant information on boththe human resource (HR) practices
that indigenous workplaces adopt and their associations with HR-related outcomes. The purpose
of this paper is to fill that gap by examining whether universalistic assumptions about the applicability of
“high-performa nce”HR practicesare valid in Pakistan,a country with religiousvalues and organizational
traditions that differ to those in the west.
Design/methodology/approach –This study draws on the, to date, most comprehensive survey
of indigenous establishments in Pakistan. The authors use logistic regressions to analyze the data.
Findings –Workplaces, in general, adopt several “high-performance”HR practices, such as extensive
training, career breaks, rigorous pre-employment candidate assessment, and the sharing of strategic
information with employees. Attitude surveys and the provision of training in a variety of jobs to
non-managerial employees are consistently associated with better HR-related outcomes (absenteeism,
quit rates, and labour productivity). Overall, the paper finds some limited support for the applicability
and efficacy of high-performance HRM practices in Pakistan. Such practices conform to Islamic
principles. The results also indicate, however, that cultural traits play a role in how those practices
are implemented.
Social implications –Increased adoption of certain HR practices by establishments in Pakistan
may help to improve the working conditions and employment prospects of employees and may also
ameliorate the country’s sluggish economic growth rates.
Originality/value –HRM in Pakistani establishments has received relatively scantattention. Existing
research either focuses on a relatively small number of firms, assesses HR in MNC subsidiaries, or
examines a limited range of HR practices. Understanding the HR practicesthat are (and are not) adopted
and theirassociations with performanceoutcomes will notjust enhance the knowledgeof HR in emerging
economies, butwill also provide insights into how to improve establishment performanceand economic
growth rates.
Keywords Pakistan, Productivity, Emerging markets, “High-performance”HRM,
Absenteeism, Quit rates
Paper type Research paper
Introduction
Research on the links between “high-performance”human resource (HR) practices and
organizational performance is an important strand of the literature (Guest et al., 2003;
Huselid, 1995; Ichniowski et al., 1997; Wood, 1999; Wood and de Menezes, 1998, 2008).
Much of this work examines firms in developedeconomies. Studies that examine human
resource management(HRM) in developing economiestend to focus on MNC subsidiaries
at the expense of examining HR policies in indigenous (local) firms (Budhwar and
Debrah, 2001, 2009).
Employee Relations
Vol. 37 No. 5, 2015
pp. 506-524
©Emerald Group Publishing Limited
0142-5455
DOI 10.1108/ER-05-2014-0044
Received 7 May 2014
Revised 11 November 2014
Accepted 22 December 2014
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
506
ER
37,5
There has, however, recently been an upsurge in interest in the HR practices of
indigenous firms in developing economies, including those in the Indian sub-continent
(Chand and Katou, 2007; Chandrakumara, 2007; Raman et al., 2007) and the Middle East
(Budhwar and Mellahi, 2006). Increased international economic competition, a lack
of awareness and understanding of HR practices in indigenous firms, and a desire
to assess if high-performance HR practices that emerged in western countries can be
applied in developing economies lie behind these studies (Budhwar and Debrah, 2009;
Ramdani et al., 2014).
Very little is known, however, about, first, the HR practices of Paki stani establishments
(or business units) and, second, the links between HRM and establishment performance
there (Budhwar and Singh, 2007; Chaudhry, 2013; Debrah and Budhwar, 2001; Khilji,
2001, 2002; Tayeb, 1997; Yasmin, 2008). Previous research either focuses on a relatively
small number of firms, whose findings cannot be generalized (Chaudhry, 2013; Khilji,
2001); assesses HR in MNC subsidiaries (Chaudhry, 2013; Khilji, 2002) ; or examines
a limited range of HR practices (Yasmin, 2008).
Pakistan is a particularly interesting country to study the associations between
high-performance HR practices and establishment performance for three main reasons.
First, Pakistan is characterized by collectivism, high power distance (Mangi et al.,2012),
and high uncertainty avoidance (Islam, 2004) that largely account for organizational
practices, such as nepotism, centralization, and corruption, that some research identifies
as traits of Pakistaniorganizations (Islam, 2004; Khilji,2002). These characteristics could,
as we discuss below, hinder both the adoption and efficacy of high-performance
workplace practices.
Second, the role of religion in management, although largely ignored until recently
(Mellahi and Budhwar, 2010), is importantin Pakistan (Khilji, 2002; Tayeb, 1997), as it is
in other emerging economies with Muslim majorities (Ali, 2010; Branine and Pollard,
2010; Hashim, 2010). Even though the philosophical foundations of the Islamic model
of HRM differto those of western thought (Ali,2010), they do not contradictthe principles
of high-performance workplace practices that came to prominence, and have evolved,
in the USA and the UK (Ali, 2010). Indeed, in many instances, Islamicprinciples of HRM
converge with those of high-performance HRM practices (Abuznaid, 2006; Ali, 2010;
Branine and Pollard, 2010; Budhwar and Mellahi, 2007; Mellahi and Budhwar, 2010).
The role of religion may, therefore, encourage the use and efficacy of high-performance
HR practices in ind igenous establi shments.
Finally, low labour productivity is one of the causes of sluggish economic growth in
Pakistan (World Bank, 2013). HR practices that improve employees’skills and increase
productivity may also ameliorate social and working conditions, key concerns for Pakistani
policy makers (National Vocational and Technical Education Commission (NAVTEC),
2009; World Bank, 2013). Indeed, policy makers have recognized that the sectors examined
in this study, the banking, ICT, and pharmaceutical industries, are crucial to boosting
growth and productivity (Government of Pakistan, 2007; NAVTEC, 2009; Pakistan
Pharmaceutical Manufacturers’Association (PPMA), 2013; World Bank, 2013).
High-performance HRM practices could help to do that.
This study differs from the dominant literature on HRM in emerging economies in
three significant ways. First, it draws on the, to date, most comprehensive survey of a
wide range of potential high-performance HR practices in indigenous workplaces in
Pakistan, an oft overlooked country in the literature (Budhwar and Singh, 2007; Khilji,
2001, 2002). Second, it examines the links between high-performance HR practices and
HR-related outcomes amongst indigenous establishments. Existing research on HRM in
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HRM and
establishment
performance
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