Jamaican Banking Industry
The focal point of effective human resource management (HRM) is on managing people within the employer-employee relationship. As banks are considered a very critical industry of the economy, it is important that the workforces supporting these banks are well motivated and are effective in delivering the necessary work output. It includes the productive utilization of employees to achieve the organization’s business objectives and satisfy individual employee needs (Stone, 1998). HRM seeks to strategically combine the interests of an organization and its employees (McGraw, 2003).
Consequently, ineffective HRM can be a major barrier to employee satisfaction and organization success (McGraw, 2003). HRM practices in the banking industry play a key role in attracting, motivating, rewarding, and retaining employees. HRM practices include recruiting employees, selecting employees, designing work, compensating employees, and developing good labor and employee relations (Noe, 2005). For the purpose of this study, the researcher bundled five specific human resource management practices.
These are HR planning, training, career development, performance appraisal, and employee participation programs. The researcher chose to bundle HRM practices since bundled HRM practices produce interrelated and complimentary functions. For example, training and development, and performance appraisal overlap each others’ results. The appraisal of an employee’s performance will show potentials and identify gaps in employee’s knowledge, skills, and abilities that will be filled in by training and development.
Furthermore, the alignment of HR practices produce synergy contributing to increase productivity and corporate financial performance (Huselid, 1995). Bundled HRM practices contribute to overall firm performance by motivating employees to adopt desired attitudes and behaviors (Bowen & Ostroff, 2004). Moreover, Chang (2005) argues that employees perceived HR practice as an exclusive and single practice rather than separate and diverse fields.
According to Fishbein’s (1963) an individual’s overall attitudes towards each HRM practices can be represented by a summation of the belief held about each HR practices. It is important to study HRM practices and its relationship with work related attitudes, and behaviors. Attitude is a mental state of readiness that is organized through experience, applying a dynamic influence on the individual’s response to objects and situations to which it is related such as job satisfaction and organizational trust. (Allport, 1935).
On the other hand, behaviors are manners in which an individual or group conduct and respond to his/her environment like Organizational Citizenship Behaviors or OCBs ( Robbins, 2005). Employee perception of organizational banking practices and working conditions within the banks of Jamaica influence employee attitudes and behavior (Guest, 2001; Ramamoorthy, ; Flood, 2005). Existing organizational practices within banks in Jamaica such as HRM should facilitate the development of desired employee attitudes and behavior that contribute to enhance firm performance (Chang, 2005).
Previous studies have found that positive perceptions of HRM practices lead to positive employee attitudes and behaviors such as job satisfaction (Guest, 1999), organizational trust (Barney, 1995 as cited by Gould-Williams, 2003), organizational commitment (Ogilivie, 1986), organizational justice (Greenberg, 1990; Kurland ; Egan, 1999;; Kanter 1977, McEnrue ; Hechler, 1985). Job satisfaction, organizational trust and OCBs were the variables selected to be studied in relation with HRM practices as these three elements are key factors in organizational effectiveness and these variables are considered understudied.
These facets affect and overlap each other’s functions and outputs that contribute to the development of HRM practices. Furthermore, this study contributes to the literature by examining a wide breadth of outcome measures within the same study. The study extends HRM literature in three ways. First, it provides additional research in the examining the role of HRM practices to employee attitudes and behaviors since there are limited studies in HRM conceptualized as a bundle (Chang, 2005; Guest, 2004; Huselid 1995; Tang, Restubog, Rodriguez, ; Cayayan, 2006).
Second, it examines the proposition of Morrison (1996) on the role of HRM practices in contributing to extra-role behaviors. An examination of HRM literature revealed that there has no study conducted investigating HRM to organizational citizenship behaviors. Third, it also simultaneously examines HRM, job satisfaction, organizational trust, and OCBs in one study. Previous studies have examined these variables separately. For example, Ellickson (2002) and Bradley, Petrescu, and Simmons (2004) conducted the study on HRM practices to job satisfaction, Tzafrir (2004) examined HRM practices to organizational trust.
Furthermore, since there are limited studies on HRM practices within Jamaica; this would contribute to the importance of HRM practices in the management organization. Review of Related Literature This section discusses the key variables included in the study. These are HRM practices, job satisfaction, organizational trust, and OCBs. Each section discusses the concepts and outcomes based on an examination of academic and empirical literature. In addition, the study will also present a very brief profile of the Scotiabank of Jamaica.
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