Defining Human Resources “Bundles” and Its’ Correlation with Companies’ Financial Performances

Authors: Ivana Tadić, Snježana Pivac

Abstract:

Although human resources are recognized as the crucial companies’ resources and their positive influence on companies’ performances has been confirmed through different researches, scientists are still debating it. In order to contribute this debate, this paper firstly discusses the most important human resource management elements and practices and its influence on companies’ success. Afterwards it defines human resource “bundles” – interrelated and internally consistent human resource practices, complementary to each other, or the most important human resource practices and elements regarding Croatian companies and its human resource management activities. Finally, the paper provides empirical results; more precisely it reveals the relation of the level of development of human resource management function (“bundles”) and companies’ financial performances (using profitability ratios, liquidity ratios, solvency ratios and a group of additional ratios related to employees’ indicators).

Keywords: Companies’ performances, human resource bundles, multivariate statistical analysis.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1091880

References:

[1] A. Reichel and W. Mayrhofer, „Saving faith? The merit of subjective form performance measures - a methodological contribution to the HRM - firm performance debate. HRM - Between performance and employees," in Proceedings from the HRM conference in Helsinki, November 16, 2006, pp. 33-48.
[2] E. T. Stavrou and C. Brewster, „The Configurational Approach to Linking Strategic Human Resource Management Bundles with Performance: Myth or Reality?," Management Revue, vol. 16, no. 2, 2005, pp. 186-201.
[3] C. Ichinowski, K. Shaw and G. Prennushi, „The effects of human resource management practices on productivity: A study of Steel Fishing Lines," The American Economic Review, vol. 87, no. 3, 1997, pp. 291-313.
[4] J. P. MacDuffie, „Human resource bundles and manufacturing performance: Organizational logic and flexible production system in the world auto industry," Industrial and Labour Relations Review, vol. 48, no. 2, 1995, pp. 197-221.
[5] D. E. Bowen and C. Ostroff, „Understanding HRM – Firm Performance Linkages: The role of the „strength" of the HRM system," Academy of Management Review, vol. 29, no. 2, 2004, pp. 203-221.
[6] E. Houldsworth, and D. Jirasinge, Managing & Measuring Employee Performance. London: Kogan Page, 2006.
[7] A. Rejc and S. Slapničar, „Corporate performance measurement Systems: Empirical evidence of determinants," Working papers - Research Center of the Faculty of Economics Ljubljana, 2004.
[8] M. Tekavčič, D. Peljhan and U. Kosi, „Performance management,". Sixth International Conference on „Enterprise in Transition", in Conference Proceedings, 26-28 May 2005, Split, Bol, Hrvatska. Split: Faculty of Economics Split, 2005, pp. 219-236.
[9] Lj. Vidučić, Financijski menadžment. 5 izdanje. Zagreb: RRIF – plus d.o.o., 2006.
[10] L. Žager and K. Žager, Analiza financijski izvještaja. 2. prošireno izdanje. Zagreb: Masmedia d.o.o., 2008.
[11] I. Tadić, Utjecaj stupnja razvijenosti funkcije upravljanja ljudskim resursima na performanse poduzeća. Sveučilište u Splitu, Ekonomski fakultet Split, 2011, pp. 1-346.