Effect of human resource practices and job security on employees’ work performance

Abstract

Numerous studies have empirically confirmed that a positive relationship exists between human resource practices and employees’ work performance. However, most previous studies have been conducted in the context of large organizations in developed countries where economic and political conditions are relatively stable as compared to underdeveloped or developing countries. Prior studies have reported a significant relationship between human resource practices and individual work performance. However, the need to investigate the effect of job security on the relationship between human resource practices and employees’ work performance is eminent as it remains unclear and still requires more theoretical and empirical inquiries. Hence, the objectives of this study are, first, to examine the effect of selected human resource practices (i.e. training, job definition, performance appraisal, employee participation, and compensation) on individual work performance and, second, to investigate the mediating role of job security on the relationship between human resource practices and employees’ work performance in Palestinian small and medium-sized enterprises (SMEs). This study was based on the Ability-Motivation-Opportunity (AMO) theory, which shows that a selected set of best practices can generate added value to employees’ performance. A cross-sectional survey was used to collect data from employees working in the industrial sector in Palestine. Structural Equation Modelling (SEM) was used to test the conceptual model empirically and statistically. It was found that, training, performance appraisal, employee participation and compensation have positive significant relationship with individual work performance. However, job definition has non-significant relationship with individual work performance. The results also revealed that job security mediates the relationship between compensation, employee participation, performance appraisal and training with individual work performance. Thus, this study recommends that the small and medium-sized enterprises in the industrial sectors in Palestine should pay more attention to the effective implementation of human resource practices and provide a higher degree of security in the job so as to increase employees’ performance, which in turn will increase the firm’s performance. Finally, by considering and investigating selected human resource practices, the result could be less comprehensive and valuable. Therefore, for future research, this study recommends examining the compound human resource practices and their influence on the employees’ performance through the mediation effect of job security.