Topics: Human resource management, Financial ratios, Asset turnover Pages: 12 (3734 words) Published: January 20, 2013
Asian Business Review, Volume 1, Issue 1, September 2012

ISSN 2304-2613

Human Resource Management Practices and Firms Performance in Bangladesh: An Empirical Study on Pharmaceutical Industry Serena Aktar1, Md. Shoriful Islam2, Sayed Mohibul Hossen3
1 Department 2 Department

of Business Administration, Northern University Bangladesh of Business Administration, Northern University Bangladesh 3 Department of Business Administration, Northern University Bangladesh

This research work has been conducted in the field of human resource management (HRM), more specifically on firm performance. The aim of the study is to show the relationship between HRM practices and firms performance of pharmaceutical industry in Bangladesh. It is assumed that HRM practices could positively influence profitability and growth and depressingly bias employee turnover. The primary data were collected using structured questionnaire sent to employees of different departments having different job status of some pharmaceutical companies in Bangladesh. Secondary data were collected from annual reports of the selected companies for measuring and finding out their performance. The paper has tried to elucidate the role of HRM practices and to test the relationship among the variables indicating that HRD has a relationship with performance like inventory turnover, total assets turnover, net profit margin, gross profit margin etc. It is found that HRM practices enhance performance of the pharmaceutical firms in Bangladesh. Keywords: HRM Practice, Firm’s Performance, Pharmaceutical Industry JEL Classification Code: M120



HE concept of HRM became popular in the early 1980s; since then there has been increasing interest in the academic concept as well as in the research area. Early models of HRM were largely conceptual and not based on substantial empirical evidence for their validity (Beer, Spector, Lawrence, Miles & Walton,1984; For burn, Tichy & Devanna,1984; Guest,1989). The 1990s saw a substantial amount of empirical research carried out to find evidence on the link between HRM practices and performance. In recent years much of the research work could , in fact, find statistical evidence for an association between HRM practices and resulting performance (e.g. Arthur, 1994; Huselid, 1995; Ichniowski, Shaw & Prennushi, 1997). Recently human resources have been recognized as an important source of continued competitive advantage. A number of researchers examining the relationship between HRM and firm performance have taken a micro approach investigating single HRM practices such as staffing, training, goal-setting, compensation, and so forth, and the effects of those practices on organizations’ outcomes. In this millennium, the role of human resources remains important to organizations. In spite of this evidence, many organizations are slow in adopting those practices that were found to contribute to organizational success. This situation is found not only in the plantation sector (Bawa, 2000), but also in manufacturing sector.

Effective use of human resources leads to a number of consequences like helping the firm to achieve its objectives, increasing employees’ job satisfaction, providing the firm with well-trained and motivated employees and developing quality of work life which makes employment personally and socially desirable. (Khan, 2007) An effective and competitive human resource is the key to the strength of organizations in facing the challenges of business today. Such type of human resource will produce quality and productive individuals that will eventually minimize the problems related to human resources such as job dissatisfaction, absenteeism, or turnover of employees (Daud, 2006). Pharmaceutical companies design and produce pharmaceutical products, including drugs, medical products and equipments (for example cardiovascular or laser equipment), not for open sale only but also as prescriptiononly...

References: [1] Ahmad, Iqbal & Khalil Md. Ibrahim (2007) “Human Resource Planning in the Banking Sector of Bangladesh: A Comparative Study Between Public and Private Bank”, Journal of Business and Administration, Oct.33. Boselie, P., Dietz, G., and Boon, C.(2005). Commonalities and contradiction in HRM and performance research. Human Resource Management Journal, 15(3):67-94
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