Presenter Saba Mateen-Iqra University Strategic HR Practices, Employee Empowerment and Organizational Performance: Empirical findings from small and medium enterprises of Karachi Presenter Saba Mateen-Iqra University Co-Author Dr. Naveed R. Khan- Iqra University

INTRODUCTION The business risk and its uncertainty are increasing day by day. According to the World Bank (2011), total number of population is around 176 million in which the majority of the people are youngsters. As far as the GDP of Pakistan is concerned, this commodity sector provides contribution of 46.5 % towards the GDP (Economic Survey of Pakistan, 2011). According to SMEDA (2006), Pakistan 90% of the firms came under the classification of Small and Medium sized enterprises

INTRODUCTION Federal Board of Statistics demonstrates that 65% of enterprises are located in Punjab, 18% of enterprises are in Sindh and 14% of enterprises are in KPK whereas 3% of enterprises are located in Baluchistan and Islamabad respectively. Three classes were defined for the SME’s that includes the size of the employment, the annual sales and lastly the paid up capital.

PROBLEM STATEMENT “The SME’s in Pakistan lacks in practicing the Human resource practices .” According to (Cassell et al., 2002) that employment practices are found to be very diminutive in the measure tasks list of the Smaller or medium sized firms. Due to financial restraints & growth constraint, smaller firms focus more on utilizing the existing resource effectively and efficiently (Gallego et al., 2012).

Cont. In Pakistan, SMEs are not properly utilizing their work force therefore the organization’s most treasured resources are ignored, i.e. Human resource. (Khan et al., 2013).

RESEARCH OBJECTIVE RO: To examine the impact of strategic HR practices and employee empowerment on organizational performance in small and medium enterprises of Karachi.

LITERATURE REVIEW According to Moideenkutty et al (2011) the best human resource management practices implemented in the Oman Sultanate i.e. staffing, performance management and empowerment are positively associated with the performance of the organization. Yang (2011) conducted a study and identified the bond between performance of the Taiwan manufacturing firms and the practices of Human resource management. The author used conceptual framework for his discussion on the practices and the performances.

Cont. Muhammad Abdul Rauf (2007) in Lahore, Pakistan is based on the HRM practices and SME’s performance in garment manufacturers which explains that the formal HRM Practices have a significant and a positive effect on the performance of the firm. Another research conducted by Abdul Raziq (2011) on SME’s is related to the comparative analysis of Human resource management practices between manufacturing and service sectors in Karachi, Pakistan.

Theoretical Framework Resource Based View (RBV) RBV focuses on intra-organizational perspective and argues that performance of the firm is due to their specific resources and capabilities (Barney, 1997).

Proposed framework

Hypotheses Ha1: There is a significant relationship between selective staffing and organizational performance Ha2: There is a significant relationship between employee empowerment and organizational performance Ha3: There is a significant relationship between performance management and organizational performance Ha4: There is a significant impact of selective staffing, employee empowerment and performance management on organizational performance.

Methodology Research Approach Quantitative Approach Research Purpose Explanatory Data Source Primary data Data Collection Instrument Survey Questionnaire ( Likert scale) Sampling Technique Convenience Sampling Target Population SME’s from Karachi. Sample Size 215 respondents Statistical technique Correlation and Multiple Regression Analysis

Results Table 4.1: Correlations Selective Staffing   Selective Staffing Employee Empowerment Performance Management Organizational Performance Pearson Correlation 1 Sig. (2-tailed) .740** .000 .803** .772** .585** .484** .601**

Regression Table 4.2: Model Summary Model R R Square Adjusted   Model R R Square Adjusted Std. Error of the Estimate df F Sig. dimension0 1 .626a .391 .383 5.00956 3 211 215 45.216 .000 b a. Predictors: (Constant), Performance Management, Employee Empowerment, Selective Staffing b. Dependent Variable: Organizational performance

Cont. Table 4.2a Coefficientsa Unstandardized Coefficients   Unstandardized Coefficients Standardized Coefficients T Sig. B Std. Error Beta (Constant) 2.503 .219 11.406 .000 Selective staffing .321 .101 .303 3.195 .002 Employee empowerment -.036 .079 -.041 -.456 .649 Performance management .448 .116 .388 3.865 a. Dependent Variable: Organizational performance

Conclusion This study provides a better understanding about the utilization of specific HR practices in order to obtain high organizational performance of SME’s functioning in Karachi, Pakistan. The findings of this research statistically examined and conclude that the relationship among st the selective staffing and performance management practices has a positive impact on the Organizational performance of SME’s whereas the empowerment did not have a positive impact on the organizational performance.

Conclusion Empirically and theoretically, organizational performance can be increased by the adaption of Specific HR Practices such as Selective Staffing & Performance Management. The suggestions for SME’s of Karachi is that the SME’s needs to work hard on implementing the Selective Staffing and Performance Management Practices and owners or managers of the SMEs needs to increase the scope of HR Practices, which will help in getting the high level of productivity, employee satisfaction, customer satisfaction which ultimately results in high organizational performance.

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