Corporate Governance across Ethics, Culture & Citizenship; What to give and what to expect?

1. The Effects of HRM Practices on Organizational Performance in Lebanese banks Ali H. Halawi Lebanese International University • Wael S. Zaraket • Prince Mohammad Bin Fahd University Corporate Governance across Ethics, Culture & Citizenship; What to give and what to expect?

2. Focus points HRM and HRM practices HRM system Mediating variables HRM practices and Ethical behavior HRM practices and Performance

3. HRM and HRM practices Essential factors in creating competitive advantage Resource based view (Barney 1991) Four people/employee features (Wright & McMahan 1992): Individual performance Exceptional skills Un-copied human capital investment Un-replaceable Human resources

4. 3 types of theories - Guest (1997): • Strategic Theories • Descriptive Theories • Normative Theories • 3 types of theories - Boselie et al. (2005): • Contingency Theory • Resource-based view • AMO theory (Ability, Motivation, Opportunity) HRM theories

5. Models of HRM Harvard Model (focuses on employee commitment, resulting that employees have be consistent, capable and cost effective) Michigan Model (emphasizes on hard HRM—meaning, people have to be managed like any other resources: acquired cheaply, used economically, developed and abused fully) Guest Model (operates on the conviction that a set of incorporated HRM practices will lead to superior individual and organizational performance) Warwick Model (identifies the influence of personnel on HR strategy content and emphasizes recognizing the inner (organizational) and external (environmental) context)

6. HRM Practices Organizational Citizenship Behaviors( OCBs) Job Satisfaction Employee Engagement Employee Motivation HR Flexibility Employee Attrition Employee Retention Employee Performance Variables affecting the relationship between HR and Organizational performance

7. Aset of distinct yet interrelated activities, functions and processes aimed at attracting, developing and maintaining an Organization’s human resources (Lado & Wilson, 1994). Employee Participation Compensation & Benefits Management & Reward System Career Planning System, Training & Development Employee Empowerment HRM Practices (Independent Variables)

8. Organizational Citizenship Behavior • Job Satisfaction • Employee Engagement • Employee Motivation • HR Flexibility Mediating variables

9. Employee Attrition • Employee Retention • Employee Performance Organizational Performance (Dependent Variable)

10. When organizations invest in an employees through training and education, the employee becomes ethically rather than contractually related to the organization. • Normative type of organizational commitment: • The sense that people should stay with their current employers may result from personal work philosophies or more general codes of right and wrong developed over the course of their lives. • Build a sense of obligation-based commitment among employees HRM Practices and ethical behavior

11. H1. HRM practices affect employee attrition. H2. HRM practices affect employee retention. H3. HRM practices affect employee performance. H4. HRM practices affect organizational citizenship behaviors. H5. HRM practices affect job satisfaction. H6. HRM practices affect employee engagement. H7. HRM practices affect employee motivation. H8. HRM practices affect HR flexibility. H9. Organizational citizenship behaviors affect employee attrition. H10. Organizational citizenship behaviors affect employee retention. H11. Organizational citizenship behaviors affect employee performance. H12. Job satisfaction affects employee attrition. H13. Job satisfaction affects employee retention. H14. Job satisfaction affects employee performance. H15. Employee engagement affects employee attrition. Hypotheses

12. H16. Employee engagement affects employee retention. H17. Employee engagement affects employee performance. H18. Employee motivation affects employee attrition. H19. Employee motivation affects employee retention. H20. Employee motivation affects employee performance. H21. HR flexibility affects employee attrition. H22. HR flexibility affects employee retention. H23. HR flexibility affects employee performance. Hypotheses (Cont’d)

13. Output Job Performance Inputs Processes Employee Skills and Motivation Practices related to strategic planning, selection and recruiting processes, promotion & reward processes, employee training and development programs, employee performance & review processes Output Financial Performance Reaching intended outcomes, return on assets, market-to-book ratios, percent growth, quality control measures, perceived organizational performance and perceived market value Research Framework

14. This study focuses on the impact of HRM practices on Organizational performance in the Lebanese banking sector. Research was conducted on various banks from the Alfa list of top ten Lebanese banks Scope of the study

15. Profile of Respondents

16. H1. HRM practices affect employee attrition. (Not supported) H2. HRM practices affect employee retention. (Supported) H3. HRM practices affect employee performance. (Not supported) H4. HRM practices affect organizational citizenship behaviors. (Supported) H5. HRM practices affect job satisfaction. (Supported) H6. HRM practices affect employee engagement. (Supported) H7. HRM practices affect employee motivation. (Supported) H8. HRM practices affect HR flexibility. (Supported) H9. OCBs affect employee attrition. (Not supported) H10. OCBs affect employee retention. (Not supported) H11. OCBs affect employee performance. (Not supported) H12. Job satisfaction affects employee attrition. (Supported) H13. Job satisfaction affects employee retention. (Not supported) H14. Job satisfaction affects employee performance. (Not supported) H15. Employee engagement affects employee attrition. (Supported) Results

17. H16. Employee engagement affects employee retention. (Supported) H17. Employee engagement affects employee performance. (Supported) H18. Employee motivation affects employee attrition. (Supported) H19. Employee motivation affects employee retention. (Supported) H20. Employee motivation affects employee performance. (Not supported) H21. HR flexibility affects employee attrition. (Supported) H22. HR flexibility affects employee retention. (Not supported) H23. HR flexibility affects employee performance. (Not supported) Results (Cont’d)

18. Results from the test found new associations between variables that have significant influences: • Employee Motivation has a direct, positive impact on Job Satisfaction, Employee Engagement, and HR Flexibility. • Employee Engagement has a direct, positive impact on OCBs. • Employee Performance has a direct, significant, and positive impact on Employee Retention; and has a direct, significant and negative impact on Employee Attrition. • Employee Attrition has a direct, significant and negative impact on Employee Retention. Additional results

19. Structure Model

20. The study was conducted in Lebanon and was limited to one sector. And so, the conclusions are only representative of that context. Those who intend to do further research on the topic should include other sectors, particularly insurance companies and financial institutions in general. Doing this will reinforce studies on HRM practices by adding varied, cross-sectorial contexts. • This study focuses on HRM practices in general; future studies could examine each individual HRM practice, such as compensation and benefits management and reward systems, to determine the extent of their effects on Organizational performance. Finally, it would be beneficial to research industries other than banking, such as service, hospitality and airline. Limitations

21. This study has clarified the direct positive relationships between variables. • It has discovered additional relationships that could help as points for future studies • The results confirm HRM practices, demonstrating that they are paramount to long-term sustainable growth and success in organizations. Conclusion

22. Thank you Questions?