Investigating the Effects of SHRM on Operational and Financial Performance in Educational Institutions

Abstract

Strategic human resource management (SHRM) seeks to create alignment between human resource management (HRM) practices and business strategy (strategy fit); linking HR strategies, policies, and practices within the functional units of the HR department (intra-functional fit); maintaining the status of the HRM department within corporate strategic plan (HR-roles-position fit); and alignment of HRM functions with all other departments (cross-functional fit). This study investigates the effects of SHRM on organizational performance. Data was collected from 314 employees in tertiary educational institutions in Ghana. A conceptual model was developed and a set of hypotheses were proposed. The results found that cross-functional fit has a significant effect on both financial and operational performance. However, the results found no significant effect of strategy fit, role-position fit, and intra-functional fit on financial and operational performance. Therefore, tertiary educational institutions should develop cross-functional fit to improve their financial and operational performance.