Evaluation of the Impact of Human Resources Practices on Organizational Performance Using the PLS Approach

Abstract

Considering that the individual is at the heart of human resources strategies, investment in this intangible capital becomes an imperative for companies seeking to achieve excellence. The aim of this research is to demonstrate the causal link between human resource development practices and organizational performance. In this work, we have presented the theoretical approaches that to treat the relationship between human performance and business performance. Following the universalist approach, we have developed a conceptual model linking the human motivation practices most common in the literature, namely: compensation, training, information sharing and communication, employee involvement, applied leadership style and internal professional relations. To verify the research model, we conducted a field survey of 46 companies in the industrial sector in the wilaya of Béjaia. The research results, obtained through structural equation modelling using SMART PLS, showed that leadership style and internal professional relationships have no direct impact on financial and non-financial performance. However, information sharing and communication only impact non-financial performance. And the two variables which measure remuneration and training were eliminated by the “PLS Algorithm” method.