Economic Impact of HRM Practices on Organizational Economic Performance: Does Employee Retention Mediates?

Abstract

Human resource is a crucial aspect of an organization's ability to enhance its performance. The study's primary objective was to identify various HRM factors that can improve an organization's economic performance. Therefore, this study employed a combined approach of qualitative and quantitative research to identify factors and assess their impact on Organizational Performance. For qualitative analysis, simple random sampling was used to acquire data from 20 Saudi Arabian employees in the telecom industry. Using a grounded theory approach, NVIVO was used to evaluate these data. In contrast, data for the quantitative segment were collected through a questionnaire using simple random sampling. 196 usable questionnaire responses were returned and were analyzed using Smart PLS 3.3.9. The study revealed that HRM practices such as training and development, compensation and reward, and the absence of absenteeism are crucial for enhancing employee retention and Organizational Economic Performance. Also confirmed by the study's findings is the mediating effect of employee retention. The study's findings are useful for strategists who want to use HR practices to enhance organizational and economic performance.