The Relationship Between Strategic Human Resource Management (SHRM) and Organizational Performance

Over the last decade, Organizations are becoming more aware of the important role human resources play in the success of their organizations to achieve financial performance. The purpose of this study is to examine the relationship between SHRM and organizational performance and to determine the extent of impact of SHRM (acquisition, training, retention and internal labor market) on organization's performance. The data were collected via hard copy questionnaire distributed to 105 employees within Intel Human Resource Global Shared Services (HR SSC) organization located in Penang Malaysia. A total of 100 useable responses were obtained and used for the purpose of analysis. Data were analyzed using Statistical Package for Social Science (SPSS) Version 12.0 with reliability test, Pearson correlation analysis and Linear Regression to examine the relationship between SHRM and organizational performance. The result shown that among all four independent variables, internal labor market and acquisition have the most influence on the organizational performance. The findings can form the basis for useful recommendations for managers in encouraging the practice of human resource management and for employees who are concerned with maintaining their competitive advantage for long-term organizational success.