Can effective people development lead to increased firm performance?


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The findings demonstrate support for hypotheses H1—H3 see Table 4. Modeling customer perceptions of complaint handling over time: The effects of perceived justice on satisfaction and intent. Journal of Retailing , 78 , — Following the four-step practice recommended by Baron and Kenny Baron, R. The moderator-mediator variable distinction in social psychological research: Conceptual, strategic, and statistical considerations? Journal of Personality and Social Psychology , 51 , — Calculation for the Sobel test: An interactive calculation tool for mediation tests. Multiple-group analysis was used to check the validity of the hypothesized model across different interdepartmental relationships i.

A test of invariance regarding the structural coefficients revealed that the null hypothesis cannot be rejected. The results show that the model is supported in both groups and pooling the different types was appropriate.


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The effect is significant among respondents from both groups i. The results show that the interdepartmental relationship has no moderating effect on the relationship between IMO and commitment see Table 6.

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The group with better interdepartmental relationships has higher retention rates i. The results indicate the importance of interdepartmental relationships to turn retention into performance. The same analysis to consider the hypothesized role relating to interdepartmental communication was undertaken see Table 6. The results also show that interdepartmental communication had no moderating effect on the relationship between commitment and retention. Multiple-group analysis was conducted and the main model was run separately for different ownership types as subgroups.

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The statistics found that pooling the different ownership types was considered appropriate. Following the existing practice recommended by Garcia and Kandemir Garcia, R. An illustration of modeling moderating variables in cross-national studies. International Marketing Review , 23 , — Overall, the results show that the moderating effect of ownership was partially supported. Journal of Service Marketing , 28 , 10 — The empirical findings also uncover the effectiveness of IMO in terms of retaining employees.

The partial mediating effect of organizational commitment between IMO and employee retention implies the important role that IMO plays in employee retention, however one also needs to consider employee organizational commitment as this can be critical in predicting employee retention. The findings of this study extend previous research outcomes in terms of employee satisfaction, customer satisfaction and loyalty by measuring firm performance via sales growth, market share and company profitability. The study also makes a first attempt to empirically prove the association between IMO and commitment.

Furthermore, this paper extends the previous literature by examining institutional environmental factors such as the role of 1 interdepartmental relationships and interdepartmental communication; and 2 different forms of ownership in China. Finally, this study argues that IMO is not only important for companies purely operating in the service industry, but is also applicable for manufacturing and other non-service firms.

The results from this study demonstrate the moderating effect of interdepartmental relationships on organizational commitment — employee retention — firm performance linkages. Based on these findings, it is argued that for companies having high levels of IMO, interdepartmental relationships may not play such a critical role in terms of influencing employee organizational commitment, but it does contribute greatly in converting employee organizational commitment into retention.

The study revealed that good interdepartmental relationships interact with employee organizational commitment and employee retention, leading to better firm performance Ellinger et al. Maximizing this internal relationship among different departments will have the effect of increasing mutual understanding and improved internal service quality Lings, Lings, I. Such improved support delivered from other departments in the organization will make it easier for individuals to fulfil their roles and perform better in their jobs.

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In terms of interdepartmental communication, the results however did not reveal any interactive effect on the IMO — organizational commitment and organizational commitment — employee retention relationships. Perhaps this is due to the higher power distance associated with the Chinese culture. When companies have good IMO, i. Once Chinese employees are highly committed, their devotion and loyalty to the organization will not be influenced by interdepartmental communication styles or its frequency.

The results do however illustrate a moderating effect of interdepartmental communication on the relationship between retention and performance.


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Communication between internal customers and suppliers on expectations, providing feedback, offering help and being aware of potential problems in a firm result in better internal and external service delivery. When there is a lack of effective interdepartmental communication, company performance can be dragged down Ellinger et al. The current result shows that ownership typology as a moderator in the framework is partially supported. POEs stand out from their counterparts. The paths in the conceptual model are all significantly positive. The result suggests that if POEs pay more attention to IMO, they will in return have better employee commitment, retention and organizational performance.

This is understandable as POEs face more challenges in terms of recruiting and retaining skilled staff in the competitive Chinese labor market Zhu et al. Unlike SIEs which are constrained by their historical heritage, i. Also, unlike FIEs which are constrained by having limited local cultural knowledge or by their parent companies in home countries, POEs work diligently to adapt and keep pace with every challenge coming from the market competition, especially in terms of employee management Wang et al.

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The findings reveal that all three ownership types have significant relationships between commitment and retention. Performance of domestic and foreign-invested enterprises in China. Journal of World Business , 41 , — SIEs in general do not fire their employees. On the other hand, if FIEs want to retain staff, they must find ways to improve their commitment as their employees have the intention to leave the company more readily should they find that the company or the job is no longer fit for them Wang et al.

Surprisingly, the only significant relationship between retention and performance was found among POEs. Unlike SIEs, which are protected by policies, industrial experience, government relationships, and being monopolies in certain areas, POEs are more likely to pay a price if staff members leave. The loss of key personnel can lead to a significant deterioration in performance Wang et al. SIEs still carry over traditional planned economy social responsibilities and often retain ineffective or underperforming employees.

Therefore, a high rate of employee retention for SIEs in China does not necessarily lead to better performance Xu et al. Do types of economic ownership matter in getting employees to commit? International Journal of Human Resource Management , 13 , — The situation is different for FIEs that have better designed working processes, established internal systems and technological advanced online office systems. Their performance relies more on the development and perfection of the systems, rather than on individuals Wang et al. Traditionally, FIEs enjoy more advantages compared with their local competitors, such as adequate financial resources, brand reputation, advanced technology and remuneration packages.

They can attract, retain, promote and train the best talent in China. The research would suggest that those firms with better performance also tend to have better IMO practices. Interdepartmental relationships and communication are found to have varying moderating effects on the proposed IMO employee management framework. Considering the transportability of Western theory into Eastern contexts, this study also discovers noteworthy findings regarding the moderating effect among different types of firms competing in China.

First, as the sample did not tend to focus on different types of firm ownership, further research could investigate such factors. This may offer fresh insights into different organizational cultures and values, and in particular the role played by the CEO surrounding such issues. Secondly, this study only examined the impact of IMO at the employee level leading to organizational performance. There may be an opportunity for furthering this study by investigating its impact on different departmental level performance.

Thirdly, the data were collected at one period of time. The total impact of IMO on performance may take time to occur. A longitudinal study with a time lag effect is therefore recommended in future research. Furthermore, objective measures of organizational performance in terms of market share growth, sales growth and profitability may be considered.

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As the notion of IMO is relatively under researched, future endeavors may wish to explore its possible antecedents. Understanding Humanistic Management.

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Humanistic Management Journal , 1 , 33 — Such research in these areas is likely to be highly valued by both academicians and practitioners alike. No potential conflict of interest was reported by the authors. Notes: All loadings are standardized. Notes: All estimates are standardized.

Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?
Can effective people development lead to increased firm performance? Can effective people development lead to increased firm performance?

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