EVALUATING THE ROLE OF HUMAN RESOURCE MANAGEMENT PRACTICES IN SHAPING EMPLOYEES’ PERFORMANCE: A PLS-SEM-BASED APPROACH

Abstract

This study investigates the impact of Human Resource Management (HRM) practices on perceived employee performance within Pakistan's manufacturing sector—a domain underrepresented in current literature, especially in developing countries. For data collection, a self-administered questionnaire was distributed among the individuals employed in Pakistan's manufacturing and service sector firms. Data was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to determine the significance and interrelationships among all constructs. The findings reveal a strong, positive association among all HRM practices examined. Notably, employee participation, compensation systems, and performance evaluation significantly impacted perceived employee performance. This research contributes a validated framework of five critical HR practices that can influence perceived employees’ performance, especially in the manufacturing and service landscape. Moreover, recommendations for policy enhancement and future research directions are discussed.