Relationship between Human Resource Management and Organizational Performance: An Empirical Research on Manufacturing Organizations in Malaysia

This study explores the relationship between human resource management (HRM) and organizational performance of manufacturing organizations in Malaysia. A total of 137 organizations were involved in this study. Multiple regression analysis results showed that there was a multi collinearity problem among the HRM variables, but this problem was resolved using the principle component analysis method. Further, simple linear regression model was developed to analyze the relationship between HRM aspects of organizational performance. Simple linear regression analysis results indicated that the model developed had a significant F value at the significant level of 0.01. In addition, the results also showed that HRM collectively accounted for 29.5 percent of the variance in the human resource outcomes, and 26.3 percent of the variance in operational performance.