Comparing appropriate decision support of human resource practices on organizational performance with DEA/AHP model

Abstract

The issue of human resource practices has been widely applied to examine the organizational performance for multiple industries. Few researches have realized that the relationships of human resource practices to organizational performance in different culture types support the meaningful information. In this paper, an Analytical Hierarchical Process/Data Envelopment Analysis (AHP/DEA) model that helps in investigating the associated importance of human resource practices and organizational performance variables is proposed. This research involving 129 companies in the Taiwanese electronics industry and 112 branches in China are used to demonstrate and compare the impact of human resource practices on organizational performance in each organizational type with the proposed AHP/DEA model. The study contains five human resource practice variables and seven organizational performance variables through Linear Structure Relation (LISREL). The main findings suggest: (1) asking employee to participate company activities, because doing so may greatly consume the employees’ relationships in each organizational type for both the Taiwanese and branches electronics industry; and (2) the importance of employee relations is more significant in stratum and rational culture than in development and common culture regardless of Taiwanese companies or branches in China. Discussion and implication with respect to decision support are also addressed.

Introduction

Numerous studies have identified the elements of human resource practices and organizational performance (Delery and Doty, 1996, Fields et al., 2000, Guest et al., 2004, Huselid, 1995, Youndt et al., 1996). These studies have considered various traditional approaches for assessing the human resource practices on organizational performance within various industries. Moreover, Goodman, Zammuto, and Gifford (2001) considered that examining organizational performance in different cultures has more useful information to managers than just exploring performance in each culture. Authors (e.g. Goffee and Jones, 1998, Quinn and Spreitzer, 1991, Wang and Shyu, 2003) thus divided organizational culture, and found that different culture type has its unique impacts on organizational performance. These studies also found that different cultures have different relationships with organizational performance. In addition, few studies have examined the relationship and explored the appropriate decision support of human resource practices on organizational performance in each culture type.

To address this challenge, this study explored and investigated human resource practices and their influence on organizational performance, and compared with the difference of the appropriate decision support in each culture for the Taiwanese electronics industry and subsidiary company in China.

The remainder of this study is organized as follows: Section 1 presents an introduction. The introduction is followed by the key factors of human resource practices, organizational performance and culture category, and the relationships between them. Section 3 then introduces the method used to obtain the sample, data, and measurement. Subsequently, Section 4 shows the reliability and validity test, demonstrating structural model estimation, and calculating and comparing appropriate decision support of human resource practices and organizational performance in each culture type for Taiwanese electronics industry and branches in China using Analytical Hierarchical Process (AHP)/Data Envelopment Analysis (DEA). The final section includes concluding remarks, study limitations and future research suggestions.