Impact of Human Resource Management Practices on Perceived Organizational Performance of State Commercial Banks Within Northwestern Province in Sri Lanka

Abstract

: The stability of the Sri Lankan financial system heavily relies on the sound health regarding the performance and the capital adequacy of the six largest Licensed Commercial Banks (LCBs). Those banks are described as Systemically Important Banks (SIBs). This group consists of the two main reputed public sector commercial banks which have been targeted in this study. However, the ineffective implementation of the Human Resource Management function of public sector Commercial banks has been a continuing issue within the Sri Lankan context. The current study examines how the perceived organizational performance of public sector commercial banks is linked with human resource management practices namely, Recruitment and Selection, Training and development, Performance Appraisal, Rewards management, Employee retention, and Employee relations which provides a solution for the problem of relatively low performance of state commercial banks in Sri Lanka compared to employee base. The study was quantitative and the survey method was applied for data collection. A structured questionnaire was distributed using simple random sampling and 158 clear and completed responses were returned representing a population of 750 managerial employees within two public sector commercial banks of Northwestern Province of Sri Lanka. The collected data were analyzed using Statistical Package for the Social Sciences (SPSS) version 23.0. The methods used in the analysis of this study involved simple descriptive analysis, correlation analysis and multiple regression analysis. The findings concluded a significant positive relationship of perceived organizational performance with recruitment and selection, training and development, performance appraisal, rewards management, employee retention and employee relations.