The Relationship between Human Resource Management and Firm Performance in Malaysia

Abstract

Drawing upon resource based theory which explains human capital as the key resource for the firms’ development, this paper hypothesized that the human resource management (HRM) was anchored on firm performance. HRM were conceptualized as 4- and unidimensional constructs, respectively. The main thrust of the paper is to assess the impact of HRM on firm performance. The research uses a sample of 85 firms surveyed in Sarawak, Malaysia. The findings suggested that incentives and information technology are positively related the firms’ performance. Implications of the findings, potential limitations of the study, and directions for future research were further discussed.