Analyzing the Impact of AMO-based HR. Practices on Performance of Employees in the Banking Sector of the Kingdom of Bahrain

Abstract

Although it has become a confirmed empirical evidence that HR practices are a significant driver of improved performance, the functionality of HR practices is context dependent as some HR practices had been found in some extant studies to have no impact on performance in some contexts. To enrich the existing literature and expand the current scope of knowledge, this study investigates the impact of AMO-based HR practices (i.e., training & development, compensation, and employee involvement) on the performance of employees in the banking sector of Bahrain. Data were collected from 702 employees of ten major bank employees and analyzed via the partial least squares method (PLS) algorithm and bootstrapping techniques. The overall results indicate that training & development and employee involvement have significant and positive effect on employee performance. Nevertheless, compensation has a non-significant effect on employee performance. This indicates that not in all circumstances that HR practices can significantly predict performance. The circumstances and environment, as postulated by contingency theory, could affect the relationship between HR practices and performance. Hence, future research should endeavor to investigate some situational factors or environmental factors in the HR practices-performance connection.