of HR practices to develop a competitive edge.

This notion has made the scholar and researchers

to discover the correlation between lhe performance of individual employee perceived and the
HR practices particularly promotion, compensation, and performance evaluation. The link
between these HR practices and the performance of employee is recognised in a statistical mode
afready by the previous empirical researches.
As a consequence, the basic idea emerged within the researchers that the business performance is
not directly affected by the practices of HRM (Katou and Budhv.r,s

2006). But the behaviour of employee and human capital are firm's resources that are being
affected by these HRM practices. Delery (1998) and Wright et al., (1994) has presented the
opposite idea that the behaviour and human capital evcntually leads to the performance of
organisation. This statement indicates that the correlation between organisational performance
and HR practices are connotcd by these variables. Number of researches have revealed the
significance and measured the impact of variables for the enhancement of organisational
performance (Huselid, 1995: MacDuffie, 1995: Fey et al., 2000: Boselie et al., 2001: Park et al.,
2003: Paul and Anantharaman, 2003: Katou and Budhwar, 2006). For instance, Delery & Doty
(1996) studied the link between the HR practices and profit maximisation in US banks and the
outcome was profitability is related to HR practices in a positive manner. Researches are done in
a very confine manner to uncover the procedure for building the HR practice's value (Wright and
gardener, 2002). Syed et al (2008) has critically analysed the linkage betwecn the HRM practices
in a strategic mode and organisational perfoimance. The

following study also find out that practices like training, promotion, career planning,
performance evaluation and promotion inspire the performance in both financial and non
financial manner. According to Syed et a! (2008)h profitability contribute to financial betterment
but vital role to produce a product or services, the job description and job security are essential
practices.
Marwat et al (2006) commenced an investigation in order to elaborate the correlation betwcen
HR practices and performance of employee's perceived. The same study further showed that HR
practices like training, performance appraisal, career planning, promotion, performance
evaluation, selection, participation of employees and job enrichment are linked with the
employee's performance in a positive and constructive way (Marwat et al, 2006). Huselid (1995)
emphasised more on significance of training as a selcction practice's complement which can
enable the behaviour of employce and

the culture of organisation to generate positive outcomes. william et al (1996) suggest that
promotion is an effective tool that be used to motivate employees in future and it is a practice
that can shape the HR nceds in future. Furthermore, this type or practice increases worker's inner
urge to be more competent and develop their personal career (ibid). According to Datta et al
(2003) organisational productivity is in close link with the process of undertaking or HRM
practices. Ichniowski (1995) also proposed that employee's perfoimance is influcnced by the HR
pmctices like pronotion,

compensation, training, selection, and performance appraisal. Number of researches have given a
strong notion that employee's outcome are in close relation with the HR practices (Sels, 2006).
Singh (2004) carried out a study to examine the important correlation between HR practices and
actual and perceived performances of employees by considering lhe 82 Indian forms ardd the
outcome revealed that lhere is a heallhy link between practices and outcomes. In the research
investigation of Sels (2006) compensation and training were the main consideration from set of
HR practices. Likewise, Quresh et al (2010) strongly urged that financial performance of
banking institutions in Pakistan is exceeding well due to the HR practices as they are vital
component to increase the performance. Moreover, Deepak et al (2003) suggestcd that
organisational perfommance and practices of HR have a relation that helps in lifting to the
desired level. The positive relationship between the HR practices like promotion, compensation,
and performance evaluation and organisational outcomes is revealed by lhe study of Ouresh et al
(201 0.

Shahzad et al (2008) explored the relationship betwcen practices of HR and individual

employee's performance and identificd that a link is positive betwcen these practices including
compensation, promotion practices and perceived performance of employees. On the other hand,
performance evaluation practices are not linkcd with the perceive performance of employees in a
significant way (ibid). Shahzad et al (2008) proposed that the practice of compensation nced to
be reviewed by the universitics of Pakistan and also to enhance the level of performance of its
professors the career path should be clearly defined. Huselid (1995) have undertakcn the Hr
practices like grievance procedures, employee training and promotion, personnel selcction,
information sharing attitude assessment, performance appraisal, incentive compensation, job
design, labour management participation, and recruitment efforts to show their impact on the
perfommance of employees. Additionally, Teseema & Soeters (2006) have also

examined eight practices including selection practices, grievance procedure, placement practices,
training practices, compensation practices, recruitment, employee performance evaluation
practices, promotion practices, and pension or social security (ibid). Furthermore, Frye (2004)
elaborated the connection between compensation based on methods of equity and the
organisational performance and reached to a conclusion that between these two variables the link
is positive in nature. According to Frye (2004) to retain a high skilled labour within an
oroanisation lhe vital role is niayed
by compensation practice. Huseild (1995) also emphasised on compensation that it has a strong
connection with the both fmancial performance and the employee's individual performance. In
addition, Taseema and Soeters (2006) also argucd that a relationship that exists between the
compensation and the performance of employee perceived is strong one. Ichniowski et al.,
(1997) stress on point that the employee's performance is affected in a positive way by bonus pay
plans by creative practices at workplace like involving employees in decision making, training
programs, promotion, performance evaluation and employmcnt security. Teseema & Soeters
(2006) has identificd in their research investigation that connection between variables like
promotion and perceived employee performance has a strong positive connection. Moreover, the
research of past executed by park et al (2003) revealed that promotion affect the performance of
employee in a positive manner. Such step of giving promotion to workers can develop the feeling
of justice and hclp in making employees more committcd with their

organisations.
Campbell (2007) analysed the connection between the financial/nonfinancial performance
and the promotion practice and his study identificd that decisions regarding the employce's
promotion and demotion are critical and sensitive to service quality's nonfinancial
mcasures. The research investigation also showed that decisions of promotion and
demotions are receptive to retention of workers. Furthermore, Benson (2006) recommended
that employce's intension to resign from company reduces if after training they are
promoted. The same notion is also highlighted and sustained by the previous research
carried by Becker (1965) that elaborated the point that those employees would less
reluctant to lcave the organisation whose skills are polished and are given a promotion. The
model developed by Appelbaum et al., 2000: Batt, 2002: Schuler and Jackson, 1987 to
measure the level of performance and the further studies revealed that promotion and
compensation are positively linked with the higher level of ncrforrminrf Mopnver mcwlel
ctwlv cii ecte’l thit the nerfnrnimnre level nfemnlnv

Campbell (2007) analysed the connection between the financial/nonfinancial performance and
the promotion practice and his study identified that decisions regarding the employee's
promotion and demotion are critical and sensitive to service quality’s nonfinancial measures. The
research investigation also showed that decisions of promotion and demotions are receptive to
retention of workers. Furthermore, Benson (2006) recommended that employee's intension to
resign from company reduces if after training they are promoted. The same notion is also
highlighted and sustained by the previous research carried by Becker (1965) that elaborated the
point that those employees would less reluctant to leave the organisation whose skills are
polished and are given a promotion. The model developed by Appelbaum et al., 2000; Batt,
2002: Schuler and Jackson, 1987 to measure the level of perfommance and the further studies
revealed that promotion and compensation are positively linked with the higher level of
performance. Moreover, model study suggested that the perfommance level of employee
are working in lose consideration with the corporate performance and HR practices (Horgan,
2003: Huselid, 1995: MacDuffie, 1995). The obstacle that an organisation usually encountered is
to use the conbination of practices to enhance the performance level of employees (Huselid,
1995; Ichniowski et al., 1997). The studies conducted in recent times shows that perfoimance
evaluation is critical to employees and organisations and moreover, the sources that shows the
real influence of these hr

practise would be workers y themselves as ((.ierliardd et at 2UUU) states that competitive

advantage is gained by firms through employees (Pfeffer, 1994), argued that to remain
competent in market it is firms that nced to ensure practices to maintain its workforce.
Likewise, Armstrong (2000) suggested that compensation is vital to motivate employee and
training to improve the existing bthaviour of employee through means of promotion to feel
the responsibility in task. Performance evaluation has a direct link with the chances to get a
modification through required training or promotion to develop further skills. Ginsberg
(1997) revealed in his study that training is essential for employee o get a promotion later on
in career as it develops the skills which increase charces for promotion. Moreover, Chand
and Katou (2007) investigated that for organisational performance the performance
evaluation of employees are a vital practice. The investigation study determined that
performance of firm is connected positively with the systems of HRM including
compensation practice, promotion practice, training practice, recruitmcnt and selection,
manpower planning, job design,

anu perrormance appraisai 1D1U). ivioiueenxurry et ai., ui 1) aiso proposea tnat m uuir Arabian
firms enhance their performances through executing HR practices including training, promotion,
performance evaluation, career planning and selection. Previous researches associated to
practices of HRM and level of employee's perfonnance has determined that performance of
employee can be evaluated by numerous means, but Dyer & Reeves (1995) suggested specific
four methods:
1. Employee Outcomes
2. Organisational Outcomes
3. Financial Accounting Outcomes
4. Market Based Outcomes
Furthermore, these different outcomes are linked with the type of HR practices, exploring
affirmative relationships vital to declare lhat HR practices can be successfiilly
considered via performance of workers, along with the connection that Prevails move in a right
and positive dimension.
Previous study also explains that high level of employee's performance with related with the
practices of HR (Horgan & Mo’hlau 2006) and that compensation practice and training practice
appear to affect the employees in a positive manner (Singh K 2004). Guest (2002) has identified
that apart from the fact that HR practices influence the employees in a positive manna but the
levcl or outcomes relay on response or individual worker to particular practices. The perception
of practice by worker will affect the impact's level and Qa1ar Baksh et al (2010) investigated that
three distinguish HR practices: Promotion, Performance evaluation, and Comoensation Dractices
has a huge and vital influence on emDlovee’s oerceived

performance in commercial sector in N wFP Pakistan. Further studies ot similar kind has
identified the possible links for connecting HR practices and employee's performance by
scrutinizing particular exercises and thcir Quit Rates (Batt 2002) who revealed that the level of
quit rate in service sector can be reduced by high level HR practices.
A condemnation, on lhe other hand, is that there is not yet a single recognizcd model within
extensive study investigation literature to empirically scrutinize the influences of HR practices
precise manner, so any statistical connection between HRM practices and employee performance
is as yet somewhat meaningless, restricting the generalizability of outcomes (Rrao, Ganesh,
Sriram 2010). Further issues stem from the problems that researchers face in elucidating the
causality (track and magnitudes of the variables) and why these HR practices appear to create a
difference (Baron 1999).