HOW HUMAN RESOURCE MANAGEMENT(HRM) PRACTICES TRANSLATE INTO SUSTAINABLE ORGANIZATIONAL PERFORMANCE(SOP)? THE MEDIATING ROLE OF ORGANIZATIONAL INNOVATION

Abstract

Nowadays sustainable organizational performance (SOP) is crucial for all types of organizations as it ensures long-term success and resilience. SOP refers to economic, social and environmental initiatives. As regard SOP, it significantly impacts on banking sector's stability and higher performance among competitors. In previous days, Sri Lanka's banking sector played a major role in the country's economic landscape. But these days, Sri Lanka's banking sector has an impact on economic, social and environmental activities and also, not only the bank sector but also every organization should be aware of the social and environmental effects. These days, if the banking sector is to increase their financial income, they are using it strategically to increase their reputations among society. That's why they are more aware of the environment and social activities. Therefore, effectively manipulating HRM practices in organizations is very important for improving the organization's performance as well as its sustainability. Prioritizing sustainability across an organization will naturally affect various elements of HRM practices, along with environmental and social responsibility. Through these HRM practices, the banking sector can handle their employees' behavior and attitude in an effective and efficient manner, which will achieve the organization's sustainable performance, which is to integrate social, economic, and environmental performance. In every organization, employees are the main asset; thus, motivating and encouraging the employees is essential for organizational success. If the employees are well satisfied and motivated within the banking sector, they enthusiastically participate in innovation activities, which leads to SOP. The quantitative study conducted based on primary data which were collected among 238 employees who are working in selected bank in Batticaloa District and, five point Likert scale was assigned to measure the variables. The collected data were analyzed by using univariate, bivariate and multivariate techniques in a computer based Statistical Package for the Social Science 22nd version software. In this study, the statistical tools that used to analyze the levels of variables are mean and SD values, while relationships were measured by Pearson coefficients and linear regressions for further mediation analyses. Moreover, the result shows significant positive associations among all the variables, by denoting a positive relationship between HRM practices (Staffing, performance management, staff development and compensation and management, SOP and organizational innovation too, where most of the literatures are commonly supporting for negative relationship. Hence, this study helps managers especially for Human Resource managers to understand How HRM practices translate into sustainable organizational performance through organizational innovation among the competitive world.