Article Published In Vol.8 (March-April-2020)

The Role of Human Resource Management Practices on Financial Performance in Firms

Author : Enis Mulolli and Diana Boskovska

Human resources are considered the most precious asset of the organization. In order to reach its values the firm must pay a huge importance in human resource management. Good management of human resources helps three fundamental intentions of each enterprise: surviving, increasing and raising their incomes. On the other hand, it offers them an easy confrontation with the market competitors, which is very cruel. Financial performance of firm comprises of financial efficiency and profit. Financial efficiency measures the return on investment and return on equity, whereas profit measures the return on sales and net profit margin. The hypothesis of this seminar paper is that appropriate human resources practices have positive relationship with financial performance of firms. The subject of the paper is analysis of the relation between different human resource practice and the financial performance of the firms. So, the aim of this seminar paper is to choose the best human resource practice visa-vi financial performance of the firms. The methodology of the paper include: descriptive and comparative method, then questionnaire and econometric model to test empirically this relationship, passed through the IBM SPSS v.23.0. For the research is used contemporary literature and publication in the field of HRM practices and financial performance.

Keywords: HRM practices, financial performance, firms.