The Impact of Human Resources Management Systems on Financial Performance of Banks in Russia
DOI:
https://doi.org/10.21638/11701/spbu18.2017.404Abstract
The article presents analysis of the impact of human resource management systems (HRM) on the financial performance of banks operating in the Russian market. The sample includes 67 banks with different organizational characteristics (nationality of capital, ownership, location of the head office, number of years of operation in the Russian market). The research is based both on qualitative (a survey of heads of HR services of banks) and quantitative (analysis of financial statements of banks). Data were collected in the period from 2011 to 2015. Initially, the main indicators characterizing the effectiveness of the HRM system (labor productivity and return on investment in human capital), as well as indicators of the financial performance of banks (return on assets and return on capital), were calculated. Further, with the help of the system of econometric equations, the impact of performance indicators of HRM systems on financial results of banks was determined. The study revealed that, on one hand, implementation of the functions of the HRM system does not have a positive impact on financial performance of the bank. At the same time, the impact of effects of some particular variables characterizing the HRM system itself (orientation on the strategic goals of the bank, the composition of the functions performed, the automation of functions, the flexibility and innovation of the HRM system, the amount of personnel costs) on performance of banks was revealed. So, the positive effect of the HRM system arises from its orientation towards the strategic goals of the bank, as well as with the use of electronic systems that automate the functions of HRM and thus improving the timing and quality of their implementation. Together, these variables, characterizing the HRM system, increase the return on investment in human capital. If the bank also achieves the flexibility and innovation of the HRM system, then labor productivity also increases. This, in turn, has a positive impact on the financial performance of banks.
Keywords:
human resources management system, financial performance, labor productivity, return on investment in human capital, banking sector of Russia
Downloads
Download data is not yet available.
References
ЛИТЕРАТУРА НА РУССКОМ ЯЗЫКЕ
Герчиков В. И. 2008. Управление персоналом: работник — самый эффективный ресурс компании: Учебное пособие. М.: ИНФРА-М.
Каплан Р., Нортон Д. 2003. Сбалансированная система показателей. Пер. с англ. М.: Олимп-Бизнес.
Линге Д. И. 2009. Оценка эффективности управления человеческими ресурсами при проведении инноваций в компаниях финансово-банковского сектора. Автореферат диссертации кандидата экономических наук: 08.00.05. М.
Одегов Ю. Г., Никонова Т. В. 2010. Аудит и контроллинг персонала. М.: Экзамен.
Петренко Е. А. 2011. Система управления персоналом в коммерческих банках. Управление развитием персонала (2): 102–110.
Справочник по кредитным организациям. 2014. Официальный сайт Центрального Банка Российской Федерации [Электронный ресурс]. http://cbr.ru/credit/main.asp
Справочник по кредитным организациям. 2015. Официальный сайт Центрального Банка Российской Федерации [Электронный ресурс]. http://cbr.ru/credit/main.asp
Фитц-енц Я. 2006. Рентабельность инвестиций в персонал. Измерение экономической ценности персонала. Пер. с англ. М.: Вершина.
Фитц-енц Я., Дэвисон Б. 2009. Как измерить HR-менеджмент. Пер. с англ. М.: HIPPO.
Эфендиев А. Г., Балабанова Е. С., Ребров А. В. 2014. Управление человеческими ресурсами и эффективность компаний: есть ли связь? Российский журнал менеджмента 12 (1): 39–68.
REFERENCES IN LATIN ALPHABET
A New Vision for Growth. Key Trends in Human Capital 2014. PricewaterhouseCoopers Survey. 2014. [Electronic resource]. http://www.pwc.com/gx/en/hr-management-services/pdf/pwc-key-trends-in-human-capital-2014.pdf (accessed: 05.12.2016).
Al-Tarawneh M., Tarawneh H. 2012. The effect of applying human resources information system in corporate performance in the banking sector in Jordanian firms. Intelligent Information Management 4 (2): 32–38.
Antony J. P., Bhattacharyya S. 2010. Measuring organizational performance and organizational excellence of SMEs — Part 1: A conceptual framework. Measuring Business Excellence 14 (2): 3–11.
Armstrong M., Taylor S. 2014. Armstrong’s Handbook of Human Resource Management Practice. 13th ed. Kogan Page: London.
Arni Ariyani S. A., Rosmah M. 2012. Evaluating the effectiveness of a training program using the four level Kirkpatrick model in the banking sector in Malaysia. In: 3rd International Conference on Business and Economic Research (3rd ICBER 2012) Proceedings. Indonesia.
Asmild M., Paradi J. C., Aggarwall V., Schaffnit C. 2004. Combining DEA window analysis with the Malmquist index approach in a study of the Canadian banking industry. Journal of Productivity Analysis 21 (1): 67–89.
Awazu Y., Desouza K. C. 2003. Knowledge management. HR Magazine 48 (11): 107.
Azmi I. A. G. 2010. Islamic human resources practices and organizational performance: A preliminary finding of Islamic organizations in Malaysia. Journal of Global Business and Economics 1 (1): 27–42.
Bartel A. P. 2004. Human resources management and organizational performance: Evidence from retail banking. Industrial and Labor Relations Review 57 (2): 181–203.
Batt R. 2002. Managing customer services: Human resource practices, quit rates, and sales growth. Academy of Management Journal 45 (3): 587–597.
Boohene R., Asuinura E. L. 2011. The effect of human resource management practices on corporate performance: A study of graphic communications group limited. International Business Research 4 (1): 266–272.
Boselie P., Dietz G., Boon C. 2005. Commonalities and contradictions in HRM and performance research. Human Resource Management Journal 15 (3): 67–94.
Buller P. F., McEvoy G. M. 2012. Strategy, human resource management and performance: Sharpening line of sight. Human Resources Management Review 22 (1): 43–56.
Chang S., Gong Y., Way S. A., Jia L. 2013. Flexibility-oriented HRM systems, absorptive capacity, and market responsiveness and firm innovativeness. Journal of Management 39 (7): 1924–1951.
Chang W.-J. A., Huang T. C. 2010. The impact of human resource capabilities on internal customer satisfaction and organizational effectiveness. Total Quality Management & Business Excellence 21 (6): 633–648.
Chen S.-H., Liao C.-C. 2010. Are foreign banks more profitable than domestic banks? Home- and host-country effects of banking market structure, governance, and supervision. Journal of Banking and Finance 35 (4): 819–839.
Chompukum P. 2011. Performance management effectiveness in Thai banking industry: A look from performers and a role of interactional justice. Journal of International Business and Cultural Studies 6: 1–22.
Collins M. 1992. Evaluating the personnel department. Health Manpower Management 18 (2): 8–10.
Delery J. E., Doty D. H. 1996. Modes of theorizing in strategic human resource management: Tests of universalistic, contingency, and configurational performance predictors. Academy of Management Journal 39 (4): 802–835.
Druker P. F. 1954. The Practice of Management. Harper & Row: N. Y.
Ferguson K. L., Reio Jr. T. G. 2010. Human resource management systems and firm performance. Journal of Management Development 29 (5): 471–494.
Fethi M. D., Pasiouras F. 2010. Assessing bank efficiency and performance with operational research and artificial intelligence techniques: A survey. European Journal of Operational Research 204 (2): 189–198.
Global Human Capital Trends 2016. The New Organization: Different by Design. 2016. Deloitte University Press. [Electronic resource]. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/HumanCapital/gx-dup-global-human-capital-trends-2016.pdf (accessed: 05.03.2017).
Gomez-Mejia L. R., Palich L. E. 1997. Cultural diversity and the performance of international firms. Journal of International Business Studies 28 (2): 309–335.
Gurbuz S., Mert I. S. 2011. Impact of the strategic human resource management on organizational performance: Evidence from Turkey. International Journal of Human Resource Management 22 (8): 1803–1822.
Guthrie J. P. 2001. High involvement work practices, turnover and productivity: Evidence from New Zealand. Academy of Management Journal 44 (1): 180–190.
Horgan J., Muhlau P. 2005. Human resource management and performance: A comparative study of Ireland and Netherland. Management Revue 16 (2): 242–258.
Huselid M. A. 1995. The impact of human resources management practices on turnover, productivity, and corporate financial performance. Academy of Management Journal 38 (3): 635–672.
Jiang K., Lepak D. P., Han K., Hong Y., Kim A., Winkler A.-L. 2012. Clarifying the construct of human resource systems: Relating human resource management to employee performance. Human Resource Management Review 22 (2): 73–85.
Ketkar S., Sett P. K. 2009. HR flexibility and firm performance: Analysis of a multi-level causal model. International Journal of Human Resources Management 20 (5): 1009–1038.
Key Trends in Human Capital 2012. A Global Perspective. PricewaterhouseCoopers Survey. 2013. [Electronic resource]. http://www.pwc.co.uk/assets/pdf/key-trends-in-human-capital-2012.pdf (accessed: 09.11.2016).
Khatri N., Baveja А., Agrawal N. M., Brown G. D. 2010. HR and IT capabilities and complementarities in knowledge-intensive services. International Journal of Human Resource Management 21 (15): 2889–2909.
Knight-Turvey N., Neal A., West M. A., Dawson J. 2004. The Impact of an Innovative Human Resource Function on Firm Performance: The Moderating Role of Financing Strategy. Centre for Economic Growth. CEP Discussion Paper № 630. [Electronic resource]. http://cep.lse.ac.uk/pubs/download/dp0630.pdf (accessed: 05.11.2015).
Lambooij M., Sanders K., Koster F., Zwiers M. 2006. Human resource practices and organizational performance: Can HRMperformance linkage be explained by the cooperative behaviours of employees. Management Revue 17 (3): 223–240.
Law K. S., Tse D. K., Zhou N. 2003. Does human resource management matter in a transitional economy? China as an example. Journal of International Business Studies 34 (3): 255–265.
Lawler III E. E. 2005. From human resources management to organizational effectiveness. Human Resource Management 44 (2): 165–169.
Luo X. 2003. Evaluating the profitability and marketability efficiency of large banks: An application of data envelopment analysis. Journal of Business Research 56 (8): 627–635.
Oster A., Antioch L. 1995. Measuring Productivity in the Australian Banking Sector. [Electronic resource]. https://www.rba.gov.au/publications/confs/1995/oster-antioch.html (accessed: 08.12.2015).
Park T. A., Davis E. E. 2011. Productivity and efficiency impacts of human resources practices in food retailing. Applied Economics 43 (30): 4689–4697.
Pena Garcia-Pardo I., Fernández Moreno M. V. 2009. Looking into the black-box: Analysis of the effectiveness of human resources strategy. Proceedings of Rijeka Faculty of Economics 27 (1): 31–56.
Pena Garcia-Pardo I., Villasarelo M. 2010. Business strategy, human resource systems, and organizational performance in the Spanish banking industry. International Journal of Human Resource Management 21 (15): 2864–2888.
Phillips J. J. 1997. Return on Investment. Gulf Publishing: Houston.
Phillips P. P., Phillips J. J. 2005. ROI at Work — Best-Practice Case Studies from the Real World. The American Society for Training & Development.
Richard O. C., Johnson N. B. 2001. Strategic human resources management effectiveness and firm performance. International Journal of Human Resources Management 12 (2): 299–310.
Richmond B. 1993. Systems thinking: Critical thinking skills for the 1990s and beyond. System Dynamics Review 9 (2): 113–133.
Rodsutti M. C., Swierczek F. W. 2002. Leadership and organizational effectiveness in multinational enterprises in Southeast Asia. Leadership & Organization Development Journal 23 (5): 250–259.
Schuler R. S., MacMillan I. C. 1984. Gaining a competitive advantage through human resource management practices. Human Resource Management 23 (3): 241–255.
Sink D. S., Tuttle T. C. 1989. Planning and Measurement in Your Organization of the Future. Industrial Engineering and Management Press: Norcross, GA.
Spaulding A. C. 2012. Human Resources Management Systems: The Search for Quality and Effectiveness in Healthcare Delivery. Dissertation.
Stone D. L., Lukaszewski K. M. 2009. An expanded model of the factors affecting the acceptance and effectiveness of electronic human resource management systems. Human Resource Management Review 19 (2): 134–143.
Ulrich D. 1997. Human Recourse Champions. Harvard Business School Press: MA.
Way S. A., Wright P. M., Tracey J. B. 2013. HR Flexibility and Firm Performance: The Cross-Level Moderating Effect of Industry Dynamism. [Electronic resource]. http://proceedings.aom.org/content/2013/1/10607.short?related-urls=yes&legid=amproc;2013/1/10607 (accessed: 05.11.2015).
Wooldridge J. M. 2013. Introductory Econometrics: A Modern Approach. South-Western: Mason, OH.
Wright P. M., Boswell W. R. 2002. Desegregating HRM: A Review and Synthesis of Micro and Macro Human Resources Management Research. CAHRS Working Paper Series, CAHRS WP02-11.
Wright P. M., McMahan G. C., Snell S. A., Gerhart B. 2001. Comparing line and HR executives’ perceptions of HR effectiveness: Services, roles, and contributions. Human Resources Management 40 (2): 111–123.
Yawson R. M. 2013. Systems theory and thinking as a foundational theory in human resource development — A myth or reality? Human Resource Development Review 12 (1): 53–85.
Yorks L., Nicolaides A. 2006. Complexity and emergent communicative learning: An opportunity for HRD scholarship. Human Resource Development Review 5 (2): 143–147.
Translation of references in Russian into English
Gerchikov V. I. 2008. Personnel Management: The Employee — The Most Effective Resource of the Company: The Tutorial. М.: Infra-М. (In Russian)
Kaplan R. S., Norton D. P. 2003. The Balanced Scorecard: Translating Strategy into Action. Russian translation. М.: Olymp-Business. (In Russian)
Linge D. I. 2009. Evaluation of the Effectiveness of Human Resources Management in the Innovation Conduct in the Companies of Financial and Banking Sector. PhD in Economic Sciences (08.00.05) Thesis Abstract. М. (In Russian)
Odegov Yu. G., Nikonova T. V. 2010. Personnel Auditing and Controlling. М.: Ekzamen. (In Russian)
Petrenko Е. А. 2011. The system of personnel management in commercial banks. Personnel Development Management [Upravlenie Razvitiem Personala] (2): 102–110. (In Russian)
Credit Organizations’ Guide. 2014. The Central Bank of the Russian Federation [Electronic resource]. http://cbr.ru/credit/main.asp (In Russian)
Credit Organizations’ Guide. 2015. The Central Bank of the Russian Federation [Electronic resource]. http://cbr.ru/credit/main.asp (In Russian)
Fitz-enz J. 2006. The ROI of Human Capital: Measuring the Economic Value of Employee Performance. Russian translation. М.: Vershina. (In Russian)
Fitz-enz J., Davison B. 2009. How to Measure Human Resources Management. Russian translation. М.: HIPPO. (In Russian)
Efendiev А. G., Balabanova Е. S., Rebrov А. V. 2014. Human resource management and firm performance: Is there any relationship? Russian Management Journal [Rossiiskii Zhurnal Menedzhmenta] 12 (1): 39–68. (In Russian)
Downloads
Published
2017-12-28
How to Cite
Zelenova, O. I., & Prosvirkina, E. Y. (2017). The Impact of Human Resources Management Systems on Financial Performance of Banks in Russia. Russian Management Journal, 15(4), 463–490. https://doi.org/10.21638/11701/spbu18.2017.404
Issue
Section
Theoretical and Empirical Studies
License
Articles of the Russian Management Journal are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
