Human resource management practices and performance in Malaysian SME: a proposed conceptual framework

The objective of this article is to introduce a conceptual framework about the relationship between human resource management practices and organizational performance in the context of small industry in Malaysia. Based on an extensive review of the study in the past, the relationship between human resource practices and organizational performance remains unclear. Previous studies from various industry sectors had found the results were inconsistence about the relationship. Despite these studies, human resource management practices have been suggested to be studied in order to determine the relationship between organizational performance. Hence, this concept paper attempt to study the relationship between four variables of human resource management practices which is known as selective hiring, training, compensation and empowerment and organizational performance of Malaysian SMEs. Based on the Resource Based View (RBV) perspective, HRM practices are the best way of utilizing vital internal resources that influence performance in organization. Most of researchers are now paying extra attention on different human resource practices that can enhance performance. This study will contribute to knowledge by providing insights on the impact of HRM practices on SMEs performance in Malaysia