This study examines the impact of HR practices on organizational performance in the United Arab Emirates (UAE), a Middle Eastern emerging market characterized by rapid economic growth, a highly diverse workforce, and a unique socio-cultural environment. It seeks to enhance the theoretical understanding of the mechanisms connecting HRM practices to organizational performance by analyzing the mediating role of strategic HR directors.
Using a comprehensive HRM survey, data were collected from 127 private and public organizations in the UAE. The study examines five HRM practices: recruitment and selection, training, internal career opportunities, extrinsic incentives, and intrinsic incentives. It also tests the mediating role of strategic HR directors in the relationship between HRM practices and organizational performance.
The findings indicate that recruitment and selection, training, and internal career opportunities significantly enhance organizational performance, whereas extrinsic and intrinsic incentives have no substantial impact. While this outcome aligns with existing research, a key theoretical contribution is the identification of the strategic role of HR directors as a crucial mediator in the HRM-performance relationship. Specifically, HR directors fully mediate the link between recruitment and selection and perceived organizational performance, while partially mediating the effects of training and internal career opportunities on performance.
The findings emphasize the critical role of HR directors in strategically shaping recruitment, selection, and training practices to improve organizational performance. To maximize the effectiveness of HRM practices, organizations should invest in developing the strategic capabilities of HR leaders.
This study provides new theoretical insights into the strategic role of HR managers in the HRM-performance nexus. This not only sheds light on the so-called “black box” in HRM and performance research but also proposes a novel extension to strategic HRM theory.
