Abstract:
Purpose
The objective of the study is to analyze the role of human resource practices on
organizational performance with the moderating effect of Islamic principle application in the
Islamic banks of Karachi, Pakistan.
Methodology & Design
242 sample responses were collected from the employees of Islamic banks of Karachi,
Pakistan using convenience sampling technique while PLS-SEM has been employed for data
analysis using SmartPLS version 3.2.8.
Findings
Results showed that employee involvement, performance appraisal system, and selection and
recruitment have significantly positive relationship with organizational performance;
whereby, compensation, and training and development have no relationship with
organizational performance. Furthermore, performance appraisal system may improve its
relationship with organizational performance due to the moderating effect of application of
Islamic principles. Selection and recruitment and training and development may have
reduced their effectiveness on organizational performance due to the moderating effect of
Islamic principles’ application. However, the relationship of employee involvement and
compensation with organizational performance may not be moderated by the application of
Islamic principles. Limitations
The data of study has been collected through convenience sampling technique as knowledge
about the other techniques is limited. The study only focuses on the banks situated in
Karachi.
Recommendations
Managers of Islamic banks have to provide great focus on the training and development side
of the organization. This is so because, when a company provides relevant training to the
employees, only then they would be able to perform their job in a proper way and as per the
expectations from the management.
