Prior studies supported the theories regarding the relationship between human resource management practices and firm performance. However, a review of extant literature reveals lacking studies in the context of small and medium enterprises. More specifically, the available works of literature are considered still developing and insufficiently studied. Therefore, this paper investigates the relationship between strategic human resource management and SME performance in Sabah, Malaysia. This study adapted Ulrich’s Business Partner Role model as the theoretical support to explain the integration of strategies in human resource management practices. By using the quantitative approach, 260 respondents participated in the study. Findings from the study revealed that regardless of the size of a company, adapting strategic human resource management helps improve firm performance.
Almada, L., and Borges, R. (2018). Sustainable competitive advantage needs green human resource practices: A framework for environmental management. Revista de Aministracao Comtemporanea, 22(3), 424-442. Retrieved from
https://doi.org/10.1590/1982-7849rac2018170345
Amarakoon, U., Weerawardena, J., Verreynne, M. L., and Teicher, L. (2019). Entrepreneurial behaviour: A new perspective on the role of the HR professional, Personnel Review, 48(7), 1809-1829. Retrieved from https://doi.org/10.1108/PR-03-2018-0087
Bahuguna, P. C., Kumari, P., and Srivastava, S. K. (2009). Changing face of human resource management: A strategic partner in business. Management and Labour Studies, 34(4), 563-581. Retrieved from https://doi.org/10.1177%2F0258042X0903400407
Bamber, G. J., Bartram, T., and Stanton, P. (2017). HRM and workplace innovations: Formulating research questions. Personnel Review, 46(7), 1216-1227. Retrieved from https://doi.org/10.1108/PR-10-2017-0292
Bashawir, A., Kaliappen, N., Jermsittiparsert, K. (2019). Enhancing Malaysian SME employee work engagement: The mediating role of job crafting in presence of task complexity, self-efficacy, and autonomy. International Journal of Innovation, Creativity, and Change, 6(11),1-18. Retrieved from https://repo.uum.edu.my/id/eprint/27888
Bhatnagar, J., and Sharma, A. (2005). The Indian perspective of strategic HR roles and organizational learning capability. International Journal of Human Resource Management, 16(9), 1711-39. Retrieved from
https://doi.org/10.1080/09585190500239424
Byrne, B. M. (2010. Structural Equation Modelling with AMOS: Basic Concepts, Applications, sand Programming, (2nd ed). Routledge Taylor & Francis Group
Choi, S. L., and Ismail, W. I. (2008). Understanding the relationship of HR competencies and roles of Malaysian human resource professionals. European Journal of Social Science, 7(1), 88-103
Chaudhry, S., and Joshi, C. (2017). Transformational leadership, HR practices and affective commitment to change: A theoretical perspective. Journal of Organisation & Human Behaviour, 6(3), 37-45
Choi, S. L. (2011). Relationship between Human Resource Professionals’ Competencies, Human Resource Professionals’ Roles and Organizational Performance (PhD Thesis). Universiti Teknologi Malaysia, Faculty of Management and Human Resource Development, Johor Bahru, Johor
Choi, S. L., Lim, Z. Y., and Tan, W. C. (2016). Analysis of the relationship between leadership styles and affective organizational commitment. International Journal of Management, Accounting and Economics, 3(10), 572-598.
Conner, J., and Ulrich, D. (1996). Human resource roles: Creating value, not rhetoric. Human Resource Planning, 19(3), 38-49
Cristiani, A., and Peiro, J. M. (2019). Calculative and collaborative HRM practices, turnover and performance: Evidence from Uruguay. International Journal of Manpower, 40(4), 616 642. Retrieved from https://doi.org/10.1108/IJM-11-2016-0207
Fahim, M. G. A. (2018). Strategic human resource management and public employee retention. Review of Economics and Political Science, 3(2), 20-39. Retrieved from https://doi.org/10.1108/REPS-07-2018-002
Farndale, E., and Paauwe, J. (2018). SHRM and context: Why firms want to be as different as legitimately possible. Journal of Organizational Effectiveness: People and Performance, 5(3), 202-210. Retrieved from https://doi.org/10.1108/JOEPP-04-2018-0021
Fornell, C. D., and Lacker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(3), 39-50. Retrieved from http://dx.doi.org/10.2307/3151312
Francis, H., and Baum, T. (2018). HR transformation within the hotel industry: building capacity for change. Worldwide Hospitality and Tourism Themes, 10(1), 86-100. Retrieved from https://doi.org/10.1108/WHATT-10-2017-0064
Gahlawat, N., and Kundu, S. C. (2019). Progessive human resource management and firm performance: Empirical evidence from Indian context. International Journal of Organizational Analysis., 27(3), 471-493. Retrieved from https://doi.org/10.1108/IJOA 05-2017-1159
Garg, N. (2019). High performance work practices and organizational performancemediation analysis of explanatory theories. International Journal of Productivity and Performance Management, 68(4), 797-816. Retrieved from https://doi.org/10.1108/IJPPM-03-2018-0092
Hair, J. F., Sarstedt, M., Hopkins, L., Kuppelwieser, V. (2014). Partial least square structural equation modelling (PLS-SEM): An emerging tool in business research. European Business Review, 26(2), 106-121. Retrieved from https://doi.org/10.1108/EBR-10-2013-0128
Hair, J. F., Sarstedt, M., Ringle, C. M., and Gudergan, S. P. (2017). Advanced issues in Partial Least Squares Structural Equation Modeling. Thousand Oaks, California: SAGE
Harney, B., and Alkhalaf, H. (2020). A quarter-century review of HRM in small and medium-sized enterprises: Capturing what we know, exploring where we need to go. Human Resource Management Special Issue. Retrieved from
https://doi.org/10.4278%2F0890-1171-11.4.290
Henseler, J., Ringle, C. M., and Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modelling. Journal of Academy of Marketing Science, 43(1), 115-135
In, J. (2017). Introduction of a pilot study. Korean Journal of Anesthesiology, 7o(6), 601-605. Retrieved from https://dx.doi.org/10.4097%2Fkjae.2017.70.6.601
Iqbal, A. (2019). The strategic human resource management approaches and organisational performance: The mediating role of creative climate. Journal of Advance in Management Research, 16(2), 181-193. Retrieved from DOI:
https://doi.org/10.1108/JAMR-11-2017-0104
Jackson, S. E., and Schuler, R. S. (2000). Managing Human Resources for Innovation and Learning. Innovative Management, 325-365
Katou, A. A., and Budhwar, P. S. (2006). Human resource management systems and organizational performance: A test of a mediating model in the Greek manufacturing context. The International Journal of Human Resource Management, 17(7), 1223-1253. Retrieved from https://doi.org/10.1080/09585190600756525
Kossek, E. E., and Block, R. N. (2000). Managing Human Resources in the 21st Century: From Core Concepts to Strategic Choice. Cincinnatio, Ohio: Southwestern/ITT Publishing
Kuipers, B. S., and Giurge, L. M. (2017). Does alignment matter? The performance
implications of HR roles connected to organizational strategy. The
International Journal of Human Resource Management, 28(22), 3179-3201.
Retrieved from https://doi.org/10.1080/09585192.2016.1155162
Kundu, S. C., Mor, A., Bansal, J., and Kumar, S. (2019). Diversity-focused HR practices and perceived firm performance: Mediating role of procedural justice. Journal of Asia Business Studies, 13(2), 214-239. Retrieved from https://doi.org/10.1108/JABS-02-2018-0032
Lai, W. H. (2019). Leveraging human assets for MNCs performance: the role of management development, human resource system and employee engagement. The International Journal of Human Resource Management, 1, 1-30. Retrieved from
https://doi.org/10.1080/09585192.2019.1590443
Lai, Y., Saridakis, G., and Johnstone, S. (2017). Human resource practices, employee attitudes and small firm performance. International Small Business Journal: Researching Entrepreneurship, 35(4), 470-494. Retrieved from
https://doi.org/10.1177%2F0266242616637415
Lemmergaard, J. (2009). From administrative expert to strategic partner. Employee Relation, 31(2), 182-196. Retrieved from https://doi.org/10.1108/01425450910925328
Li, L. Q., Xin, K., Pucik, V., and Wei, W. X. (2019). MNCs’ R&D talent management in China: Aligning practices with strategies. Chinese Management Studies, 13(4), 1086-1106. Retrieved from https://doi.org/10.1108/CMS-10-2018-0703
Mahadevan, J., and Schmitz, A. P. (2020). HRM as an ongoing struggle for legitimacy: A critical discourse analysis of HR managers as “employee-experience designers”. Baltic Journal of Management, ahead of print. Retrieved from https://doi.org/10.1108/BJM-10-2018-0368
Manoharan, A., and Singal, M. (2019). Organizational effectiveness in hospitality: Managers perspectives. International Journal of Hospitality Management, 80, 181-190. Retrieved from https://doi.org/10.1016/j.ijhm.2019.05.003
Marescaux, E., De Winne, S., and Sels, L. (2013). HR practices and HRM outcomes:
The role of basic need satisfaction. Personnel Review, 42(1), 4-27. Retrieved
from https://doi.org/10.1108/00483481311285200
Martinez-del-Rio, Li, P., and Guthrie, J. P. (2021). Antecedents of high performance work practices in SMEs: an attention-based view. The International Journal of Human Resource Management. Retrieved from
https://doi.org/10.1080/09585192.2021.1991431
Masnan, F., Saad, N. M., and Ramlee, A. A. (2018). Assessing the implications of dynamic capability and international opportunity recognition on export performance of manufacturing SMEs in Malaysia. International Journal of Academic Research in Business and Social Sciences, 8(8), 361-374. Retrieved from DOI: https://doi.org/10.6007/IJARBSS/v8-i8/4474
McDermott, A., and Keating, M. (2011). Managing professionals: Exploring the role of the hospital HR function. Journal of Health Organization and Management, 25(6), 677-692. Retrieved from https://doi.org/10.1108/14777261111178556
Ministry of Economic Affair, MEA. (2019). Twelfth Malaysia Plan, 2021-2025 (12MP). Retrieved from rmke12.mea.gov.my
Nam, J., and Lee, H. (2018). High commitment human resource practices and employee behaviour: A multi-level analysis. International Journal of Manpower, 39(5), 674-686. Retrieved from https://doi.org/10.1108/IJM-09-2016-0171
Nguyen, D. T. N., Teo, S. T. T., DeCieri, H., and Ho, M. (2019). Perceived formal authority and the effectiveness of the HR department in Vietnam. Personnel Review, 48(2), 551-569. Retrieved from https://doi.org/10.1108/PR-03-2017-0073
Othman, A. E. A., Dassanayake, M. S., and Suleiman, W. (2015). A review of essentials of training transfer in organizations: HR perspective. Science International, 27(1), 407-410
Othman, S. A., and Mahmood, N. H. N. (2020). Linking level of engagement, HR practices and employee performance among high-potential employees in Malaysian manufacturing sector. Global Business Review, Advanced online publication. Retrieved from https://doi.org/10.1177%2F0972150919877342
Para-Gonzalez, L., Jimenez-Jimenez, D., and Martinez-Lorente, A. R. (2019). Do SHRM and HPWS share employees’ affective commitment and empowerment? Evidence-based HRM, 7(3), 330-324. Retrieved from https://doi.org/10.1108/EBHRM-01-2019-0004
Prikshat, V., Salleh, N. M., and Nankervis, A. (2016). An exploratory study of HRM roles and competencies in Vietnam, India, and Malaysia. Nankervis, A (Ed). Asia Pacific Human Resource Management and Organizational Effectiveness: Impacts on Practice (pp. 111-145). Retrieved from https://doi.org/10.1016/B978-0-08-100643-6.00006-3
Rees, G., and Smith, P. (2017). Strategic Human Resource Management: An International Perspective. London: Sage
Roehl, M. T. (2019). The impact of SHRM on the psychological contract of employees: A typology and research agenda. Personnel Review, 48(6), 1580-1595. Retrieved from https://doi.org/10.1108/PR-02-2018-0063
Sabiu, M. S., Ringim, K. J., Mei, T. S., and Joarder, M. H. R. (2019). Relationship between human resource management practices, ethical climates and organizational performance, the missing link: An empirical analysis. PSU Research Review, 3(1), 50-69. Retrieved from https://doi.org/10.1108/PRR-12-2016-0022
Shahnaei, S. (2017). The mediating effect of knowledge management on the relationship between human resource management practices and organizational innovation performance (Doctoral thesis). Universiti Teknologi Malaysia, Johor Bahru.
Shahzad, K., Arenius, P., Muller, A., Rasheed, M. A., and Bajwa, S. U. (2019). Unpacking the relationship between high-performance work systems and innovation performance in SMEs. Personnel Review, 48(4), 977-1000. Retrieved from https://doi.org/10.1108/PR-10-2016-0271
Storey, J. (1992). Developments in the Management of Human Resources. London: Blackwell Business.
Su, Z. X., Wright, P. M., and Ulrich, M. D. (2018). Going beyond the SHRM paradigm: Examining four approaches to governing employees. Journal of Management, 44(4), 1598-1619. Retrieved from https://psycnet.apa.org/doi/10.1177/0149206315618011
Sullivan, J. (2003). Knocking Down the Silos. Human Resources,16-18
Teal, D. (2019). Organizational growth and its impact on the role of human resources: A qualitative narrative stud (Doctoral Dissertation). Northcentral University, San Diego, California, USA
Thierry, T., Victor, T., and Paul, D. (2018). What about HRM in SMEs: An analysis from the strategic vision of the owner-managers of SMEs in Cameroon. Acta Universitatis Danubius, 14(7), 120-139.
Triguero-Sanchez, R., Pena-Vinces, J. C., and Sanchez-Apellaniz, M. (2013). Hierarchical distance as a moderator of HRM practices on organizational performance. International Journal of Manpower, 34(7), 794-812. Retrieved from DOI: https://doi.org/10.1108/IJM-03-2012-0046
Tyson, S., and Fell, A. (1986). Evaluating the Personnel Function. London: Hutchinson.
Ulrich, D. (1997). Human Resource Champion. Boston, MA: Harvard Business School Press
Ulrich, D. (2016). HR at crossroads. Asia Pacific Journal of Human Resources, 54(2), 148-164. Retrieved from https://doi.org/10.1111/1744-7941.12104
Ulrich, D., and Brockbank, W. (2005). The HR value proposition. Boston: Harvard Business School Press
Vanhala, M., and Ahteela, R. (2011). The effect of HRM practices on impersonal organizational trust. Management Research Review, 34(8), 869-888. Retrieved from https://doi.org/10.1108/01409171111152493
Wielemaker, M., & Flint, D. (2005). Why does HRM need to be strategic? A consideration of attempts to link human resource and strategy. The Business Review, 3(2), 259-264
Wright, C. (2008). Reinventing human resource management: Business partners, internal consultants and the limits to professionalization. Human Relations, 61(8), 1063-1086. Retrieved from https://doi.org/10.1177%2F0018726708094860
Wright, P. M., and Ulrich, M. D. (2017). A road well-travelled: The past, present, and future journey of strategic human resource management. Annual Review of Organizational Psychology and Organizational Behavior, 4, 45-65. Retrieved from https://doi.org/10.1146/annurev-orgpsych-032516-113052
Wright, P. M., Nyberg, A. J., and Ployhart, R. E. (2018). A research revolution in SHRM: New challenges and new research directions. In Buckley, M. R., Wheeler, A. R., and Halbesleben, J. R. B. (Ed.). Research in Personnel and Human Resource Management (36, pp. 141-161). Emerald Publishing Limited
Xiu, L., Liang X., Chen, Z., and Xu, W. (2017). Strategic flexibility innovative HR practices, and firm performance: A moderated mediation model. Personnel Review, 46(7), 1335-1357. Retrieved from https://doi.org/10.1108/PR-09-2016-0252
Zakaria, N., Fauzi, W., and Abdullah, N. A. C. (2018). The link between HRM practices and performance in Malaysian SMEs. International Journal of Supply Chain Management, 7(6), 118-126
Zheng, C., O'Neill, G., and Morrison, M. (2009). Enhancing Chinese SME performance through innovative HR practices. Personnel Review, 38(2), 175- 194. Retrieved from https://doi.org/10.1108/00483480910931334.
In-Text Citation: (Voo et al., 2022)
To Cite this Article: Voo, I. C., Li, J. O. M., Yuan, P. Y., & Loong, A. H. (2022). Adapting SHRM: Game Changer for Malaysian SMEs. International Journal of Academic Research in Business and Social Sciences, 12(8), 897– 911.
Copyright: © 2022 The Author(s)
Published by Knowledge Words Publications (www.kwpublications.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode