HRM practices and organizational performance in Oman

Purpose – The purpose of this paper is to test the relationship between high‐involvement human resource management practices and organizational performance in the Sultanate of Oman, an Arabian Gulf country. Design/methodology/approach – Companies listed in the Muscat Securities Market in the Sultanate of Oman were surveyed. The final sample consisted of 87 companies. Survey responses were subjected to statistical analysis. Financial measures of organizational performance were also used in the analysis for a subset of the sample for which these data were available. Findings – Results of the statistical analysis indicated that, after controlling for size, type of firm (publicly traded or closely held) and average industry price‐earnings ratio, high involvement human resource management practices were positively related to subjective organizational performance and an objective measure of performance, ratio of market value to book value. Research limitations/implications – Research limitations include measuring high‐involvement HRM practices and subjective organizational performance from the same source, assuming that HRM practices are uniform across organizational levels and using a composite measure of high‐involvement HRM practices. Future research should address these limitations. Practical implications – The results of the study suggest that organizations in the Arabian Gulf can enhance their performance by implementing high‐involvement HRM practices in spite of the unique national culture and special features of the labour market in the region. Originality/value – To the best of one's knowledge, this is the first study of high‐involvement HRM practices and organizational performance in the Arabian Gulf using both subjective and objective measures of organizational performance. Unlike other studies on HRM in Oman, this study was based on data collected from private‐sector organizations.