The impact of human resource management practices on affective commitment : an empirical study in micro, small and medium enterprises using partial least squares structural equation modelling

Purpose: The research empirically investigates the effect of human resource management practices (HRMP), consisting of recruitment and selection, reward as well as recognition, training, performance appraisal (PA) and career development on affective commitment (AC) among employees working for micro, small and medium enterprises (MSME) in Tirupur, the commercial hub of India. This study develops a better understanding of employer-employee exchange relationships by drawing on the theoretical framework of social exchange theory. Design/methodology/approach: A structured questionnaire was employed to conduct survey-based research on 210 personnel, comprising managers, supervisors and employees. A questionnaire that used a set of 35 pre-existing items was adapted from prior studies to measure each latent variable, with slight alterations to fit the Indian context. It was then analysed with SMART PLS and the Statistical Package for the Social Sciences (SPSS), which included descriptive statistics, analysis of variance and structural equation modeling. Findings/results: The findings established a substantial positive association between AC and component-by-component evaluation of HRMP. In comparison, career advancement was observed to be the most important predictor of AC, followed by reward and recognition. Practical implications: Micro, small and medium enterprises are the fastest-growing revenue-generating and job-creating sector. Therefore, well-designed and executed HRMP in these organisations will nurture AC by lowering turnover besides absenteeism, while improving employee performance. This research will be extremely useful to stakeholders in any emerging nation who seek to expedite their organisation's development by strengthening human-resource competencies. Originality/value: This study is unique in the context of developing countries, as the impact of HRMP on AC in MSME has not been well addressed. The author's contribution extends to the scant literature available on MSMEs.