Role of Relational Coordination and HR practices: An Understanding of Branch Performance in Banking Sector
Institute of Management Sciences
This paper aims to determine the role of relational coordination among employees in improving the performance efficiency in relation to unit-level performance in the banking sector of Pakistan. Underpinning on relational coordination theory, this paper examines the relationships between various Human Resources (HRM) practices in predicting relational coordination that affects unit-level performance in highly interdependent work settings. This research has been conducted in the banking sector of Pakistan. Employees’ perceptions about the extent of seven identical HRM practices and relational coordination are obtained through a personally administered survey in 218 sample branches. Utilizing hierarchical regression, empirical evidence indicate that various HRM practices have different effects in predicting relational coordination in terms of communication and relationship ties among bank branches. Results show that both communication and relationship ties of relational coordination are significantly related to branch level deposits, advances and overall profitability. These findings provide novel contributions to HRM and performance literature, suggesting what needs to be done in terms of HRM practices that can result in improving the potential of enhancing communication and relational ties of relational coordination among employees. This study concludes that a coordinated approach to HRM practices and relational coordination on the part of bank’s HRM department to liaison with branch management and develop better levels of communication and relational ties that would ultimately lead to higher performance.
Keywords: Employee relational coordination, HPWS, interdependence, organizational performance, financial sector, Pakistan