An Integrated HRM-Finance Framework for sustainable Organizational Performance: Evidence from Emerging Market Firms in Pakistan

https://doi.org/10.5281/zenodo.17754481

Abstract

This paper focuses on the combined effect of Strategic Human Resource Management (SHRM) and High-Performance Work Systems (HPWS) and Financial Capability of Management on the financial performance of Organizational by the mediating position of Human Capital Efficiency and moderation role of Financial Governance Quality in Pakistani companies. Data were gathered by using a quantitative methodology and a structural equation modeling with a SmartPLS4. A sample of 352 middle and top-level managers working in SME and large enterprises was used. The results indicate that SHRM, HPWS, and managerial financial capability have a strong impact in increasing human capital efficiency that further has strong impacts on financial performance. Although financial governance does not have a direct influence on performance, it enhances the association between workforce efficiency and financial performance via the moderating influence. The findings affirm the fact that the positive changes in the financial performance of the Pakistani organizations are also obtained mainly as a result of the effective use of human resources that is facilitated by the adequate managerial and governance standards. The paper indicates that HR systems and financial capacity as well as governance alignment are important issues that need to be considered at the strategic level to ensure sustained competitiveness and profitability in the long term.