The Impact of Human Resource Practices and Organizational Citizenship Behaviors on Firm Performance

Abstract

Problem statement: The examination of organizational citizenship behaviors as the mediating variable through which human resource practices affect firm performance is still scarce. Approach: This study examined the mediation effects of organizational citizenship behaviors on the relationships between selected human resource practices and firm performance. The human resource practices studied were reward and performance appraisal practices and firm performance was studied in terms of quality of services. Data were collected from a sample of 179 branches of two banks in Tehran, Iran. The participants in this study included 176 managerial employees, 352 non-managerial employees and 871 customers. To achieve these objectives a mediation model was tested using structural equation modeling procedure to examine if the hypothesized model fit the data. Results: The results showed that organizational citizenship behaviors fully mediated the relationships between reward practices and quality of services and partially mediated the relationships between performance appraisal practices and quality of services. Conclusion/Recommendations: The findings of this study suggest that human resource practices play a critical role in enhancing employees’ organizational citizenship behaviors and firm performance. Organizational citizenship behaviors mediate the effects of reward and performance appraisal practices on service quality. To improve service quality, employers should improve reward and performance appraisal practices since these practices have an impact on employees’ organizational citizenship behaviors which in turn would affect service quality.