The Influence of Human Resource Practices on Internal Customer Satisfaction and Organizational Effectiveness

Abstract

It is generally believed that the impact of Human Resource Practices on internal customer satisfaction can create comparative advantage for the organizational performance. The main objective of this study was to find out the impact of Human Resource Practices on internal customer satisfaction and organizational effectiveness. The impact of human resource practices on the overall performance of organizations has been a leading subject of research and the results have been encouraging, indicative of positive relationship between Human Resource practices and organizational effectiveness. Data was collected through personally administered questionnaire-based survey from 290 banking personnel of Pakistan. Structural equation modeling was used to examine the anticipated model. The results showed that some Human Resource Practices appear to be linked to internal customer satisfaction and organizational effectiveness. The implications for practitioners were to modify and emphasize certain human resource practices, and to emphasize the role of internal customers for organizational effectiveness enhancement. These findings revealed the importance of internal customers in enhancing employee morale, organizational commitment, employee productivity, turnover rate and the organization’s ability to attract talent.