The Critical Review of Social Sciences Studies
Online ISSN: 3006-7170
Print ISSN: 3006-7162
Volume 3, Number 1, 2025, Pages 3154 – 3164
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Strategic Human Resource Management and Employee Outcomes: A
Comprehensive Literature Review on the Impact of SHRM Practices on
Job Satisfaction and Organizational Commitment
Hina1, Rabia Siraj2 & Dr. Ghazala Yasmeen3
1
Lecturer, Department of Home Economics, University of Swat, Pakistan
2
Lecturer, Department of Home Economics, University of Swat, Pakistan
3
Professor, College of Home Economics, University of Peshawar, Pakistan
ARTICLE INFO ABSTRACT
Article History: Strategic Human Resource Management (SHRM) has emerged
Received: February 06, 2025
Revised: March 10, 2025 as a critical approach to managing human capital by aligning
Accepted: March 13, 2025 HRM practices with organizational objectives. This literature
Available Online: March 15, 2025
review examines the impact of SHRM practices on job
Keywords: satisfaction and organizational commitment. Key SHRM
Strategic Human Resource Management, practices such as training and development, performance
Training and Development, Performance appraisal, and compensation and rewards are analyzed in
Appraisal, Compensation and Rewards,
Job Satisfaction, Organizational relation to their effects on employees’ attitude and
Commitment. organizational performance. This review synthesizes findings
from prior research to establish a conceptual framework
Corresponding Author: linking SHRM practices with job satisfaction and
Hina
organizational commitment. The study highlights the
Email:
[Link]@[Link] significance of SHRM in fostering employee engagement,
motivation, and retention. The review also identifies research
gap particularly in the academic sector of Pakistan,
emphasizing the need for further empirical studies.
Introduction
Strategic Human Resource Management (SHRM) has gained prominence as a vital approach to
managing human capital in a competitive business environment. SHRM emphasizes integrating
human resource policies with corporate strategies to enhance employee performance, job
satisfaction, and organizational commitment. This literature review explores how SHRM practices
influence job satisfaction and organizational commitment, with a focus on training and
development, performance appraisal, and compensation and rewards.
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Strategic Human Resource Management
The concept of SHRM originated in the late 1980s and early 1990s, stressing an integrated,
proactive, and value-driven approach to HRM. In this new paradigm, human resources are
considered a firm's asset rather than a reactive, inflexible, and administrative role (Hamid & Azhar,
2014). By comparing it with human resource management, the term "strategic human resource
management" may be better understood. Human resource management (HRM) focuses on finding
and keeping the best employees while also giving them the compensation, rewards, training, and
growth they need to succeed in the workplace. However, strategic human resource management
goes a step further by tying these operations to the objectives of other corporate divisions as well.
Additionally, strategic HR departments make sure that all of their objectives are consistent with the
mission, vision, values, and the company's overall objectives (Alaraqi, 2017; Afaq et al., 2022). In
order to generate competitive advantages and cross-departmental cooperation, organizations may
integrate their strategies with human resource management after learning about the external
environment, opportunities, and threats. Even though both general and SHRM may enhance
company performance, talented personnel can have a higher impact on SHRM (Thuo, Senaji, &
Kirimi, 2018). The social exchange theory states that when businesses show they care about their
employees and take the necessary steps, a good social exchange relationship will form between
them and their workforce. This connection will encourage individuals to adopt work practices and
attitudes that are advantageous to their companies (Woodrow and Guest, 2020). Previous studies
have demonstrated that the psychological contract is significantly influenced by HRM strategies
that are consistent with organizational strategy (Ali et al., 2020).
Organizations utilize SHRM practices, to accomplish their strategic objectives (Han et al., 2019).
According to studies, effective SHRM not only allows employees to fully utilise their talents,
capabilities, and knowledge, but also makes them feel supported by their employers, strengthening
their psychological contract and assisting them in achieving organisational goals using their skills
and motivations (Hernaus et al., 2019). In addition, SHRM is more inclined to award staff
members externally for their efforts (Woodrow & Guest, 2020). SHRM helps employees feel
supported at work by employers while also assisting individuals in maximizing talents, expanding
capacities, and boosting confidence (Han et al., 2019).
Training and Development
Because of the necessity of a changing environment, organizations are having difficulty thriving in
a global setting. As a result, training is crucial for surviving in a constantly changing, competitive
corporate environment. Training is seen as a crucial and dynamic role that contributes to employee
retention and job satisfaction. Employee productivity increases as a result of training. Employees
who are efficient and content contribute to the organization's success. Employees that have
received additional training will be more diverse in their operations and flexible in their job.
Training is an investment in human resources that promises a higher return in the future. As a
result, training is critical in this globalized period (Nagaraju & Archana, 2015). Increased
productivity in terms of quantity and quality of output per hour of labor is considered a byproduct
of increased working life quality. Training aids in the acquisition of new skills and knowledge
connected to a given career (Okechukwu, 2017).
The role of training and development in enhancing job performance has not been extensively
studied. In addition, research shows that training and development is a learning approach that
might aid workers in developing new abilities and knowledge for improved performance (Dermol
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et al., 2013). A more recent study revealed that training identifies employees' requirements and, in
reality, raises their level of capability to function successfully for the organization’s aim.
Additionally, it proved that employee performance and training and development are successful
and advantageous techniques for the success of organizations and their workforce (Talwar &
Thakur, 2016). Strategic human resource management and organizational performance were
examined in three different methods by Liu (2016), the concepts of universality, form, and
contingency correspond to these modalities. It was concluded that a contingency mode study
would be required to look at the relationship between strategic human resource management and
organizational performance. Following that, the organizational performance standard would be
evaluated.
Nagaraju and Archana (2015) investigated the impact of staff development programs on job
satisfaction. According to the findings of the study, employee satisfaction is increased through
training and development. It is always expected of employees to arrive at work with the skills
needed to support the company in achieving its objectives. Employees still need training to become
fully trained in skills and knowledge in order to blend in and be valuable team members. Employee
development is dependent on interactions with managers and coworkers, as well as education and
training linked to the job. Armstrong and Taylor (2020), stated that employees with advanced
degrees are more likely to be provided with opportunities for professional growth. In order to
determine the staff's training requirements, the performance assessment system is required.
Performance Appraisals
The Parsad (2015) research examines how performance appraisal affects motivation and job
satisfaction. According to the findings of the study using correlation analysis, there is a positive
relationship between job satisfaction and motivation. Organizations are eager to make their
performance evaluation procedures more open and inventive in order to decrease prejudice and
conflict while increasing objectivity. Employee performance is a crucial factor in an organization's
productivity (Singh, 2015). Performance appraisal is an important component of HRM processes,
particularly for organizations. Job satisfaction, on the other hand, is dependent on the
organization's performance appraisal system owing to its relationship with a positive attitude and
emotion about the job. According to the findings of Saleem and Shah (2015), employees who are
happy with their institute's performance appraisal system are enthusiastic about their jobs and are
strongly committed to achieving organizational objectives and goals. In a nutshell, the
performance assessment system has a significant influence on job satisfaction. Wahjono et al.,
(2016) found in their regression study that performance appraisal had predictive value toward job
satisfaction.
According to Sajuyigbe and Ademola (2017), many firms have low productivity because PAS is
not adequately managed (performance appraisal system). Only the outcomes of performance
evaluations may be used to evaluate training needs. PAS is a high-productivity and high-
performance model. Agyare et al., (2016) Performance appraisal is an important factor in
motivating employees to attain company goals. The study examined the impact of performance
appraisal on job satisfaction and staff commitment. The study employed descriptive research, with
200 samples drawn from a microfinance organization in Ghana. According to the findings of the
study, fair employee appraisals by management have a beneficial effect on employee satisfaction.
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Compensation and Reward
Employees are the most important resources for any firm, and when it comes to managing people,
the reward, and compensation system is a vital aspect of the employment relationship. The
organization's success or failure is mostly determined by its personnel. Employees must be
motivated, attracted, and retained in order for the organization to be successful or to achieve the
intended goals. The Organization's incentive and compensation management systems are the
primary tools or instruments for this (Siyum, 2019). Compensation is an element that helps
individuals achieve their goals in business. In order to produce good results, the researcher
suggested that public institutions should adopt compensation practices for rewarding their
employees. Employees will always obtain job satisfaction and job security through high
remuneration, which will also contribute to the attainment of both organizational and individual
goals (Omuya, 2018).
Strategic Human Resource Management enhances corporate performance by using novel
approaches (Chopra, 2017; Delery & Roumpi, 2017). Having the best workers possible includes
creating and implementing strategic human resource plans, such as providing a benefits and
compensation package that satisfies employees and inspires them to go the extra mile for the firm
(Dessler 2019). When designing a compensation plan, several issues must be considered, including
company goals, equity, existing legislation, and unions (Anthony, 2009; Pynes, 2013). Aside from
this, the corporation must consider whether its employees desire a higher salary or additional
benefits.
According to a survey by the SHRM (2018), there are strong links between rewards and
compensation and job satisfaction, with 92% of respondents saying that these factors were
important for their job satisfaction. The survey also found links between compensation and reward
and employee retention, with 29% of respondents saying that the compensation and reward
package would affect their choice to look for another organization to work for and 32% saying it
was the reason they liked working there. Perácek (2020) stated that one of the most important
success factors is a company's ability to attract and retain talented employees, and that one of the
best ways to do this is through compensation. To have the best employees possible, there are
several steps to take: creating and putting into practice strategic human resource plans; identifying
personnel requirements; recruiting and choosing the best candidates; training; evaluating
employees through an appraisal system; and, of course, motivating to ensure employee retention.
Another important step is providing a compensation package (Portolese, 2018 ).
Employee compensation and reward, according to Dessler (2014, 2019), encompass all types of
income that employees get in addition to their normal earnings or salary. They are made up of both
direct and indirect cash. The compensation aspect is critical throughout both the recruitment and
retention phases. One study found that teachers who received incentives at the beginning of the
school year but had to return them if they failed to meet educational objectives were more
motivated and outperformed those who were only guaranteed the reward at the end of the year if
the objectives were met (Fryer et al. 2012). Comparatively speaking, some sectors offer more
advantages. The sectors that provide greater benefits are manufacturing, banking and insurance,
and public administration and governance. Retail, housing, and food industry staff receive far
fewer benefits (Greenwald & Fronstin, 2019). In order to boost employee loyalty, higher
education institutions, according to Mabaso and Dlamini (2021), should improve their
compensation strategy. However, they must also provide excellent results efficiently.
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Strategic Human Resource Management and Organizational Commitment
Organizations are struggling to perform optimally in today's rapidly changing business
environment and intense global competition. Employee commitment is increasingly regarded as a
natural process for individuals and companies to achieve high productivity (Armstrong & Taylor
2023). Employee commitment can boost a company's performance, although it is not always
beneficial, such as when the firm does not provide incentives or include people in their work (Iqbal
et al., 2013). If a firm provides adequate possibilities and advantages to its employees, the
employees will feel comfortable, and their commitment level will grow with time (Ahmad, Zaman
& Shah, 2015). Job satisfaction is an attitude toward work-related circumstances and is the
outcome of employees' organizational commitment to the organization. Commitment is a more
general response to an organization, whereas job satisfaction is more of a response to a specific job
or multiple aspects of the job state (Reza, 2019). There has been much prior research on best
practices in HRM aimed at establishing an optimal combination of activities that might promote
the organizational commitment of workers and their intention to stay in the organization (Chew &
Chan, 2008).
Organizational commitment is critical for completing organizational activities. Organizational
commitment helps to keep the relationship between the organization and its personnel intact. Thus,
it is critical to examine effective methods of fostering organizational commitment among workers
(Endodu, Kocabacak, & Güven, 2013). Morrow (2011) stated that there is a need for scholars and
academics to extensively focus on the variables impacting organizational commitment. Based on
the findings of previous studies, the following hypothesis on the influence of SHRM on
organizational commitment has been developed:
H1: Strategic Human Resource Management practices have a positive and significant impact on
organizational commitment.
Strategic Human Resource Management and Job Satisfaction
Strategic Human Resource Management is becoming increasingly important in organizations
(SHRM). Strategic human resource management is essential to an organization's productivity and
employee satisfaction. The development of businesses now heavily depends on people. Strategic
choices influence the need for skills and human resources. Ineffective and unbalanced training and
development, incentive, and performance appraisal methods leads to low performance and job
dissatisfaction (Knies et al., 2017). The application of strategic organizational processes and
practices by human resource management may have an impact on organization performance,
which is why SHRM is seen as a crucial component of human resource practices (Lengnick-Hall et
al., 2013).
According to Obeidat (2017), human resource management has a beneficial influence on business
performance, highlighting the need of carrying out HR activities to sustain corporate strategy in
order to increase organizational performance and establish an organizational culture that supports
creativity and adaptability. An SHRM strategy that addresses employees' needs and helps them
adopt positive attitudes is likely to increase their engagement with the organization and job
satisfaction (Haque, 2018). According to Adgüzel (2019), SHRM pursues a strategy that aims to
draw in competent individuals who are eager to work toward attaining corporate goals. This
enhances job performance and lowers employee absenteeism, fosters organizational transformation
and creativity, and helps to find solutions to issues that arise in the workplace.
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According to different literature studies, employee satisfaction is related to HRM practices.
According to research on HRM practices and employee satisfaction conducted at micro-financial
institutions in Nigeria, strategic human resource procedures can help MFBs satisfy their employees
while maintaining a competitive edge. According to the findings of the study, HRM practices are
the instruments utilized by various firms to get the maximum performance out of their personnel. It
says that in order to be competitive, firms must consider all stakeholders and assure their
satisfaction by using strategic HRM practices (Nwachukwu, & Chladková, 2017).
A Saudi Arabian bank research looks into the influence of human resource management methods
in determining organizational commitment. The survey approach was used to obtain relevant data
for the study. Employee satisfaction and HRM practices were independent variables, while
organizational commitment was the dependent variable. According to the results, HRM practices
have a good association with job satisfaction and organizational commitment. While job
satisfaction correlates positively with organizational commitment. Both individual independent
variables contributed significantly to organizational commitment. (Cherif, 2020).
SHRM is recognized as an important field of practice that improves employees' capabilities and
productivity (Sareen, 2018). As an outcome, SHRM may favorably influence employee job
satisfaction by highlighting their skills and expertise and enhancing their task-based performance
in order to achieve organizational objectives. Several studies have found that SHRM practices
have a positive and significant impact on job satisfaction (Hamid & Azhar, 2014; Haque, 2018;
Sareen, 2018). Several studies show a link between HRM practices and employee satisfaction.
Although there is extensive literature on the effectiveness of SHRM in various sectors such as
banks, industry, and other business sectors, very few studies have been conducted on the
effectiveness of SHRM practices in academia, with particular reference to the Pakistani academic
sector. To fill this gap, both empirical and conceptual studies on the influence of SHRM practices
on job satisfaction and organizational commitment may be conducted. Based on the findings of
previous studies the following hypothesis on the influence of SHRM on job satisfaction has been
developed:
H2: SHRM practices have a positive and significant influence on job satisfaction.
Methodology
This study adopts a systematic literature review approach to examine the impact of Strategic
Human Resource Management (SHRM) practices on job satisfaction and organizational
commitment. The methodology involves identifying, analyzing, and synthesizing existing research
on SHRM practices, specifically focusing on training and development, performance appraisal,
and compensation and rewards.
Inclusion and Exclusion Strategy
To maintain the relevance and rigor of the review, the following inclusion and exclusion criteria
were applied:
Inclusion Criteria
Studies published in peer-reviewed journals.
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Research that examines SHRM practices in relation to job satisfaction and organizational
commitment.
Studies conducted in various organizational contexts, including corporate, industrial, and
academic institutions.
Empirical and conceptual studies that provide insights on the impact of SHRM practices on
employee attitudes and organizational performance.
Exclusion criteria
Non peer-reviewed articles, conference proceedings, and opinion pieces.
Research focusing on HRM practices without strategic perspective.
Studies unrelated to job satisfaction or organizational commitment.
Conceptual Framework
SHRM
Practices
Training and
Development
1. Job Satisfaction
Performance 2. Organizational
Appraisal Commitment
Compensation
and Reward
Conceptual Framework and Variables Description
According to the hypotheses developed based on the findings of the reviewed studies, a
Conceptual Framework was constructed to illustrate the relationship between SHRM practices and
employee attitudes. The framework identifies training and development, performance appraisal,
and compensation and rewards as independent variables,with job satisfaction and organizational
commitment as dependent variables.
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Conclusion
This literature review highlights the critical role of SHRM practices in enhancing job satisfaction
and organizational commitment. Training and development, performance appraisal, and
compensation and rewards are key factors influencing employees attitudes and performance. The
review underscores the need for further empirical research on the impact of SHRM practices in
academic institutions, particularly in Pakistan. By implementing SHRM practices, organizations
can foster a motivated, committed, and high-performance workforce.
Future Research Directions
While this literature review provides significance insights into the impact of SHRM practices on
job satisfaction and organizational commitment, several research gaps remain that warrant further
investigation:
1. Empirical Research in Academic Institutions
Most existing studies focus on SHRM practices in corporate and industrial settings. However,
limited research has examined how these practices influence employees in academic institutions,
particularly in Pakistan. Future studies should conduct empirical investigations to explore how
SHRM practices can enhance jobs satisfaction and organizational commitment in universities.
2. Longitudinal Studies on SHRM Practices
Much of the current literature relies on cross-sectional research designs, which provide a snapshot
of SHRM impact at a single point of time. Future research should adopt longitudinal studies to
assess how changes in SHRM practices affect employee attitude and organizational performance
over time.
3. Role of Technology in SHRM Implementation
With advancements in HR technology, such as AI-driven recruitment and automated performance
appraisal system, there it a need to explore how digital transformation in HRM influences job
satisfaction and organizational commitment. Future studies should investigate the role of HR
analytics, digital performance management tools, and virtual training programs in SHRM.
4. Sector Specific SHRM Strategies
While this review highlights general SHRM practices, different sectors may require tailored HR
strategies, future research should examine sector-specific SHRM approaches to understand how
customized HRM strategies can enhance employee satisfaction and commitment in different
industries.
5. Comparative Analysis Across Cultural Contexts
Given the globalization of organizations, comparative studies between different cultural and
economic context are essential. Future research should analyze how SHRM practices impact
employees in various cultural settings to identify best practices application across diverse work
environment.
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6. Policy Implication and Practical Application
Further research is needed to bridge the gap between theoretical insights and practical applications
of SHRM. Studies focusing on policy formulation, HR interventions, and best practices for
implementing SHRM strategies in organizations would provide valuable guidance for HR
practitioners and policymakers.
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