DefinePK

Abstract

The objective of the study is to analyze the role of human resource practices on organizational performance with the moderating effect of Islamic principle application in the Islamic banks of Pakistan. Responses from 242 employees of Islamic banks located in Karachi, Pakistan, were collected using convenience sampling technique while PLS-SEM has been employed for data analysis using Smart PLS version 3.2.8. Results showed that employee involvement, performance appraisal system, and selection and recruitment have significant positive relationship with organizational performance; whereby, compensation, and training and development have no relationship with organizational performance. Furthermore, compensation. Training & development, selection and recruitment has improved whereas performance appraisal system has reduced its relationship with organizational performance due to the moderating effect of application of Islamic principles. Employee’s involvement may have reduced ,i.e., it showed insignificant impact on organizational performance due to the moderating effect of Islamic principles’ application. We suggest the managers of islamic banks to provide greater focus on the training and development side of the organization. This is so because, when a company provides relevant training to the employees, only then they would be able to perform their job in a proper way and as per the expectations of the management. Application of Islamic principles need to be coupled with providing monetary benefits as it motivates them to perform more actively and accurately.``