Introduction

Strategic human resource management (SHRM) research emphasizes the involvement of human resource (HR) practices that improve the performance of organizations and lead to competitive advantage (Collins and Clark, 2003). To have competitive advantage, the human resource management (HRM) shall be strategic companion with stimulus in organisational strategy and HR strategic decision-making (Barney & Wright, 1997). Globalisation of business and the resulting increase in competitive pressures have resulted in HR professionals playing a more strategic role in aligning HR practices with business strategy (Raub et al., 2006). Experts emphasize the strategic role of HR in strengthening the organizational value of the human resource management system and its input toward attaining organizational strategic goals (Pfeffer, 1994; Ulrich, 1997). Notwithstanding the importance placed on HR professionals as strategic allies, current reviews suggest that there has been little effort to assess the strategic contribution of the HR role (Cabrera & Cabrera, 2003). This is a significant research gap, particularly as studies show that firms remain primarily concerned with efficiency of HRs (Becker & Gerhart, 1996).

SHRM has done a lot of research that demonstrates that implementing high-performance human resource practices (HPHRP) improves organisational performance (Becker & Gerhart, 1996; Huselid, 1995). However, the link between an HR professional’s strategic position and the successful implementation of HPHRP has yet to be discovered (Chang & Chi, 2007). While earlier research suggests that HR professionals’ strategic participation in HRM policy implementation is crucial (Hailey et al., 2005), limited studies have examined, or recognised, the link between the literature on HPHRP and HR professionals’ strategic role. However, no comparative studies with respect to HPHRP have been found.

‘High-performance human resource practices have been defined as systems of HR practices planned to upsurge organizational efficiency through creating conditions that help employees become decidedly involved in the organization and work firm to attain its goals’—Whitener (2001). Training, performance appraisal, information exchange and involvement and participation are all examples of HPHRP (Jiang et al., 2015; Messersmith et al., 2011; Rabl et al., 2014). Many research studies have been conducted over the last decade to examine the relationship between HPHRP and other employee outcomes including work satisfaction, organisational commitment and citizenship activities (for example, Alfes et al., 2013; Boon et al., 2011; Messersmith et al., 2011; Mostafa & Gould-Williams, 2014). On the basis of the accrued research endorsement, there can now be minor disagreement that HPHRP are related to required employee outcomes.

Employees are a significant source of competitive advantage that is difficult to emulate in high-performance work systems (HPWSs), and workers are capable of continual improvement and will perform at higher levels if they are driven to do so (Pfeffer, 1998). In order to gain success and to achieve competitive advantage, it is very crucial for any organisation to manage its HRs and this principle applies equally and perhaps more aptly to service institutions like banks. With the influx of new participants into the banking industry, each armed with innovative products, the system as a whole and older banks in particular, began to experience a widening gap in HR skill sets. On the strength of a market-related remuneration structure combined with technology-supported delivery methods, the new private sector banks and foreign banks were able to acquire younger and more skilled people with newer skills and competencies, giving them an advantage over their public sector bank (PSB) contemporaries.

Thus, this study makes an attempt to study HPHR practices on the banking sector in Ithe ndian context specifically in Rajasthan considering both public and private sector banks.

Literature Review

Difference Between Public and Private Sector Banks Regarding HPHRP

Numerous studies have earlier revealed significant differences between public and private sector banks in terms of HPWS. Nawaz (2020) discovered a link between several HRM practices and employee engagement, which includes performance appraisal, rewards and recognition, career promotion and recruitment in private banks, in Chennai. Gulzar (2018) analysed HR practices in Indian PSBs in Jammu and Kashmir and their impact on organisational performance. HRM methods of public and private sector banks in Telangana state were compared by Ramakrishna and Rao (2017). They found that HRM procedures in Indian private sector banks are superior to those in Indian PSBs. Employee engagement was discovered as intervening variable by Muduli et al. (2016) in HPHRP and organisational performance link in the banking sector. Chahal et al. (2016) deliberate the influence of perceived high-performance HRM practices on employee business performance in India’s telecoms sector in Jammu and Kashmir. The study looked at thorough training, performance management and other HRM methods. Dutt (2016) investigated if sales training programmes improve the expansion of India’s private sector banks. A systematic questionnaire was used to collect data from 137 private sector bank salespeople in Dehradun, India. Training programmes were found to have a considerable impact on organisational performance. The role of employee engagement and rewards to employees was investigated by Ghosh et al. (2016) among private bank employees in India on 176 respondents from banks in India. Employee recognition and reward were found to be a substantial predictor of employee engagement, which leads to improved bank performance. In the Indian banking sector, Jain and Jain (2015) showed evidence of training effectiveness. The authors assessed the efficiency of training at India’s public, private and foreign banks. The findings suggest that significant levels of training participation were discovered in the banks chosen for the study. Lakkoju (2014) investigated the nature and scope of HRM practices in the Indian commercial banking industry. The goal of the study was to find out how management and non-managerial staff at the banks viewed HRM practices. The study demonstrated significant differences in the perception of management and non-managerial employees. Jeet and Sayeeduzzafar (2014) investigated the impact of HR practices, such as training, performance appraisal, compensation, employee participation and teamwork on job satisfaction in HDFC Bank Limited and found that all HR practices, except employee participation, have a significant impact on job satisfaction. In Indian banks, Khera (2010) discovered a substantial relationship between employee productivity and HR procedures, such as selection, employee perks, salary, training and staffing.

In their study, Quresh et al. (2010) found that all investigated variables had a positive relationship and impact on bank financial performance, but that selection, training, compensation and employee participation are the most important contributory practices. Employees at private banks were more satisfied with pay, recognition and working hours than employees of PSBs (Khalid & Irshad, 2010). Employees in the public sector, on the other hand, were happier with job security than bank employees in the private sector. In Tiruchirappalli District, South India, Karthikeyan et al. (2010) analysed the existing practices of many components of training programmes and their effectiveness in selected public and private sector banks. The primary goal of this research is to assess an employee’s present efficacy in carrying out their activities and responsibilities in accordance with business policies and procedures. Job satisfaction in India’s public and private banks was studied by Shrivastava and Purang (2009). The study enlisted the participation of 340 bank employees. According to the study, bank employees in the private sector had superior job satisfaction in terms of compensation, social possibilities and opportunities for advancement. Employees of PSBs, on the other hand, reported higher job satisfaction and job security than employees of private sector banks. Bajpai and Srivastava (2004) used a structured questionnaire to investigate the level of job satisfaction among 280 bank employees in India’s public and private sector banks. According to the research, private-sector bank employees had higher job satisfaction than public-sector employees in terms of compensation, social and development elements of employment.

Thus, based on past studies, the following hypothesis is formulated:

H₁: There is a significant difference between public and private banks with reference to HPHRP.

Objectives of the Study

• To study the HPHRP of public and private sector banks.
• To find out the difference between the public sector and private sector banks concerning HPHRP to benchmark.

Research Methodology

Data was drawn from a sample of 500 respondents (managers) from four public and four private sector banks in Rajasthan, India, which includes managerial staff. The multi-stage sampling method is used in this study.

Measure

To measure HPWS, this study has used the adapted version of HPHRP scale as suggested by Sun et al. (2007). It consists of 29 questions, which solicited information regarding HPHRP and questions were measured on a Likert scale ranging from (5) strongly agree, (4) agree, (3) can’t say, (2) disagree and (1) strongly disagree. Several responses were used after reversing the value of the question so that higher values indicate higher perceived effectiveness.

Reliability

HPHRP was measured using 29 items scale developed by Sun et al. (2007). The scale had the following 10 dimensions: (1) selective staffing, (2) extensive training, (3) internal mobility, (4) employment security, (5) clear job description, (6) results-oriented appraisal, (7) incentive reward, (8) participation, (9) team work and (10) flexibility. The Cronbach’s alpha for the 29 items scale was 0.803.

Demographic Variables Frequencies

The frequencies of occurrence of certain variables are determined, from which the percentage and cumulative percentage are calculated. The frequency of demographic variables is as follows:

Gender

Respondents were asked to mention their gender. The majority of the respondents were male (n = 425), representing 85% of the sample, while females (n = 75) represented 15%.

Education

Respondents were asked to mention their education qualification. Education qualification is divided into the following three categories, that is, graduation, postgraduation and others. Majority of the respondents were postgraduate (n = 295) representing 59%, graduate (n = 160) representing 32% and others (n = 45) representing 9%.

Bank Type

Four PSBs and four private sector banks, as shown in Table 1, were selected for data collection. All the selected banks participated in the survey, but the response rate was different for each bank. The overall response rate was 83.33%, which is considered a very good response rate.

 

Results and Discussion

Factor Analysis

Factor analysis was performed for the 29-item scale of HPHRP. One variable (F1) having a low correlation was dropped; therefore, it was eliminated. Again, factor analysis was applied. Further results of the correlation matrix found all the statements to be correlated with each other. The result of the Kaiser–Meyer–Olkin (KMO) measure of sampling adequacy of statements under study is 0.808, showing that statements can be subjected to factorability. The significance level of Bartlett’s test of sphericity is 0.000, which reveals that the variables are significantly correlated and fit for factor analysis.

On the basis of principal component analysis, eight factors were extracted. All the statements with factor loadings greater than 0.5 were considered significant.

The 28 items clubbed in 8 sets of factors depicting different dimensions of HPHRP had very strong rotated factor loadings. The eigenvalue of participation and teamwork was 2.9; for internal mobility, it was 2.9; for extensive training, it was 2.8; for selective staffing, it was 2.5; for result-oriented appraisal, it was 1.8; for employment security, it was 1.5; for incentive rewards, it was 1.5; and for a clear job description, it was 2.3. All eight factors accounted for 66.76 variances.

Independent Samples t-Test

An independent sample t-test of the variables of HPHRP is studied to ascertain whether the means of the two groups (public and private sector banks) are statistically different from each other.

Table 2 divulges that in six out of eight HPHRP the mean score of the private sector is greater than that of PSBs. These factors are participation and teamwork (private = 4.01, public = 3.95), extensive training (private = 3.95, public = 3.94), selective staffing (private = 4.19, public = 3.94), result-oriented appraisal (private = 4.05, public = 3.88), employment security (private = 3.99, public = 3.79) and incentive rewards (private = 3.49, public = 3.01).

 

 

When applying a t-test to the differences between the mean scores of two groups, as shown in Table 3, it is noted that in five out of eight HPHRP, the differences were statistically significant at the 95% level. The level of significance, thus, was 0.05 or lower for five out of the eight HPHRP. A statistically significant difference existed in the following five HPHRP that related to internal mobility (p = .029), which indicates that the hypothesis is accepted and the significant difference between private and PSBs is related to internal mobility.

 

 

Selective staffing (p = .000) indicates that the hypothesis is accepted, suggesting a significant difference between private and PSBs related to selective staffing. Result-oriented appraisal (p = .014) results indicate that there exists a significant difference between private and PSBs related to result-oriented appraisal. Thus, the hypothesis is accepted.

Employment security (p = .03) results reveal a significant difference between private and PSBs related to employment security. Thus, the hypothesis is accepted. Incentive rewards (p = .000) indicate the significant difference between private and PSBs. Thus, the hypothesis is accepted.

The results indicate that public and private sector bank managers have different perceptions about HPHRP. Thereby signifies the significant difference between private and PSBs related to HPHRP. Thus, the hypothesis is accepted. It is worth noting that in 18 out of 28 HPHRP items, the mean for private sector banks is higher than PSBs. When applying a t-test on the differences between the mean scores of the two groups, it is noted that in 13 out of 28 items, the differences were statistically significant at the 95% level. The level of significance, thus, was 0.05 or lower for 13 out of the 28 items. Thus, the hypothesis is accepted, which means that there exists a significant difference between private and public sector banks with reference to HPHRP like internal mobility, selective staffing, result-oriented appraisal, employment security and incentive rewards.

Public-sector banks are performing better than private-sector banks with respect to ‘internal mobility’. Public-sector banks place an emphasis on internal transfers, which leads to internal mobility. When public-sector employees perceive that their organisations want them to develop within the organisation through internal mobility and that their future is also secure, internal mobility increases. Therefore, internal mobility is found to be greater in public-sector banks than in private-sector banks.

Promotion policy is well-defined in public-sector banks and is based on seniority, whereas in private sector banks, employees do not feel secure in the organisation, and the promotion policy is also not clear.

Private sector banks are performing better than PSBs regarding selective staffing, as employee potential, past experience, training, etc., are given paramount importance during the selection process. On the other hand, the selection process is based on a written examination and is very standardised. These findings are consistent with a previous study conducted by Khera (2010). In Indian banks, the study discovered a substantial relationship between employee productivity and HR procedures, such as selection, employee benefits, training, compensation and staffing practices.

The result of the study found that there is no significant difference between private and public sector banks with reference to HPHRP factors like extensive training, clear job description, and participation and teamwork. The possible explanation for extensive training would be that now the major emphasis of Indian banks is to use their training systems and establishment to the fullest extent possible. Nowadays, banks are keen on encouraging their staff to take new courses. Employee training has become increasingly important as banking jobs have become more complex. Employee training is not only a desirable activity in a fast-changing society, but it is also an activity to which an organisation must devote resources if it wants to maintain a viable and knowledgeable workforce (Karthikeyan et al., 2010).

Gyawali (2017) looked into how employee participation affects job happiness, employee perceptions of fairness and organisational commitment. Employee participation has the highest correlation coefficient of the three factors, indicating that it has the greatest impact on organisational commitment. In order to gain success, organisations have realised the significance of team building approach. Managers encourage teamwork to improve cohesiveness, skills and knowledge, which leads to satisfaction and better results (Hanaysha, 2016).

Conclusion

In terms of HPWS, the study found a significant difference between public and private sector banks with reference to practices like internal mobility, selective staffing, result-oriented appraisal, employment security and incentive rewards. The result of the study found that there is no significant difference between private and public sector banks with reference to HPHRP, like extensive training, clear job description and participation and team work. This situation needs attention, especially in PSBs. Due to shifting client demands and rapid technological innovation, PSBs will need to rethink their present HR practices. To have a better understanding of how public and private sector banks operate, examining the business scenario in which they operate is very essential. It will aid in determining the reason for the difference between public and private sector banks.

The findings of this study cannot be extended to all types of service organisations, as only banking sector was included in the sample. There is, however, scope to consider HPHR practices in other service settings. Without a doubt, examining samples from diverse settings can help us better understand the dynamics of HPHR practices. The present study mainly emphasised on quantitative data, although qualitative data were also collected but they were used to check the validity of the questionnaire. Understanding of the HPHR practices would be greatly enhanced if supplemented by qualitative data. Therefore, it opens the door for further studies to collect qualitative data to have better insight about HPHR practices.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

ORCID iD

B. S. Rathore  https://orcid.org/0009-0000-5212-2323