The Link between HRM Practices and Organizational Performance Based on System Dynamics Modelling Approach: A Conceptual Framework

In recent years, the use of performance measurements (PM) has been the primary concern of many organizations to improve overall organizational performance. One of the critical factors to increase organizational performance is increasing the contributions of high-performing individuals. The challenge is how to enable employees to be high-performing individuals through the implementation of HRM practices. However, there is a limited understanding of how HRM practices enhance overall organizational performance. Indeed, the alignment between strategy used in HRM practices and organizational strategic objectives is necessary. This paper aims to develop a conceptualization model in the form of a causal loop diagram that supports further research in analyzing the HRM practices in terms of contribution to organizational growth and development. The causal loop diagram developed through this research will help the greater extent of relevant researchers and management's implication using a system dynamic approach to achieve organizational goals and objectives by implementing strategic HRM practices.