Impact of Human Resource Management (HRM) Practices on the Performance of Call Center in Lahore, Pakistan: Evaluating Employee Staffing, Satisfaction and Reward

Introduction

Human Resource Management (HRM) comprises tasks pertaining to the coordination, management, and allocation of employees in an organization. It focuses on the management and developmentof human capital. HRM encompasses a wide range of activities that are aimed at the effective utilization and maximization of employees' potential to achievethe organizational goals. It plays a vital role in retaining, attracting,and developing talent as well as constituting a positive work environment conducive to high performance and employee engagement.

The impact of HRM practices on employee performance has gained significant attention in recent years, particularly in the context of Pakistan. Call centers are a vital part of the service industry, heavily relying on their employees' performance and satisfaction to ensure operational efficiency and customer satisfaction. The current study aimed to explore the influence of three key HRM practices, namely employee satisfaction, staffing, and reward systems, on employee performance in Pakistan. By evaluating these aspects, valuable insights may be gained into the strategies that organizations could adopt to enhance their call center operations in order to achieve optimal performance. The effective implementation of HRM practices including targeted recruitment and selection, training and performance, development, management, and workforce planning, significantly affects the employee performance by improving employee performance, reducing turnover, and enhancing customer satisfaction (Bhatia, 2019; Budhwar et al., 2019).

Effective HRM practices contribute to employee satisfaction, employee engagement, rewards, and compensation while aligning the workforce with strategic organizational goals. In an ever-changing business landscape, HRM continues to evolve and adapt to new challenges and opportunities, ensuring that the organizations mayeffectively manage their most valuable asset.

On the same board, call centers have become an integral part of modern business operations, providing crucial customer support as well as sales and services. In Pakistan, call center industry has witnessed a remarkable growth and has emerged as a significant contributor to the country's economy. With its large and young English-speaking population, Pakistan has attracted both domestic and international companies to establish call centers and outsourcing operations within its borders. Call centers in Pakistan serve diverse sectors including telecommunications, banking and finance, healthcare, e-commerce, and technology. They act as a vital interface between organizations and their customers, handling inbound and outbound calls, responding to inquiries, resolving issues, and providing a wide range of customer-centric services. These call centers operate across different time zones, catering to customers from various regions around the globe. The challenges faced by call centers in Pakistan, such as high employee turnover, language proficiency, and cultural diversity, may be effectively addressed through the implementation of strategic HRM practices.These practices include tailored recruitment and selection strategies, language and cultural training programs as well as employee engagement initiatives, leading towards improved employee performanceand customer service delivery (Bhatia, 2019; Budhwar et al., 2019)

Problem Identification and Problem Statement

The call center industry heavily relies on its workforce to deliver quality customer service and to maintain operational efficiency. However, call centers may often face challenges per taining to employee staffing, satisfaction, and retention. These challenges may considerably impact the overall performance and success of call centers. Therefore, it is crucial to observe the influence of HRM practices on call centers, specifically focusing on employee staffing, satisfaction, and reward system. The frequently demanding setting of call centers may result in employee burnout, increased turnover, and higher rates of absenteeism (Poddar &Madupalli, 2012). For instance, it is worth noting that beyond the correlation among employee satisfaction and client satisfaction, customer feedback (including both acknowledgment and criticism) may trigger the feelings of contentment, dissatisfaction, or emotional conflict among employees (Little & Dean, 2006).

Rewards may act as a positive reinforcement, motivating call center agents to perform at their best and achieve their goals. Intrinsic and extrinsic rewards mayenhance employee engagement and job satisfaction, leading to higher levels of productivity and performance (Chen, & Silverthorne, 2008). Insufficient staffing in call centers may lead towards long waitinghours, increased customer frustration, and lower service quality (Bolander, 2019; Levy, 2019).

The current study aimed to assess the impact of HRM practices on employee performance, taking into consideration the factors of employee staffing, satisfaction, and reward system.

Research Objectives

The main objectives of thecurrent studyincluded the determinationof the impact of HRM practices on employee performance metrics,such as:

RO1: To examine the relationship between employee staffing and employee performance.

RO2: To examine the relationship between employee satisfaction and employee performance.

RO3: To examine the relationship between employee reward and employee performance.

Significance

The current study aimed to investigate the impact of HRM practices, such as employee staffing, employee satisfaction, and employee reward on employee performance. The study was based ona longitudinal research since the data was required to determine the relationships between these variables, especially employee staffing, employee satisfaction, and employee reward. Therefore, the data would be helpful forcall centers to improve their organizational performancein order to improve the country's economy. The HRM practices may improve when the results would be applied in call centers of Pakistan.

Literature Review

Organizational Performance

Organizational performance is significant for both scholars and practitioners in the field of public administration, particularly in the context of new organizational reforms and the adoption of new public management principles (Cooper, 2016). Performance management stands out as a pivotal element that should be measured and actively implemented by the organizations. Employee well-being, seen as a measure of organizational effectiveness, is assessed through dimensions, such asemployee commitment, job satisfaction, and work-life balance satisfaction (Baptiste, 2008). The multifaceted nature of organizational performance, encompassing sustainability, profitability, stakeholder satisfaction, and adaptability to environmental changes, makes its assessment complex. On the other hand, financial metrics are often conceptualized, their practical implementation remains challenging (Anwar, 2017). The call center industry is a distinctive service-oriented sector, predominantly reliant on voice-to-voice interactions between employees and customers via telephone. Generally, customer satisfaction is lower in call centers as compared to traditional frontal service settings (Bennington et al., 2000). In this industry, call center operators serve as the primary interface connecting the organization with customers. These employees manage diverse tasks simultaneously, requiring ambidextrous behavior to maintain service quality, resolve issues promptly, and handle a high call volume efficiently (Jasmand et al., 2012).

Call centers adopt two main models, that is, in-house and outsourced. In-house centers operate within the same organization, while outsourced centers serve external companies that choose to contract out their call center operations. Classification may also be based on the type of telephone calls, that is, inbound or out bound. The employed managerial strategies often depend on the contract type between the client,company, and the outsourced call center. Optimal equilibrium between employee activities and efforts is often achieved through partnership contracts (where the call center pays a user fee and shares costs) and pay-per-call plus shared-cost models (where the center earns for successful call resolution and shares expenses) (Zhou et al., 2008). Despite variations, the overarching aim of call center managerial strategies is not merely to establish a causal link between service quality and customer satisfaction, however, to define desired outcomes. Customer-centric approaches remain the preferred managerial orientation for organizations aiming to uphold service quality and customer contentment (Curry & Lyon, 2008).

Human Resource Management (HRM) Practices

HRM practices play a pivotal role in improving the organizational performance. Moreover, they encompass the delegation of responsibilities to employees and team, fostering incentives for knowledge-sharing, individual accomplishments, and collaborative benefits. These practices serve as conduits to shareinformation within the organization pertaining to strategies, such as job rotation and knowledge exchange. Moreover, they facilitate the creation of both internal and external training prospects for employees. Lastly, HRM practices aid in executing retention, recruitment, and promotion of policies that fulfill the organization's HR requirements (Foss &Lyngsie, 2011). Since the organizations increasingly recognize the significance of HRM implementations, management professionals are increasingly invested in leveraging these practices to positively influence employee conduct, harness their capabilities for innovative business processes, and realize organizational objectives (Chen et al., 2009).

Previous studies have extensively examined the link between HRM practices and organizational performance, generally yielding supportive outcomes. Further research delves beyond this connection to uncover the mechanisms through which HRM practices impact the organizational performance (Paauwe&Boselie, 2005). Yet, reviews of the current research have raised concerns regarding the methodological rigor, suggesting that the assumptionof an unequivocal positive relationship between HRM practices and organizational performance is premature. These reviews advocate for more rigorous research designs to establish this relationship conclusively (Wood, 2005).

HR plays a crucial role in diverse business entities. International HRM contributes to organizational transformation and innovation, impacting both appearance and structure. The influence of HR department on organizational growth extends to efficiency and employee training, with benefits provided to managers and production workers alike (Miiro et al.,2016).Additionally, HR also shapes policies, practices, and corporate culture. HRM activities influence the organizational creativity and information managementcompetency (Lombardi et al., 2020). Novel models to definesuccess encompass review, organizational competency, performance assessment, and expanding job measurement approaches.

Employee Staffing

Staffing encompasses the comprehensive process to attract, select, and retain proficient individuals in order to fulfill organizational objectives (Ployhart, 2006).Staffing, within the realm of HRM, involves the identification, attraction, hiring, and retention of individuals equipped with the requisite knowledge, skills, and capabilities to excel in present and future organizational roles. Staffing serves as a mechanism through which organizations engage in the recruitmentand selection of candidates possessing higher-quality and versatile human capital (Hedge et al.,2012). Essentially, recruitment and selection constitute two phases of the staffing process. Employee staffing encompasses the identification, assessment, and assignmentof various roles to individuals (Gomez, 1998). The existing literature underscores the positive correlation between the implementation of an effective staffing process and organizational performance(Murphy et al., 2018).

In multilevel staffing models, staffing contributes to enhanced productivity and profit growth (Ployhart et al.,2009). Elevated employee performance levels subsequently lead towards increased firm productivity by reducing costs and augmenting output (Lepak, 2006; Podsakoff et al., 2009).

The staffing pattern of nonprofit organizations is decisive to the quality of services that these organizations provide. Research report has shown that a higher number of nonprofit agencies are recruiting employees mainly on a contract or part-time basis (Reed & Howe, 1999).

H₁. Employee staffing has a positive impact on the employee performance.

Employee Satisfaction

Employee satisfaction plays a significant role within the organizations, encompassing various factors that contribute to its complexity. The elements of basic necessities, exciting components, and performance-related aspects collectively shape employee satisfaction. The fundamental essentials are pivotal in averting employee dissatisfaction. Exciting elements elevate customer satisfaction, while performance factors yield contentment when performance standards are high (Kurt, 2007).

The interrelation between customer and employee satisfaction is closely tied to service quality, a factor that significantly impacts business profitability. Service quality has a direct positive influence on customer contentment, and to some extent, employee satisfaction correlates with corporate profitability. Employee well-beingcontributes to the enhancement of business profitability, strengthening of organizational performance, and elevation of product and service standards. Notably, in sectors, such as call center industry, employee satisfaction is indispensable toachieve quality and success (Yee et al.,2008).

Employee satisfaction epitomizes the amalgamation of emotional responses rooted in the delta between expected and actual outcomes (Cranny et al.,1992). It also plays a vital role to boost efficiency, reduce turnover intentions, enhance creativity, and foster commitment. Hence, the significance of employee satisfaction should not be undermined, yet only a few organizations treat employee satisfaction with due seriousness (Syptak et al.,1999).

Employee satisfaction signifies a state of positive emotional well-being resulting from the evaluation of an employee's experiences within the organizational milieu (Rollinson, 2005). This contentment extends to job satisfaction and significantly influences an employee's decision to either stay or seek alternatives elsewhere (Robinson et al., 2006). The correlation between employee satisfaction and reduced turnover is well-established (Tett& Meyer, 1993).

Employee satisfaction is closely tied to individual needs and expectations atworkplace. This interplay among various demographic groups influences personal motivation, satisfaction levels, and job performance (Robinson et al., 2006).Assessing these needs and expectations encompasses intrinsic and extrinsic motivations, as well as relational motivations.

H₂. Employee satisfaction has a positive impact on employee performance.

Employee Reward

A reward system encompasses an organization's processes and practices designed to provide integral recognition to its employees based on their contributions, skills, competence, and market value. It is created in alignment with the organization's philosophy, strategies, and policies, encompassing various arrangements, such as processes, practices, structures, and procedures. These arrangements are aimed to establish and maintain appropriate levels of compensation, benefits, and other forms of rewards for employees (Armstrong, 2001). In a similar vein, a reward system serves as an incentive bestowed upon employees to encourage their performance (Obisi&Anyim, 2003).

The concept of a reward system can be defined as the strategic formulation, implementation, and operationalization of policies and systems aimed to aid the organization in order to achieve its objectives. This achievementis made possible by acquiring and retaining necessary personnel while simultaneously enhancing their motivation and dedication (Robert et al., 2005). Furthermore, the objectives of a reward system encompass attracting, retaining, and motivating the employees. Additionally, it also aids in fulfilling short-term organizational goals by ensuring access to a skilled, competent, committed, and motivated workforce. Reward system also addresses employees' expectations for equitable, fair, and consistent treatment in relation to their work and contributions (Johnson, 2010).

An effective reward program is typically composed of three things: immediate, short term, and long-term rewards. Immediate recognition is granted for exemplary performance, short-term recompenses could be administered on a monthly or quarterly basis to acknowledge the ongoing achievements, and long-term rewards arebestowed to acknowledge the employees' loyalty and dedication over an extended period of time (Schoeffler et al., 2005).

Rewards are bestowed upon employees repeatedly to highlight and acknowledge their exceptional performance. These rewards encompass both verbal recognition from their immediate supervisor and tangible incentives. Instant rewards are allocated on a monthly or quarterly basis, contingent on an individual's performance. Such rewards might contain monetary bonuses or special gifts to acknowledge their brilliant achievements. These rewards strategically contribute to retain top-tier human resources (Yokoyama, 2010).

Reward management system serves as a fundamental component within the realm of HR, functioning as a strategic collaborator with organizational management. Its significance extends to shaping work outcomes. Notably, the impact of reward management systems on a call center's ability to attract, retain, and encourage high-potential employees is profound, ultimately leading towards heightened levels of performance (Gungor, 2011).

One of the prevalent forms of reward system is the remuneration approach.This approach is often implemented to incentivize employees towards improved quality performance, heightened productivity, enhanced retention rates, the cultivation of service-oriented behavior, and the prevention of corruption. Remuneration may encompass various forms including monetary compensation, such as salary, fixed andvariable allowances, incentives, and supplementary benefits. It constitutes the comprehensive compensation granted to employees in exchange for their rendered services (Agustiningsih et al., 2016).

In the contemporary landscape, rewards play a key role in strengthening job satisfaction and fostering employee commitment, regardless of the organizational context. Collectively, the assortment of benefits an employee receives from their workplace contributes to the factors influencing rewards (Malhotra et al.,2007).

H₃: Employee reward has a positive relationship on employee performance.

Research Frameworks

In the current study, employee performance was placed as a dependent variable and the other three variables, such as employee staffing, employee satisfaction, and employee reward were placed as independent variables. The research framework shows a relationship between these dependent and independent variables. It shows that the three independent variables are affecting the single dependent variable.

Figure 1

Conceptual Framework

Methodology

Methodology is an important part of a research which includes the details of methods and approaches engaged to conduct the investigation. The research report's methodology section acts as a road map to help researchers undertake their studies.

Research Design

Research methodology encompasses a range of methods that play a key role in shaping the practical execution of research endeavors (Krathwohl& Smith2005). The current study was conducted using the survey method in Lahore, Pakistan. The survey questionnaire was distributed primarily within the region of Lahore. A time frame of two weeks was chosen as a reference point to distinguish between early and late responses. This two-week duration was considered appropriate to allow participants have sufficient time to fill the questionnaire. Data was collected through self-administered questionnaires distributed among employees working in call centers in Lahore. According to Shank (2002), qualitative research is characterized as a structured and empirical exploration of significance. The term "systematic" underscores a methodical and organized approach that adheres to established guidelines acknowledged within the qualitative research sphere. The research follows rules collectively accepted by members of the qualitative research community

Population

A population constitutes a collective individuals, items, units, or subjects that serve as the focus of a study. This population might encompass a finite or infinite number of entities (Lewis et al., 2003). Table below showsemployee or staff ratio in different call centers in Lahore.

Table 1

Population of the Study

Sample Size

Sample size indicates the number of respondents based on the estimated total population. A larger sample size enhances the possibility to achieve accurate results. A suitable sample size should not be less than 377 respondents, according to the sample size table published by Krejcie and Morgan (1970), which the current study employed.

Unit of Analysis

It is significant to determine the unit of analysis before initiating the process of data collection. Unit of analysis may vary based on the nature and context of given study.It may comprise individuals, groups, and organizations (Sakaran& Bougie, 2016). Employees of call center were the unit of analysis in the current study.

Data Analysis Strategy

The data analysis of the current study was conducted by using SPSS. SPSS was used to describe the descriptive analysis in order to determine the general understanding of respondents. Moreover, it was also used to summarize the data,to make presentations in tabular form,as well as to measure the frequency of the occurrence of outcomes. SPSS, a widely utilized software, serves as a prominent tool for statistical analysis within the realm of social sciences.

Results

This identifies the accurate response rate, descriptive analysis, descriptive statistics,and test of hypothesis. It comprises study findings, derived from the data analysis, utilizing the quantitative approach. Figures and tables are used to display research findings and data analysis.

Cronbach's Alpha

This study employed the Cronbach Alpha technique to assess the reliability. Table 2 presents the internal consistencies of study variables which were excellent

Table 2

Cronbach's Alpha

Response Rate

Various departments of call centers in Lahore provided the evidence. The surveyanceof 306 respondents was deemed appropriate based on the study's design.

According to Walker and Hamilton (2009), the response rate is determined by multiplying the number of people who completed the questionnaire by the sample size used in the research.The researchers received all 306 distributed questionnaires back immediately, reaching the desired 100% response rate.One hundred and forty (140) out of 306 distributed questionnaires were used yielding avalid response rate of 45.75%.

The questionnaires were reviewed after the completion process. No missing responses were found during the data entry after undertaking necessary precautions. The ratio of response rate was 100%,while there were no unreturned questionnaires. The number of final usable questionnaires were 140 and each of them were valid.Therefore, the ratio of valid response rate was also 45.75%.There were 4 missing values of employee performance, 47 missing values of employee staffing, 41 missing values of employee satisfaction, and 74 missing values of employee reward in questionnaires. The respondents filled the questionnaires willingly.

Descriptive Statistics

The gathered data was entered into the SPSS for analysis and descriptive statistics test was employed to examine this data. The data gathered from the target population of call centers was summarized using the descriptive test. It is necessary to examine the respondent profile for a clear understanding of the outcomes. The profiles of the respondents are presented in in Table below. Here, 140 respondents were analyzed in total.

Table 3

Demographics

Regression

Evaluating the measurement model begins with the determination of R-squared (R²), which can vary in its interpretation based on the specific field of study (Sarstedteret al., 2014). In this regard, researchers like Hair et al. (2010) have proposed that an R² value of 0.75 can be considered high. However, differing disciplines might view a value of 0.20 as indicative of a high level of model fit. Another perspective, as outlined by Chin (2010), suggests that R² values of 0.67, 0.33, and 0.19 signify significant, moderate, and weak relationships, respectively.

Cohen (1988) introduced a guideline where an R² value of 0.26 or higher is deemed significant, 0.13 is considered moderate, and 0.02 is considered weak by his criteria. In order to assess the model's predictive capacity for future outcomes, the coefficient of determination or R-star (R*) is utilized (Hair et al., 2013).The comprehensive influence of exogenous variables on the endogenous variable is determined by R², as suggested by Hair et al. (2013). Effect size value ranges between 0 and 1. Hair et al. (2013) and Cohen or the two minimal acceptable standards for evaluating R2, or the coefficient of determination (Cohen, 1988).This specific study was inspired by Cohen (1988), who claimed that significant coefficients of determination exist. According to the value of R², government technology is taken into account when describing accountability, a responsiveness participation rule of law transparency usefulness and productivity. The SPSS algorithms explain endogenous variable.

Table 4

ANOVA

The table shows value of Alpha is 0.05 and the significance level is 0.00 which means that the model is significantas shown in Table.

Table 5

Model Summary

The table shows the level of significance for model fitness is 0.05 and in the above Table, the value is .000, which means model is fit for study

Table 6

Coefficients for Prediction of Call Center Performance

Table shows that one unit increase in employee staffing leads towards .308 units increase in performance keeping all variables constant. Secondly, one unit increase in employee stratification leads towards .332 units increase in performance, keeping all variables constant. Lastly, one unit increase in employee reward leads towards .245 units increase in performance, keeping all variables constant.

Figure 2

Hypothesis result

Table 7

Summary of Hypothesis Testing

Discussion

The research has shed light on the important role that employee staffing, employee reward and employee's satisfaction play in determining and improving the Employee Performance in Pakistan. Organizational performance is significant for both scholars and practitioners in the field of public administration, particularly in the context of new organizational reforms and the adoption of new public management principles (Cooper, 2016).

The study used a quantitative methodology to collect data through a questionnaire survey, which helped to identify the impact of these independent variables on the Employee Performance in Pakistan. One of the key findings of this research is that the human resource management practices significantly affect the performance of an organization in a positive way in Pakistan. The influence of HR department on organizational growth extends to efficiency and employee training, with benefits provided to managers and production workers alike (Miiro et al.,2016).

Additionally, HR also shapes policies, practices, and corporate culture. This means that the employee staffing, employee satisfaction and employee reward have a direct effect on the Employee Performance and must be taken into account when designing policies and programs for these kinds of organizations. Similarly, the quality of human resource management practices was found to be another critical factor that affects the Employee Performance in Pakistan. HRM activities influence the organizational creativity and information managementcompetency (Lombardi et al., 2020).

The research findings indicate that the employees training, employees staffing as well as the environment and all the important factors that contribute to the efficiency of HRM practices in the call centers. Furthermore, the findings of the study highlight the need of human resource practices in organizations in Pakistan. Insufficient staffing in call centers may lead towards long waitinghours, increased customer frustration, and lower service quality (Bolander, 2019; Levy, 2019). By refining the value of staffing methods in the call centers, to address the social culture factors and investing in infrastructure, it is possible to create a more equitable and effective environment in the call centers in Pakistan. This in turn can contribute to the country's development and progress.

Conclusion

The current study underscored the importance of HRM practices in Pakistani organizations. By improving staffing methods, addressing social and cultural factors, and investing in infrastructure, it is possible to create a more equitable and effective environment in call centers. This, in turn, may contribute to the country's development and progress.. Additionally, the quality of HRM practices including employee training and work environment also affect the employee performance in Pakistan.

Future Recommendations

There are numerous recommendations to improve the employee performance in Pakistan. Some of these recommendations have been mentioned as follows:

Advanced Workforce Management Systems

There is a need to implement sophisticated workforce management software that utilizes AI and predictive analytics to forecast call volumes accurately. This may help optimize staffing levels, ensuring the availability of right numbers of agents during peak calling times while minimizing overstaffing during slower periods.

Real-time Performance Analytics

The development of a dashboard is required that provides real-time performance metrics to both agents and supervisors. This transparency may motivate employees to meet their targets and allow supervisors to identify coaching opportunities promptly.

Recognition and Rewards Programs

A comprehensive rewards program should be established that goes beyond monetary incentives. Agents' achievements should be recognized and celebrated publicly along with offering career growth opportunities and providing access to skill development workshops and certifications.

Wellness Initiatives

Wellness programs should be launched focusing on physical, mental, and emotional well-being of employees. Resources should be offered,such as counseling services, mindfulness workshops, and setups to support the overall health of employees.

Conflict of Interest

The author of the manuscript has no financial or non-financial conflict of interest in the subject matter or materials discussed in this manuscript.

Data Availability Statement

The data associated with this study will be provided by the corresponding author upon request.