An Empirical Study on Lean Management and HRM Practices in Relation towards Operational Performance

Azhani Ismail, Yuserrie Zainuddin
2018 The Turkish Online Journal of Design Art and Communication  
In recent years, the matter of lean management (LM) and human resource management (HRM) practices have been commonly used to observe operational performance (OP). One of the distinctive features of LM and HRM practices is that better performance is achieved through the people in the organization. Many researchers have demonstrated that investments in human capital can significantly influence organizational objectives and outcomes. The resource-based view (RBV) theory perspective has been
more » ... vely utilized to empirically test and predict these organizational objectives and outcomes. This study investigates from RBV theory perspective, the mediating effect of HRM practices on the relationship between LM and OP within public sector in Malaysia. The main research question addressed by this study is whether LM enhances OP directly or indirectly through the support of the HRM practices. A survey research method is adopted to collect data from Malaysia local authorities. The analysis of the research model uses Partial Least Square (PLS) based software SmartPLS 3. The results will provide practitioners with guidelines in implementing LM more efficiently and effectively for enhancing OP of their organizations. rewards and incentive of the organization. It demonstrates the important role of HRM practices in developing resources that are imperfectly imitable and difficult to duplicate. Based on data from 149 Malaysia local authorities (LAs), the study empirically demonstrates that achieving high level of OP of organization results from LM practices which in turn, is driven by HRM practices. This paper begins with an introduction, followed by a literature review in the area, and discusses the methodology and data analysis of the study. Finally makes some concluding remarks. Literature Review This study attempts to understand how LM effect OP via HRM practices in Malaysia public sector. It looks into the performance of organization in the public sectors, particularly in the LAs in Malaysia. The LAs are selected because of their features that exist, particularly in terms of resources, capabilities, positions, roles and responsibilities, services provided and the system practiced which may indirectly reflect the real state of the public sector in Malaysia (Yusoff, 2008; Talib, 2010; Zakaria, 2011). OP is defined from logistics point of view, which is the extent to which an organization is successful in achieving its planned targets by carefully and considered use of limited resources (Hookana, 2011) as well as being able to conduct its internal operations smoothly and efficiently (Zakaria, 2011). The OP is measured through an appropriate combination of two dimensions: (1) efficiency, and (2) effectiveness (Mouzas, 2006 , Hookana, 2011 . Nowadays under the global economic constraints, the main strategic issues challenges the public sector are efficiency and doing more with less. Fiscal pressures, economic constraints, and the demand for greater sustainability in the delivery of services, usage of resources, and the potential environmental toxicity of products used in service delivery and at the same time contain expenditure growth will continue to force the public sector to be resource efficient and optimize functions and service delivery processes in order to be able to do more with less. Moreover, the existence of globalization and the borderless world forces public sector to deal with the clients with information, knowledgeable, intelligent and expect something more than the satisfaction or expectations set by them on the service provided. Citizens are demanding that public sector be made more accountable for what they achieve with taxpayers' money (Curristine, Lonti and Joumard, 2007). Johnston and Jones (2004) observe that over the past three decades, criticisms about government performance have surfaced across the world from all points of political spectrum. They note that critics proclaim governments to be inefficient, ineffective, too large, too costly, overly bureaucratic, overburdened by unnecessary rules, unresponsive to public wants and needs, secretive, undemocratic, invasive into the private rights of citizens, self-serving, and failing in the provision of either the quantity or quality of services deserved by the taxpaying public (Hamid, Hamali and Abdullah, 2016) . The Public Complaints Bureau (PCB) under the Prime Minister's Department also recorded that among the main reasons identified as the driving factors for the public to make complaints against the quality of service in government departments are due to delays in carrying out official duties or no action at all, the decision is deemed unfair, the failure to enforce the rules and laws, and the lack of public facilities (PCB, 2017) to meet the customer's needs. About 17% of total complaints received are attributed to LAs throughout the country (Zakaria, 2011). Beside these external criticisms, Talib (2010) pointed that among the internal problems often face by LAs are related to the acquisition of the collection, the question of financial resources to cover the costs of maintenance, staffing and human resources issues. All of these factors become the biggest challenge to public sector's growth and should be given attention since the public sector is the only agent of change who serves as a driver for economic development to prepare Malaysia to become one of the developed countries by 2020. The government has been emphasizing the enhancement of service delivery systems in the public sector under its Excellent Work Culture Movement since the early 1990s. Many service improvement programs have been undertaken by the government (Zakaria, Al Mamun, Nawi and Razak, 2016), such as benchmarking, key performance indicators (KPIs), balanced scorecard (BSC), focus groups, international standards organization (ISO), blue ocean strategy, total quality management (TQM), business process reengineering (BPR), strategic management, etc. The government has also committed to a Government Transformation Program (GTP) in accordance with the principles of 1Malaysia, People First, Performance Now. The rationale for the GTP is that the government needs a new way of doing things to both accelerate and sustain impact and enhance performance (Hamid, Hamali and Abdullah, 2016) . It seems that various management strategies have been implemented in public sectors especially to fasten the delivery of services to the customer and reduce administrative cost. However, the actual Submit
doi:10.7456/1080sse/158 fatcat:fedlaowgevcwpkrzr3ojae3ezq