Yuswardi Yuswardi, Dhita Hafizha Asri, Osgood Feriady Darma Saputra

Effect of Sustainable HRM Practice on Organizational Performance Mediated by Knowledge Management, Work Engagement and Organizational Culture

Introduction

Effect of sustainable hrm practice on organizational performance mediated by knowledge management, work engagement and organizational culture. Explore how sustainable HRM practices boost organizational performance in Batam's manufacturing sector through knowledge management, work engagement, and culture. Discover key strategies for firms.

Abstract

The manufacturing sector is currently under significant pressure to enhance productivity and sustainability due to rapid industry changes, technological advancements, and intensified global competition. This creates an urgent need for integrating sustainable Human Resource Management (HRM) practices to support long-term organizational performance. This study investigates the impact of sustainable HRM practices on organizational performance within the manufacturing industry in Batam, Indonesia. Employing a quantitative research approach, data were collected through structured questionnaires distributed to 370 employees across multiple companies. The research involved several stages of data analysis, including validity testing, reliability analysis, and structural equation modelling (SEM), to evaluate the hypothesized relationships among variables. The results revealed that sustainable HRM practices significantly influence knowledge management, work engagement, and organizational culture, which collectively enhance organizational performance. These findings imply that manufacturing firms should emphasize the development of sustainable HRM strategies, such as effective knowledge sharing systems and fostering a positive organizational environment. Implementing such practices will improve employee engagement, promote innovation, and sustain competitive advantage. Overall, this research underscores the importance of integrating sustainability initiatives into HRM practices to achieve resilient and high-performing manufacturing organizations.

Review

This study addresses a highly pertinent and timely topic, exploring the impact of sustainable Human Resource Management (HRM) practices on organizational performance within the manufacturing sector in Batam, Indonesia. Given the escalating pressures on manufacturing firms to enhance productivity and sustainability, the research premise is well-justified and tackles a critical need for integrating long-term HRM strategies. The authors employ a robust quantitative methodology, gathering data from 370 employees across multiple companies and utilizing Structural Equation Modeling (SEM) to test the hypothesized relationships. The abstract clearly outlines the central finding: sustainable HRM practices significantly influence knowledge management, work engagement, and organizational culture, which collectively mediate and enhance organizational performance. While the abstract provides a strong overview of the study's scope and key outcomes, a comprehensive review would benefit from further elaboration on certain methodological aspects. The abstract mentions "multiple companies," and while a sample size of 370 employees is substantial for SEM, a clearer indication of the number and types of companies involved would provide valuable context for understanding the generalizability within Batam's manufacturing landscape. Furthermore, the operationalization of "sustainable HRM practices" is crucial; ensuring that the measures truly capture sustainability principles beyond conventional good HRM practices would strengthen the theoretical contribution. Deeper insight into the distinct contributions and interplay of the three mediating variables – knowledge management, work engagement, and organizational culture – would also enrich the understanding of their pathways to enhancing performance. Overall, this research offers a valuable contribution to the sustainable HRM literature, providing empirical evidence from a specific regional context often overlooked in global studies. The findings offer clear practical implications for manufacturing firms, strongly advocating for the development of sustainable HRM strategies to cultivate effective knowledge sharing systems, foster positive organizational environments, and improve employee engagement. This integrated approach is presented as essential for promoting innovation and maintaining competitive advantage. Future research could extend these findings by exploring the long-term effectiveness of such practices, conducting comparative analyses across different industrial contexts, or incorporating qualitative methods to gain a deeper, nuanced understanding of the implementation and impact of sustainable HRM from an employee perspective.

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