CHAPTER ONE
INTRODUCTION OF THE STUDY
1.1    BACKGROUND OF THE STUDY

Over the years, researchers have amassed a fair amount of empirical evidence that certain Human Resources practices can directly firm perform. For example, studies show that comprehensive selection and training activities are frequently correlated with both productivity and firm performance (Terpstra & Rozeu, 1993). A message frequently found in corporate mission statements and annual reports is that humans are the most valuable resources of any organization. Having the right personnel to the survival and success of any organization. The recognition of Human Resources Management (HRM) as a key source of competitive advantage provides professionals working in the Human resources management, However, presents professionals working in the area with a  number of role changes and new challenges. For example, the creation of more central strategies role for the human resource function  bring with it the expectation that is not enough for Human Resource to simply partner top management; it has to drive business success. Several antiques have been raised regarding the value creation of human resources management (HRM) that is whether it can contribute directly to the implementation of the strategies objectives of firm and improve productivity in companies (Hope-Hailey 1997)

Supporting the Human resources systems and internal fit view point (Arthur 1992, 1994) found that Human resource practices focused on enhancing employees commitment (e.g. decentralized decision making, comprehensive training, salaried compensation, employee participation) were related to higher performance. Conversely, he also found that Human resource practice that focused on control, efficient and the reduction of employee skills and discretion were associated with increased turnover and poorer manufacturing performance. Similarly, in a stufy of high performance work practices, (Huselid 2002) found that investments in human resource…