EXPLORING THE CORRELATION BETWEEN HUMAN RESOURCE PRACTICES AND HERZBERG’S TWO-FACTOR THEORY: IMPLICATIONS FOR ORGANIZATIONAL PERFORMANCE

Abstract

The study is aimed to examine the correlation between human resource practices (HRPs)  and Two-Factor Theory of motivation given by Herzberg’s , significantly focusing on to understand the impact of this relationship on organizational performance. Herzberg’s two factors theory differentiate between hygiene factors (salary, company policies, and working conditions) and motivators (recognition, achievement, and opportunities for advancement). The theory provides a fundamental framework to examine employee satisfaction and their motivation at workplace. The study aims at bridging the theoretical models with the practical HR applications and to explore whether contemporary HR practices align with and support Herzberg’s motivational constructs, and what is the contribution of this alignment to the overall performance of an organization.

The population of this study is employees of private banking sector of Pakistan. This research employs quantitative methodology.The research instrument of this study is close-ended questionnaires. The sample is randomly selected from the following prominent financial institutions in Pakistan. Habib Bank Limited (HBL), Meezan Bank Limited (MBL), Bank Al Habib (BAH), and Bank Al Fallah (BAF).The researcher examined major HR domains, which include Employee Empowerment (EE), Performance Appraisal (PA), Compensation Management (CM), and Employee retentions (ER). The findings suggested a significant correlation between well-executed HR practices and the incidence of both hygiene and motivational factors. This study adds to the expanding body of literature regarding motivation in the financial sector. Furthermore it also provide practical implications for the HR practitioners of banking sector. These include the incorporation of motivational theories into HR practices and the cultivation of the culture that considers both intrinsic as well as extrinsic factors that influence employee engagement.

This research makes a valuable contribution to the expanding body of literature on motivation in the financial services sector and offers practical recommendations for HR practitioners in banking. These include embedding motivational strategies into HR systems and fostering a culture that values both extrinsic and intrinsic drivers of employee engagement. The study concludes by suggesting future research in digital banking environments and comparative studies across public and private banking institutions.