Topics: Innovation, Internal consistency, Cronbach's alpha Pages: 13 (2572 words) Published: December 15, 2013


Executive Summary
Human resource management (HRM) is seen as crucial department for creating innovation and firm performance. This assignment aims to complete an empirical study to investigate the relationship between dimensions of HRM on technological innovation and firm performance. The research uses a sample of 165 participants of SME firms.

This assignment provides useful managerial information for managers especially those who work on SME level. First, employee training is needed to develop employees' knowledge. Second, material incentive is still in need though it is not the main motivation in SME. Third, process control should be emphasized more than outcome control in SME firms.

This research was conducted to understand the influence and effect of variable HRM activity towards the technology innovation and firm performance. The activity of HRM that to be analyzed are employee training, material incentive, non-material incentive, process appraisal and control, outcome appraisal and control, recruitment and selection.

Content Page
Reliability Analysis of the Study Variables
(a)Employee training
(b)Material incentive
(c)Non-material incentive
(d)Process appraisal and control
(e)Outcome appraisal and control
(f)Recruitment & Selection
(g)HRM Practices
(h)Technological Innovation
(i)Firm Performance
4Descriptive Statistic on Demography of Organization and Respondents.11-17 5Descriptive Statistic on the Study Variables
(a)Relationship between HRM and technological innovation (TI) (b)Relationship between HRM and Firm Performance (FI)18-19 6Conclusion20

This assignment was conducted in order to identify the causing factors of HRM activity in SME business effectiveness. These kinds of organizations have many challenges in up streaming the competitive advantage and also incomplete in management expertise especially in human resource capabilities. For this reason it is important to understand the relevant factors in the effective performances in this business.

The study context developed from the understanding of the existing strengths and weaknesses of these HRM activities toward the management of the firm that provides the results regarding the performances. In conclusion, this assignment aims to provide direction as to what SME business can do to enhance their capacity to compete in need of economic needs.

Reliability is used to describe the overall consistency of a measure. A measure is said to have a high reliability if it produces similar results under consistent conditions. For example, in a questionnaire designed to measure optimism, there are typically many items that collectively measure the construct of optimism. Reliability means consistency. It is the degree to which an instrument will give similar results for the same individuals at different times. To have confidence in a measure such as this, we need to test its reliability which is the degree to which it is error-free. The type of reliability we'll be examining here is called internal consistency reliability which is the degree to which multiple measures of the same thing agree with one another. In reliability analysis, Cronbach's alpha is a coefficient of internal consistency. It is commonly used as an estimate of the reliability of a psychometric test for a sample of examinees. It was first named alpha by Lee Cronbach in 1951, as he had intended to continue with further coefficient. [2] Cronbach’s alpha is the most common statistic used to describe the internal consistency reliability of a set of items. Cronbach's alphaInternal consistency

α ≥ 0.9 Excellent (High-Stakes testing)
0.7 ≤ α < 0.9)Good (Low-Stakes testing
0.6 ≤ α < 0.7...
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