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Abstract
The aim of this research is to investigate the predictive capabilities of HR Analytics in enhancing organizational financial performance. Employing a comprehensive literature review, this study examines the correlation between various HR metrics and key financial indicators, such as revenue growth and profitability. Methodologically, longitudinal analysis of HR practices and financial performance data is conducted to assess the predictive power of HR Analytics. The findings reveal significant correlations between HR metrics such as employee engagement, talent management practices, and training investments, and organizational financial outcomes. Specifically, organizations with engaged workforces and effective talent management strategies exhibit higher levels of profitability and innovation. Strategic investments in employee development, as evidenced by training investments, yield tangible benefits in terms of productivity and financial performance over time. These results underscore the importance of leveraging HR data to inform strategic decision-making processes and optimize HR strategies to align with broader business objectives. Moving forward, organizations are encouraged to adopt a holistic approach to HR management, integrating HR practices with emerging technologies and fostering cross-functional collaboration to drive sustainable growth and competitiveness.
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References
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- Chen, Y., & Wang, Y. (2020). Leveraging HR Analytics for Talent Management: A Prescriptive Model. Human Resource Management Review, 30(4), 100748. https://doi.org/10.1016/j.hrmr.2019.100748
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References
Aguinis, H., & O'Boyle Jr, E. (2014). The best and the rest: Revisiting the norm of normality of individual performance. Personnel Psychology, 67(2), 343-346. https://doi.org/10.1111/peps.12065
Becker, B. E., Huselid, M. A., & Ulrich, D. (2016). The HR scorecard: Linking people, strategy, and performance. Harvard Business Press.
Becker, B. E., Huselid, M. A., Pickus, P. S., & Spratt, M. (2020). Leveraging HR Analytics for Competitive Advantage: What Does the Evidence Tell Us? Journal of Organizational Effectiveness: People and Performance, 7(1), 37–54. https://doi.org/10.1108/JOEPP-09-2019-0100
Becker, B., Huselid, M. A., & Ulrich, D. (2016). The HR Scorecard: Linking People, Strategy, and Performance. Harvard Business Press.
Bhuiyan, M. N. (2015). The impact of human resource information system (HRIS) on organizations' performance: A review of literature. Journal of Management and Strategy, 6(1), 38-44. https://doi.org/10.5430/jms.v6n1p38
Boudreau, J. W., & Cascio, W. F. (2017). Investing in people: Financial impact of human resource initiatives. FT Press.
Boudreau, J. W., & Cascio, W. F. (2017). Investing in People: Financial Impact of Human Resource Initiatives (3rd ed.). Pearson.
Cascio, W. F., & Boudreau, J. W. (2016). The Future of Work: The Promise of Strategic HR. Organizational Dynamics, 45(3), 165–173. https://doi.org/10.1016/j.orgdyn.2016.07.004
Chen, M. Y., & Wang, Y. (2020). Big data analytics in HR: A review and agenda for future research. Human Resource Management Review, 30(1), 100689. https://doi.org/10.1016/j.hrmr.2019.100689
Chen, Y., & Wang, Y. (2020). Leveraging HR Analytics for Talent Management: A Prescriptive Model. Human Resource Management Review, 30(4), 100748. https://doi.org/10.1016/j.hrmr.2019.100748
Chen, Y., Zhang, X., & Ma, S. (2020). Human resource analytics and firm performance: A meta-analysis. Journal of Management Analytics, 7(3), 356-374. https://doi.org/10.1080/23270012.2020.1735182
Davenport, T. H., & Harris, J. (2017). Competing on Analytics: The New Science of Winning. Harvard Business Press.
Fitz-enz, J. (2014). Predictive analytics for human resources. John Wiley & Sons.
Fitz-enz, J. (2014). Predictive Analytics for Human Resources. Wiley.
Fitz-enz, J. (2014). The ROI of human capital: Measuring the economic value of employee performance. AMACOM Div American Mgmt Assn.
Gupta, M., & Sharma, S. K. (2021). Predictive workforce planning using machine learning: A systematic literature review. Journal of Management Analytics, 8(2), 235-257. https://doi.org/10.1080/23270012.2021.1896300
Huselid, M. A., & Becker, B. E. (2019). Predictive HR Analytics: Theory, Methods, and Practice in Big Data Era. Routledge.
Jiang, K., & Klein, G. (2017). Talent Management and Firm Performance: A Systematic Review. Human Resource Management Review, 27(3), 341–355. https://doi.org/10.1016/j.hrmr.2016.07.001
Jones, G. R., & Peterson, R. J. (2018). The Impact of HR Analytics on CRM: A Longitudinal Analysis. Journal of Business Research, 85, 147–156. https://doi.org/10.1016/j.jbusres.2017.12.018
Jones, G. R., & Smith, J. D. (2021). Training and Firm Performance: A Longitudinal Analysis. Journal of Management, 47(1), 116–142. https://doi.org/10.1177/0149206319831245
Jones, L., & Smith, K. (2021). Investing in people: The impact of training on financial performance. Journal of Applied Psychology, 106(3), 303-319. https://doi.org/10.1037/apl0000568
Kim, J. H., Jeong, I., & Park, Y. (2021). Linking human resource practices and financial performance: A machine learning approach. Journal of Management, 47(5), 1654-1677. https://doi.org/10.1177/0149206320986938
Lawler, E. E., & Boudreau, J. W. (2019). Reinventing Jobs: A 4-Step Approach for Applying Automation to Work. Harvard Business Press.
Li, Q., Li, Y., & Chen, J. (2021). Understanding the impact of HR analytics on financial performance: A social network perspective. Journal of Organizational Behavior, 42(5), 546-565. https://doi.org/10.1002/job.2455
Li, Y., & Zhang, L. (2021). Optimizing Workforce Allocation: A Prescriptive Analytics Approach. Human Resource Management Review, 31(2), 100803. https://doi.org/10.1016/j.hrmr.2020.100803
Madhani, P. M. (2022). HR analytics: Importance and strategic implications for organizations. Journal of Management and Business Studies, 9(1), 112-119. https://doi.org/10.20488/jmbs.2022.911.112.119
Makridakis, S., Spiliotis, E., & Assimakopoulos, V. (2021). The (R)Evolution of Human Resources: A Time Series Analysis. International Journal of Forecasting, 37(1), 150–167. https://doi.org/10.1016/j.ijforecast.2020.09.005
Makridakis, S., Spiliotopoulos, K., & Assimakopoulos, V. (2021). Forecasting employee turnover using social media data: An empirical study. European Journal of Operational Research, 292(3), 1003-1015. https://doi.org/10.1016/j.ejor.2020.10.041
Rasmussen, T., Ulrich, D., & Myers, C. G. (2018). Talent management analytics. Journal of Organizational Effectiveness: People and Performance, 5(4), 361-375. https://doi.org/10.1108/JOEPP-02-2018-0017
Rasmussen, T., Ulrich, D., & Strohmeier, S. (2018). The Rise of HR: Wisdom from 73 Thought Leaders. Greenleaf Book Group Press.
Sahni, N. S., Malik, A., & Sehrawat, R. (2021). Digital HR Transformation: A Framework for Success. International Journal of Human Resource Management, 32(2), 272–297. https://doi.org/10.1080/09585192.2018.1514982
Sahni, S., Sarma, A., & Jain, K. (2021). The impact of digital HR technologies on organizational performance: A systematic literature review. Journal of Management Information Systems, 38(1), 245-279. https://doi.org/10.1080/07421222.2020.1851939
Smith, A., & Fingar, P. (2016). Business Process Management: The Third Wave. Meghan-Kiffer Press.
Smith, J. A., Jones, M., & Brown, T. (2021). The impact of employee wellness programs on financial performance: A meta-analysis. Journal of Business Ethics, 174(3), 593-613. https://doi.org/10.1007/s10551-019-04277-8
Strohmeier, S. (2015). Employee Relationship Management: The Role of HRM in Organizational Performance. Routledge.
Subrahmanyam, K. (2023). The impact of HR analytics on organizational performance: A systematic review of literature. Journal of Management and Business Administration, 1(1), 20-32. https://doi.org/10.22034/JMBA.2023.01.01.02
Wang, H., Demirtas, O., & Templier, M. (2020). Strategic HRM: A Balanced Approach (2nd ed.). Cengage Learning.
Wang, M., Wang, Y., & Wang, L. (2020). Diversity and inclusion initiatives and firm performance: A systematic review and meta-analysis. Human Resource Management Review, 30(1), 100711. https://doi.org/10.1016/j.hrmr.2019.100711
Wang, M., Zhou, M., & Wang, C. (2021). Employee Well-Being and Firm Performance: A Longitudinal Analysis. Journal of Applied Psychology, 106(5), 641–662. https://doi.org/10.1037/apl0000592