The effect of reported human resource practices on organizational effectiveness in the generating and transmission utility industry

Peggy H. McArthur


Human resource practices are very important to the employees in any business. They are also a very important part of the organization. This study looked at how human resource practices affected the organizational effectiveness of the generation and transmission (G&T) utility industry in the United States. The G&T industry faces challenges every day with governmental issues, price variances, and natural occurrences over which they have little or no control. Determining and/or measuring how and to what degree the human resource practices in the G&T industry affect the effectiveness of the G&Ts was the subject of this study. Surveys were mailed (N = 57) March 2004 addressed to the Human Resource Personnel of which 26 responded for a 46% return. The survey addressed five practice areas found to be common in the literature review. They included planning and staffing, compensation and benefits, employee relations, training and development, and performance appraisal. Two measures of effectiveness were selected for this study. EBITDA (earnings before interest, taxes, depreciation, and amortization), and safety. The workers' compensation experience factor was used to measure how well the G&Ts were utilizing the safety programs. The G&Ts were divided into three groups: small, medium, and large. The small group included those G&Ts with 0-1 employees handling the human resource practices. The medium group included those G&Ts with 2-4 employees taking care of the human resource practices. The large group consists of those G&Ts with 5 or more employees working in the human resource departments. Results were clear that the G&Ts are utilizing all the human resource practices with the means averaging from 4.63 to 5.88 on a scale of 1 to 7. Results were also clear that human resource practices have a positive effect on organizational effectiveness. Depending on the effectiveness criterion, the most predictive specific human resource practices were employee relations, development, and job design, in that order.