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Interrelation of Human Resource Management and Companies’ Performance: Evidence from Croatia

Human resources are unavoidable part of the overall company’s success. Human resource management as fundamental managerial function is responsible for creating, leading and developing human resources in order to survive, enhance and support organizational success. The main aim of this paper is to explore the relation between human resource management activities and company’s financial and organizational performance in Croatia through different aspects: regional, industrial and size. The basic assumption for this research is the fact that companies which carry out more different groups of human resource management activities approximated by aggregate measure of human resource management index will obtain better financial performance measured by different profitability ratios and organizational performance measured by productivity ratios and cost effectiveness ratio. Our findings confirmed the importance of human resource management, as well as expected differences in the level of human resource activities with regard to county of residence and company’s main activity.

Human Resource Management, Financial Performance, Organizational Performance, Croatia

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