Strategic Human Resource Management and Its Impact on Organizational Performance: Empirical Insights

Abstract

In light of today’s dynamic economy, Human Resource Management (HRM) has become a strategic lever for enhancing organizational performance, resilience, and long-term competitiveness. This study presents an original pioneering investigation into the strategic role of HRM within the Albanian private sector, making the first study of its kind in the country. It introduces an innovative conceptual model that integrates both HR roles and practices as dual expressions of HR strategy, offering a novel and internationally relevant framework. Grounded in more than two decades of international literature, the study applies a robust econometric approach to examine the multidimensional relationships between HRM and the performance of the organization. Data were collected through a structured questionnaire among private companies of varying sizes in Albania with over fifty employees. The evaluation was conducted using the Structural Equation Model (SEM) via the "LaVan" package in R. Findings reveal that key strategic components business strategy, the role of Human Resources, HR practices, and HR outcomes collectively contribute to strategic and internal fit, significantly enhancing organizational performance. By addressing a critical research gap in developing economies, this study establishes a strong theoretical and methodological foundation for future research both in Albania and in other transitional markets. The implications are particularly relevant for scholars, policymakers, and business leaders seeking to advance sustainable performance through strategic human resource development.