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Human resource management Human

resource
from an Islamic perspective: management
a contemporary literature review
Muhammad Habib Rana and Muhammad Shaukat Malik 109
Alfalah Institute of Banking and Finance, Bahauddin Zakarya University,
Received 4 January 2015
Multan, Pakistan Revised 8 August 2015
7 November 2015
Accepted 10 November 2015

Abstract
Purpose – The purpose of this paper is to present a concise overview of available research work on
Islamic principles related to human resource management (HRM).
Design/methodology/approach – With the purpose in view, an effort was made to collect books,
journal articles and research papers. The selected works cover the period from 2003 to 2014. The reason
behind selection of this period is the fact that during this time, an increased emphasis on religion,
particularly Islam, has been felt the world over. The ideas and inferences out of those works have been
compiled in a concise and ordered form. Compilation of ideas has been thematically arranged on the
basis of different areas of HRM which led to the findings of the study.
Findings – Business organizations in Islamic countries or those being managed by the Muslims
generally claim to follow Islamic management principles. However, practical adherence to these
principles varies in various shades depending on national and organizational culture. The reviewed
literature covers the theory of HRM and identifies the Islamic principles related to it. Mostly, the
researchers have elaborated the Islamic guidelines related to HRM; however, a few have also ventured
to find out practical application of Islamic principles and their efficacy.
Research limitations/implications – Books and articles included in this review do not present
wholesome picture. Although random selection from various authors and journals neutralizes the
limitation to some extent, a more comprehensive review may improve the findings.
Originality/value – Religion has proven to be a driving force in the display of human commitment
and devotion in various forms of competitions including war. Identification of the role of religion in
business can open new vistas in HRM. The glimpses of the role of Islam in business, especially HRM,
included in this review can have far reaching impact.
Keywords HRM practices, Compensation, Selection, Employee training, Performance appraisal,
Islamic work ethic
Paper type Literature review

Introduction
The most important asset for an organization is composed of its employees. The concept
of human resource management (HRM) revolves around improvement of this asset with
a view to attain competitive advantage. The concept has evolved and matured over the
past century. Although the principles of human nature are universal, their adoption and
application differ in organizations depending on specific religion, culture and traditions. International Journal of Islamic
and Middle Eastern Finance and
Religion plays a dominant role in shaping individual behavior in social life as well as at Management
workplace (Razimi et al., 2014). Islam provides a complete code of life with guidance for Vol. 9 No. 1, 2016
pp. 109-124
every aspect of life, may it be physical, social, intellectual or spiritual (Hashim, 2009, © Emerald Group Publishing Limited
1753-8394
2012; Hussain, 2007; Leat and El-Kot, 2007; Razimi et al., 2014). Islam covers human life DOI 10.1108/IMEFM-01-2015-0002
IMEFM in detail covering, at the same time, the spiritual aspects propagated by Christianity and
9,1 other religions (Ali and Al-Owaihan, 2008).
Hussain (2007) argues that the Muslims generally do not try and develop in-depth
understanding of the religion. The Holy Quran is mostly recited and memorized without
comprehending its essence and meanings. This has resulted into formation of barriers in
the process of understanding as well as development of certain dogmatic views. People
110 are generally conversant with the basic principles, but, owing to lack of understanding,
problem arises at the application stage. Due to short sightedness and excessive focus
on profit, business organizations tend to miss out the fact that adherence to the basic
principles is not a choice but an obligation not only from religious, ethical and social
points of view but also from the long-term perspective of business interest.
Principle-based management according to the Islamic guidelines is expected to take care
of interests of all the involved parties in addition to generating synergy.
Importance given to religion in business is increasing with increased attention being
bestowed upon the concepts of motivation and inspiration of employees and social
responsibility (Ali, 2009). The recent past has witnessed increasing interest within
Western nations concerning Islam and the Islamic world. There has also been a renewal
of interest in business and management processes in Islamic countries in their religious,
political and cultural contexts. However, most of the attention has been given to Islamic
economics and Islamic banking. There are few credible empirical studies that have
examined the practice of HRM from an Islamic management perspective. The
management literature is also scant in exposing the gap that exists between the theory
of management in Islam and the management practices in vogue in Islamic countries
(Branine and Pollard, 2010; Razimi et al., 2014).
This paper covers review of literature encompassing the ideas and discussion on the
subject of HRM and its Islamic perspective. The layout includes elaboration of the
concept of HRM, Islamic perspective of HRM, implications of Islamic teachings, results
including outcomes and findings and conclusion. The purpose is to relate Islamic
teachings with the applied concepts of HRM so that the concepts are refined and their
usefulness is enhanced.

Human resource management

Various researchers have defined HRM in many ways, for example Van De Voorde et al.
(2012) define HRM as the combination of activities associated with the management of
people in firms aiming to build ability, motivation and opportunity to perform. Rahman
et al. (2013) take it as the process encompassing practices related to acquisition,
development, motivation and maintenance of human beings in an organization, aligned
with the organizational goals and strategy. Quresh et al. (2010) define it as the process
for development of abilities and attitudes of individuals leading to personal growth and
self-actualization, and enabling them to contribute toward organizational objectives.
Abutayeh and Al-Qatawneh (2012) quote the definition of HRM by Dessler as “HRM is
the process of acquiring, training, appraising, and compensating employees and of
attending to their labor relations, health and safety, and fairness concerns”. According
to Chukwunonso (2009), HRM encompasses organizational activities ensuring effective
utilization of employees for attainment of individual, group and organizational goals.
Mangi et al. (2012) declare HRM as a support activity that goes hand in hand with all the
other organizational activities like operations, logistics, marketing and sales, etc. HRM
can therefore be defined as a set of activities aimed at development of human capital Human
with a view to align the interest of employees with the organizational objectives. resource
Human capital is the core asset for an organization and a source for sustained
competitive advantage (Shahzad et al., 2011). HRM aims at the most effective and
management
efficient use of human capital to achieve organizational and individual goals
(Chukwunonso, 2009; Razimi et al., 2014). Becker and Gerhart (1996) reiterate that HR
strategies are source of sustainable competitive advantage, as they are difficult to 111
imitate because of causal ambiguity and path dependency. Onder and Dogan (2013)
argue that HRM plays a vital role in organization’s long-term interest by restructuring
and reducing salary expenses without losing valuable employees, acting firmly without
damaging the trust and loyalty of employees and motivating employees in a crisis
situation.
HRM has evolved through various stages starting from compulsory labor of ancient
times, passing through personnel management and landing on to the modern HRM.
Personnel management includes the activities done by the managers to manage
subordinates, whereas HRM encompasses entire organization (Quresh et al., 2010).
Mangi et al. (2012) state, “The nature of HRM has changed from being reactive,
prescriptive and administrative, to being proactive, descriptive and executive in
Western developed economies”. They highlight the perspective and paradigm
difference of developed and developing economies. The developed economies are taking
HRM as strategic necessity to attain competitive advantage, whereas the developing
economies are still keeping it in the sphere of routine administration.
Jiang et al. (2012) are of the view that HR practices can be distributed into three policy
domains: knowledge including skills and abilities, motivation and effort and
opportunities to contribute. Tayeb (1997) distributes HRM practices into four categories:
employee selection and development, job design, reward system and employee
participation. Van De Voorde et al. (2012) present three categories of HR practices,
namely, enhancement of employee ability, employee motivation and opportunity to
perform. There are seven types of HRM practices put forward by Pfeffer, (1998) as
employment security, selective hiring, self-managed teams and decentralized
decision-making, comparatively high compensation, extensive training, reduced status
of distinctions and barriers and extensive sharing of information.

Islam and human resource management

Islamic approach to HRM is human-centric, covering all aspects of human life including
individual, physical, material, social and spiritual (Zangoueinezhad and Moshabaki,
2011). Islam lays a lot of emphasis on “Muamlaat”, i.e. dealing with other human beings
to such an extent that Allah may forgive lapses about His rights but will not forgive any
transgression on the rights of other human beings unless the victims themselves
forgive. Islam does not restrict human imagination and evolution of thought process by
giving a fixed system of “Muamlaat”, rather it gives broad principles and guidelines
basing on which systems can be devised appropriate to time and circumstances
(Ahmad, 2009). Islam comprehensively covers all aspects of human life, may those be
theological, social or economic (Tayeb, 2004; Leat, and El-Kot, 2007). Moideenkutty et al.
(2011) reiterate that we can find appropriate and ample guidelines in the religion
concerning various facets of HRM. Islamic concept of HRM has a multidirectional
approach covering welfare of employees, organization and society as a whole (Ali, 2010).
IMEFM The Holy Quran is the divine book which, as per the Muslim religious belief, includes
9,1 guidelines for every aspect of human life. Razimi et al. (2014) state that the topic of the
Holy Quran is “Human Being”, and it mostly covers guidelines on aspects of day-to-day
matters of human life. Tayeb (2004) and Mellahi and Budhwar (2010) state that the key
sources of Islamic prescriptions are the Holy Quran, the direct message from Allah and
the Sunnah and the real-life examples and teachings of the Prophet Muhammad (PBUH).
112 Branine and Pollard (2010) also highlight that the key sources of Islamic prescriptions
are the Holy Quran and the Sunnah. Similarly, Alorfi (2012) points out that HRM related
to Islamic management theory is characterized by comprehensive guidelines on all
aspects of human life, guidance derived from the Quran and the Sunnah, and alignment
of application of the principles with the theory.
Islam shares many elements with Christianity and Judaism and, in addition, provides
certain unique perspectives, like considering work as worship and perfection of work as
a religious duty, making welfare of society contingent on business and balancing work
and life (Ali, 2009). Islamic teachings are globally relevant as Muslims are residing and
working in many countries other than the Islamic countries. There is not much of
difference in Islamic work behaviors and generally accepted work behaviors in the
world (Sarwar and Abugre, 2013). Mostly, non-Muslims’ organizational cultures
encompass ethical values similar to those taught by Islam (Hashim, 2009).
Islamic guidelines on business are closer to capitalism as highlighted by Tayeb,
(1997) that the role of state is limited to the matters beyond the control of market like
broad direction of economy and natural monopolies. Islam unifies positive aspects of all
the economic systems negating their negativities. The concept of interest-free economy
propagated by Islam goes against the basis of Capitalism and the egalitarian concept
favors Socialism. Ahmad (2008) argues that contrary to the Western materialism, Islam
provides twofold view of human existence where worldly existence and the life hereafter
cannot be separated. Human existence in the life hereafter will be consequent to their
performance in this world.
Ali and Al-Owaihan (2008) argue that Islam glorifies work and trade in contrast to
old Greek and Jewish beliefs where trade and manual work was considered to be menial
and sinful activities. Theory of labor presented by the Islamic scholars such as Ibn
Khaldun propagated labor as the center of economic activities and strictly forbade
unjustified imposition of tasks as well as forced labor. Islam dignifies labor and
encourages human beings to engage in gainful activities for the society (Ali, 2010). Ali
highlights that Islam clearly lays out obligations for employers as well as employees in
the employment contract. The employers are supposed to treat the employees with
dignity, avoid undue burdening them, provide adequate instructions and ensure just
compensation. The employees are also bound for commitment, loyalty, obedience and
rendering sincere advice to peers and superiors.
Islamic social guidelines encompass egalitarian society with divine fear and trust,
care for the poor and the weak, respect for age and seniority, family orientation,
uncertainty avoidance and fatalism coupled with responsibility and accountability for
one’s actions. Basic values include nobility, patience, self-discipline, cleanliness,
abstinence, resolve, sincerity, loyalty, truthfulness, servitude, trust, dedication,
diligence, gratefulness and moderation (Tayeb, 2004). Islam lays emphasis on
continuous hard work viewing work not as an end in it but as a means to foster personal
growth and social relations. Dedication to work, creativity, justice, generosity and Human
transparency are considered virtues (Ali and Al-Owaihan, 2008; Leat, and El-Kot, 2007). resource
Basic Islamic principles of business ethics defined by Hashim in 2012 are trust,
legitimate and “Halal” earning, judicious spending instead of parsimony, paying of
management
“Zakaat” to take care of the poor, honesty, soft and decent behavior in dealings, fulfilling
promises and obligations, better treatment of employees, mutual respect and mutual
consent without any coercion. There is strong family orientation in Islam giving value to 113
marriage, having children, obeying parents and care for relatives (Branine, 2004).
Branine also finds out that family orientation and obligations significantly affect
employee relations.
It is evident from the preceding discussion that Islam provides ample guidelines on
dealing with human beings. Islam urges for establishment of egalitarian society and
business based on justice, fair play and transparency. The concept of reward in the
world hereafter adds a new dimension to individual gains. An effort has been made to
touch upon various aspects of HRM and Islamic viewpoint pertinent to these.
Incorporation of Islamic values and guidelines in HRM system has potential to enhance
its value as both (the religion and HRM system) focus on human beings and their
behavior (Razimi et al., 2014). There is a need to evaluate existing practices related to
HRM in the light of the religious guidelines and seek out areas requiring improvements.
The organizations that align their HRM practices with the principles are likely to
perform better (Moideenkutty et al., 2011). The next part includes discussion on practical
implications of Islamic guidelines on HRM.

Implications of Islamic teachings

The available literature on HRM is very vast and practices related to HRM can be broken
down into many types and categories. However, for the purpose of discussion in this
review, HRM practices have been grouped into five main areas, namely, selection,
training and development, compensation, performance appraisal and employee
involvement. These practices have been elaborated in the light of Islamic teachings in
succeeding paragraphs.

Selection
Selection is the process of reducing the number from the pool of candidates created by
recruitment by choosing individuals with relevant qualifications (Amin et al., 2014).
Hussain and ur Rehman (2013) and Razimi et al. (2014) define selection as a decision
process aimed at choosing the most suitable applicant out of available applicants for a
job.
In the business world, there exists a general tendency to hire like-minded people
creating homogenous and inflexible organizations lacking diversity and adaptability
(Becker and Gerhart, 1996). Deliberate selection of suitable employees for appropriate
jobs enhances employees’ engagement and sequential contribution to the output of the
organization (Sardar et al., 2011). Pfeffer (1998) suggests that basic character traits
should take precedence in hiring rather than skills which can easily be imparted through
training. Abutayeh and Al-Qatawneh (2012) say that selection is important because
performance of the selected individuals will reflect upon overall performance of the
organization.
IMEFM The Quranic guidelines on assessing a candidate for selection encompass capability,
9,1 knowledge, specialization, experience, personal abilities, potential, character, diligence
and obedience to the rules of the organization as well as the laws of the religion (Salleh,
2012). Islamic guidelines include five conditions to be satisfied for selection:
competency, experience, shouldering responsibility, organizational fit and reputation
(Ali, 2010). Islam emphasizes employee selection based on merit and competency. In no
114 case, selection is to be influenced by friendship, blood relationship or kinship, age,
wealth, race or political power (Alorfi, 2012). Azmi (2010) says that as per Islamic
teachings, those responsible for selection should ensure that there is no discrimination
and in addition to qualification and expertise of the applicants, character qualities
should also be judged and given due importance.
Islamic HRM requires selection decisions to be based on fairness, piety and
wisdom. Hiring of the best suited candidate should be ensured (Razimi et al., 2014;
Salleh, 2012). Islamic principles concerning selection are justice, honesty, trust and
responsibility. Justice is ensured once employees’ selection is based on their
competence and character strength rather than kinship, friendship, financial status
and political affiliation (Rahman et al., 2013; Salleh, 2012). Nepotism in selection is
against the Islamic principle of fairness (Mellahi and Budhwar, 2010). Hashim (2010)
quote the fourth caliph Ali (RA), saying that “Do not nominate them on account of
favoritism or egoism; these two attributes reflect injustice and treachery”. Branine
and Pollard (2010) argue that Islam lays a lot of emphasis on justice and directs that
it should never be affected by personal interests and other considerations. Salleh
(2012) states that as per Islamic teachings, selection especially for leadership roles
should not be done on desire and request of the applicants and quotes a saying of the
Holy Prophet (PBUH), “We, by Allah, would not charge anybody who requests it, or
is greedy for it”.
Hashim (2009, 2010) reiterates that as per Islamic teachings selection is
conducted fairly with just treatment for all applicants. He quotes from the Holy
Quran, that “Allah doth command you to render your trust to those to whom they are
due; and when ye judge between man and man that ye judge with justice”. He argues
that selection as per Islam should follow certain principles: first principle is justice,
second principle advocates that the selection should be based on competency alone
disregarding wealth, age, race, political power, friendship and blood relations, third
principle is honesty, fourth is to ensure assigning work as per capacity of
individuals. Hashim argues that according to Islamic way of selection employers
should inform the potential employees about job requirements and compensation
and applicants should provide true information about themselves. He quotes from
the Holy Quran, “And never mix truth with false, nor conceal the truth”. Mohiuddin,
(2012) states that the second caliph Umar (RA) would not only ensure the selection
of the best available individual for a particular post but also that the selected person
should perform according to the rules and ethics.
Deliberate selection based on principles enhances employees’ morale and eventually
contributes toward betterment of the organization. Islam directs to be fair and across the
board in the process of selection while avoiding all sorts of discrimination and nepotism.
At the same time, according to Islamic teachings, employees are also advised to do their
best while keeping organizational interest supreme.
Training and development Human
Training and development defined by Hussain and ur Rehman (2013) include programs resource
to teach employees about the specifics of the organization aimed at ameliorating
employees’ performance. They argue that employee turnover is inversely proportional
management
to the training programs conducted in an organization. Training and development
activities include training of new employees, improving skills of existing employees and
development of employees for upward mobility (Salleh, 2012). 115
Pfeffer (1998) argues that training is not something decorative and superfluous
which can be curtailed in the times of economic downturn, rather it can be a source of
competitive advantage. Training enhances the skill level of employees making them
intellectually better equipped to perform their duties, strengthens their bonding with
the organization, increases productivity and reduces turnover (Abutayeh and
Al-Qatawneh, 2012). Dar et al. (2014) suggest that imparting proper training is the best
HRM practice which significantly contributes toward attainment of organizational
goals and sustainable competitive advantage. Therefore, expenses on training should be
taken as investment rather than expenditure.
Investment incurred on training of employees is indirectly paid back once the
organization employs them on jobs requiring more skill and competence (Bonavia and
Marin-Garcia, 2011). An organization can be termed as a learning organization if it is
deliberately exerting to improve its human resource. It is a long-term activity and such
endeavor to tap people’s commitment and capacity to learn will equip an organization
with requisite advantage to excel in future (Akhtar and Khan, 2011). Training and
development has positive impact on organizational commitment and employees who are
imparted with training are less likely to leave the firm (Mohyin et al., 2012).
Knowledge and wisdom are attributes of Allah, and He explicitly directs human
beings in the Holy Quran to seek and apply knowledge for development of human
potential. Islam encourages human beings to acquire skills and technology (Hashim,
2009). Developing human resource is considered a very important pursuit in Islamic
theology. Hashim states that Adam was graded superior to the rest of creations on the
basis of knowledge and quotes from the Holy Quran, “Are those who know equal to
those who know not? But only they who are endowed with understanding keep this in
mind (Holy Quran, 58:11)”. Knowledge is highly regarded in Islam and knowledgeable
are considered superior. Muslims are encouraged to seek knowledge from cradle to
grave and strive for excellence. Islam emphasizes on all-encompassing training and
development including moral and spiritual development of employees at all levels of
organizational hierarchy (Hashim, 2010). Islam provides a wholesome approach of
human development inclusive of material and spiritual development aiming at
quantitative as well as qualitative development (Zangoueinezhad and Moshabaki,
2011).
Hameedullah (1995) highlights the importance of education by stating that the first
revelation on the Holy Prophet (PBUH) was the order to seek knowledge. He reiterates
that the Holy Quran includes numerous instructions on the importance of knowledge
and education. The Holy Prophet (PBUH) laid a lot of emphasis on education and
training to the extent that people, who were appointed as governors of various states,
used to get instructions to ensure public education under their jurisdiction. The Holy
Quran declares learning as a compulsory activity for its followers. The Holy Prophet
(PBUH) was an earnest promoter of religious as well as worldly knowledge
IMEFM (Laugu, 2007; Razimi et al., 2014). In early Islamic history, mosques were developed as
9,1 the centers of learning and teaching, for both religious and non-religious matters, in
addition to their basic role for worship. The idea resulted into conversion of various
mosques into educational institutions as well as establishment of Mosque Libraries
(Laugu).
According to Islamic teachings, employers should facilitate career development of
116 employees through training, special assignments and mentoring without discrimination
on the basis of race, color, sex or religion (Azmi, 2010). Rahman et al. (2013) establish that
training and development positively reinforce employee trust in organization. They also
argue that Islamic concept of training and development includes acquiring knowledge,
skills and personality development by purifying one’s soul. As per Islamic principles of
administration, managers should themselves be knowledgeable, and they should
continuously look for opportunities and means for improving knowledge and skills of
those under their charge (Salleh, 2012).
Training aims at employees’ development and skill enhancement, and thereby, it is
expected to significantly contribute toward organizational performance. Islam is
explicit about importance of knowledge, education and skill enhancement. Islam urges
employers to facilitate development of their employees without any sort of
discrimination.

Compensation
Compensation is the reward offered by organizations to their employees for their
services (Amin et al., 2014). Sardar et al. (2011) define compensation as a combination of
financial and non-financial rewards; financial rewards include pay, bonuses and other
financial incentives and non-financial rewards include extra holidays and voucher
schemes, etc. Saeed (2013) narrates the differences in philosophy of work ethics and
motivation in various economic systems. Socialist system provides it through
regimentation and very high degree of discipline. Capitalism uses financial incentives,
whereas Islam gives the concept of Halal (just) and Haram (unjust) and ultimate reward
in the world hereafter. Therefore, Islam provides the concept of intrinsic motivation
which is lacking in the other economic systems. Islamic concept of compensation is
twofold; material benefits including salary and wages are just the means of sustenance,
whereas true return of labor is with Allah as it is considered an act of worship (Ahmad,
2009).
Williams and Zinkin (2010) put forward an argument that according to Islamic
teachings, an explicit contract should be made with workers clarifying the nature of
work as well as recompense. Burden of work should be commensurate with the workers’
abilities, and they should be promptly and justly paid. Rahman et al. (2013) argue that as
per Islamic teachings, compensation should be based on certain principles: it should be
mutually decided by the employer and the employee, it should commensurate with the
work done and capabilities and competence of the employee and it should be free from
all sorts of discrimination. Islam strictly forbids coercion and forced labor. Suggesting
that wages should be fair and as per output of employees, Hashim (2010) quotes the Holy
Prophet (PBUH), “Whosoever engages a worker on work should mention the wages in
advance”. Hashim lists Islamic principles related to compensation as determination in
advance without ambiguity, just recompense, based on expertise and situation,
increased according to circumstances and sufficiency to ensure decent living.
 Islamic principles related to compensation put forward by Salleh in 2012 include Human
payment decided in advance according to well-defined terms of agreement, at par with resource
prevailing market standards, based on employee’s experience and qualifications,
commensurate with performance, just, fair, sufficient to cover the basic needs and given
management
immediately after completion of work. Saeed (2013) states that Islam lays emphasis on
labor rights which include that the work assigned should be within the capability of the
employee, wages and pay should commensurate with the requirements of decent living 117
and sickness and old age benefits should be ensured, preferably with the intervention of
the state. Tayeb, (1997) argues that a good businessman should pay reasonable wages,
charge fair price, be decently restrained in spending profits and take care of
environment. Reward should be without any discrimination, and it should also consider
the employees’ family obligations like children’s education, etc. (Azmi, 2010; Razimi
et al. 2014). Islam teaches to be kind and affectionate with the employees and giving
decent remuneration to ensure resistance to temptation for unfair means.
According to Islamic teachings, mere compensation does not justify excessive
burden of work; instead employers are responsible to ensure that the assigned work is
commensurate with the abilities of the employees. A unique and humanistic concept
given by Islam is that the number of employee’s dependents should also be considered
while deciding about compensation. Compensation is a strong contributor toward
employee morale; therefore, it ought to be fair, just and prompt.

Performance appraisal
Performance appraisal can be defined as the process of determining employees’ performance,
communicating to the employees and suggesting as well as planning for improvement
(Amin et al., 2014). It is a systematic approach toward setting standards, assessing
performance and providing feedback with the purpose of motivation, development,
reward and performance management (Hashim, 2009). The objective of performance
appraisal is to assess productivity level of employees with a view to suggest measures
to improve (Dar et al., 2014). Abutayeh and Al-Qatawneh (2012) state that
performance appraisal compares individual performance with required standards
having a threefold aim: improvement of current performance, enhancement of
motivation and identification of training needs. They find it to be positively related
to organizational performance.
Dar et al. (2014) argue that fair and just performance appraisal enhances motivation
of employees and sequentially positively affects the organizational performance. Amin
et al. (2014) reiterate that ineffective performance appraisal can have negative impact on
employees’ morale leading to low productivity. Performance management practices,
including appraisal frequency, appraisal outcome, extent of personal involvement and
performance feedback, influence employee commitment (Mohyin et al., 2012).
According to Islamic principles, employees’ performance appraisal should be based
on justice, fairness, accountability and responsibility, and its attributes should be based
on criteria included in the selection (Rahman et al., 2013). Ali (2010) quotes that the Holy
Quran explicitly notifies individual responsibility for actions and deeds, “Every soul
will be held in pledge for its deeds (Holy Quran, 74:38)”. Individuals are responsible for
their job outcome, and no one should be held responsible for the mistakes of others
(Hashim, 2010). Tayeb (2004) argues that the religion has been incorrectly perceived by
some as an absolute fatalist. The Holy Quran explicitly declares that human beings are
IMEFM able to exercise choice in their actions and are, therefore, accountable for their deeds.
9,1 Islam makes it obligatory for employees to perform up to the best of their abilities. Islam
provides a divine concept of accountability and high standard of self-discipline. It
declares that humans have been given freedom of choice in their actions and they are
rewarded according to those; good deeds deserve reward and bad ones are condemned
and rendered liable for punishment (Ahmad, 2009).
118 Hashim (2009) elaborates that as per Islamic instructions, performance appraisal can
be distributed into three categories, namely, contractual arrangements,
self-responsibility and control and accountability toward the Creator. Contractual
arrangements include fulfilling the obligatory bonding on employees as well as the
employer as per the terms of engagement of the employment contract. Self-
responsibility and control cover the moral and spiritual aspects of human dealings
which bound individuals to monitor their own performance considering that they would
be held accountable for it in this world as well as hereafter. Accountability toward the
Creator is the spiritual dimension of human performance where one feels responsible
toward the Creator and tries to perform up to his/her best of abilities without any
influence of worldly gains.
Islam urges managers to be just, fair and responsible in assessing performance of
others with the purpose of improvement, rather than publicizing weaknesses (Azmi,
2010). Hashim (2010) says that Islam introduces performance appraisal as a system to
ensure that no effort is left unrewarded. He quotes the Holy Quran:
Not an atom’s weight, or less than that or greater escapes Him in the Heavens or in the Earth
but it is in a clear record, that He may reward those who believe and do good works. For them
is a provision and a rich provision (Holy Quran, 39:3-5) Hashim (2010).
Ali (2010) that there were three approaches of performance appraisal adopted by the
second Caliph Umar: feedback from public complaints (customers’ feedback), feedback
from subordinates (360 degree performance appraisal) and sending monitors to assess
performance (monitoring).
Performance appraisal, as an important facet of HRM, is aimed at assessing the
productivity and providing feedback with the view to ameliorate individual
performance. Islam lays emphasis on individual responsibility for job performance and
organizational responsibility for just appraisal. The dimension of divine accountability
added by the religion is effective against errors of performance appraisal committed by
managers as well as faulty perception of employees concerning errors in appraisal.

Employee involvement
Employee involvement and participation is an arrangement to provide an opportunity
to employees to influence management decisions by exchange of information and ideas
(Amin et al., 2014). Employee involvement encompasses employer’s actions to provide
fair chances to employees to have an impact on decisions that affect their job (Mohyin
et al., 2012). For development of team and creation of sense of belonging, consultation is
an effective mean. Consultation in organizational affairs should be based on honesty and
true sympathy among the team members. Pfeffer (1998) points out that pooling up ideas
causes generation of more creative solutions to problems.
The organizations following total quality management practices for enhancement of
performance to the level of perfection normally use participative approach in
decision-making because of its inherent benefits (Amin et al., 2014). Sardar et al. (2011) Human
suggest that once the employees are involved in decision-making, they express resource
whole-hearted commitment with enthusiasm and look for opportunities to contribute
toward organizational success. Authority to make decisions in project-related problems
management
is valued by the employees and has positive impact on their commitment with the
organization (Mohyin et al., 2012). Daron and Robinson (2012) carryout detailed analysis
of the causes of rise and fall of various nations in human history and conclude that 119
innovations sprout once people have liberty and interest in presenting new ideas. Such
ideas bring forth creative destruction and economic progress, whereas repression of
labor results into absence of innovation and economic stagnation.
Mellahi and Budhwar (2010) state that the decision-making style in Islam is based on
consultation. Thanvi (2003) quotes from the Holy Quran, “Their (the believers’) affairs
are decided by mutual consultation (Holy Quran, 42:38)”. Another quote presented by
Thanvi:
(O Muhammad)! Consult with them in special matters. And, when you have arrived at a
decision then have trust in Allah. Verily Allah loves those who rely on Him (Holy Quran, 3:159).
Involvements of subordinates and subjects in decision-making and constructive
criticism after implementation of the decisions have been openly encouraged by the
pious caliphs in early Islamic history (Salleh, 2012). Leat and El-Kot (2007) suggest that
Islam emphasizes consultation and cooperation in performance of job and advocates
that consultation helps overcoming obstacles and avoiding mistakes.
Branine and Pollard (2010) point out that the Holy Prophet (PBUH) used Shura or
consultation in routine management. He often used to consult and follow his
companions’ advice in a number of matters which were not explicit in the Holy Quran.
Trust leads to consultation and delegation of authority to employees. Every employee is
“ameen” or a trustee, who should respect the trust bestowed on him/her by the superiors
and subordinates. Tayeb (2004) says that leaders are encouraged by Islam to trust and
consult their followers and adopt a participative and consultative decision-making style.
Williams and Zinkin (2010) explain that Islam protects the right of individuals to
disobey their superiors in case they feel that the orders given are against the spirit of
law. It is a source of security in recognition of the fact that instructions from superiors
can be mala fide. It also serves as an effective check against illegal practices by those in
the position of authority. The practice of offering prayers together standing side-by-side
regardless of worldly position and rank is expected to lessen power distance and
enhance interaction between managers and employees (Mellahi and Wood, 2004).
Once employees are involved in decision-making in and organization, they develop
identification with the organization. Islam encourages employees’ involvement in
decision-making and allows constructive criticism by the employees on organizational
policies. Consultation enhances cooperation and teamwork by the employees, while at
the same time acts as a check against faulty decision-making or injustice at the part of
superiors.
An endeavor has been made to elaborate practices related to HRM with special
reference to the Islamic guidelines. The discussion reveals that the Islamic teachings are
directed to create a fine balance where employers are made responsible to ensure justice
and display magnanimity toward their employees and, at the same time, the employers’
interest is also amply guarded. The essence of Islamic principles on HRM lies in creation
IMEFM of a win-win situation. It will not only result into more committed and motivated
9,1 employees but also a healthy and prosperous organization. The following section covers
results of the research including outcomes and findings.

Results
120 Of the reviewed literature, from the 24 articles related to Islamic guidelines, only 3 (12.5
per cent) covered empirical analysis of efficacy of Islamic principles, 5 (20.8 per cent)
encompassed practical application of Islamic principles in various sectors and 16 (66.7
per cent) included general discussion about the Islamic principles. Of 20 articles selected
from the field of HRM, 13 (65 per cent) covered empirical analysis of impact of HRM on
organizational performance and 7 (35 per cent) covered discussion on HRM. Four
selected works covered general discussion on management and history.
Empirical analysis on the impact of Islamic principles on business organizations has
been presented only by Hashim (2010), Rahman et al. (2013) and Salleh (2012). All these
articles fall in the past four years meaning thereby that there is an awakening and
emerging trend to empirically find out efficacy of Islamic principles which have
otherwise been attracting scholarly discussion without scientific evidence. Hashim
focuses on business organizations of Malaysia having majority ownership with the
Muslims and finds Islamic HRM highly and significantly correlated with organizational
commitment. Rahman et al. find Islamic principles related to knowledge, selection,
performance appraisal, training and development and reward and compensation
significantly related to trust in organization in the Islamic banks of Bangladesh. Salleh
studies Malaysian business organizations and finds Islamic principles of administration
have positive impact on the organizations.
Application of Islamic principles in business organizations has been studied by
Al-Owaihan (2008), Azmi (2010), Branine and Pollard (2010), Hashim (2009) and Sarwar and
Abugre (2013). Al-Owaihan discusses the application of Islamic principles in various
Muslim countries including Saudi Arabia, UAE and Kuwait. Azmi suggests that
implementation of Islamic HR practices, in Malaysian government, NGO and private sector
organizations, is moderate. Branine and Pollard find out that gap exists between theory and
practice of Islamic management in Arab countries. Hashim establishes that Islamic HR
practices related to recruitment, selection, performance appraisal, training and development
and compensation are frequently being practiced in certain Islamic organizations in banking
and financial sector of Malaysia. Sarwar and Abugre present the status of application of
Islamic work ethics in business organizations of UAE.

Findings
Islamic teachings related to HRM are logical and closely related to human nature.
Translating the theory into practice and its application in business is expected to bring
dividends. There is dire need of research in this regard because very few researchers
have embarked upon empirical analysis of efficacy of Islamic teachings related to HRM.
Only after establishing credible evidence of their efficacy, it can be scientifically concluded
that Islamic teachings can be usefully applied in business. Because of similarity of ethical
point of view, assessment of practical utility of the teachings can be made excluding the
context of the religion. For example, fairness and application of justice in selection,
assessment and compensation are important from religious as well as secular points of view.
Therefore, a possibility exists that a researcher endeavors to find out extent of application of Human
Islamic HRM practices in business organizations world over. resource
An emerging trend has been observed, at the advent of present decade, to empirically management
establish efficacy of Islamic teachings related to HRM in business. Nonetheless, there
exist two problems: one, the research is too less to be considered sufficient; second, it is
focused only on a few Muslim countries in the Far East or Middle East. A hypothesis
stating that the teachings are useful in business irrespective of religious orientation of 121
an organization will provide broader canvass for research, and its outcome will
contribute more toward existing knowledge of HRM.
The Muslims generally possess theoretical knowledge of Islam, and they also
practice religious rituals but during business activities religion somehow goes to the
back burner. Various researchers have established that culture has stronger influence
on business activities than religion in Muslim countries. Therefore, mere location of a
business organization in a Muslim country, or its claim of having Islamic system, is not
enough to prove existence of practices according to Islamic teachings.

Conclusions and direction for future research

Human beings as the most important asset of an organization deserve utmost attention
through HRM. Their development in line with the strategic objectives of the
organization will create a win-win situation where both the organization and the
employees, will be at the gaining end. The ultimate objective of HRM is to align
organizational interests with the interest of employees. HRM got evolved in the
twentieth century taking due account of the lessons learnt during the industrial
revolution as well as the two World Wars. Research on HRM has also passed through
evolutionary stage during the past two decades.
Of late, an increasing trend in the Muslims to understand their religion and its
application in society has been observed. The Muslims believe that Islam provides a
complete code of life where guidance can be sought for every aspect of human life,
including business. Islamic values are in consonance with the universally accepted
ethical norms. Islam advocates the rights, welfare and betterment of all the stakeholders
of business. Where employers are advised to be just and considerate, the employees are
also urged to do their best and be loyal to their organizations.
The principles and practices related to HRM discussed above are having universal
appeal independent of their religious aspect. Islam provides moral and spiritual
dimensions in addition to the physical ones. Individuals expect to be rewarded for their
deeds in life hereafter in addition to the worldly gains. This dimension of thought gives
an added strength to the commitment of employees as well as managers in an
organization because it adds a religious dimension to the routinely understood aspects
of motivation. Western material orientation in management is also based on principles;
therefore, its merger or amalgamation with the Islamic thought is possible. On one side,
principles are understood and implemented with cold logic of material gains, and on the
other side, a spiritual dimension is also added. Spiritual perspective of Islamic
motivation makes it more comprehensive than the concepts of motivation presented by
Maslow, McClelland and Freud which cover only the material aspect. Employment
relationships go beyond the written and the psychological contracts between an
individual and an employer by having a religious dimension.
IMEFM The concepts of HRM and their connection with Islamic teachings presented in the
9,1 findings can be used as variables to conduct an empirical study in the future. Selected
HR managers could be provided surveys to test hypothesis based on the given HRM
concepts. A qualitative study could be conducted to interview Muslim HR managers to
get insight into their thoughts on the results of this study.

122
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Corresponding author
Muhammad Habib Rana can be contacted at: habibrana@gmail.com

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