Pa ge 1 Pa ge 93 American Journal of Economics and Business Innovation (AJEBI) Intermediating Role of Human Resource Management in Organizational Conflict and its Influence on Organizational Effectiveness – Evidence from Bangladesh’s Banking Sector Sohana Intasa Siddiqua1*, Tasnuva Fayezin2, Reazul Hoque3 Volume 1 Issue 3, Year 2022 ISSN: 2831-5588 (Online) DOI: https://doi.org/10.54536/ajebi.v1i3.946 https://journals.e-palli.com/home/index.php/ajebi Article Information ABSTRACT Received: November 15, 2022 Accepted: December 09, 2022 Published: December 12, 2022 Since the economy has changed due to globalization, markets have become extremely competitive. The market system is shaping the expansion of business, the economy, and other areas. As a result, human resource management (HRM) plays a crucial function. The study’s goal is to assess the effectiveness of human resource management (HRM) and how organizational disputes affect HRM’s influence on organizational effectiveness in Bangladesh’s banking industry. This paper used primary data from 400 employees in Bangladesh’s banking industry through a questionnaire, of which 310 were returned for the purpose of testing study hypotheses. PLS-SEM has been used for data analysis and the result shows that the functional conflict has a favorable link to organizational success. Additionally, it has been discovered that HRM practices have a substantial impact on organizational effectiveness and can change dysfunctional conflict into functional conflict. The finding in this study reveals that there is a strong correlation between dysfunctional conflict and organizational success. This paper provides administrators in Bangladesh’s banking sector with an essential framework for comprehending why HRM is important in banks and other enterprises and demonstrates a positive association between HRM performance and organizational success. Keywords HR Practices, Organizational Effectiveness, Organizational Conflict, Banking Sector of Bangladesh 1 American University of Ras Al Khaimah, UAE 2 East Delta University, Bangladesh 3 University of Chittagong, Bangladesh * Corresponding author’s e-mail: sohana.siddiqua@gmail.com INTRODUCTION Conflict resolution is essential in both HRM practice and theory. However, some argue that conflict should be avoided, while others argue that it should be welcomed in order to promote organizational effectiveness. The existence of humans and their interactions with one another creates the possibility of conflict. Dispute at conflicts at the intermediate level are a natural occurrence; we face possible conflicts at all organizational levels (Barker et al., 1987). The only issue that develops in the organization is when disagreements are impossible to keep at a moderate level. As a result, disagreements are crucial in organizations. The banking industry is considered as the backbone of the financial system in most nations and is essential to achieving economic progression and growth (Kamarudin et al., 2016). The expansion of trade and commerce, the creation of jobs, and the encouragement of the industrial revolution in an economy all depend on the banking sector growing. Bangladesh’s financial industry is changing and has experienced tremendous growth during the past 20 years (Ahamed, 2012). However, the rate of development decreased, leading to subpar performance and effectiveness because of a lack of sufficient capital, solid governance, an increase in non- performing loans, liquidity problems, and other concerns. These are some of the main issues facing Bangladesh’s banking industry, as they have weakened the sector (Zheng et al., 2020; Amir, 2019; Habib, 2018). Every year to address capital deficiency, the financial rule expert inserts investment into the banking industry, although the development is not however apparent (Uddin and Bristy, 2014). Both the nation’s financial sector and the whole economy are impacted by these problems. Due to the recent liberalisation of monetary policies, numerous international commercial banks have entered the local banking market, increasing competition (Mirzaei et al., 2013). This might have an impact on the effectiveness and performance of banks by reducing monopolistic power and profitability (Banna et al., 2017). Ineffective banking practices can lead to issues like bank collapse and a loss of public faith in the financial system, which can result in economic stagnation (Mahmud et al., 2016). However, all Bangladeshi banks are placing a greater focus on cost management and providing high-quality services and commodities in order to perform well (Ahmed and Liza, 2013). In this situation, Bangladesh critically needs efficient regulatory guidelines and rating systems for assessing banking performance, with a particular focus on management effectiveness, asset and profits quality, risk reduction, and financial stability (Moudud-Ul-Haq, 2017). As a result, effectiveness has become increasingly important (Shameem, 1995), and efforts have been made to increase the effectiveness of Bangladesh’s banking sector. This approach forces banks to operate in a manner that is efficient or near to “best practise” in terms of service delivery (Rashid et al., 2020). However, due to management bottlenecks, insufficient capital, low profitability, market risk, and other factors, the majority of banks perform below expectations (Bangladesh Bank, 2019). Conflict is one of the numerous causes of variation in the performance of Bangladesh’s banking sector, according to this study. There are numerous explanations for this, but according to this report, conflict is one of the causes of the deterioration in banking standards in Bangladesh. Moudud-Ul-Haq https://doi.org/10.54536/ajebi.v1i3.946 https://journals.e-palli.com/home/index.php/ajebi mailto:%20otong.karyono%40iain-bone.ac.id?subject= mailto:sohana.siddiqua@gmail.com Pa ge 94 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 (2017) discovers a substantial association between organizational higher education conflict and employee performance effeteness. Furthermore, he feels that HRM practices are critical for resolving all types of conflicts that may arise in the workplace of banking employees, as the banking industry contributes to a high level of employment as well as varied demographic profiles of employees. How to manage people to avoid conflict and use it constructively is a difficulty that HR departments face in all corporate sectors, including banking (Rashid et al., 2020). Thus, the purpose of this study is to analyse the relationship between organizational conflict, HRM, and organizational success, as well as to apply such HRM techniques to reduce conflict in Bangladesh’s banking sector. LITERATURE REVIEW Planning, organizing, directing, and regulating personnel operations are all part of human resource management. Elarabi and Johari (2014) claim that HRM is a process that focuses on preserving and increasing the skills of specific employees as well as promoting cooperation and inter-employee communication to support organizational development. The application of company strategy, job performance, financial results, conflict management within the firm, and sustained competitive advantage are all positively impacted by HRM methods “(Katou and Budhwar, 2010; Caliskan, 2010; Tan and Nasurdin, 2011; Boohene and Asuinura, 2011; Mukhtar and Siengthai, 2011; Atteya, 2012; Loshali and Krishnan, 2013)”. The goal of HR planning is to predict future labor requirements for a firm. According to Yadav and Dabhade (2014), effective strategic business and people management is referred to as HR planning. These procedures seek to determine future manpower requirements and contrast them with the laborlabor force at hand. To avoid any labor surpluses or shortages, HR managers evaluated the supply and demand for human resources, according to Noe et al. (2010). They then took the necessary actions to solve these potential concerns. Werner and DeSimone (2009) claim that recruiting and selection strategies are designed to find qualified candidates for open positions now and in the future and to make the best decisions. Mondy and Mondy (2014) define recruitment as the process of persuading people to submit timely and sufficient applications for jobs with a company. The quantity and caliber of the candidate pool may be utilized to determine how successful a recruiting procedure is, claims Durai (2010). Therefore, recruiting must draw in competent candidates as well as applications in order to persuade them to apply for a position. Employees must be capable of handling a variety of duties in an effective and efficient manner given the dynamic work environment and complicated business needs of today. An effective training and development program provides employees with continual knowledge and experience. “Training and expansion are critical for improving job performance, increasing employee productivity and satisfaction, lowering expenses, and improving work quality. According to Mondy and Mondy (2014)”, training and development are ongoing programs that strive to improve organizational performance and employee competency by providing employees with the skills and information they need to execute their jobs. Compensation is critical for recruiting and retaining competent workers. It relates to all remuneration and benefits provided to employees in acknowledgment of their efforts, as a result of their employment, and as a result of their contribution to the company’s growth (Mondy and Mondy, 2014). Pay is a human resources technique used to enhance employee behavior and performance, according to Gilmore and Williams (2009). Irshad (2008) asserts that every firm strives to improve the performance of its employees because it wants the best individuals to work for it. Better pay is necessary to recruit the top employees and entice personnel away from other companies. Al-Hyasat (2006) looked at the efficacy and effectiveness of HRMS (human resource planning, hiring and placement, performance evaluation of staff members, and employee training) as well as the connection between these tactics and business success. In twenty-one Jordanian news organizations, information was gathered from staff members who hold positions below section head. The efficiency and effectiveness of HR planning techniques, challenging and selection procedures, people performance evaluation systems, and training strategies were positively correlated with institutional performance, according to the findings. Al-Sahryra and Al-Graeb (2010) looked at how organizational creativity and HRM methods are used. The study also looked at how the two dimensions related to one another and discovered how demographic and functional factors affected organizational creativity and HRM in the Jordanian telecoms business. It has been shown that there is a high level of organizational innovation and HRM function usage. Additionally, it has been discovered that HRM activities have a considerable impact on organizational innovation. Hypothesis 1: Organizational effectiveness is correlated with effective HRM strategies. HRM philosophy and practices place a strong emphasis on understanding conflict. Some people believe that conflict should be avoided, while others believe that it should be welcomed to improve organizational performance. Managing conflict to keep it at a productive level is a supervisor’s duty and may take up more than 25% of their time (Mintzberg, 1975; Thomas and Schmidt, 1976). According to recent surveys, managers now spend over 18% of their time managing employee disagreements, more than tripling that amount since the mid-1980s (Hignite, Margavio, and Chin, 2002). Additionally, HRM philosophies deliver leadership for developing interferences and analyzing the consequences (Latham and Crandall, 1991). Recruitment and selection are the initial https://journals.e-palli.com/home/index.php/ajebi Pa ge 95 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 stage from an HRM viewpoint. Attracting applicants and selecting them mostly through unstructured interviews are the first steps in the recruiting process (Wilk and Cappelli, 2003). A person has to be trained and developed after being chosen based on desirable characteristics. It becomes essential to keep staff informed, especially in educational institutions “(Pfeffer, 1994; Appelbaum and Goransson, 1997)”. According to Latham and Stuart (2007), performance’s significance must be expressed clearly. According to Campbell et al. (1993), performance is defined as behavior or activity. Teaching abilities, research capabilities, and service are the factors used by Latham and Stuart (2007) to evaluate the faculty. These many hypothetical viewpoints on HRM practices deliver a foundation for utilizing HRM practices to change dysfunctional conflict keen on functional conflict. This study postulates the following hypothesis because HRM practices may convert dysfunctional conflict into functional conflict. Hypothesis 2: HRM procedures may transform conflict from being dysfunctional into being functional. Organizational Conflict and Organizational effectiveness Manulang asserted that a company’s effectiveness is simply the sum of its employees’ effectiveness. The process of taking activities in support of organizational objectives is known as organizational effectiveness (Robbins, 2010). In other words, organizational effectiveness will result from each component of the company doing its responsibilities appropriately (Hossain, 2017). Conflict may injure many fine people as well as corrupt the organization. Three viewpoints on conflict may be identified: 1) Traditional views, which maintain that conflict is undesirable; 2) behavioral views, which maintain that conflict frequently occurs in organizational life; and 3) interaction views, which maintain that conflict is inevitable and occasionally even necessary due to the structure and operation of organizations. (Stoner and Freeman, 2009; Robbins, 2014; Wahab, 2011). At the institutional or organizational level, disputes frequently take an asymmetrical form. Human resources are the source of the complexity that frequently arises, including tasks, status and position, authority, etc (Muhammad Hisyam, 2016). Conflict management is one way to resolve conflicts or turn them into a force for increasing organizational success. Contrary to popular belief, some disagreements can literally increase the performance of an organization (Boutros-Gali, 1999). Conflict is now increasingly seen as a necessity rather than as something that has a negative impact, and it demonstrated the influence of conflict variables on organizational effectiveness variables through the relationship between sub-variables. “Conflict seems to be essential characteristics of organizational effectiveness and learning,” write Luthans, Rubach, Sechein, and Senge in Afzalur Rahim (Rahim, 2017). The understanding of conflict, according to Carruthers (2000), refers to the approach to individual behaviour as a conflict that develops within a person, and the understanding of conflict through an organizational approach is a situation that results from disagreement over the goals to be attained and the strategy to accomplish them (Davis and Newstrom, 1996) Conflict management is the process of preparing for conflict and handling it when it occurs (Aula and Siira, 2010). Therefore, conflict itself is not a problem; the problem arises when ineffective leaders employ subpar conflict management strategies. Hypothesis 3: Organizational effectiveness and conflict within organizations are related. Figure 1: Conceptual Framework METHODOLOGY As phenomena are previously known and intended for additional explanations within the context of theorized correlations, thus this study is quantitative in character and explanatory in nature. Explanatory research is a study method that explores the causes of an occurrence when there is few accessible information (Greener, 2008). He continued by saying that it may improve your comprehension of a certain subject, allow you to determine how or why a specific phenomenon is occurring, and allow you to make forecasts around the prospect. The population of this research has been targeted with multistage sampling techniques in which entire three https://journals.e-palli.com/home/index.php/ajebi Pa ge 96 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 banks were considered via random sampling from entire population. Furthermore, data was only collected by using quota sampling, the staff was divided into three tiers. Questionnaires were administered in top level, middle level and first line managers with the help of snow ball technique. A total of 34 items were taken from the (Huselid,1995; Gould-Williams,2003 and Pfeffer,1998). Each variable has high internal consistency and dependability during the initial investigation (Organizational Effectiveness 0.702, Organizational Conflict 0.753 and HR practices 0.711). 1 represents strongly disagreed and 7 represents strongly agreed on a seven point Likert scale. 400 employees were given questionnaires to complete; 310 of those 400 questionnaires were returned, and 280 were chosen for examination. The SEM from Smart PLs was then used for analysis. Structural Equation Modeling by Smart PLS Structural Equation Modeling (SEM) is a statistical-based multivariate modeling methods. Application of SEM is similar but more powerful than regression analysis; and number of scientists using SEM in their research is rapidly increasing. This review article algorithmically discusses the SEM methodology. SEM strategies, SEM steps and SEM stages are introduced in this article; validity tests are presented as well. Novelty of this article is in modified steps of SEM application in modeling strategies, also in its developed practical comprehensive SEM application flowchart. This article is a roadmap for business advisors and those scholars trying to compute SEM for their decision making, complex modeling and data analysis programming Structural Equation Modeling (SEM) is a statistical-based multivariate modeling methods. Application of SEM is similar but more powerful than regression analysis; and number of scientists using SEM in their research is rapidly increasing. This review article algorithmically discusses the SEM methodology. SEM strategies, SEM steps and SEM stages are introduced in this article; validity tests are presented as well. Novelty of this article is in modified steps of SEM application in modeling strategies, also in its developed practical comprehensive SEM application flowchart. This article is a roadmap for business advisors and those scholars trying to compute SEM for their decision making, complex modeling and data analysis programming Structural Equation Modeling (SEM) is a statistical-based multivariate modeling methods. Application of SEM is similar but more powerful than regression analysis; and number of scientists using SEM in their research is rapidly increasing. This review article algorithmically discusses the SEM methodology. SEM strategies, SEM steps and SEM stages are introduced in this article; validity tests are presented as well. Novelty of this article is in modified steps of SEM application in modeling strategies, also in its developed practical comprehensive SEM application flowchart. This article is a roadmap for business advisors and those scholars trying to compute SEM for their decision making, complex modeling and data analysis programming “A multivariate statistical analytic method called structural equation modelling is used to examine structural connections” (Hair et al., 2016). This method examines the structural link between measured variables and latent constructs by combining component analysis and multiple regression analysis (Awais-E-Yazdan et al., 2022). This method is preferred by the researcher since it estimates several related dependencies in a single inquiry. The two types of variables used in this study are endogenous and exogenous. Endogenous variables are equivalent to both independent and dependent variables (Awais-E-Yazdan et al., 2022). Moreover, SEM has been performed via Smart PLS software. RESULTS AND DISCUSSION Out of 280 participants, 231 were men, making up the majority of the participants who were targeted for data Table 1: Profile of the respondents. Demographics Categories Frequency Percentage Gender Male 231 82.5 Female 49 17.5 Marital Status Married 186 66.4 Single 94 33.5 Age 20 to 29 84 30.0 30 to 39 112 40.0 40 to 49 70 25.0 50 to 59 14 5.0 Education Bachelor Degree 90 32.1 Master Degree 177 63.2 MPhil/Phd 13 4.64 Experience Less than 1 year 9 3.2 1-10 years 156 55.7 11-20 years 65 23.2 21-30 years 30 10.7 31-40 years 20 7.1 Occupation Top level Management 18 6.4 Middle level management 89 31.7 First line Management 173 61.7 https://journals.e-palli.com/home/index.php/ajebi Pa ge 97 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 collection. 66.4% of the participants were married, with a frequency ratio of 186. The majority of employees in the private banking industry are between the ages of 30 and 39, with a frequency ratio of 112. According to demographic statistics, private banks in Bangladesh have highly educated staff members, with 63.2 percent of them holding master’s degrees and 156 percent of them having one to ten years of experience. With a frequency of 173, the participants who were targeted during data collection primarily belong to first line management. The Table 1 is where the respondents’ profiles are displayed, and they are as follows. Findings of Measurement Model Cross Loadings An item that loads at.32 or higher on two or more criteria is referred to as “cross loading.” If there are numerous adequate to strong loaders (. 50 or better) on each component, the researcher may want to consider excluding a cross loading item from the study. If crossloading items must be larger in their own latent variable, their relevance in explanatory research is 0.7. (Hair et al., 2016). Organizational Effectiveness (OE), Organizational Conflict (OC), and HR Practices (HRP) are all items of latent variables in this study, and cross Table 2: Factor Analysis (Cross Loadings) Sl. No. Latent Indicators Organizational Effectiveness (OE) Organizational Conflicts (OC) HR Practices (HRP) 1 OE2 0.947 0.653 0.198 2 OE3 0.756 0.577 0.309 3 OE4 0.760 0.711 0.455 4 OE5 0.788 0.610 0.635 5 OE6 0.780 0.526 0.612 6 OE7 0.829 0.596 0.583 7 OC1 0.611 0.732 0.441 8 OC3 0.256 0.862 0.757 9 OC4 0.072 0.933 0.589 10 OC5 0.564 0.929 0.444 11 OC7 0.582 0.755 0.718 12 OC8 0.484 0.765 0.763 13 OC9 0.251 0.736 0.437 14 OC10 0.650 0.936 0.383 15 OC11 0.544 0.812 0.623 16 HRP1 0.351 0.581 0.756 17 HRP2 0.534 0.326 0.788 18 HRP3 0.315 0.612 0.822 19 HRP4 0.684 0.555 0.823 20 HRP5 0.542 0.175 0.799 21 HRP8 0.556 0.266 0.701 22 HRP9 0.613 0.487 0.806 23 HRP10 0.646 0.688 0.865 24 HRP12 0.215 0.553 0.801 25 HRP13 0.667 0.455 0.832 26 HRP14 0.631 0.622 0.783 loading analysis of factor analysis reveals that these items are all extremely heavily internally loaded. In Table No. 2, further statistics are provided in more profundity. Internal Consistency Reliabilities In PLS-based research, researchers choose the Composite Reliability. Composite reliability may result in larger estimations of genuine reliability compared to Cronbach’s alpha. Including Cronbach’s alpha, the acceptable cutoff for composite reliability is the same as for the other reliability metrics. From 0 to 1, with 1 denoting perfect predicted reliability, is the range for composite reliability. Composite reliabilities in a model should be equal to or larger than.6 for exploratory purposes, equal to or greater than.70 for confirmatory reasons (Henseler et al., 2012), and equal to or more than.80 for confirmatory studies (Chin, 1998; Höck and Ringle, 2006). (for ex., Daskalakis and Mantas, 2008). The numerous indicators may only be little wording variations of one another rather than being really representative measurements of the construct the factor reflects, according to very high composite reliability (>.90). With values of 0.769, 0814, and 0.815, the endogenous variable Organizational effectiveness (OE) in this instance has strong Cronbach’s Alpha, Rho A, and Composite reliability, indicating that the components of the variable OE have good internal consistency reliability. Organizational Conflicts and HR practices also have excellent internal consistency reliability of their items, as shown below in table No. 3 accordingly, which is similar to the exogenous and mediating variables. https://journals.e-palli.com/home/index.php/ajebi Pa ge 98 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 Convergent and Divergent Validities (AVE and Discriminant validity) A test of convergent and divergent validity may be performed using AVE. In a reflective model, AVE represents the average communality for each latent component. In an acceptable model, AVE should be larger than.5 and bigger than the cross-loadings, which indicates that variables should account for at least half of the variation of their respective indicators. (Chin, 1998; Höck and Ringle, 2006) AVERAGE below 50 indicates that explained variance is more than error variance. Table 3: Internal Consistency Reliabilities. Latent Variables Cronbach's Alpha rho_A Composite Reliability Organizational Effectiveness 0.769 0.814 0.815 Organizational Conflicts 0.712 0.800 0.792 HR Practices 0.807 0.872 0.860 All of the latent variables in this study have extremely strong and substantial average of variance extraction, as shown by the AVE values of OE (AVE = 0.52), OC (AVE = 0.641), and HRP (AVE = 0.627). Additionally, the square root of AVE is displayed in the diagonal cells of the Fornell-Larcker criteria table in the SmartPLS output, and correlations are displayed below it. As a result, in absolute value terms, there is discriminant validity as indicated by table No.4 if the top number (which is the square root of AVE) in any factor column is higher than the numbers (correlations). Table 4: Convergent and Divergent Validities Latent Variables Organizational Effectiveness Organizational Conflicts HR Practices AVE Organizational Effectiveness 0.721 0.521 Organizational Conflicts 0.727 0.800 0.641 HR Practices 0.765 0.723 0.792 0.627 R_Square and F_Square (Model Fit Test) The structural model’s overall effect size is measured by R-square, also known as the coefficient of determination and previously mentioned and shown above. Results of the OC and HRP below the cutoffs of 0.26 and 0.21 are referred to as “significant” by Chin (1998) and Höck and Ringle (2006), respectively. Here, the R-square would be seen as having a modest strength or influence. However, what is termed “high” depends on the field: a number of.25 would be regarded as “high” if the prior state of the art in the relevant field had produced even lower values. The R-square change effect is also known as the f-square effect size measure. The R2 change’s contribution to the unexplained variance is expressed using the f-square equation (Hair et al., 2014). Once more, OE has an excellent F Square value of.27, and HRP likewise has a decent F Square value as a mediator, with a 0.13-bit smaller effect because of the Mediation effect. Table 5: R Square and F Square Analysis (Model Fit Test) Latent Variables R Square R Square Adjusted F Square Organizational Effectiveness -- 0.27 Organizational Conflicts 0.26 0.26 -- HR Practices 0.21 0.22 0.13 Findings of Structural Model Mooney and Duval (1993) and Wood (2005) both assert that the bootstrap has several significant consequences for researchers. First off, the approach is straightforward and needs a basic understanding of mathematics. Second, the approach may be used to a wide range of statistical ideas. In this Table 6. Beta, standard error, and T-statistics analyses are included in the path coefficient table, which analyses the significance of hypotheses with various significant values. At 0.05, the beta value is significant, and at 1.96, the T value is significant. Here, OC is highly associated to HRP with a beta value of 0.315 and a T value of 5.102. Additionally, OC is significantly related to OE as a result of a direct impact with beta and T values of 0.382 and 5.133. Additionally, through HRP, there is an indirect connection between OC and OE. Because of the mediation effect, OC-HRP also has a substantial connection with OE, with beta and T values of 0.282 and 7.912 respectively. Table 6: Path Coefficient Path Coefficient Hypotheses Beta Standard Error T Statistics Direct Effect OC -> HRP 0.315 0.071 5.102 OC -> OE 0.382 0.053 5.133 Indirect Effect OC-HRP-> OE 0.282 0.078 7.912 https://journals.e-palli.com/home/index.php/ajebi Pa ge 99 https://journals.e-palli.com/home/index.php/ajebi Am. J. Econ. Bus. Innov. 1(3) 93-101, 2022 CONCLUSION This study confirms the first hypothesis of the study, which states that there is an association between organizational conflict and organizational effectiveness. The research discovers a strong link among OE and “functional conflict”. This study’s discovery of a substantial association between dysfunctional conflict and organizational success lends weight to the theory that there is a link between the two. As a result, it is clear from the findings that although dysfunctional conflict reduces organizational performance in the banking industry as well as other economic sectors, functional conflict helps to increase it. The study’s second objective is to determine is HRM performs and OE are related? Research has also provided solid evidence that organizational success in Bangladesh’s baking industry is significantly influenced by recruiting and selection, training and development, performance evaluation, and the involvement of the union. Acceptance of this concept therefore gives the administrators in Bangladesh’s banking industry a crucial foundation for understanding why HRM is crucial in banks and other industries. As a result, analysis reveals that HRM performs have a favorable relationship with organizational success. Effective HRM practices are thought to help keep conflict at a functioning level. Additionally, communication is proven to be important. The findings of this study provide strong evidence in favor of the hypothesis that HRM practices serve as an important moderating variable. Therefore, this study suggests that using HRM practices as a arbitrator in turning dysfunctional conflict into functional conflict will help Bangladesh’s banking sector reduce employee conflict and increase organizational effectiveness. The findings imply that, in banks as in other business sectors, maintaining organizational conflict at a functional level may improve organizational effectiveness. This study also reveals that through enhancing employee performance and happiness, HRM may play a significant role in banks and contribute to greater organizational success. Additionally, this research specifically focused in particular variables i.e. Organizational Effectiveness, Conflict and Mediation role of HRM, however future studies should extent and alter this model by exploring impact of other variables of alike Organizational Culture, Performance Appraisal and others on organizational effectiveness. 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