Management Control System, Human Resource Management Practices, and Organizational Performance of Selected Higher Education Institutions in the Southern Asia Pacific Ruben T. Carpizo Adventist University of Philippines And Harlyn Siagian Universitas Klabat, Manado, Indonesia

INTRODUCTION The condition and the picture of the organization in the future are full of uncertainty because of the economic crisis that struck the world, such that organizations are forced to carry out planning and even formulate and determine strategies which are appropriate and flexible. With the increasing desire of many companies to be competitive between organizations, the organizations today must undertake or carry out a good system to be able to follow the development of a dynamic economy. Adventist schools in the Philippines also experience decreased number of students because of poor organizational performance (Carpizo, 2008).

Poor performance is often like a fight as it rebuilds organizational mechanisms and offers timely corrective actions. There are four causes of poor performance: (a) ineffective leadership, (b) wrong people at the wrong place, (c) inadequate work-system and processes and, (d) individual incapability (Vaisher, 2011). Based on the threats mentioned, a research is necessary to find the relation of management control systems, human resource practices and organization performance. Management control system and human resource practice model can be used to improve performance in SDA Higher Educational Institutions in the region of Southeast-Asia Pacific Division (SSD). These would also enable the institution to face competition with other higher education institutions.

Epstein and Manzoni (2006) argue that management control system covers the entire organizational rules and actions in achieving an objective in design to improve performance with low risk. Normala (2006) mentioned that human resource management practices could positively influence profitability and organizational growth. This study sought to determine the relationship of management control system and human resource management practices on organizational performance.

METHODOLOGY The research made use of the descriptive Correlational research design. There were 483 respondents coming from the SDA Higher Educational Institutions in Indonesia, Philippines, and Thailand. The respondents of this research were the regular employees of higher education institutions under the supervision of the Southern-Asia Division (SSD). Data was gathered though survey questionnaires. The questionnaire consists of three major parts excluding the demographic characteristics (Management Control system, Human Resource Practices, and Organizational Performance). Each item utilized the five point Likert type scale of Never (1), Rarely (2), Sometimes (3), and Oftentimes (4), and Always (5). These scales were interpreted as Very good, Good, Fair, Poor, Very poor.

METHODOLOGY The questionnaire was content validated and were subjected to pilot study to determine the internal consistency. The reliability results were high in all dimensions of Management Control system (0.90), Human Resource Practices (0.82), and Organizational Performance (0.88).

Management Control Systems Management Control System RESULTS Management Control Systems The management control system of the participating institution is perceived by their workers as oftentimes practiced by their institution. The overall grand mean of management control system is 3.85. Results indicated that management control system in terms of strategic planning, budget preparation, operation and measurement, and reporting and evaluation are good. Management Control System Mean Scaled Response Verbal Interpretation Strategic Planning 4.05 Oftentimes Good Budget Preparation 3.95 Operation and Measurement 3.78 Reporting and Evaluation 3.64 Legend: Very Good (4.50 – 5.00); Good (3.50 – 4.49); Fair (2.50 – 3.49); Poor (1.50 – 2.49); Very Poor (1.00 – 1.49)

Human Resource Management Practices The grand mean for Human Resource Management is 3.59 which revealed that the overall human resource management practice was good. Findings show that Human Resource Management Practices was good in terms of relationship, compensation, performance management, and training and development and fair in selection and recruitment. HR Practices Mean Scaled Response Verbal Interpretation Relationship 3.73 Oftentimes Good Compensation 3.67 Performance Management 3.62 Training and Development 3.54 Selection 3.48 Sometimes Fair Recruitment 3.47 Overall 3.59 Legend: Very Good (4.50 – 5.00); Good (3.50 – 4.49); Fair (2.50 – 3.49); Poor (1.50 – 2.49); Very Poor (1.00 – 1.49)

Organizational Performance The results revealed that the overall organizational performance was good (mean = 3.78). The findings imply that the institutions were doing well. The workers of institutions were innovative and developing, their workers had skills and capabilities and the institutions had the ability to generate income. Organizational Performance Mean Scaled Response Verbal Interpretation Business and Production Process 3.80 Oftentimes Good Financial 3.78 Learning and Growth 3.76 Overall Level of Performance Legend: Very Good (4.50 – 5.00); Good (3.50 – 4.49); Fair (2.50 – 3.49); Poor (1.50 – 2.49); Very Poor (1.00 – 1.49)

Management Control System and Organizational Performance The results show that management control system and its dimensions: strategic planning, budget preparation, operation and measurement, and reporting and evaluation are significantly (p < .01) related to organizational performance. This means that the company financial performance is strongly determined by the system of management control of structure and process and the process of management control system has positive correlation with financial performance Management Control System Organizational Performance R Sig Verbal Interpretation Strategic Planning 0.675** 0.000 S Budget Preparation 0.684** Operation and Measurement 0.756** Reporting and Evaluation 0.773** 0.798**

Human Resource Management and Organizational Performance The results show that human resource management and its dimensions: practices, recruitment, selection, training and development, performance management, compensation, and relationship are significantly related to the organizational performance. The direction of the relationship between human resource management practice, and organizational performance was positive. This implies that the better the human resource management practices in term of recruitment, selection, training and development, performance management, compensation, relationship, the better the organizational performance of the respondent institutions. HR Practices Organizational Performance R Sig Verbal Interpretation Relationship 0.818** 0.000 S Compensation 0.683** Performance Management 0.727** Training and Development 0.759** Selection 0.666* Recruitment 0.722** HRM Practices 0.840**

Human Resource Management Practices The final regression model indicated seven significant predictors of organizational performance. These are relationship, operating and measurement, compensation, recruitment, reporting and evaluation, training and development, and strategic planning. When the seven predictors were taken as one, the regression coefficient (R) was 0.872 and they account or predict 76.1% of the variance in organizational performance. The best predictor is relationship. HR Practices R R2 Change Sig Relationship 0.818 0.669 0.000 Operation and Measurement 0.849 0.720 0.051 Compensation 0.858 0.737 0.016 Recruitment 0.865 0.749 0.012 Reporting and evaluation 0.868 0.754 0.005 0.001 Training and Development 0.871 0.758 0.004 Strategic Planning 0.872 0.762 0.003 0.026

Conclusion The management control system of the higher education institutions was good. The human resource management practices of the higher institutions were good. The level of higher institution’s performance was good. The significant predictors of organizational performance are relationship, operating and measurement, compensation, recruitment, reporting and evaluation, training and development, and strategic planning. These specific dimensions of management control system and human resource management practices influenced organizational performance. Among the significant predictors, relationship is the best predictor of organizational performance in this study.