122 The Relationship of Human Resource Management Roles and Practices and Organization Effectiveness MENDIOLA T. CALLEJA Ateneo de Manila University Human resource (HR) professionals are increasingly challenged to play strategic roles in organizations and demonstrate how HR functions are linked with organizational performance. This study describes the current state of human resource management practice in the Philippines through HR's work systems and roles. It evaluates the relationship of these variables with: (a) perceptions of organizational performance, (b) employee productivity, (c] human capital depletion, and (d) financial performance. Respondents of the survey included HR and line managers in 41 firms. Results indicated that HR units in Philippine organizations are weaker in the strategic HR roles. Significant relationships were obtained with HR roles and work systems and perceptions of organizational effectiveness. It is human capital that gives organizations a strategic advantage over competitors. In this age of globalization, boundary-less knowledge and extremely tough competition, it is easier for firms in the same industry to acquire the best technology used by high- performing organizations (Becker, Huselid & Ulrich, 20011. What is almost impossible to imitate is the organization's capability to innovate and come up with the best ideas and solutions through the collective competence of its people. Thus, it is argued that human rather than physical capital gives business a greater competitive advantage. PHILIPPINE JOURNAL OF PSYCHOLOGY (2006), Vol 39 No 1, pp. 122-145.