Abstract—Although human resources are recognized as the crucial companies’ resources and their positive influence on companies’ performances has been confirmed through different researches, scientists are still debating it. In order to contribute this debate, this paper firstly discusses the most important human resource management elements and practices and its influence on companies’ success. Afterwards it defines human resource “bundles” – interrelated and internally consistent human resource practices, complementary to each other, or the most important human resource practices and elements regarding Croatian companies and its human resource management activities. Finally, the paper provides empirical results; more precisely it reveals the relation of the level of development of human resource management function (“bundles”) and companies’ financial performances (using profitability ratios, liquidity ratios, solvency ratios and a group of additional ratios related to employees’ indicators). Keywords—Companies’ performances, human resource bundles, multivariate statistical analysis. I. INTRODUCTION UMAN resources are recognized as the most important companies’ resource, which influences companies’ success and creates sustainable competitive advantage in changing, dynamic and unpredictable environment. In the last decades, the influence of human resource function on companies’ performances represents one of the main research topics in the area of human resource management (HRM). Many scientists and researchers have analyzed and confirmed that HRM and human resource (HR) practices have considerable influence on companies’ performances. However, there is still ongoing debate among respectable scientists about stated relationship, but there has been made almost general consensus that HRM practices should be an important variable influencing company’s performances [1]. This influence is stronger and more direct if the HR practices are not observed as separated and unrelated fields of practice or activity, but as the sets of combined HR activities, commonly called “bundles”. Many researchers have confirmed that when HR practices are considered and practiced as “bundles”, those provide more direct and stronger synergic effects on companies’ performances [2], [3]. The aim of this study is to research relationship between the Ivana Tadić is with the University of Split, Faculty of Economics Split, Department of Management, Cvite Fiskovića 5, 21 000 Split, Croatia (corresponding author phone: 00-385-21-430-661; e-mail: itadic@efst.hr). Snježana Pivac is with the University of Split, Faculty of Economics Split, Depertment of Quantitative Methods, Cvite Fiskovića 5, 21 000 Split, Croatia (e-mail: spivac@efst.hr). level (quality) of HR function developed in Croatian enterprises and the impact that might have on enterprises' (financial) performance. Two separate researches were conducted for this study. The first research included written survey distributed to all Croatian public companies listed on Croatian Stock Exchange Market. The survey was generally designated to the HR managers, investigating their subjective opinions on the level of development of HR activities within their company. The other part of the research provided data on financial performances of companies participating in the survey. The two sets of data were paired and analyzed using multivariate statistical analysis. Comprehensive analysis of the results provided very interesting insights into overall level of HR activities development in Croatian enterprises and the impact it has on companies' (financial) results. II. THEORETICAL BACKGROUND A. Human Resource Practices Unpredictable and always changing environment requires companies’ continual development in order to succeed in business. Despite possible similarities among companies in terms of structure of their human resources - educational level, age structure, sex structure or working experience - every company has its unique set of human resources. Those are valuable, exceptional and very difficult to imitate according to their specificities as knowledge, working experience, skills, abilities, culture, emotional and social intelligence, etc. The fact that human resources are present in a company does not guarantee company’s success, but the success can be accomplished only by proper management, development, control or motivation of employees. Those and similar understandings have changed traditional economy to modern one, recognizing now HR as investment in future business and as the key factor in creating sustainable business performances instead of understanding them solely as business costs. Companies sharing these beliefs, invest efforts in order to improve company’s policies and practices in the field of HRM, aiming eventually the increase of companies’ performances. Reputable authors have provided more precise explanations on the relationship between HR practices and companies’ performances, investigating empirical evidence regarding mentioned relationship. Many HR practices became popularized and accepted by employers although there was no empirical evidence about that. In order to empirically prove influence of particular HR practices on company’s performances, many researchers were investigating individual Defining Human Resources “Bundles” and Its’ Correlation with Companies’ Financial Performances Ivana Tadić, Snježana Pivac H World Academy of Science, Engineering and Technology International Journal of Economics and Management Engineering Vol:8, No:4, 2014 1032 International Scholarly and Scientific Research & Innovation 8(4) 2014 scholar.waset.org/1307-6892/9997946 International Science Index, Economics and Management Engineering Vol:8, No:4, 2014 waset.org/Publication/9997946