ABSTRACT
Human Resource Management is one of the factors that determine organisation’s
performance and it is used by quite a large number of organisations to increase the
productivity of employees which also increases the organisation’s total productivity and
enhances the organisation’s efficiency and effectiveness. The study examined the impact of
human resource management on organisation’s performance. To achieve this, a public
survey was adopted and data were obtained through the distribution of rate scale
questionnaire and oral interviews. The sample for this study comprises of employees from
MTN Nigeria, Access Bank, Fidelity Bank, Wema Bank, Forte Oil Plc and African Petroleum
Oilfield Services Limited (a subsidiary of Forte Oil Plc) and also from Mutual House
Insurance company. Frequency Tables and charts were used to represent the bio data and
responses from respondent, Regression was used in testing the hypotheses. The results
therefore, reveal that there is a significant relationship between human resource management
and organisation’s performance as human resource management was divided into human
resource policies, employee welfare, employee participation and employee training and
satisfaction. This study concludes that four major factors are responsible for the success of
human resource management in improving organisation’s performance which includes the
implementation of human resource policies, inclusion of the investment and value of
employee’s remuneration in the organisation’s culture, employee participation and employee
training and satisfaction. The study recommends that organisations should try as much as
possible to implement human resource policies put in place by them and there should be a
periodic review and assessments (performance appraisal) for employees in the organisation.
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TABLE OF CONTENTS
Page
Title Page i
Approval page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of Contents vi
CHAPTER ONE
1.0 Introduction 1
1.1 Background to the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the Study 4
1.4 Research Questions 4
1.5 Research Hypotheses 5
1.6 Assumptions to the Study 6
1.7 Significance of the Study 6
1.8 Scope of the Study 7
1.9 Limitations of the Study 8
1.10 Organisation of the Study 8
1.11 Definitions of terms 8
References 9
viii
CHAPTER TWO
Literature Review
2.0 Introduction 10
2.1 Conceptual Framework 10
2.1.1 Nature of Human Resource Management 12
2.1.2 Rationale for Strategic Human Resource Management 14
2.1.3 Human Resource Development in Nigeria 18
2.1.4 Evolution and Development of Human Resource Management 19
2.1.5 Strategic Human Resource Management Model 19
2.1.6 Human Resource Management Activities 25
2.1.7 Human Resource Policies 29
2.1.8 Importance of Human Resource Policies 36
2.1.9 Organisational Performance 38
2.1.10 Human Resource Management 40
2.1.11 Importance of Human Resource Management to Organisations 43
2.2 Theoretical framework 44
2.2.1 Organisation Life Cycle Theory 45
2.2.2 Role behaviour Theory 45
2.2.3 Resource Dependency Theory 45
2.2.4 Institutional Theory 46
2.2.5 Transaction Cost Theory 47
2.2.6 Comparative Cost Theory 47
2.2.7 General System Theory 48
2.2.8 Human Capital Theory 48
2.2.9 Strategic Contingency Theory 49
2.2.10 Organisation Change Theory 50
2.2.11 Organisation Learning Theory 50
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2.3 Empirical Review 53
2.4 Current Trends in Thinking ` 60
References 62
CHAPTER THREE
Methodology
3.0 Introduction 68
3.1 Research Design 68
3.2 Research Population 69
3.3 Sample and Sampling technique (s) 69
3.4 Research Instrument (s) 70
3.5 Validity and Reliability of instruments 70
3.6 Method (s) of data collection 70
3.7 Data validation 71
3.8 Data Presentation and Analysis Techniques 72
3.8.1 Model Specification 72
CHAPTER FOUR
Data Presentation and Analysis
4.0 Introduction 73
4.1 Return of Questionnaire 73
4.2 Presentation and Analysis of Demographic Characteristics 74
4.3 Data analysis ( Test of Hypothesis) 82
CHAPTER FIVE
Summary of Findings, Conclusion and Recommendations
5.0 Introduction 96
x
5.1 Summary of Findings 96
5.2 Discussion of Findings 97
5.3 Conclusion 99
5.4 Recommendations 100
5.5 Contribution to Knowledge 101
5.6 Areas of Further Research 101
Bibliography
Appendix
xi
LIST OF TABLES
Table 4.1.1 Distribution of returned questionnaire 73
Table 4.2.1 Age analysis of respondents 74
Table 4.2.2 Demographic Characteristics by gender 75
Table 4.2.3 Demographic Characteristics by marital status 76
Table 4.2.4 Demographic Characteristics by educational qualification 77
Table 4.2.5 Demographic Characteristics by professional qualification 78
Table 4.2.6 Demographic Characteristics by nature of employment 79
Table 4.2.7 Demographic Characteristics of years spent in the organisation 80
Table 4.2.8 Demographic Characteristics of working experience 81
Table 4.3.1 Data Analysis for Existence of Human resource Department 83
Table 4.3.2 Data Analysis for human resource policies 83
Table 4.3.3 Data Analysis for the aim of human resource policies 84
Table 4.3.4 Data Analysis for the impact of human resource policies on performance 84
Table 4.3.5 Data Analysis for Employee welfare 85
Table 4.3.6 Data Analysis for Precautions taken by organisation 86
Table 4.3.7 Data Analysis for team work of employees 86
Table 4.3.8 Data Analysis for discussion of key issues between employees 87
Table 4.3.9 Data Analysis for Assessment of employees and management 87
Table 4.3.10 Data Analysis for Provision of job training for employees 88
Table 4.3.11 Data Analysis for good working conditions for employees 88
Table 4.3.12 Model Summary 90
Table 4.3.13 Analysis of Variance 90
Table 4.3.14 Coefficients 91
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LIST OF FIGURES
Figure 2.14a representing Figure 1.1 19
Figure 2.15a representing Figure 2.1 20
Figure 4.2 Bar chart for the table 4.2.1 74
Figure 4.4 A Bar chart for table 4.2.3 75
Figure 4.5 A Bar Chart for table 4.2.4 76
Figure 4.6 A Bar Chart for table 4.2.5 77
Figure 4.7 A Pie Chart for table 4.2.6 78
Figure 4.8 A Bar Chart for table 4.2.7 81
Figure 4.9 A Bar Chart for table 4.2.8 82
1
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In today‟s increasingly competitive business environment, organisations keep evolving ways
of ensuring their continued survival and improving organisational performance on a sustained
basis. Human resources are considered the most important asset of an organization, but very
few organizations are able to fully harness its potential. Pfeffer (1994) argued that human
capital has long been held to be a critical resource in most firms. Lado and Wilson (1994, p.
701) define a human resource system “. . . as a set of distinct but interrelated activities,
functions, and processes that are directed at attracting, developing, and maintaining (or
disposing of) a firm‟s human resources. Companies are now trying to add value with their
human resources and human resource (HR) department has been set up in order to manage
their human capital, where as organisation in last decade, managed their human capital
through personnel department which is only a small division of the company. The process of
managing the human capital is called human resource management (HRM). Traditionally,
management of this system has gained more attention from service organizations than from
manufacturing organizations. However, to enhance operational performance, effectively
managing this system is equally important in both types of organizations. Needless to say,
sophisticated technologies and innovative manufacturing practices alone can do very little to
enhance operational performance unless the requisite human resource management (HRM)
practices are in place to form a consistent socio-technical system. For this reason,
manufacturing organizations need to carefully evaluate their existing HRM practices and
modify them, if needed, so that employees can effectively contribute to operational
performance improvement. This lack of attention is surprising when one considers human
2
resources‟ critical role in achieving superior performance in competitive priorities, such as
low cost, quality, delivery, flexibility, and innovation.
Nigerian organizations have started realising the importance of HRM. Cheah et al. (2003)
stated that Nigerian managers realised that HRM had to be effective to bring about
organisational stability and harmony. Besides, they also stated that the diversity of the
composition of the modern workforce in Nigeria requires more appropriate and imaginative
HRM solutions. As several scholars have noted that managing people is more difficult than
managing technology and capital (Barney, 1991; Lado & Wilson, 1994), principally, in a
country like Nigeria which is a developing country with more labour than capital, failure in
managing human capital and maintaining the harmony within an organisation will create fatal
problems to the organisations.
Nigerian government has envisioned as a developed nation by 2020. Government has also
recognised that human resource management can play an important role for the said vision.
Managing human resources has become critical to the success at all companies, large and
small, regardless of industry (Ulrich, 1997). Stavrou-Costea (2005) also argued that the
effective human resource management can be the main factor for the success of a firm. Today
the most of the companies believed that without efficient HRM programmes and activities
companies would not achieved and sustained effectively (Schuler, 2000). Consequently most
of the organisations, domestic companies and multinational companies in Nigeria nowadays
tend to focus more on HRM and also treated HRM as a key of success. In as much as the
policies are there, the organisations still do not implement them.
Considering the need for HRM practices, Effective Human Resources Management (HRM)
provides a means, through which an organisation attracts, retain, develop, motivate and
adequately compensate employees for a sustained growth and increased competitiveness.
3
Thus, this research is expected to become, in an important part, a meaningful guideline for
human resource management practitioners and other stakeholders to see the critical role of
Human Resources Management in the success or failure of companies and ensuring the
efficient and effective functioning of companies as against their competitors.
1.2 Statement Of The Research Problem
The increasing competitive business environment has made every business to strive towards
the improvement of organisational performance in all aspects, human resource management
is one of them and in absence of it, problems could arise.
The following are problems identified with this research work:
1. Strategic human resource policies put in place and failure to implement these policies by
the management has contributed to poor performance in companies in Nigeria.
2. Weak organisational culture, disregard for the value of workers‟ remuneration and resistant
to change the overall culture of the organisation by the management has led to poor
performance in companies in Nigeria.
3. lack of involvement of the employees in decision making, quality circles and team work in
organisations led to poor human resource management which also affects organisational
performance in Nigeria.
4. Negligence on the part of board of directors and laziness on the part of the human resource
manager in the performance of their responsibilities to the organisation in selecting the right
4
person for the right job, job training and job satisfaction has contributed to poor human
resource management and ultimately poor performance in organisations in Nigeria.
1.3 Objectives Of The Study
Generally, this study seeks to explore the relationship between human resource management
and organisational performance.
The specific objectives are set out as follows:
1.To examine the impact of different human resource policies on organisation‟s performance
and find out why organisations hesitate to implement them in Nigeria .
2.To review organisation‟s culture and whether the investment and value of workers‟
remuneration are fitted into organisation‟s performance criteria in Nigeria.
3. To facilitate employee involvement and participation in decision making quality circles
and team work all of which contributes to effective performance of organisations in Nigeria.
4. To examine the responsibilities of the board of directors and human resource managers in
the areas of job selection, job training and job satisfaction which contributes to good human
resource management and performance in organisations in Nigeria.
1.4 Research Questions
1. Do human resource policies affect organisation‟s performance in Nigeria?
2. To what extent is the investment and valve of employees‟ remuneration included in
the organisation‟s culture and its impact on organisation‟s performance in Nigeria?
3. Do employees actively participate in decision making, quality circles and team work
in organisations to improve its performance in Nigeria?
4. To what extent does the responsibility of the board of directors and human resource
managers in the areas of job selection, job training and job satisfaction contribute to
5
good human resource management and effective performance of organisations in
Nigeria?
1.5 Research Hypothesis
The questions asked above lead to hypothesis, which will be tested on whether good human
resource management leads to effective and efficient organisation‟s performance.
The hypotheses of the research are stated as follows:
Research hypothesis 1:
H0: Human resource policies do not affect organisation‟s performance in Nigeria?
H1: Human resource policies do affect organisation‟s performance in Nigeria?
Research hypothesis 2:
H0: Inclusion of the investment and valve of employees‟ remuneration in the organisation‟s
culture does not affect organisation‟s performance in Nigeria?
H1: Inclusion of the investment and valve of employees‟ remuneration in the organisation‟s
culture affect organisation‟s performance in Nigeria?
Research hypothesis 3:
H0: Participation and involvement of employees in decision making, quality circles and team
work does not affect organisation‟s performance in Nigeria?
H1: Participation and involvement of employees in decision making, quality circles and team
work does affect organisation‟s performance in Nigeria?
Research hypothesis 4:
H0: Responsibilities of board of directors and human resource managers in the areas of job
selection, job training and job satisfaction for good human resource management does not
lead to effective organisational performance?.
6
H1: Responsibilities of board of directors and human resource managers in the areas of job
selection, job training and job satisfaction for good human resource management leads to
effective organisational performance?
1.6 Assumptions To The Study
The following are the general considerations in the working of the HR concept by
organizations:
1. Only internal human organization (employees) are considered. External organizations like
customers are not considered.
2. All categories of employees are included. The value of employee potential services is
considered (remuneration and other commissions).
3.Employees are classified according to age and pay scales under six categories i.e.
executives, supervisors, supporting technical staff, skilled artisans, unskilled and semi-skilled
workers and clerical staff.
4. Future number of employees is worked out on the basis of general promotion policy.
5. Employee considerations include direct and indirect benefits.
The medium and large scale companies in Nigeria except for developed countries like the
United states of America and some parts of India reward employees in terms of increase in
Revenue, productivity and flexibility in skill development and so on.
1.7 Significance of The Study
Human resource management has a very high significance not only for the management, but
also for analyst and even for employees. This study focuses on the impact of human resource
management on organisation‟s performance; therefore the study will be relevant to:
1. Management:
The study will help management in better utilization, planning and management of human
resources (employees) in the organization.
7
2. Employees:
This study will help employees to know their value of remuneration and help them to relate
with their managers to achieve an effective organisational performance.
3. Financial Analysts:
Even today, when a good deal of work has been done in this field, it is very much
unfortunate that there is not only a set pattern or generally accepted method either for
valuation of human resource or for their recording in books of accounts or for the disclosure
of information by means of different statements. So as for analysts, this study will help them
to find out a method of valuation of human resources for better management and effective
organisation‟s performance.
4.Government:
This study will help improve an organisation‟s performance which in turn create
employment, lead to a better society and a better tax system.
5.Other researchers:
This study will help upcoming researchers to further their research on human resource
management as it relates and affects organisation‟s performance.
1.8 Scope Of The Study
This research work will focus attention on management of human resources in an
organisation in relation to achieving an effective and efficient performance. The study will
therefore stress on the human resource management‟s impact on organisation‟s performance.
The scope of the issues that will be examined is limited to the overall objective of the
research. As a result of non implementation of human resource policies in any organization,
non inclusion of the valve of employees in the organisation‟s culture, lack of involvement of
employees in decision making, quality circles and team work, the study is embarked upon.
Benefits of human resource management to organisational performance are the major scope
8
that should be covered as it is the main topic of this study. However, the time coverage of this
research is 2005-2014.
1.9 Limitation to the Study
The limitation of this study is that there is restricted access to materials needed for the study
as all the information are gathered from articles, accounting Journals and reference books and
from questionnaire administered to various organisations.
1.10 Organisation of the Study
The research work is structured as a five- chapter work. Chapter one is the general
introduction of the study, chapter two is literature review, chapter three is for research
methodology, chapter four is devoted to data presentation and analysis and chapter five is for
conclusions, recommendations and suggestions for further studies.
1.11 Definition of terms
i) Human resource(s): is the set of individuals who make up the workforce of an
organisation.
ii) Human resource management (HRM): primarily concerned with how people are managed
within organizations, focusing on policies and systems.
iii) Quality circles: is a participatory management technique where a group of employees who
do same or similar work, who meet regularly to consider ways of resolving problems and
improving production in their organisation.
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REFERENCES
Agarwala, T. (2009), Strategic Human Resource Management. New York: Oxford University
Press.
Dessler, G. (2005), Human Resource Management. Pearson: Prentice Hall.
Dyer, L., & Reeves, T. 1995. HR strategies and firm performance: What do we know and
where do we need to go? International Journal of Human Resource Management,
6: 656-670.
De Cenzo, D. & S. Robins (1998), Personnel/Human Resource Management. New Delhi:
Prentice Hall.
Debrah, Y. & G. Ofori (2006), Human Resource Development of Professionals in an
Emerging Economy: The Case of Tanzanian Construction Industry. International
Journal of Human Resource Management 17(3): 440-463
Dessler, G. & B. Varkkey (2009), Human resource management. New York: Prentice Hall.
G. R. Ferris (Ed.), Research in personnel and human resources management, vol. 14: 143-
203. Greenwich, CT: JAI Press. Gomez-Mej.
Huselid MA (1995). “The impact of human resource management practices on
turnover,productivity, and corporate financial performance”, Academy of
Management Journal, Vol 38,No 3
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